“I’m 64, politics is boring. It makes me sick but I keep doing it”cowardly, in dull anger, Yanis Varoufakis. The former Greek finance minister, who clashed swords with the European Union’s top leaders during Greece’s debt crisis in 2015, now wants to focus on “raise public awareness”. A fight that the economics professor is waging through the left-wing pan-European party Diem25 which he co-founded, and through his books. He comes to present his « 17e or 18e » opus dedicated this time to the era of “techno-feudalism”. Ce “casual Marxist” denounces it “yoke of algorithm-patterns” who enslave « technos-prolos ».
THE TRIBUNE – You denounce a world where Big Tech enslaves individuals, going so far as to assert that “capitalism is dead, replaced by techno-feudalism”. However, statistical data (World Inequality Database) show that over the last two decades, globalization and technological revolutions have enabled notable advances: reduction in extreme poverty, reduction in hunger, increase in life expectancy, banking, etc. In 2024, is there no room for an optimistic vision of human progress?
YANIS VAROUFAKIS – In “The New Serfs of the Economy”*, I adopt a dialectical approach, refusing to reduce reality to a simplistic opposition. It is often easy to divide people into two camps: those who celebrate globalization and those who oppose it. The reality is much more nuanced. The history of humanity bears witness to successive technological revolutions, starting with agriculture, followed by the Iron Age. The mastery of steel opened the way to new forms of wealth, enabling the construction of magnificent cities and extraordinary achievements for the human spirit. However, these revolutions also intensified the anxieties of those who were excluded from them, those who did not directly participate in these upheavals. Capitalism illustrates this duality. Karl Marx, in the first pages of his Manifestfirst celebrates capitalism, recognizing its successes. But very quickly, he also highlights the devastation it causes, particularly in terms of poverty. It ultimately depends on what we choose to measure in statistics, like the ones you mention.
Let’s take a historical example: when British colonists landed in Australia in the 18th century, a country where I lived for several years, Captain Cook and his men were fascinated by the life of the Aborigines. The latter enjoyed flourishing health, lived on hunting, rituals, art, poetry. They only worked two hours a day, which provoked both envy and ridicule from the British, who accused them of laziness. In reality, the lives of the settlers were marked by illness and constant toil. Now look at the situation of the approximately 900,000 aborigines who survived the genocide perpetrated by the whites. Today they are struck by scourges like diabetes and alcoholism. So, sure, 300 years ago, their per capita income was technically zero. But if you just compare that to current statistics, which show higher incomes, you are being dangerously naive.
Today, middle class incomes are eroding due to inflation. Who is primarily responsible?
Inflation first finds its source in the Covid-19 crisis, which seriously disrupted production chains, creating an imbalance between supply and demand. This rupture was exploited by the petro-monopolies, who seized the opportunity to increase prices. Supermarkets were then allowed to follow this trend. The same goes for electricity prices, controlled by a cartel that operates, in many ways, like a mafia. Contrary to what one might believe, there is no real electricity market in Europe. What we call a “market” is only an illusion, an artificial construction put in place by the States themselves. The latter manipulate prices and hide their actions behind the pretext of inflation.
The French state debt has exploded to more than 3,220 billion euros, or 110.7% of GDP. How to solve the French debt problem?
You do not have a debt problem in France. What is causing you harm is that France no longer controls its currency. As a deficit country within the euro zone, France is no longer economically viable. Let’s go back to 1964: Valéry Giscard d’Estaing, then Minister of Finance under General de Gaulle, went to Berlin to propose to his German counterpart, Rolf Dahlgrün, the creation of a common Franco-German currency. An idea which was, unsurprisingly, refused, at the time, by Berlin. Because when you merge the currencies of countries where one is in a deficit and the other in a trade surplus, you inevitably introduce a structural imbalance. The only way to balance such divergences is to adopt floating exchange rates. However, by linking the French currency to that of Germany, this imbalance only worsens, exacerbating the trade deficit. To compensate, France must then impose budgetary austerity. But this freezes investments, with companies anticipating a slowdown in consumption. At the same time, public aid is decreasing while social needs are increasing. Result: the state is forced to borrow more to fill the gap. The French debt thus becomes the symptom of a deeper problem, and not the cause. Unlike Japan in a similar debt situation, France is no longer truly a sovereign state in monetary matters. The problem therefore goes beyond national borders: it concerns the entire euro zone. With Germany’s tech recession and the continent’s overall industrial decline, Europe is unable to compete with massive investments from China and the United States. The absence of a real European federal Treasury, supported by the European Central Bank (ECB), is the real tumor that is undermining the economy of the Old Continent.
Can Europe regain its sovereignty?
Yes, provided that it unites and admits that the creation of a common currency was a mistake.
Who should hold the power of money?
I consider myself a radical democrat. The people should have control of the currency. However, out of 100 euros in circulation, 97 are created by private banks, while only 3 euros are created by the ECB. This leads to immense power inequality. We could consider an ECB application allowing every citizen to open an account, where transactions would be free and secure. To avoid inflation while stimulating demand, the ECB could credit each account with 200 euros. However, this would represent formidable competition for banks.
Isn’t this digital euro project already being studied at the ECB level?
No, not really, because the banks will not let such power escape them. Although Christine Lagarde, the ECB and the Fed are in favor of this initiative, the banks retain a preponderant influence over these institutions. The digital euro project will therefore be limited and will only aim to compete with the Chinese e-yuan. In addition, the digital euro is not based on the principles of a cryptocurrency. I am in favor of a public cryptocurrency, as opposed to private systems like bitcoin. Although the bitcoin algorithm is impressive and fascinating, and which I have seen in its white paper a potential to solve problems that we have not yet identified, it should not replace a real currency.
It is essential to be able to adjust the total quantity of currency issued—bitcoin being limited to 21 million digital tokens—in order to be able to absorb economic shocks, such as those we experienced during the Covid crisis. Also, a political system is necessary to increase or decrease the volume of money in circulation. We cannot separate politics and economics. Additionally, speculation surrounding bitcoin means there is no incentive to use it as a means of payment, such as buying a coffee. The more valuable bitcoin is, the less useful it becomes. Finally, the increase in demand creates a bitcoin oligarchy, where millionaires get rich. This system, which is based on a decentralized register, should in reality be used as a public register. It is crucial that the people control their currency.
With “cloud capital”, you explain that the quest for profit of the industrial era has been replaced by that of digital rent. Who maintains this new quest?
People have always sought to get rich, even under capitalism. However, something has changed. Until now, the economic model was inspired by the Middle Ages. In France, lords exploited peasants, artisans and small businesses, collecting rents on their land. The baron could take up to half of the agricultural production. Then, the great cathedrals and sumptuous palaces were built thanks to these rents.
With the advent of capitalism, the power of wealth extraction shifted from rent extortion to profit creation. When Henry Ford or Thomas Edison founded the first large companies, they restricted the market to establish a monopoly, taking advantage of the gap between the cost of production and the selling price.
However, if we look at Amazon and Jeff Bezos’ model, we see that he doesn’t sell anything produced. It has established digital strongholds where producers and consumers coexist, but it is not a market in the traditional sense. In a market, there is decentralization and choice. On Amazon, it is the algorithm that dictates our purchases, taking into account our individual behaviors. This algorithm knows our preferences perfectly and maximizes sales prices so that Bezos receives his income, which is a percentage of each sale. The capital Bezos owns differs radically in how he extracts this rent in exchange for our data. Each time you leave a comment or a trace, you feed its “cloud capital”.
Can we put an end to these monopolies, as the European Union is trying to do with antitrust measures?
It is entirely possible to do this. However, the answer does not lie in regulation. The efforts of Brussels and the EU to control this cloud capital are absolutely pathetic. In the case of the old version of capital, it was possible to dismantle giants like Standard Oil, which was distributed among the 50 American states. But what to do with companies like Facebook, which operate on a global scale and without borders? Instead of just regulating, it is crucial to change the ownership rights of algorithms. We need to socialize cloud capital. Property should become common. Currently, we face applications like Uber, owned by the financial holding company State Street Corporation. The City of Paris should develop its own solution, but this failed because Uber or even Airbnb would have to be banned, provided that Parisians could participate in decisions regarding prices and offers.
What message would you like to send to young people?
There is a new force in your company called “cloud capital” that you fuel every time you use TikTok or Instagram. It’s fun and useful, and I’m all for social media. But they are controlled by people who undermine your social life, poisoning conversations about topics like the environment and climate. It is necessary to have a convergence of views with a synthesis. These algorithms prevent this because they fuel anger and hatred.
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*“The new serfs of the economy”, Les éditions qui liberate, September 11, 2024.
Comments collected and translated by Jeanne Dussueil.
