Traditional capitalism is dead. It has been for a while. As far as the really big money and power is concerned, the traditional industries, manufacturing, construction, and transportation, with their long-standing tension between capital and labor, were replaced by finance beginning in the 1980s.
Finance is an interesting “industry” because, for all its self-importance, obscene profits, and domination of the economy, it doesn’t, in itself, produce any goods at all, and the services it provides are strictly limited and highly self-serving.
Still, there is a new king in town and even the mighty financial “industry” will soon have to bend the knee. I’m talking about the online media giants.
Value extraction has increasingly shifted away from markets and onto digital platforms, like Facebook and Amazon, which no longer operate like oligopolistic firms, but rather like private fiefdoms or estates.
Yanis Varoufakis
Since capitalism’s dawn, power stemmed from owning capital goods; steam engines, Bessemer furnaces, industrial robots, and so on. Today, it is cloud-based capital, or cloud capital in short, that grants its owners hitherto unimaginable powers.
Yanis Varofakis
Online databases define who you are
Online companies know more about you than you know yourself. To accomplish certain banking procedures, I have been required, more than once, to prove my identity online by answering questions that supposedly “only I would know.” Unfortunately, the database of questions went back decades farther than my memory. Also, the questions were subject to multiple interpretations.
Do you remember the “make and model” of your first car? And what does “first car” mean? The hand-me-down from your older brother? Your Dad’s old truck when he wasn’t using it? Or, since THEIR information was likely coming from a Credit Bureau database, does it mean “The first car you purchased in your name?”
There is no way to ask a clarifying question. You don’t find out if you got the answer right or wrong. You don’t even know how many correct answers are required. You just answer 5 or 6 questions and the system decides that you are not yourself.
Digital platforms are selling you
It is important to remember that the big money in online platforms is not in selling products to you. The big money is in selling you to the advertisers. Those ads are precisely targeted to our interests because we voluntarily provide data about our likes, our health, our shopping habits, and our lifestyle choices.
Every time we post to Facebook or do a search on Google we freely provide these platforms with additional information to add to their profile of us. It is these huge databases of freely-given personal information that constitute the capital assets of these large digital media corporations.
Digital platforms have replaced markets as the locus of private wealth extraction. For the first time in history, almost everyone produces for free the capital stock of large corporations. That is what it means to upload stuff on Facebook or move around while linked to Google Maps.
Yanis Varoufakis
We are now the product
Under the old industrial capitalism, those who controlled the means of production (capital) tried to maximize their profit by abusing those who worked for them (labor). This is why unions were and are needed.
During the reign of financial capitalism, those who controlled the access to money (banking, investing, insurance) got rich by dominating and manipulating traditional industries through fees, interest rates, stock manipulation, takeovers, leveraging, and corporate raiding. This is why government regulation of finance is needed.
Under the new techno-feudalism, WE are the asset. These companies own US. Well, to be precise, they own our personal data. But, they own so much of our personal data their picture of who we are is likely more accurate than our own understanding of ourselves.
Digital platforms control what you believe
Unlike old-fashioned terrestrial or analogue capital, which boils down to produced means of manufacturing things consumers want, cloud capital functions as a produced means of modifying our behavior in line with its owners’ interests.
Yanis Varofakis
Here is the scary part. They know our likes, our preferences, our habits, our tastes, in such detail, and they are perfecting the science of influence, persuasion, and manipulation to such a degree, that they can often dictate our opinions and motivate our actions without our even being aware of being controlled.
We still like to think that we make all of our own choices independently, logically, and in our own best interests. But, in fact, our opinions about products, policies, and politicians are largely determined by the media we choose to watch, read, and listen to.
What we think of as “our” opinions, preferences, and beliefs have largely been “fed” to us by sophisticated propaganda systems. The situation is so bad now that millions of Americans live in an “alternative facts” bubble that is completely divorced from reality.
Farewell to democracy
The consequences of this situation for our democracy are potentially catastrophic. The Big Brothers of Digital Media have been deliberately fomenting distrust, disgruntlement, and rage among the people for decades in order to funnel huge amounts of cash to their billionaire owners.
Because of this corruption of civil discourse and the breakdown of public trust, the Republican party has now been completely co-opted by fascists. These people are actively promoting both political and physical violence against the rights, hopes, and dreams of the majority of Americans.
Our billionaire masters don’t care what happens to democracy as long as their profits continue to flow in. Indeed, the great unwashed masses will be easier to control, and less of a threat to their assets, once the fascists are firmly in control.
The only power strong enough to possibly counter the worst impulses of our techno-feudal masters would be the Federal government. But the government will do nothing as long as the Congress and the Courts are dominated by Fascist “MAGA” Republicans.
If the fascist bullies take back the Presidency AND continue to dominate the Congress, I would say, “Heaven help us!” Except, as the Book of Mormon makes clear, in such a situation Heaven will NOT help us. We will have ignored the warnings and voluntarily brought the destruction upon ourselves….
Sources:
— “Neo-feudalism,” Wikipedia.
Yanis Varoufakis, “The Techno-Feudal Method to Musks’s Twitter Madness,” Project Syndicate, November 24, 2022.
Yanis Varofakis, “Techno-Feudalism is taking over,” DiEM25, September 7, 2021.
Nick Hanauer, “The Pitchforks Are Coming… For Us Plutocrats,” Politico Magazine, July/August 2014.
Kirsten Powers, “Bernie Sanders is right about capitalism,” CNN, February 24, 2023.
Techno Feudalism or Corporate Feudalism both are similar to the old medieval government feudalism where the world is divided into small kingdoms that benefit from constant warfare. The new God of the feudalism is Money or Capital. Most of us are just the serfs that keep the money churning whether we’re working for substandard wages or paying to much for goods and services.
We might try to make ourselves feel better by “buying local” but even then when you consider the supply chain or the banking industry it’s virtually impossible to do local business without involving the Corporate Feudal Lords. We can’t get away from them in entertainment or getting the news either. We may take pride in our local communities but if you’ve traveled even a little in the United States it’s pretty apparent that Salt Lake City’s suburbs look virtually the same as Witchita’s or Austin’s. The only places in the country that truly have their own uniqueness are small towns far off the Interstate System.
Thanks Brian for pointing out interesting ways of looking at our society and calling it what it is, fascist and feudalistic.
And our health care system is now run by pharmaceutical corporations. These companies do their own research and keep their methods and study statistics as private corporate information.