Technofeudalism: What Killed Capitalism

by Yanis Varoufakis

Beneath the surface, however, the heat of war had transformed American capitalism at a molecular level, just as the heat of our fireplace had transformed iron into steel. By the war’s end, American capitalism was unrecognisable. Business and government had become profoundly entwined. Indeed, the revolving doors between government departments and corporations saw to it that the same crowd of mathematicians, scientists, analysts and professional managers populated them both. The heroic entrepreneur at the helm of the corporation and the democratically elected politician at the head of the government had both been usurped by this new private-public decision-making network, whose values and priorities – indeed its survival – boiled down to one thing: the survival and growth of the conglomerates now that the war, with its infinite demand for stuff and technologies, was over. Galbraith called this nexus the technostructure. Profitability remained essential for the army of technicians and influence-wielding employees making up the technostructure. Nevertheless, profit was no longer their top priority. As with all bureaucracies, their primary goal was to keep their underlings employed and busy. This meant they had not merely to avoid the shrinking of their conglomerates at the war’s end, but to grow them.