In a recent interview (September 2023), Yanis Varoufakis, Economist and former Greek Finance Minister, discussed his new book “ Techno Feudalism: What killed capitalism?”.
He makes the case that “Techno Capitalism was so successful, powerful and toxic, that it mutated into a stupid virus that creates a variant that kills it’s host“. In other words, Techno Capitalism is killing the exact same thing that allowed it go morph into a dominating, all consuming force in the economy, the middle class.
Why should we care you might ask?
Profit is the lubricant of the socioeconomic system known as capitalism where producers could invest their profits back into their communities, thereby benefiting everyone who lived in those community. Varoufakis makes the case that Techno Feudalism achieves the exact opposite.
Amazon is much worse than a monopolist. It isn’t a market. Rather, it is a digital version of a fiefdom in which vassal capitalists are laboring for the lord, along with the peasants who may even love the lord – Yanis Varoufakis
As an example, Amazon charges producers 40%. This substantially lowers the profits they need to reinvest in their operations which benefits local communities. Essentially, this replaces profit with a new form of “cloud rent”. The reason this matters is because our societies becomes increasingly unstable as a result of shrinking profits by those who produce goods for their communities.
Why does it become unstable you might ask? Yanis makes the case that rent is waste. Producers must reinvest profits in order to maintain competitiveness. This investment goes back into the economy, benefiting the community as a whole.
Old style capitalist corporations like automakers pay on average 80-85% of their revenues as wages, salaries and so on. Facebook pays only 1%, Amazon 1.5%. The rest is not circulated in the economy as in the case of traditional capital industries and markets, but rather used by these Techno Capitalist to further increase their dominant position in the market leading to a concentration of wealth in the hands of a few. Anyone who understands economic theory will know this trend cannot end well.
This is all possible because in the case of Facebook, content is not created by paid wages as in the case of traditional companies. Rather it’s content is created for free by it’s users. In the case of Amazon, it’s the producers and sellers of goods who create the content for which they must pay 40% of their revenue to Amazon.
Lina M. Khan, Chair of the FTC and author of the influential essay “Amazon’s Antitrust Paradox”, is trying to address the dominating monopolistic tendencies of the big tech like Amazon and Facebook. However, Varoufakis believes she is doing it the wrong way by using outdated methods that were used back in the 1920’s by president Roosevelt’s anti-monopolistic stance against Standard Oil and Rockefeller. The outcomes of the attempts by Ms. Khan is proving him right.
The era of quantitative easing which started after the 2008 banking crisis, unleashed vast amounts of investments in cloud capital and big tech. The two dominant forces of cloud capital (America vs China) are battling it out for world domination. Where does that leave the small island economies like those in the Caribbean?
In the words of Varoufakis, “Amazon is much worse than a monopolist. It isn’t a market. Rather, it is a digital version of a fiefdom in which vassal capitalists are laboring for the lord, along with the peasants who may even love the lord”. In essence, we are now voluntary “Cloud Serfs” to these monopolist.
This is why DushiMart does not charge a commission on sales, unless there is an agreed upon consensus between the vendor and DushiMart in exchange of additional services provided by DushiMart.
We believe that vendors must have access to their capital because it is the bloodline of small business. Everyone knows that when it comes to access to capital, SMSE’s are at a disadvantage compared to larger companies.
Anyone who reads this understands that change is required if we desire a better outlook and future for ourselves and future generations.
In the famous quote by Karl Marx:
In the famous words of Karl Marx: Accumulation of wealth at one pole is at the same time the accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole.
Correction starts by making the right choices.
