Varo Fracus

Intro

Ugh. He is all over the place. Some of the things he talks about around digital currencies are mostly correct, but this idea that capitalism has moved to a different stage is ridiculous.

His hypotheses are nonsensical from a Marxist perspective (or even really a Keynesian one). It is interesting that he kind of admits that he does not really follow any internally consistent ideology. He says Marx was "erratic" because he abandoned some of his earlier writing later in life – and so Marx was erratic like him. That's not erratic, that's the scientific method, where Marx interrogated his own works and philosophy.

Erratic Erratic

Varoufakis seems just erratic here. His points on how capitalism is starting to diverge (or that something is starting to diverge within it) to become a crypto-feudal system are quickly responded to here:

Hypothesis 1. Central banks replaced private profits as a system driver

I mean, where? Investment is still done based on profit seeking even for banks. Just because finance is propped up by central bank artificially reducing borrowing costs does not mean profits no longer matter. Profit subsidy by the state has been the hallmark of capitalism since the beginning – in almost the exact same way as now: printing money and giving it to failing businesses.

Hypothesis 2. Digital platforms are replacing markets (Amazon.com, Facebook, etc. are not markets.)

It is a strange straw-man argument to say this. Amazon and Facebook (which are not at all alike in form and structure – one is an online retailer and the other is an ad company) are, indeed, not markets. Amazon is a logistics company that has an online store. It is like K-Mart or Loblaws where the front-facing store is replaced with a website. That is an innovation, but the way the system works behind the website is exactly the same as other stores.

It is not a market in any way as prices are still set by the companies within a (mostly) competitive marketplace. All of the rest of the comments about single algorithms setting prices and sales is irrelevant as it is the same way as a central body in WalMart decides what's for sale. This isn't a new form of "market" or "platform" or Feudal state. An innovation (a higher Organic Composition of Capital) that makes Amazon cheaper to operate for capital is significant, but not fundamentally different from how other firms compete in this space.

Facebook is an ad company that creates a theme park for people to be sold ads to while providing some entertainment. The Metaverse is the same. It is the Disney World model of capture for entertainment. It is profit seeking in exactly the same way, just online.

Both are dependent on cheap debt. But, in no different ways than any other company leverages cheap debt. Debt will continue to be lent so long as it can be paid through the production of surplus product, not paying all the surplus value back to the workers who produced it, and then using part of that "net revenue"/profits to pay their debts and create net profits for their shareholders.

Just like every company ever.

The rest of the article is like this. He creates an argument based on common misconceptions or bad use of language and then says this analysis is wrong which somehow exposes fundamental shifts in society. It is similar to using the language dreamed-up by the advertising department to criticize a product. This is not a legitimate place to start for material analysis.

Then he breaks it down to a point that makes no sense.

He describes Feudalism as extracting use value from peasants. Which was not the social relation in feudalism. Protection, food, work, health were provided for labour and product in feudal states. The social relation was one of monopoly over those things by landowners.

Capitalism he describes as based on the extraction of surplus labour from waged labour. This is true, but not the entire story as it is the search for profit extracted from the surplus value created by waged labour – because capital owns the means of production – that is the defining characteristic of capitalism.

And, this new phase of history he suggests we are entering called "Technofeudalism"?

Technofeudalism is a new system in which the techno-lords are extracting a new power to make the rest of us do things on their behalf. This new power comes from investing in a new form of capital (command capital) that allows them to amass a new type of value (command value) which, in turn, grants them the opportunity to extract surplus value from (i) vassal-capitalists, (ii) the precariat, and (iii) everyone using their platforms to produce on their behalf, unconsciously, even more command capital.

Command capital? Vassal-capitalists? Precariat? Platform production?

It is all based on the false notion that platforms are not just regular capitalist companies. There has been no rejection of null hypothesis here (that there is nothing new going on) to warrant a new language to describe profits derived from surplus product or the transfer of wealth through regular capitalist means. The relation to capital and ownership is exactly the same as it was.

There is no feudalism here. Just fancied-up regular exploitative capitalism.