Technofeudalism: What Killed Capitalism

by Yanis Varoufakis

Given the limited sales of US goods to China, that American customer would not be forthcoming if the US did not have a trade deficit with China. Additionally, America would not be able to maintain this trade deficit without the dollar’s global dominance. In short, for the said ton of aluminium to ship from China to some port on America’s west coast, two things are necessary: the dollar’s exorbitant privilege and the red ink all over America’s trade balance with China. TikTok, in contrast, has no need for additional dollars from American customers in order to produce new products for its US market. With its servers, algorithms and fibre optic cables already in place, produced and maintained by domestic Chinese monies, throwing one more viral video to its American customer base comes at zero additional (or marginal) cost. This is crucial: TikTok can, therefore, syphon cloud rents from the US market into China without relying on either America’s trade deficit or the dollar’s supremacy. Without a need for dollars to create its cloud capital, TikTok uses it to rake in its dollar-denominated cloud rents directly, seamlessly and at the speed of light. Power, thus, is shifting in a way that reduces the value of the Dark Deal to America’s ruling class and state.