2023’s masterpiece maps out the unexpected demise of “Capitalism”…
Preamble: --Let us not get stuck on surface labels (which social media seems to amp2023’s masterpiece maps out the unexpected demise of “Capitalism”…
Preamble: --Let us not get stuck on surface labels (which social media seems to amplify into binary "agree"/"disagree" divisiveness) and forget to dive into the substance (where there is much to synthesize). --After all, how can a single term (even “capitalism”) encapsulate the contradictory mess of the real world (without many asterisks noting contradictions)? …Instead, I treat these concepts as lenses to view the world. Think of the difference between a microscope’s lens and a telescope’s lens. Each starts with certain assumptions (and limitations) which allows each to focus more clearly on certain observations. Depending on our questions, some lenses are indeed more useful than others. The challenge is to remember each lens’ assumptions when we try to synthesize the specific observations into a totality. --So, let us use the “Technofeudalism” lens and see what we can (and cannot) observe (i.e. from the history of capitalism to today’s New Cold War on China/war in Ukraine/Musk buying Twitter, etc.)…
Highlights:
1) ”Historical materialism”: a lens for human history: --It is a crime that so much of “history” is taught as a series of names/dates/events, missing the forest for the trees (on systems not being merely the sum of its parts, see: Thinking in Systems: A Primer). No wonder there is so much confusion with “human nature”, culture, and social change. --The gist of the “historical materialist” lens is to start with: i) Material conditions needed for human reproduction, ii) How humans relate to such material conditions to produce their needs, and the resulting class relations/political bargaining powers (which is reflected in culture, i.e. the stories that narrate our value system). …For more, see "What is Politics"? video series; start from the beginning, and note episodes: -"6. Political Anthropology: When Communism Works and Why" -"7. The Origins of Male Dominance and Hierarchy; what David Graeber and Jordan Peterson get wrong" -"7.1 Material Conditions: Why You Can't Eliminate Sexism or Patriarchy by Changing Culture" -"8. Materialism vs. Idealism: How Social Change Happens" --Varoufakis applies “historical materialism” using insights he received from his parents, which he later found in Marx’s works. In particular, a historical materialist lens views history as a process. Why process (i.e. change)? Why didn’t humans just figure out an optimal means of material conditions relationships and stick with it? …Along with the variations and changes in material conditions and class conflict, we find another key concept that plagues Marx: contradictions. Marx’s empiricist critics can say this is a black-box cop-out (i.e. how can we prove you wrong when you can say both yes and no?). But these empiricist critics are themselves plagued with quantification bias, by missing the importance of what they cannot quantify. Varoufakis found his father’s contractionary views of technology in Marx [emphases added]:
In our days, everything seems pregnant with its contrary: Machinery, gifted with the wonderful power of shortening and fructifying human labour, we behold starving and overworking it; The newfangled sources of wealth, by some strange weird spell, are turned into sources of want; The victories of art seem bought by the loss of character.
--Varoufakis’ father leans more on materialism in conceptualizing how human history sped up through its relations with technology: stone, then bronze, then iron. Varoufakis later pairs this by emphasizing the social (class/political bargaining power) side [emphases added]:
I speculated about what would have happened had James Watt invented the steam engine in ancient Egypt:
The most he could have expected is that the ruler of Egypt would have been impressed and placed one or more of his engines in his palace, demonstrating to visitors and underlings how ingenious his Empire was.
My point was that the reason the steam engine changed the world, rather than ending up a showpiece in some ruler’s landscaped garden, was the epic raid on the common lands that had preceded its invention: the enclosures [see later].
2) Feudalism to Capitalism: --The aforementioned “Enclosures” are key in Polanyi’s “great transformation” from feudalism to capitalism, by creating the 3 peculiar capitalist markets of land/labour/money: i) land: privatization of Common lands (the “Enclsoures”) aimed to use these lands to produce commodities (i.e. wool) for the global market (the new source of wealth/power, rather than feudal lords merely sitting on land), thus creating the land market ii) labour: the dispossessed serfs became the labour market. iii) money: proto-capitalists in the wool industry started with credit/debt from the money market. Under capitalism, finance precedes production. …See Varoufakis’ Talking to My Daughter About the Economy: or, How Capitalism Works—and How It Fails. --Varoufakis reminds us of this prior transition [emphases added]:
As consecutive mutations multiply the variants of an organism until, at some point, a brand-new species appears, so technological change proceeds within a social system until, suddenly, the system has been transformed into something quite distinct, though that doesn’t mean that all of the materials out of which the system is built – capital, labour, money – have necessarily changed. […]
Suppose we were living in the 1770s [First Industrial Revolution], as the first steam engines began driving the water pumps that kept the mines dry and turning the wheels of William Blake’s ‘dark satanic mills’. […] we would not be wrong to speak of an emergent ‘industrial feudalism’ or ‘market feudalism’. Technically, we would be correct.
In the 1770s, and for at least another century, wherever one looked one saw feudalism. Feudal lords dominated rural areas, owned the freehold titles of most city blocks, commanded armies and navies, and presided over parliamentary committees and government bodies. Even in the 1840s, as Marx and Engels were writing their manifesto in response to the worldwide effects of the capitalist class, most production was still taking place under the auspices of the old feudalist class, the landed gentry. Land ownership remained the main source of political authority and rent continued to be more powerful than profit, especially in the aftermath of the Napoleonic Wars [1803-1815] when landlords regained the upper hand over capitalists by banning grain imports with their Corn Laws [1815-1846].
And yet something critically important would have been lost if those who forged the language of that era had been reluctant to ditch the word feudalism, choosing to call the nascent system not capitalism but industrial or market feudalism. By boldly calling it capitalism, a century before capital had fully dominated our societies, they opened humanity’s eyes to the great transformation unfolding around them as it was happening.
3) “Capitalism”: volatility and contradictions: --Varoufakis centers Adam Smith’s distinction between: a) Profits: new wealth initiated by capital investments, which other capitalists can also initiate, thus profit is vulnerable to market competition over prices/quality. b) Rent: privileged access to a fixed supply (the obvious example being nature’s resources, esp. land and fuel). --Note: for profits, Smith focuses on the production of “real commodities”, where the rising wealth/power of the global market drove the "great transformation" from landlord feudalism to Industrial Capitalism. Classical liberal economics anticipated the latter, with the value system switching from land (feudal ownership) to labour (key input in commodity production; i.e. the Classical “labour theory of value”, focusing on reducing the cost of production, ex. the factory's “economies of scale”). ...However, there's an obvious growing contradiction that Varoufakis does not seem to emphasize. The rise of the global market (in “real commodities”) led to the creation of capitalism’s 3 peculiar markets (land/labour/money), which feature “fictitious commodities” (humans/nature/money) which are not “produced” (with a “cost of production” calculated by capitalists) simply to be bought/sold on markets. These 3 capitalist markets are particularly susceptible to rent-seeking! i) land: ground rent ii) labour: imperialist rent, unwaged care-work iii) money: usury (interest) --Note: Smith had a major contradiction in his works on the source of profit, between (a) capitalists employing their capital vs. (b) labourers doing the work (“labour theory of value”); Smith also conveniently assumed capitalists obtained their capital through hard work/savings (i.e. “primitive accumulation”, where primitive means “prior” and later critics assumed as “violent”), which Marx critiques in the last part (“Part 8: So-Called Primitive Accumulation”) of Capital: A Critique of Political Economy, Volume 1 highlighting the violence of the enclosures/creation of capitalist property/markets (given Marx’s appreciation of class conflict). --Varoufakis stresses how rent survived as a parasite, thus the driver (host) has been profit. Parasites require disguise, thus rent has tried to disguise itself as profits (ex. oil companies access/real estate ground rent/privatized utilities monopolies). --Elsewhere, Varoufakis notes how steel was still rare in the First Industrial Revolution, and the primary material reliance was on slavery/colonialism. I would synthesize this observation with the profit vs. rent definitions given by Smith, as Classical (liberal) economics had major omissions: i) imperialism (Capital and Imperialism: Theory, History, and the Present), ii) environment (Less is More: How Degrowth Will Save the World; also, Jason W. Moore centers “cheap nature” in defining capitalism), and iii) social reproduction/care-work (The Invisible Heart: Economics and Family Values). …Thus, rent may be a parasite on profit, but profit is a parasite on all these “externalities” (beyond direct exploitation of wage labour); centering profit as the key driver of capitalism is useful in recognizing capitalist accounting, but we must also account for the externalities which capitalism requires to reproduce itself. --By the Second Industrial Revolution (1870-1914 WWI), steel becomes mass produced, and private bank money facilitates mass production. However, the capitalist contradiction of saturated markets (falling rate of profit/lack effective demand) led to imperialist rivalries leading to global industrial carnage (late 19th century Europe/WWI/WWII).
...See the comments below for the rest of the review: "4) Capitalism’s mutations" "5) Technofeudalism"...more
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