The idea that we are entering an era of techno-feudalism that will be worse than capitalism is chilling and controversial. We asked former Greek finance minister Yanis Varoufakis to elucidate this idea, explain how we got here, and map out some alternatives.
lol Yanis is def making the rounds cuz of his new book. He also talked about this on Adam Conover’s podcast, Factually a few weeks ago.
iirc he’s saying that we’re at the point where some of the richest people have moved from owning the means to actually produce things to providing platforms for exchanging goods for money to happen on, while basically charging rent. He compares it to feudalism in that a company like Amazon or Apple with its app store are feudal lords who come in and collect money off of each transaction made by the “serfs” (people who sell and buy things on these markets), basically in exchange for being allowed to list. And increasingly, its getting harder and harder to do business without dealing with one of these tech giants. I think he mentioned how WeChat is another good example of this in China, where they’re involved in like everything
I read a similar article a few weeks ago, and I think your concise summary is better than the article linked in this post.
I think Yanis goes a bit overboard with stating that capitalism kinda no longer exists, since it really is about a new group of rich people simply inserting their companies as evil middlemen who leach money off the whole system.
I’m not sure the solution has to be revolutionary or super complex. I’d think that large countries and groups of countries (e.g. USA, the EU) could implement their own mega marketplaces, leaching off much less money and avoiding the sort of corrupt BS that Amazon etc do to keep prices artificially high, and these governments could also stop allowing the mega platforms to do business in their region. Big countries want to facilitate an economy, and if private industry is proving to be too broken with their current approach, governments could step in to create more functional marketplaces that still work nicely in the internet age and don’t have horrible middlemen crap dragging everything down.
The difference between rents and profits in economics is crucially important tho, and so many people in these threads seem not to get it. one is progressive and at least in theory moves us closer to post scarcity. and the other does the complete opposite. Yanis is right to emphasize that difference. And his proposals are perfectly market based- he wants to use the government to create competition for the current digital rentiers. if you force them to compete again so they might get back to providing added value instead of just being leeches.
People love to harp about Radical Marxist Muslim Obama but he was onto the same thing with his “public option”. Just like it is now hard to live without interacting with big tech, it’s hard to live without interacting with private health insurance. And in the same way, health insurance can never be a truly free market because the opportunity cost of not buying insurance is well, you know…
Have you read his book? I’d be curious what he suggests. I’ve just thought that if you could legislate to make marketplaces use some kind of “activitypub” protocol, you could federate them similar to social media. A protocol and open standard to exchange prices, descriptions, order conditions etc. So people could use alternatives to amazon/ebay and still have access to the large network of vendors. That would break the digital fiefdom. Is that something he discusses?
The new EU payment directive also finally created instant wire transfers, so it’s now possible to directly and instantly pay vendors without having to pay a tax to paypal.
Maybe the next thing is going to be delivery services with drones or self driving “micro vans”.
Nationalize Amazon.
Federate Amazon! Imagine a kind of protocol / standard to exchange prices, descriptions, images, sale conditions, guarantees etc similar to activity pub. then you could use the same network of vendors as amazon.
But it probably needs more regulations because amazon is so huge and powerful to destroy competitors.
Maybe also federate / split up fulfillment warehouses.
We do need to give them the Ma Bell treatment.
We need the equivalent of keeping the phone lines and phone numbers compatible though. So that all the vendors that are on amazon can use a commonly shared internet protocol to also sell on other platforms, otherwise the network effects are lost and make splitting them up and true competition impossible.
ya middlemen is a good term for it. I don’t think that it really needs an entirely separate branding from capitalism, but idk i guess that also makes for an eye catching headline.
I agree that governments have the tools to deal with these kinds of things. It’s just getting them to actually do something about it that’s beneficial to us as average people is the tough part lol.
They are not just middlemen, they control the entire sales platform - both buyer and seller.
I do think a new term makes sense because these platforms both scale ultra large so “explode” in market power, and also can’t just be broken up using anti-trust laws because then the network effects of large network effects vanish (this is true for amazon and social media). So it is something different because of those new properties. I think federation and open protocols might be the answer to this.
Exactly! I’ve been saying this for a while that certain market places like amazon and ebay should become more public utility. I think craig’s list is the rare example of something actually owned by a person that is not just optimizing for profit. Social media should similarly be federated, which now with e.g. lemmy and mastodon seems much more plausible.
Another example is that the recent payment service directive has finally created instant wire transfers - e.g. I can wire money instantly to a shop without having to wait a few days or needing a payment processor. It’s insane that it took 30 years for instant payments. So maybe the 1.5% to 3% tax that paypal sucks out of ecommerce economy can finally end.
So maybe marketplaces could be federated as well and supported by regulations. For example some kind of open standard to exchange price info and order conditions etc. so that different services can use the same network of vendors and the customer can easily move from amazon or ebay to other alternatives without loosing the market network.
So if there is techno-feudalism it definitely can be dismantled politically. Thanks for your comment, and thanks to Varoufakis - this is actually a very valuable insight I believe. I remember like 10 years ago people started talking about the monopolies rising out of the internet and how they should be broken up. But it was clear to me that classic anti-trust measures wouldn’t work, because there are network effects that are incredibly valuable. You don’t want to split up facebook because 10 separate social media are much less useful. But maybe now we’re at a point where we have the arguments (techno-feudalism) and the solutions (federation and regulations like a protocol like activitypub) to suggest actual policy! 🙂
@PositiveNoise idk, seems to me the big countries suffer from too much legislative capture for that.
I live in a country where I do my taxes for free with one click and we don’t use paypal because we can all make free bank- to- bank deposits that clear in less than an hour.
And the reason the US doesn’t have these basic things I’ve had for a decade is because of lobbying from Turbotax and the like.
Isn’t that exactly what the EUs DMA is trying to address
Interesting, it seems so, but the DMA isn’t “marketed” as such or explains the problem and doesn’t suggest plausible solutions. What is needed I think is a kind of federation for marketplaces, so they need to use some kind of open protocol that allows others to use the same network of vendors etc. But it seems you could build on top of the DMA.
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