Techno-feudalism a threat to international peace/ Varoufakis: The new cold war between the US and China

2024-03-02 18:33:00, Aktualitet CNA

Techno-feudalism a threat to international peace/ Varoufakis: The new cold war

For former Greek minister Yanis Varoufakis, techno-feudalism is not good for geostrategic peace, but it is a very big threat to international peace.

His hypothesis in the book presented on Ditmir Bushati's show is that the new cold war is between the USA and China.

According to him, this is because there is a big clash between two fiefdoms made up of virtual capital, the American one and the Chinese one.

The former minister underlines that profit is being replaced by virtual rent, comparing General Motors or Volkswagen on the one hand, and Facebook on the other, all companies like Volkswagen or General Motors pay about 85% of their income as wages to workers , administrators, senior administrators.

They receive roughly 85% of the income of the big corporations of yore. Facebook pays less than 1%. So all this wealth, all this virtual rent (cloud rent) is taken from this circular circle of income in the US, in Germany, in France, everywhere. Which means that aggregate demand is very low.

Former Greek minister to Ditmir Bushati: Techno-feudalism is killing capitalism
March 2, 17:16

Dimtir Bushati: How is techno-feudalism developing in the current geopolitical circumstances? You mentioned that most of the capital is being provided by central banks, and we also know the techno-competition between the US and China, but there are also hot spots in the Middle East, in Europe, and everywhere. So how will this be seen or develop in the new geopolitical circumstances in your view?

Yanis Varoufakis: With techno-feudalism we have two destabilizing forces at once. The first is, in support of my hypothesis that profit is being replaced by virtual rent. If you compare General Motors or Volkswagen on the one hand, and Facebook on the other hand, all companies like Volkswagen or General Motors pay about 85% of their income as salaries to workers, administrators, senior administrators. They receive roughly 85% of the income of the big corporations of yore. Facebook pays less than 1%. So all this wealth, all this virtual rent (cloud rent) is taken from this circular circle of income in the US, in Germany, in France, everywhere. Which means that aggregate demand is very low. Which means the system is more unstable in the global north. This volatility drives the tendency to do two things.

Makes the Central Bank produce more money with the goal of replacing lost aggregate demand, and imperialism, finding markets and more markets. This is the first force. This is why techno-feudalism is not good for geostrategic peace, but is a very, very big threat to international peace. So my hypothesis in the book is that the new cold war between the US and China comes about because we have a big clash between the two fiefdoms of virtual capital, the American one and the Chinese one.

The war in Ukraine has caused Saudi Arabia, Indonesia, Pakistan, which use money in different ways, a lot of anxiety about what will happen to their dollars, because they saw that Russian dollars could be confiscated by the Americans and Europeans. Well, if you're a Saudi or Emirati in Europe with a bag of money, you think to yourself, 'ok, this doesn't look very good because today they're in conflict with Putin and his people, tomorrow they're going to be in conflict with me. God knows what could happen'.

So, to a small extent, we see an increase in global payments moving towards the Chinese payment system, the digital payment system, both WeChat Pay and the Central Bank. This is a real danger for the US and Germany, because the only reason the US maintains hegemony, knowing that their balance sheets are in the red, more and more since 1971 they are in the red, in the sense that have a trade deficit and a budget deficit, and the only reason they are combining these deficits with growing hegemony is because they all use the dollar system.

So if Chinese virtual capital and virtual finance together constitute an alternative to the dollar payment system, it poses a very big, clear and present risk to the US. And this for me explains the new cold war between the US and China./ CNA