Thanks to Erin McCarley for her contributions to this article. The writing and any mistakes are all my own, but her insights were invaluable for the creation of this piece.
Yanis Varoufakis has been back in the news lately with the release of his new book Another Now. He was recently interviewed on Democracy Now and was also a guest on Briahna Joy Gray’s Bad Faith. In each of these interviews, he describes his vision of a post capitalist future. Newsweek describes him as a “world-renowned economist” and “a rockstar politician.” He has recently been championing a new theory that techno-feudalism is replacing capitalism as the modern economic model.
This is how capitalism ends: not with a revolutionary bang, but with an evolutionary whimper. Just as it displaced feudalism gradually, surreptitiously, until one day the bulk of human relations were market-based and feudalism was swept away, so capitalism today is being toppled by a new economic mode: techno-feudalism. - Yanis Varoufakis
In this video, Yanis expands on his theory that we no longer live in capitalism. He makes the claim that once you enter an online portal like Facebook or Amazon, you are no longer under capitalism because it is controlled by one entity. It would appear that Yanis is not familiar with the concept of a “company town.” These existed under capitalism, they were not outside of capitalism. They were in fact a natural extension of the capitalist system.
The Cumberland Blues by the Grateful Dead tells the tale of living in what was likely a company town. There are several Cumberland mines in history, so I was unable to determine if there was indeed a company town at one of them. It tells the tale of working class struggle quite well though, with the dilemma of being able to spend time with loved ones or working in the mine to afford to continue a meager existence.
Yanis is simply describing monopoly capitalism and surveillance capitalism. This is not some new economic system, just late stage variations of capitalism. Monopoly capitalism is naturally what the capitalist system leads to. Yanis claims to be a Marxist, yet ignores historical materialism which is a foundation of Marxism. Marx describes this tendency toward monopoly capitalism in Capital Vol 1:
This splitting-up of the total social capital into many individual capitals or the repulsion of its fractions one from another, is counteracted by their attraction. This last does not mean that simple concentration of the means of production and of the command over labour, which is identical with accumulation. It is concentration of capitals already formed, destruction of their individual independence, expropriation of capitalist by capitalist, transformation of many small into few large capitals. This process differs from the former in this, that it only presupposes a change in the distribution of capital already to hand, and functioning; its field of action is therefore not limited by the absolute growth of social wealth, by the absolute limits of accumulation. Capital grows in one place to a huge mass in a single hand, because it has in another place been lost by many. This is centralisation proper, as distinct from accumulation and concentration. - Marx, Capital Volume 1, Chapter 25
Engels also alludes to the same concept in Socialism Utopian and Scientific:
The whole of a particular industry is turned into one gigantic joint-stock company; internal competition gives place to the internal monopoly of this one company. This has happened in 1890 with the English alkali production, which is now, after the fusion of 48 large works, in the hands of one company, conducted upon a single plan, and with a capital of 6,000,000 pounds.
In the trusts, freedom of competition changes into its very opposite — into monopoly; and the production without any definite plan of capitalistic society capitulates to the production upon a definite plan of the invading socialistic society. Certainly, this is so far still to the benefit and advantage of the capitalists. But, in this case, the exploitation is so palpable, that it must break down. No nation will put up with production conducted by trusts, with so barefaced an exploitation of the community by a small band of dividend-mongers.
Amazon is not fundamentally different from any other monopoly under capitalism. Simply because it makes use of modern technology does not change the capitalist system. Just as if someone enters a Walmart, they do not leave capitalism, the same is true with Amazon. Yanis’ assertion that this is a new economic system of techno-feudalism is absurd and has no material basis.
In addition to this talk of techno-feudalism, Yanis has long been pushing his own vision of what a post-capitalist future could look like. Rather than the standard Marxist approach of socialism leading to communism, Yanis has his own unique take with very little in common with Marxism. This vision is actually so far out there that Yanis chose to publish it as science fiction rather than economic theory in his book Another Now. I admit that I have only skimmed through the book, but it included many of the theories described by Yanis in this video:
These concepts include the fantastical need for three separate types of bank accounts in this theoretical future. One bank account would be created for every baby that is born - an automatic trust fund created by the central bank. A second account is created into which the central bank places an amount every month - a universal basic income for every citizen. And then a third account, which is for wages. This brings up several questions - considering the power that central banks hold in the present, why should they be given more power with three bank accounts? One of these bank accounts is for wages. In a post-capitalist world, why is wage slavery still in existence? After all, as Yanis is presenting this vision as a science fiction piece, why stop so short of the goal of communism?
Instead of the conservative motto: “A fair day's wage for a fair day's work!” they ought to inscribe on their banner the revolutionary watchword: “Abolition of the wages system!" - Marx, Value, Price and Profit
The UBI he proposes is not supposed to cover basic needs, he actually recommends a small amount - perhaps 100$. Exactly what is the purpose of this? How does an extra 100$ a month impact anything? Universal basic resources makes much more sense than a UBI and the same goes for the birthday bank account - the universal trust fund. Would it not make more sense for everyone to provided with housing, education, internet, cell phones, water, electricity, and food rather than a couple bank accounts? It is material gains for the people that matter and a few different bank accounts isn’t going to fix this.
When it comes to international trade and payments, Another Now features an innovative global financial system that continually transfers wealth to the global south, while also preventing imbalances from causing strife and crises. All trade and all money movements between different monetary jurisdictions (eg the UK and the eurozone or the US) are denominated in a new digital accounting unit, called the Kosmos. If the Kosmos value of a country’s imports exceeds its exports, it is charged a levy in proportion to the trade deficit. But, equally, if a country’s exports exceed its imports, it is also charged the levy. Another levy is charged to a country’s Kosmos account whenever too much money moves too quickly out of, or into, the country – a surge levy of sorts that taxes the speculative money movements that do such damage to developing countries. All these levies end up as direct green investments in the global south. - Yanis Varoufakis, Capitalism Isn’t Working, Here’s an Alternative
As can be seen, Yanis also wants to create a new “Kosmos” currency that is to be used to balance out the inequality between countries on a global scale. A country that has a surplus or a deficit deposits into this “Kosmos” account which is in then used to spend on poorer countries. This is an overly complex system that could easily just be replaced with climate reparations which would account for the damage done to the global south in the past as well as the current exploitation. This is something that Fadhel Kaboub has actually addressed from an MMT perspective in this article and in the Macro and Cheese podcast.
After explaining the “Kosmos” currency, Yanis continues with his conception of a post capitalist future including surge levies and social vs. commercial land trusts. When we already have various models for socialism, there is no reason to need Yanis’ complicated machinations of Another Now. We live in a current now, not an alternate reality and the material conditions of the day will determine the form that the transition to socialism will take in the future.
When it comes to ending capitalism and creating a sustainable future for the people of the world, we need real answers, not science fiction. We need a strong ideological basis coming from Marx - not whatever Yanis is. To paraphrase Marx’s opinion on the revolutionary phrase-mongers Jules Guerde and Paul LaFargue, if Yanis is a Marxist, then I am not a Marxist.
Of course, Yanis is not a Marxist - he dabbles with ideologies like anarcho-syndicalism (renamed corpo-syndicalism) but is at heart a Varoufakianist living in his own fantasy land of absurdities like birthday bank accounts and techno-feudalism. Rather than paying attention to Yanis, the left needs to break from him and return to its Marxist roots. We should pay attention to people like Richard D. Wolff, John Bellamy Foster, William Robinson, Robin DG Kelley, Keeanga Yamahtta-Taylor, Alan Woods, and Adolph Reed and leave Yanis behind.
I understand why some are attracted to Varoufakis. It's more fun to delve into fantasy than the overwhelming reality of global monopoly capitalism. How can we accept the solution from someone who is so wrong about the problem? As Birrion points out, YV's solution is whack: it implies that economics is about money, not the distribution of resources.
I think you’re doing a real disservice to important practical and strategic questions by dismissing Varoufakis. Whether one identifies him as a Marxist or not is less than important. He has his shortcomings, as we all do, but I see those shortcomings in his devotion to weak pseudo-democratic institutions and other more specious areas. Rarely have I ever found an thinker who speaks the language of mainstream economics and is so well read in Marx. If you draw different conclusions, that is all well an good, but these appeal to authority attacks and woefully out of context critiques are beneath you. There’s a lot more to Varoufakis’ project than you give him credit for here.