Technofeudalism: What Killed Capitalism

by Yanis Varoufakis

The kernel of German capital’s power and success is high-precision mechanical and electrical engineering. German car makers, in particular, have profited by building high-quality internal combustion engines and all the parts that are necessary to convey motion from such engines to a car’s wheels: the gear-boxes, axles, differentials and so on. Electric vehicles are mechanically much simpler to engineer. Most of their surplus value – and the profit they afford – derives from the software that runs them and connects the car to the cloud and the data that derives in turn from that. The Great Inflation, in other words, is forcing German industry to produce goods that rely a lot more on cloud capital than traditional capital. The problem, then, is this: compared to their American and Chinese counterparts, German capitalists failed to realise soon enough the benefits of investing in cloud capital – of becoming cloudalists – and lag far behind in this new game. In practical terms, they are manufacturing themselves out of a competitive position. Unable to collect sufficient cloud rents, German surpluses will suffer and so will the economy of a European Union – and its citizenry – reliant on German surpluses.