Socialists have been hotly anticipating the end of capitalism since at least 1848, when Marx and Engels published
The Communist Manifesto - but the
Manifesto also reminds us that capitalism is only too happy to reinvent itself during its crises, coming back in new forms, over and over again:
Now, in
Technofeudalism: What Killed Capitalism, Yanis Varoufakis - the “libertarian Marxist” former finance minister of Greece - makes an excellent case that capitalism died a decade ago, turning into a new form of feudalism: technofeudalism:
To understand where Varoufakis is coming from, you need to go beyond the colloquial meanings of “capitalism” and “feudalism.” Capitalism isn’t just “a system where we buy and sell things.” It’s a system where
capital rules the roost: the richest, most powerful people are those who coerce workers into using their capital (factories, tools, vehicles, etc) to create income in the form of
profits.
By contrast, a
feudal society is one organized around people who
own things, charging others to use them to produce goods and services. In a feudal society, the most important form of income isn’t
profit, it’s
rent. To quote Varoufakis: “rent flows from privileged access to things in fixed supply” (land, fossil fuels, etc). Profit comes from “entrepreneurial people who have invested in things that wouldn’t have otherwise existed.”
This distinction is subtle, but important: “Profit is vulnerable to market competition, rent is not.” If you have a coffee shop, then every other coffee shop that opens on your block is a competitive threat that could erode your margins. But if you own the building the coffee shop owner rents, then every other coffee shop that opens on the block raises the property values and the amount of rent you can charge.
The capitalist revolution - extolled and condemned in the
Manifesto - was led by people who valorized profits as the heroic returns for making something new in this world, and who condemned rents as a parasitic drain on the true producers whose entrepreneurial spirits would enrich us all. The “free markets” extolled by Adam Smith weren’t free from
regulation - they were free from
rents:
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