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American Big Tech Has Enslaved Us | Aaron Bastani Meets Yanis Varoufakis

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2,415,064 views Premiered Oct 9, 2023 Downstream - NEW episodes every Sunday 3pm UKIn his new book, ‘Technofeudalism: What Killed Capitalism’, Yanis Varoufakis explores how giant tech firms, both in the US and China are expanding their control over the planet. His analysis is that, whilst material resources certainly matter, the real battle ground is over digital real estate. Aaron sat down with Yanis to talk about how Europe’s power has faded, Elon Musk’s wet dreams and why the US is really afraid of China. Technofeudalism is available on Penguin Books. Novara Live broadcasts every weekday from 6PM on YouTube and Twitch. Episodes of Downstream are released Sundays at 6PM on YouTube.

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0:00if you don't have a competitor to Google a competitor to Uber a competitor to

0:05Facebook a competitor to Apple compared to to amazon.com if every German or

0:12Italian or French or British producer has to go through those Cloud lists in order to sell their stuff even in

0:20Europe and you know Amazon makes 42 billion every year only in Europe and

0:27pays zero zero tax zero well you're gone you're

0:33[Music] finished for M of a century socialists

0:39have believed that capitalism will end and it will be replaced by something else something

0:44better but what if it ended and was replaced by something potentially worse

0:50what if we were moving towards post capitalism but that didn't mean a more dignified Equitable economy but in fact

0:57greater inequality than ever before well that's the hypothesis of today's guest

1:02he thinks that we're moving back towards a world of feudalism where the future looks increasingly like the past but

1:10with digital characteristics Yan fakas welcome to Downstream it's very good to

1:16be back thank you for inviting me it's good to talk to you again was my pleasure you said it's good to be back I

1:22mean we first met in 2015 I think you look younger now yanis than you did then

1:28that's 80 years ago how'd you do it well it's not true but I thank you profusely for this very sweet and

1:35sugarcoated lie of yours uh if it is true it's all sub auge sauge maybe

1:41there's some advanced technology very old you're not letting us really very worn around the edges yeah it's been a

1:47very difficult year Aon very difficult year we'll get on to that particularly in regards to the politics of Greece but I think you mean obviously more widely

1:53too we're talking about your new book which of course is relevant to all that techn feudalism what killed capitalism

2:02I guess for me it's towards the end where you encapsulate the hypothesis in a single line what if we've achieved

2:09post capitalism but it isn't socialism MH so can you sort of unpack that a bit

2:14because I think most people would think that we're just in a a hyper violent

2:19decaying degenerate form of capitalism but your hypothesis is something a little bit different oh it's very

2:25different it's profoundly different but um let me remind you that uh I'm not the

2:32first to hypothesize that if socialism as a project fails we will end up with

2:39barbarism remember Rosa Luxenberg the famous question from her prison cell

2:45Socialism or barbarism it tells out that it is barbarism and of course it's very technologically advanced it is based on

2:53huge quantities of capital so Capital has triumphed uh and that answers the second

2:59part of your question of course wherever you look you come face to face with the

3:05Triumph of capital with a Triumph of those who own Capital capitalists but

3:12what I'm saying here is that in the end it wasn't the left the

3:19organized labor movement that uh upended capitalism we used to think and hope

3:27that it would be labor that uh is the comeuppance of capitalism capitalism

3:32remember what Mark said and angles capitalism creat Grave Diggers the proletariat the organized laborers who

3:39will rise up and take possession of the means of production capital and put it

3:44to good use for for society as a whole it didn't happen as you know as we all know unfortunately but what happened was

3:53another construct another product of capitalism did that job and that other

4:00product was capital in itself so my hypothesis is that this is is that Capital was so

4:09successful like a very toxic virus which kills off its host and therefore it

4:15cannot propagate itself like Ebola which is a stupid virus unlike coid 19 Co 19

4:20killed very few people uh as a percentage of those who were infected and therefore it spread and became a

4:25pandemic Ebola never left particular villages in Africa because killed all of them before it could spread

4:33Capital developed a mutation of itself which I called Cloud capital a particular form of capital which has

4:40killed off capitalism it's host that's my hypothesis I know it's extremely controversial most of the people on the

4:45left do not like it at all for two reasons firstly because they think hang on it's all capitalism but it's not

4:52socialism how can that be and the answer is Rosa Luxenberg it's barbarism uh and

4:57the second reason is because our task as socialists is now if I'm right is

5:03immensely harder because my point now is that you don't just have exploitation in

5:11the Enterprise at the level of the firm on the on the factory or the shop floor

5:17you've got a kind that that continues of course it's the main spring of surplus

5:22value it's the only spring of surplus value to this day that has not changed from capitalism but what has happened is

5:28if you're Jeff basos if you are the owner of Google of Apple

5:33of if you're Elon Musk then you own this new form of cloud Capital which allows

5:40you to extract from the rest of society from proletarians but from everyone else

5:47as well huge quantities of rents and surpluses in a manner that reconstitutes

5:55a form of feudalism the difference is that instead of feudal the original

6:01feudalism which is a system based on private ownership of land which produces

6:06rent now it's private ownership of the cloud of cloud Capital because the cloud is capital right it's not some Cloud up

6:12on the sky in the sky which yields again a form of rent every time you buy something from amazon.com 40% of what

6:19you pay doesn't go to the capitalist who is selling you that stuff it goes to Jeff basos that's a cloud rent and he is

6:26a new form of Fuda Lord I I think most people would accept this as a big new part of the of the global economy in the

6:32last 20 years where somebody might disagree with you as they would say well yanis this is ideological you're

6:38presuming that this quite important you know and and highly discussed part of the economy you know the richest person

6:44in the world Elon Musk the world's largest companies or big tech companies I didn't ever think I'd see a three trillion dollar company that's what uh

6:51Apple now is they would say fine but look Wars still happen because of petrol

6:57because of food because of access to to clean drinking water the United States is worried about Taiwan because of its

7:02semiconductor manufacturer so the world still revolves around resources minerals

7:09rare Earths and manufactured Commodities is that a criticism does that disagree

7:15with what you're saying or no you presumably have a rebuttal to it well of course I mean it always did feudalism I

7:22mean think of the great clashes between the medieval forces medieval Powers uh

7:29they were clashing over resources over Surplus distribution over ideologies

7:36over reach of Empire that was happening well before capitalism was established

7:41so nothing has changed and feudalism capitalism and nown feudalism in that

7:47regard but if you're going to understand for instance you mention Taiwan why is Taiwan an issue

7:53now if you ask them United States government they tell because you know they Beijing wants to gobble it up it

8:00always wanted to gobble it up I mean the United States has never recognized Taiwan because it recognized as part of the deal between Nixon and ma that uh

8:08China has a claim to Taiwan so what is new exactly in my book I try to explain what I think is new and it's the rise of

8:15cloud Capital the shift from capitalism to techn feudalism because if you think about it after after 1971 when the gold

8:24standard died and the dollar was no longer exchangeable with gold the United

8:30States has built its power on a remarkable model of a world system

8:37whereby uh the United States has a huge Trade Surplus which acts as a vacuum

8:42cleaner scking into its territory the products of Chinese capitalists Chinese labor to be precise of German of Dutch

8:50of Italian Japanese of course and how does it pay with that for that with IUS

8:56called dollars because it prints them and why do the Chinese the Japanese the German capitalist accept those IUS the

9:03dollars because they use it to go to take it back to W Street and to invest

9:08in real estate in bonds effectively financing the American government so

9:14that that that's the model since 19 the mid 1970s and that whole model is p predicate upon what on the Monopoly of

9:23the payment system of the dollar and the dollar payment system right what has

9:29happened in the last 10 15 years which I tried to map out in techn feudalism is

9:35that the Chinese are the only alternative Locus in which Cloud

9:43Capital emerged Europe has no Cloud capital of its own we don't have a Google we don't have a Facebook we don't have a Tesla we don't have anything zero

9:51Europe and that includes Britain the Chinese have we have only fans that's it so if you if if you take

9:59an app like weat or if you take the digital currency that is being tested

10:05massively tested 135 million accounts by the Central Bank of China they're developing the technology to have a

10:11payment system which is denominated not in dollars but in one this rise of

10:18Chinese techn feudalism if you want a a Chinese cloud fief in contradiction with the American

10:25Cloud fief explains why Taiwan is an issue yeah I think it's a really original explanation for Rising

10:31geopolitical tensions which I've not seen elsewhere I'm sure I'm sure some people have sort of hinted at it but the

10:37idea that what's really upsetting the United States is the emergence of big Tech conglomerates that can compete with

10:42their own ones and obviously the most visible example of that is the geopolitical fur around Tik Tok which

10:49you which you T touched upon in the book and I think it is true to an extent that clearly the world is diverging

10:54particularly as we move into a world of AI diverging into these two spheres of influence there was a great um paper a

11:01few years ago by Price W house Cooper saying that AI was going to add around $17 trillion to the global economy by

11:0620130 2035 and almost all of this is going to China and the United States you know none of it is going to South

11:12America or Africa or Europe or Europe exactly so I find that a really original

11:19argument but to step back a bit because I think you you you just mentioned what you referred to as the global minotour

11:25in the book and what happens after 1971 which explains where we are

11:31now and even things like us China relations so let's go back to 1971 we

11:37have the disadoption of the gold standard um by Nixon why did that happen and what has

11:45it meant in the ensuing sort of period of 50 plus years now thank you for the question which is

11:52very dear to my heart as you probably know but before I answer answering this allow me to preface it with a comment

11:57about the thing you said that beginning it's not just the Americans that Trump initially and Biden later why that big

12:05Tech in China is rising it's not just that that would not worry them so much on its own it is that Chinese big

12:14Tech a company like Alibaba or 10 cent or Huawei is rising in a country where

12:23the banking sector does not have autonomous power unlike Britain Britain

12:30with the city of London and America with Wall Street in China because of the

12:35power of the Chinese Communist Party the political power the big tech companies and the banks have fused they've become

12:43one so you have an app like wichat which is Elon musk's wet dream what Elon Musk

12:50wants to do with Twitter is to replicate wichat wiat imagine an app that does everything it shows you uh photographs

12:57uh it plays music it shows movies it allows you to communicate it's got something like Facebook on it and allows

13:05you free payments free payments uh you make payments and the bank does not

13:10retain anything either from you or from the vendor the Americans do not have that and they do not have that not

13:16because they don't have the technology to have that but because you know JP Morgan Goldman Sachs Bank of America

13:21will never allow Google and apple to get away with it to take over their business

13:27but if you refuse to together big Tech with big Finance you have something much more powerful which is what the Chinese

13:32have done than what the Americans have done have have created another point

13:37about the scupa look I'm not into projections about what will happen in 20 30 years time this is a book not of what

13:44is going to hit us in the next 5 10 years this is a book about what has already happened and now to your

13:50question what happened in 1971 which I explained in the global Min thank you for mentioning and I can actually can

13:56see a copy of it back there we're we're well read here at nevar media I can see that well thank you about the story I

14:03tell in that book is that after the second world war the United States

14:09created a centrally planned capitalist global economy centrally planned because

14:16if you think about it it's very difficult for young people today to wrap their minds around that between 1944 and

14:221971 72 73 we had fixed exchange rates that is

14:27you would never open the newspaper and try to find out what the exchange rate between the the pound and the French

14:32Frank the pound the US dollar was it was fixed for years I mean I grew up in a world where there were 30 dragas to to

14:39to a dollar Forever interest rates were fixed can you imagine a world where

14:44interest rates were not exactly fixed but more or around 4% you KN you knew that you know if you borrowed money you

14:51would be paying 4% forever and but that that's like a centrally planned G plan Soviet economy

14:58more or less without P without common ownership of the means of production but it was planned the only way that could

15:06work was if all these currencies were effectively based on the US dollar so we

15:11had the dollar in different guyses but the only way we could have the dollar in

15:16different guises was that if the United States was a surplus country because if

15:24it was a surplus while it was a surplus country after the second world war it was the only country that that had a

15:29trade surplus every time they sold a jet or a car or a washing machine to a Brit

15:37to a French person to a German person a quantity of dollars would go to the United States so the United States

15:44would give us dollars dollarize US Marshal a for instance other ways as well same to Japan and then by selling

15:51us their where we would return the dollars and that would complete the recycling Loop but for that to happen

15:59they had to have a trade surplus after 1968 69 they had a trade deficit which

16:04means that they were leaking dollars dollars were a net

16:10stream or torrent of dollars was coming to Europe and to Japan at some

16:17point those who held the dollars Germans Brits Saudi Arabians Japanese started

16:23worrying that they wouldn't be able to buy as much gold with the dollars because there was this Inc ining quantity of dollars and that meant that

16:31the fixed exchange rate regime had to break down and it broke down and the

16:36Americans instead of being yet another Empire that lost its power its political

16:43power its military power it's hegemonic power as a result of going into the red

16:48managed and it's the only Empire that has ever managed that to become more hegemonic by using their trade deficit

16:55in the way that I described before to ensure that the Japanese British Dutch

17:00German French Italian and later Chinese capitalists needed the American trade

17:07deficit as a source of demand for their their net exports to the United States

17:12and this is the world that precipitated neoliberalism precipitated the the you know

17:19financialization the crazy bets that were placed in Wall Street and therefore

17:25gave rise to the gave rise led to the crash of 2008 and then after that the

17:31central banks of the West with the Federal Reserve the American Central Bank leading the way started printing

17:37all the money that replaced capitalist profits this is another part of techn

17:42feudalism so this is more recently this is after 2009 with the QE there's an amazing before we get to 2008 2009 and

17:49quantive easing and I think that's really important to say that any any Marxist knows that really you know the

17:55history of the last you know what 75 years since World War II is a succession

18:00of trying to mify and address crisis 71 late 1980s early 1990s early 2000s

18:082008 but what happens between 2002 and 2007 with regards to financialization is

18:14extraordinary and the numbers are just mindblowing for me and you talk about this in the book so in 2002 to Total

18:19Global GDP that's all the economic transactions planetary economic transactions which have monetized 50

18:26trillion the worth of total Global uh transactions um by 2007 Rises to 75

18:33trillion so it increases by 50% which is obviously quite a lot but when you look at the sum of bets of what you call in

18:39the global money market that rises from 70 trillion in 2002 to 750 trillion so

18:46it's more than 10 times increased so what happens between 2002 and 2007 in

18:51terms of financialization and this huge explosion in in financialized debts the

18:59thatcherism and reaganism reach its cendra with Blair here in this country and with

19:07Clinton in the United States effectively the bankers were Unshackled from all the

19:14constraints of the New Deal uh the American New Deal and later The Clement

19:20Atley and 1950s governments constraints on on Bankers

19:26you see governments had been burned once in 1929 because the Roaring 20s were a

19:33period of um uh unfettered financialization the bankers let's not

19:40forget create money out of thin air you know the people talk about the money tree um in order to lust socialists but

19:49it is the bankers who have access to the manit Tre and they can pluck as much money from thin air as they want uh and

19:56of course when they overdo it under the weight of all those mountains of money that they've created uh they bu bander

20:04and something like 1929 or 2008 happens after 192 a certain amount of people can't pay back liabilities and all of a

20:10sudden the whole thing look when SC when all these lver bets that is bets based

20:17on borrowing from the future not from other people but from the future thin

20:23air you know when when let's let's make this once again clear that when Lloyd's

20:28bank or Barkley's bank give you a loan they are not giving you money that somebody has saved they are Conjuring it

20:34up like magicians effectively they type on in into your bank account you know £10,000 or 50,000 or £100,000 that money

20:42doesn't exist it's out of thin air Bankers have this right that is given to

20:48them by Society by you and me by our listeners and audience and then of

20:53course while these bets uh work out you know if the the the borrowers manage to

21:01make this money and also make the money to pay interest Bankers are laughing all

21:06their way to their own bank surprisingly they're very profitable when it works like that exactly and they think that they deserve the money and but then at

21:12some point all all that is needed is a small pin prick to deflate this or to

21:19burst that that that bubble and then what happens is UN and I and especially

21:25the working class of our countries bail them out and more money printing by central banks

21:33so after 2008 2009 we had 35 trillion printed on behalf of Bankers $35

21:41trillion to put it in context uh back then back in 20 2009 when that started

21:47the total GDP income of the United States of America was 1718 so they printed 35 and they gave it to Bankers

21:55now Bankers wanted to let ended to business people business people however looked around at the little people out

22:02there who were suffering under austerity who were impecunious who couldn't buy anything as if they were going to invest

22:08it so all this money that is being printed uh ends up inflating asset

22:15prices artwork house prices and it never feeds into investment that's why in

22:22Britain now you you have this ridiculously low level of productivity because there's been no investment and

22:27the the same thing in the European Union um and the only entrepreneurs that care to

22:35take some of these liquidity and not just put it back to the stock exchange and instead use it to build up new

22:41capital are the tech Lords they took the money and Society in other words as a

22:47result of the innan handling by The Establishment and central banks of the

22:532008 crisis effectively we have funded the buildup masses of cloud Capital

22:59Cloud Capital would always have been built but not at that rate let me put it in terms of uh uh somebody who should

23:07know uh Mami who wrote zuk A Tech U investor who was uh part of

23:15Facebook one of the early investors in Facebook he agrees with my assessment um he sent me an email recently saying so

23:22uh that nine out of 10 the $10 that have

23:28been invested in what I call Cloud Capital came from central bank

23:33money it's you know feudalism Remember The Sovereign printed the money and the

23:39feudal Lords used it uh together with their property rights over land to

23:44exploit The Peasants and the vessels which are today's capitalists who

23:50produce in the old fashioned way using Machinery industrial robots without

23:55cloud capital and one last thing thing if you want to understand the difference between Volkswagen and Tesla or Chinese

24:02cars understand this Tesla is connected to the cloud that's why Elon Musk wanted Twitter every time a Tesla goes around

24:11Tesla acquires enormous information about what music you're listening to while you're driving where you're going this is connected with the tweets that

24:17you you send and therefore the value added to Tesla comes increasingly from the cloud and far less from the money

24:24you pay to buy the car Volkswagen because it's German and Germany Europe Britain France Italy Greece we have not

24:30invested in Cloud Capital we cannot compete because we will never be able to comp well we you and I of course not but

24:37even our capitalists are vassels to the American and Chinese Cloud the owners of

24:44cloud Capital nevar media has been around for more than a decade it has grown to an extraordinary extent thanks

24:50to the generosity and kindness of our brilliant supporters Downstream in that

24:55context is a bit more recent it's it's only really appeared in the last couple of years it's now become our standout

25:02interview show here on YouTube it gives us an opportunity to talk about big ideas with Brilliant Minds the kinds of

25:08people wrestling with the challenges we all have to confront in the 21st century

25:13if you enjoy Downstream if you enjoy the rest of our content here at Nara media obviously click the YouTube subscribe

25:20button but if you want to go further than that support our work financially make a one-off payment or a monthly one

25:27we obviously prefer the latter if you can and to do that go to Novar media.com support to help build a People

25:36powerered Media because we can all have political commitments to change the world to get us out of the mess we find

25:43ourselves in but as long as the billionaires the media oligarchs own

25:48media in Britain and elsewhere we're going to make very little progress so like I say help us build People

25:55powerered Media go to Nar media.com for slash support I mean it's an elegant

26:01hypothesis um but particularly this example You' just given of cars you talk about how basically the German car

26:06manufacturing industry is over because their Global comparative advantage is in

26:12high quality engineering the combustion engine which has accumulated over what 100 150 years of engineering expertise

26:19but the cars of the 21st century require a very different skill set very different resources and they're going to

26:24be made by if anyone alphabet Apple eventually Tesla various Chinese companies so I think I think he's very

26:30elegant in that regard and there's a really interesting point here as well you talk about it at the end of the book I don't want to talk about the end of

26:36the book just yet because we're only getting started but um about the kinds of coalitions you have to build there

26:41was a really fascinating side I heard recently which was the Triumph of Donald

26:47Trump can only be understood as a clash between National and family Capital

26:52which is to say that family Capital Petty Bourgeois um capitalists were on

26:58side with Trump against what they perceived as a national variant of often Cloud Capital but also Finance we'll

27:05talk about some big Finance firms like Black Rock and whatnot and I thought that makes so much sense because that is

27:11that is precisely the fragment of of of the capitalist class the petty bouar you

27:16know we can park it's quite a difficult one to really explain but that is the fragment which has been hammered by 15

27:22years of QE which has been hammered by Del Global um it's been hammered by globalization a

27:28de-industrialization and so for me it's hugely interesting that you know people who historically the left has been very

27:35ambivalent about the petty Bourgeois the small business owner even the national capitalist making non-cloud Commodities

27:42there's the space there for interesting forms of alignment and Alliance this is absolutely correct but may I say that it

27:49is not entirely new Which social class was behind

27:54musolini and Hitler the bet b yeah the p b who was

28:00squashed by the crisis the 1920s in Italy and then late 1920s and early

28:061930s in Germany fascism is a petty bis phenomenon it begins not from the

28:13working class it starts from the P Bui and then spreads to the working class once the crisis of capitalism begins to

28:21deplete industrial workers jobs exactly the same happened after our

28:26Generations 19 29 which I keep saying happened in 2008 except that after 2008 the

28:34process of IM miseration of the petty bu and the working class was worse than it

28:40was in the 1920s and 30s because if you think about it uh in the United States

28:46all the factories shifted to China and to Vietnam all of them all of them they just shifted the and it was a part of

28:53what I call in the book a dark deal so the dark deal between Washington DC and

28:59the Chinese Communist party was okay we will send you over

29:04our Machinery our industry you will produce the stuff we

29:12will keep the IP the intellectual property rights in the case of Apple so

29:18uh we will get a large share of the Monopoly profits from selling iPhones but you will keep the share you you'll

29:26keep the Surplus value that you extract from your Chinese proletarian you will be paid in dollars

29:33which of course we meant as a deficit country so they are worthless unless you send it them back

29:39to Washington and you will finance our government and you'll get an

29:45interest rate from the bonds the treasury bills that you will buy at the same time you buy a real estate we will not let you buy companies unless they

29:52are useless and not particular so you can't buy Google you can't buy Bank of Amer America uh that that's the same

29:59deal as they were given to the Japanese in the 1960s that is the deal that enriched

30:07Chinese capitalists and American rers at the expense of the American working class

30:14you know people talk about the dominance of the dollar and they assume that it's a good thing for the United States it

30:20isn't the dominance of the dollar is fantastic for Americans and tear and for Chinese capitalists and Japanese

30:26capitalist and German capitalists and the people who actually uh suffer the

30:32most as a result of the exorbitant privilege of the dollar is the American working class which was serly abandoned

30:40by the Democratic party and politics hates a vacuum Donald Trump wall in and

30:47took it and I suppose people just quickly on that people might say oh well we know that low-income owners vote Democrat Etc obviously that's highly

30:54stratified on racial lines but in in in those states where Trump gets over the

31:00line in 2016 former heavily industrialized States Pennsylvania Michigan that is precisely the story and

31:06I think even now seven years later it's very hard for the left to understand that it was former blue color workers

31:12many in trade unions who who took Donald Trump to the White House they may do again I mean who knows it's a different world

31:18now but you know I think they might do again you say something as well building on this which is the worst thing you

31:25want as a Chinese capitalist is for Juan to be the um GL Global Currency

31:31replacing the dollar which is quite funny because when people say it's the end of the dollar you know China is you

31:37know heading towards hammany status blah blah blah well no actually if you're a Chinese exporter that's that's a

31:43terrible thing to be or a German exporter why do you think that Euro never competed with the dollar for

31:50Supremacy because the German capitalist would hate that why do you think we have no Euro Bond because

31:57the lack of a Euro Bond guarantees that the Euro will never compete with the dollar so German industrial Capital does

32:04not want the Euro Bond doesn't care so much about you know fiscal Union so on

32:09it just doesn't want to lose access to the American trade deficit which is the

32:15reason why they are um you know amassing all this all this Surplus value so yeah

32:21um it's we must stop thinking in in football terms you know my nation

32:26against The Other Nation you know England versus Argentina it's not that

32:33um the division is within our countries is between the capital the capitalist

32:38class in China and the proletariat in China the capitalist class or the rer

32:43class not even the capitalist class the rers and the techn feuda Lords in the United States that

32:49have diametrically opposed interests to those of 60% of the American population

32:54diametrically opposed interests uh so yeah let's go back to thinking as left

33:00Wingers can can I ask a question this this isn't in my notes but can I ask you a question about the Euro because the

33:06argument you're making about Euro bonds is really interesting I I've always been a Critic

33:12of the Euro um and I cannot understand why an Italian or a French leftist

33:18supports the Euro because the whole Euro project as I understand it the whole

33:24basically the sort of political economy of the Euro Zone seems to be PR upon the idea of well basically it's for German

33:29exporters um it's it's destroyed to historically powerful you know

33:35manufacturer exporter oriented countries particularly Italy you know Italy is a share the the size of the economy share

33:42of proportionate rather to the size of its economy it's manufacturing base was about the same as Germany's even as as

33:47recently sort of 105 years ago before 2008 and it seems obvious to me that

33:52membership of the Euro Zone means permanent decline for Italians permanent decline for Italy's productive Perman

33:59austerity yeah permanent austerity permanent and this is a G7 economy or G8 economy

34:05um same for France to a slightly lesser extent and yet there aren't major movements in either country to to leave

34:12the Euro I I find that I find it extraordinary now I know there's huge downsides to leaving the Euro it' be very painful but the fact that's not

34:18even in the conversation in both Nations is perplexing for me it was in the conversation but um it was killed off

34:26let let me explain what the lure of the Euro was for Progressive people people

34:32who were not sellouts turn codes because the turn codes know we know why they

34:37wanted the year uh I have this memory of um the 1970s

34:46when Greek Trad Unions would uh go on strike to gain some pay rise strikes was

34:55extremely painful there's a lot of sacrifice usually the strikers are never

35:01compensated it's the strike Breakers who get compensated because they get the pay rise even though they have not suffered

35:07any of the cost of the strike uh and the next day or five days after securing a

35:125% in let's say wage increase the Bank of Greece would devalue the dragma and

35:18they would lose it all so the notion of a currency that cannot be

35:24devalued was very attractive even to trade unions what they did not factor in was

35:30that there was a price to pay for that and the price was that there would be internal devaluation that uh they would

35:38uh you know not not find one morning that their currency the money they had

35:45in their wallet was devalued as a result of a an action of the the Bank of Greece

35:50but you know they would never get a pay rise indeed they would get pay cuts don't forget that average wages today in

35:57Greece are 35% lower 35% lower in

36:02nominal terms not in absolute terms and they were in 2007 that's crazy same similarly with pensions so that they

36:09didn't factor in once you get trapped into the Euro Zone uh it's like being in

36:16a house which is on fire but has no fire exits uh you need to demolish walls to

36:21get out you put it very nicely when you said then the costs are very large because this exactly how it's been

36:27designed to make the cost very large you know that when we entered the Euro Zone our printing presses were destroyed did

36:34you know that no it was part of the deal it was part of the deal you have to you know to to to dismantle and

36:42Destroy National like like like the IRA had to destroy its weapons as part of a good figh agreement we had to destroy

36:48our printing presses as we entered the Euro zone now somehow I don't believe

36:53that that the Buddhist Bank the Germans destroyed their printing press but we certainly did and so did the

36:59Italians that's extraordinary and what you just said there about nominal I mean just for people to nominal means look

37:04we're not talking about inflation or what you can buy we're literally talking about the currency and I I saw a

37:09statistic recently about the purchasing power of 18 to 35y Old Italians I can't

37:15remember the exact numbers but it something like it's declined precipitously since the 1990s yeah it's I think it's basically 50% what it was

37:2220 years ago and you think you only get to live once but that's why we have NE fascist in government well quite exactly

37:28of course people are going to be angry you that's why the Socialist Party died that's why the Communist party doesn't exist because it accepted this process

37:35um and the only voices that uh are supported by the public in in Italy are

37:43the ones who remain antiestablishment unfortunately as uh descendants of

37:49musolini I mean you I understand why people are angry I do understand why they turn to the far right because you

37:55only get one shot at life around for 7080 years and there is a political settlement which is screwing you over so

38:02badly it's depriving you of the life you expected which you deserve and nobody in the political

38:08class is doing anything about it don't forget the other great danger for countries like Italy

38:14and Greece immigration not immigration immigration the problem is not

38:21that the Africans are coming the problem is that the Greeks and Italians are leaving m or particularly for Greece I

38:27mean in recent years extraordinary Italy Italy young Italians are all over the place they're leaving today as we speak

38:33they're leaving so do you think then I mean so let's build on this for a moment we we agree that the Euro Zone probably

38:39locks in permanent austerity industrial decline for some really big countries historically France Italy Greece as well

38:45of course Germany as well because remember the class analysis the lower bottom of the German population or

38:53income distribution are now 15% worse off than they were 20 years ago M although that yeah their capitalist

39:00class is doing very well yeah so well the great capitalist class are doing extremely well yeah the shipping

39:06magnetes yeah not just the shipping magnetes no I can give you names youan peris MOS M Andis they are not they

39:15don't make money so much out of shipping but they own the power generation and

39:22power distribution Network as a result of the privatization of our formerly nationalized power grid um they charge

39:30an anamin leg for that uh the cost of living Christ the energy crisis has allowed them

39:36to multiply by a factor of four their surpluses they own every single

39:44television station and anyone who dares speak their name in Parliament gets absolutely vilified and

39:52demonized so you know you have a dictatorship of those oligarchs who are

39:58come to Athens I'll take you to the northern suburbs you see the Lamborghinis and the Porsches and the Ferraris well I'll hold you to that yice

40:04yeah you can show me it's a very ugly very ugly scene what okay so what I would say I'm not suggesting for one

40:10moment that the German workingclass get a better deal out of it but what I would say is there is a fragment of Italian or

40:16French Capital who gets a really bummed deal out of this industrial Capital which comparatively speaking was getting

40:22a better deal 25 years ago that's where they were giving a lot of money from the the the Corona virus uh um Recovery Fund

40:31to keep them sweet and they kept them sweet they gave them something like you know 130

40:38billion to keep them happy let's talk about Co because this is interesting right because the pandemic was a major

40:44major Boon and it was you know Mana from heaven for the establishment Mana from

40:51heaven I'm not talking about vaccines and all that right I'm talking about an opportunity Unity to take on a lot more

40:59debt pile it up on the shoulders of the weaker of the working classes and

41:06distributed amongst themselves only in Greece in 18 months during the pandemic

41:12the rightwing government was allowed to borrow another 60 billion in a country where GDP is 190 that's a huge amount uh

41:20given that we were already hugely indebted they gave them another 60 billion to the money around that's why

41:27they won the election so the the there are these moments that we're chronicling in the rise of first the global minetor

41:32and then what you call techn feudalism 71 2008 and then more recently 2020 yeah

41:40and you claim really that after 2008 Western capitalism has a 1929

41:46moment but then through the years of QE and through the pandemic we basically see the end of of

41:53capitalism as we know it C can you explain why all this money printing that's primarily going to the top 0.01%

41:59or whatever we want to say why does that mean the end of capitalism and the transition to something else you see it depends on what you how you Define

42:05capitalism because people different people I I I have a Marxist definition of capitalism but not everybody does

42:11some people think oh the marketplace buying and selling not having the state telling you what to buy and how much to

42:17pay for it that's capitalism no it's not capitalism is a system based on the private ownership of the ESS means of

42:28production and the system which is predicated on profit that comes out of

42:33surplus value exploitation of Labor of wage labor and markets the whole point

42:38about the transition from feudalism to capitalism was that you had had the process of commod commodification of

42:46land as a result of the enclosures getting rid of the peasants and commodification of Labor during

42:52feudalism land and labor didn't have markets workers worked but they didn't they couldn't quit they didn't receive a

42:58wage just that the fud the Lord sent the sheriff over to collect rents from them okay so markets and profits the two

43:04pylons on which capitalism sits both of them are now optional and actually a

43:13sideshow instead of profits you have central bank money combined with Cloud rents rents you the 40% that you of the

43:22price you pay on Amazon retained by by Jeff basos all the surpluses that

43:28private Equity firms get remember three companies Black Rock straight State Street and vangard own 90% of all

43:35companies in the New York Stock Exchange they don't make profits they make rents so you have rent

43:42replacing profit and amazon.com like companies platforms replacing markets

43:48amazon.com Alibaba Uber they are not markets they are platforms where trading

43:55takes place by and selling outside the marketplace they're like digital foms

44:01owned by a techn feuda lord who collects rents remember Uber doesn't have cars in

44:08the same way that the landlord did not participate in production he simply collect it that's what Uber does that's

44:14what airbn Airbnb does that's what amazon.com does so if you replace the

44:19two pylons of capitalism with rent Cloud rent primarily and digital platforms and

44:25all that is founded on a foundation of cloud Capital what you end up is

44:32something which is not like Capital we could have called it capitalism I could have called the book digital capitalism I could have

44:40called it Cloud capitalism I could have called it um uh rener capitalism some

44:45people some of my colleagues like I standing called it rener capitalism but you see I think it's important to ditch

44:52the word capitalism why because if this was the the 17 70s uh and we were talking about the

44:59state of the world what was going on then capitalism was already upending and

45:05undermining feudalism taking over from feudalism we could have called the new system instead of calling capitalism we

45:12could have called it industrial feudalism but that would have robbed us of the opportunity to concentrate our

45:17mind that this is a great transformation this not feudalism anymore even though it would have been technically correct to call it industrial feudalism or

45:24Capital feudalism for the same reason I'm making the controversial claim that this is not

45:30capitalism anymore even though it is a result of the Triumph of capital before we go to the next question the thing

45:36about Amazon um I think can often be understated people think oh it's it like say these aren't necessarily Market

45:42transactions it even goes beyond that to an extent so for instance I'm sure people watching and listening to this

45:47are familiar with the Amazon Basics range M you know where you get a product which looks almost exactly the same as another one but it's you know 30%

45:53cheaper or whatever those products are created precisely because they have the analytics to look at the most profitable

45:59products with the best margins with the highest volumes sold uh lowest customer

46:05returns and they say let's make exactly the same thing so they don't just own the keys in terms of can I enter you

46:12know the Town Square to sell my goods and services they also have data that the sellers don't have themselves of

46:19course that is a whole point it's incredible same with Uber yeah incredible now why can't Uber driver get

46:26together and create their own app well they could but that app would not have

46:31all the data that Uber has of on you and me and including the drivers so it is

46:37this Cloud Capital the algorithm to put it this way this way the algorithm which

46:45creates the land the digital land where you must be in order to survive as a

46:51capitalist and therefore a vessel or as a cloud surf do you think

46:57we're going to have a war with China I very much fear so very much fear so every move that Biden is taking is uh

47:06one more step closer to um some kind of Confrontation of course I hope I'm wrong

47:15maybe it won't happen maybe it will happen but it is a clear and present

47:20danger because it seems to be something that people just underprice that you know the idea of a conflict between two

47:26Powers as geopolitical influence shifts from the West to the east all that can't happen I to me it sounds like a a recipe

47:33for disaster it is it is uh if you look at the nuclear war clock it's much

47:39closer to midnight now than it ever was so at least the nuclear scientists and

47:45the uh the peace movement that are running that particular measure of the

47:52risk that we're facing as a species uh are not under selling it H and and and

47:57given techn feudalism's concentration in the Western Hemisphere and East Asia

48:03does that mean Europe's over does that mean just Europe is finished yes Europe is over I was chatting with Andre Manuel

48:12the president of Mexico um a few months ago uh and we we had this this

48:18conversation and he said yanis look I you know as a Mexican I'm closer to Europe than I am to the United States

48:24culturally spiritually politically ideologically but Europe is irrelevant to us uh it's a bricks China in other

48:31words not a bricks the only thing that matters from the bricks is a sea China

48:37and our huge neighbor north of our border uh and I I see this wherever I go

48:44and it makes perfect sense look Aon let's let's just for a moment imagine

48:50with great hope that there is a peace process that starts for Ukraine tomorrow h this big table somewhere in the UN un

48:58Geneva wherever we know who will represent Ukraine zinski Russia Putin

49:05America Biden China X India Modi who's going to represent

49:10Europe you just ask yourself that question and then suddenly you realize how irrelevant Europe is because it it

49:17used to be Merkel Merkel had the political power and Cloud to do it Schultz doesn't macron doesn't why

49:26not only because they are peepsqueaks compared to Merkel they are but because

49:32anything they say will be Ved by the government of Poland the government of Lithuania Estonia Finland Sweden who

49:40considered them to be Putin's handmaidens both Schultz and macron I'm

49:46not passing value judgment I'm simply describing so the two countries that will have to pay for the Reconstruction

49:51of Ukraine will not be allowed to represent the European Union in these negotiations and so who will from The

49:58Lion I mean she she she she's only there because she failed as a minister in Mer's cabinet and Mer wanted to get rid

50:05of her and sent her to Brussels because in Brussels you can't hear them scream remember the line from borgan um so

50:13Europe is politically this political paralysis reflects the fact that we don't have any Cloud Capital yeah well I

50:20I would add as well Europe's demographic pyramid is a nightmare I mean China is is n great Europe is a nightmare if you

50:27include obviously the East and Central Europe energy resources yeah but you know that that's I insist Cloud Capital

50:33geography it is cloud Capital nothing else everything else we could have

50:38gotten out of if you don't have a competitor to Google a competitor to

50:44Uber a competitor to Facebook a competitor to Apple a competitor to

50:49amazon.com if every German or Italian or French or British producer has to go

50:56through those Cloud lists in order to sell their stuff even in Europe and you know Amazon makes 42

51:04billion every year only in Europe and pays zero zero tax

51:10zero well you're gone you're finished it's interesting as well with with Europe because recently the sort of

51:15spokes people and this isn't this might sound sort of like little England or something it's not meant to be it's just an observation the sort of spokespersons

51:23of the last two years of Europe and the whole Ukraine um Russia conflict have

51:29really been States people from smaller countries so this lady Kaya kalas I think from um Estonia yeah she she's

51:35speaking on behalf of the of Europe and you think well then Europe must be

51:40buggered because if you've got you can't have sarin or kalas speaking on the

51:46behalf of the German the French the Italian the British the Spanish people with regards to Big foreign policy

51:51choices because when push comes to shove they're going to say sod off I don't know who you are I've never seen you

51:57before but within the media discourse they go she's so brave she she might go work for NATO should be the general

52:02secretary or whatever we are def to Nato the EU has gone it's been replaced by NATO Stenberg whom we didn't know his

52:09name until the war in Ukraine suddenly he's running Europe and kalas look I wouldn't mind if a woman young woman

52:16from a small country represented me as a European I'd love that you know what I me if you ask her so what's the end game

52:25Define victory in the war in Ukraine the only logical answer

52:31consistent with what she wants and says is to take Moscow because she's talking about

52:37dragging Putin to the international court now I would like all these bastards to be dragged to the National

52:43Court including Tony Blair right uh of course of course I'd love I'd love that but how are you going to drag Putin to

52:49the international Court you have to take Moscow there's no other way or you're going to have to in site a coup in

52:56Moscow that will bring about regime change if that happens because Putin has killed off all the progressives whoever

53:03takes over from Putin will be worse than Putin so kalas miss Callas can you please tell me what your end game

53:09is her answer terrifies me that's is the problem I have with there's this huge

53:16disconnect between foreign policy and defense preferences and the electorat it's like the electorate don't matter

53:21450 400 million Europeans do not matter here's the final question you say that

53:27we've seen the the eclipse of capitalism really since 2008 you also think we've

53:32seen the death of liberalism and the idea of the liberal individual what does that have to do with Cloud Capital the

53:39whole point about liberalism is a celebration of the individual as a source of

53:45legitimacy a country a pol a political system is legitimate in the liberal mind

53:51to the extent that it represents the autonomous will of individuals remember

53:59Thatcher there is no suching Society it's only individuals families and individuals but if the individual has a

54:06relationship with Cloud Capital with Amazon's Alexa whereby the individual trains Alexa to train the individual to

54:12trade Alexa to train the individual to trade Alexa to put into the individual's mind what he wants or she wants or it

54:18wants where is this autonomy haek the greatest Guru of

54:24thater huh uh used to celebrate the market as a mechanism that not only finds the right

54:29prices to equilibrate demand and Supply but the mechanism that actually is allowing us to develop our own character

54:36he's used to say you know I go into a shop and come out with something I didn't even know I wanted so the

54:41marketplace shapes me as a person as an autonomous liberal individual on

54:49whom the whole liberal project is based but if it's not the market but a

54:55centrally planed system that the Soviet Union would love to have had because that's what amazon.com is it's a

55:01centrally planed machine that belongs to one man who could be Jeff basis who could be Joseph

55:07Stalin then where is the liberal individual in this gone in a buff of

55:12smoke so basically this idea that there's a tyranny really of big Tech and it doesn't just inflect economies but

55:19are are sort of very psyche in Psychology I mean that's a that's a big claim but it is Aon look I was talking

55:25to some students of mine a couple of years ago and young people who wanted a

55:32reference for me to find a job go and study at postgraduate level

55:38and I saw this I saw this in full Technic color you know they were angren because they know that when they go to

55:44get interviewed for whatever to go to university but primarily to get a job in a a good job the interviewer will have

55:50checked their social media presence footprint every photo that they upload every video on Tik Tok at midnight they

55:58know or they assume will be seen so there's no demarcation between work and

56:04play and they are constantly trying to imagine what kind of self they should

56:10create in their own bosom in their own soul that will appeal to Google or to

56:16Facebook or to a good employer that's the end of the liberal individual to conclude it sounds like we're we're

56:22returning to feudal Europe but with uh a touch of the stazzy doesn't sound good I mean that's a good stazy would have

56:28loved Cloud Capital they would be kicking themselves because you know they created all these amazing mechanisms for

56:35surveillance and you know this we volunteered our information to this Wiki

56:40starzy on that note Janis it's a great book thanks so much for joining us today thank you so

56:45much hello I'm yanis vakis I'm at Novara media and I have a message for

56:51you the best way of of uh underpinning

56:56any kind of potential resistance to a very toxic

57:02establishment without being populist anti-establishment and by supporting good rational humanist

57:11causes is to support leftwing media like Novara media Novara media and all such

57:18media need your support because they certainly do not have the support of the

57:23establishment

57:29[Music]

57:36capm

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