Technofeudalism: What Killed Capitalism

by Yanis Varoufakis

Many hoped that the inflation resulting from blockages in the supply chain would be mild. The expectation that inflation would be ‘transitory’ had a logic to it: workers’ bargaining power in the 2020s was a shadow of its former self, when in the 1970s mighty trades unions could push for wage rises above the inflation rate. It followed that with only limp wage rises to support them once government furlough schemes and income support came to an end, the purchasing power of the masses would simply be depleted by rising prices, demand for goods would ebb and prices would fall. It hasn’t panned out that way. Inflation is never just a monetary phenomenon – just as money is never just a token of exchange value. When, for whatever reason, prices surge across the board, a social power game is afoot in which everyone attempts to suss out their bargaining power. Business managers try to work out how far they can raise prices – if not to profit then, at least, to recoup their own rising costs. Rentiers, both traditional and cloudalist, test the water with rent hikes. Workers assess the extent to which they can push for a pay rise – at least to compensate for the higher bills they must meet. Governments play the game too: do they intervene by using the greater income and VAT tax receipts flowing from the rising prices to assist weaker citizens being crushed by inflation? Or do they subsidise Big Business as it is squeezed by high energy prices? Or do they do nothing much? Until these q...