Technofeudalism: What Killed Capitalism

by Yanis Varoufakis

When it comes to international trade and payments, a new international financial system guarantees continual wealth transfers to the Global South, while also restraining trade and financial imbalances of the type that inflate bubbles and cause financial crashes. The idea is that all trade and all money movements between different monetary jurisdictions – such as the UK, Germany, China and the United States – are denominated in a new digital international accounting unit, which I called the Kosmos. If the Kosmos value of a country’s imports exceed its exports, the country is charged an imbalance levy, in proportion to its trade deficit. Equally, if a country’s exports exceed its imports, it is also charged the same levy in proportion to its trade surplus. This terminates the mercantilist motive for one country persistently to extract value from another country by selling to it goods of greater value than those it imports from it, and, subsequently, lending them the money to continue buying from it – a form of vendor finance that places the weaker country in permanent debt bondage.