The Search for a Definition
Over the last four or five years, like just about everyone else, I’ve been feeling that some kind of huge shift, some sort of sea change has taken place that I haven’t quite been able to define. There were certainly occurrences that stood out. There was the Trump presidency, there was the COVID pandemic, there are the horrible wars in Ukraine, in Gaza and elsewhere, etc.. However, none of these phenomena held up, by themselves or in conjunction with one another, as a satisfying answer to my query.
Inverted Socialism?
Two years ago, I wrote an article for Pressenza entitled, “We Have Entered a Post-Capitalist Era”. (1) In that piece of writing I mentioned that I’d been referring to the late 2010s and the early 2020s as an era of inverted socialism. In this era, the era we’re still in now, the poor and middle class bare the majority of the tax burden while the wealthiest of the wealthy often pay little to no taxes. Concurrently, during the past few years, the wealth gap between the super-rich and everyone else has grown at rates never before imagined possible.
Enter Technofeudalism
I was content to simply call this phenomenon inverted socialism until I discovered a youtube clip in which economist/writer Yanis Varoufakis mentions the term “Technofeudalism”. Within the first few minutes of his description of this term I knew that I was listening to a remarkably clear articulation of what would soon become a landmark socio-economic observation and theory.
The Cloudalists and Cloud Capital
Varoufakis’ new book “Technofeudalism: What Killed Capitalism”, published in late 2023, is a beautifully written description of how the entire global economy has shifted from Capitalism to a new kind of Feudalism just within the last few years. What we have now is a handful of what Varoufakis calls “cloudalists” who control “cloud capital”. These techno-feudal lords own the existing cloud platforms (Amazon .com, Facebook, Google Cloud and a few others) which all other capitalists must pay forty percent of their profits to in order to conduct business in these cloudalists’ clouds. These new techno-feudal cloud-lords simply sit back and collect rent from their capitalist vassals who now form part of the cloudalists’ newly attained serfdom. A serfdom which consists of all 7 and ½ billion of us.
The End of the Profit Motive
For the first time in history, stunningly, profit is no longer the driving force of the global market economy. This first became clear a few years ago on August 12, 2020. Fearing a repeat of 2008 during the pandemic, a huge heap of money was (again) printed and circulated by the Fed. This money ended up following the path of least resistance toward the super-rich, as it had done in the past. Except this time there was a gigantic difference in the results. Noticing the false valuation of paper capital as a result of continual mass-overprinting, “’cloudalists’ like Jeff Bezos and Elon Musk acted quickly, happily trading their paper capital in for what would end up being a far greater value extractor: ‘Cloud Capital’”. (2)
Profit is for Losers
Both Bezos and Musk figured out that profit had become irrelevant and that the paper capital that their fellow multi-billionaires were sitting on would soon lose much of its inflated value. They knew that what mattered most was to seize this opportunity to establish complete market dominance. In 2021 an official financial report issued by Goldman Sachs perfectly illustrated how this new takeover emancipated capitalism from profits. The report featured a small group of “Loss-Making” capitalists who had effectively usurped control of the market.
Bezos and Musk’s 2020 Coup
Between 2017 and the beginning of the pandemic, loss-making cloudalist companies saw their share value rise by 200%. By the middle of the pandemic, their share value rose another 300%. In 2020, Jeff Bezos’ company Amazon had its most explosive year ever, posting what would have amounted to 44 billion in profits. Bezos paid zero in taxes that year though, by listing a profit margin of 0. Elon Musk did something very similar in 2020, when his stock prices rose 743% by year’s end. He also posted a profit margin of slightly less than zero.
The New Cloud-Gentry
With what would have been almost 100 billion in combined profits in 2020, Bezos and Musk put a large portion of their newly gleaned freshly printed government capital into server farms, fiber optic cables, AI labs, gigantic warehouses, software developers, top notch engineers, etc.. In an environment where profit had been replaced by trillions in newly printed capital as the driver of the economy, the cloudalists seized upon the opportunity to create a new empire. The undermining of one of capitalism’s core principles, the profit motive, was complete. A new Cloud-Gentry was born.
The Big Three
There was another cluster of uber-lords that rose simultaneously with the aforementioned cloudalists. Three US companies with powers exceeding all terrestrial capitalists put together, Blackrock, Vanguard and State Street (The Big Three) now effectively own American capitalism. They own all of America’s major airlines, most of Wall Street, JP Morgan Chase, Welles-Fargo, Bank of America, City Group and car makers such as Ford and General Motors. Together, these three companies are the largest single shareholders in 90 percent of the companies listed in the NY Stock Exchange. Including Apple, Exxon Mobil, General Electric and Coca-Cola.
Twenty-Two Trillion
Blackrock manages 10 trillion dollars in investments, Vanguard manages 8 trillion and State Street manages 4 trillion. That’s equal to the total US national income and also to the sum of China and Japan’s national income. None of this would have been possible without the trillions upon trillions of dollars that have been printed and pumped into the system since 2008. The Lion’s share of this money accumulated in the hands of these three conglomerates and the aforementioned cloudalists, who all capitalized on the new “Loss-Making” model. These three companies’ unprecedented takeover of the majority of the market has enabled them to charge equally exorbitant cloud-rents as the aforementioned cloudalists.
Algorithms etc.
There are important aspects of this sea change from Capitalism to Technofeudalism that would take another three or four pages to cover here. Firstly, China also has a competitive cloud hub that Varoufakis feels is the real cause of the US’ constant attempts to provoke them into conflict.
Also, there’s the matter of how we are each training and being trained by our gadgets and the algorithm. I highly recommend Yanis’ book if you want to get the full skinny. Aside from being groundbreaking and informative, it’s a smooth read and/or listen. I’m listening now to the audio version of the book which is narrated by Varoufakis himself. I can’t say enough about it. (3) The book has clarified some things that I found to be quite opaque before reading it. And as dark as the subject matter sounds at first blush, there’s something hopeful and oddly uplifting about the book. I wouldn’t be as quick to recommend if this had not been the case.
Lastly
I’m going to gamble that, at this point in the game, the majority of those who have read this far in this article don’t need to be alerted to the fact that the narratives that are being pushed by the corporate “mainstream” media are being shaped and curated by the aforementioned cloud lords who own ALL of the existing mainstream legacy media outlets and publications. I’m also going to bet that the vast majority of you know, by this point, that all of the politicians in both of the two major US political parties are mouthpieces for the corporate military-industrial complex, which is also intimately linked with and financially beholden to these techno-feudal overlords.
CITATIONS:
1. https://www.pressenza.com/2022/04/we-have-entered-a-post-capitalist-era/
2. Chapter 4, p. 137, Varoufakis, Yanis, Melville House 2023, “Technofeudalism: What Killed Capitalism”
3. https://www.youtube.com/watch?v=gioEct6Kexs
