Technofeudalism: What Killed Capitalism

by Yanis Varoufakis

At least Europe is still rich and, in theory, able to look after its weaker citizens. The same cannot be said for Sri Lanka, Lebanon, Pakistan, India, most of Asia and the whole of Africa and Latin America. The rising price of food and fuel caused by the Great Inflation has pushed the Global South into a debt crisis as gruesome as that of the 1970s and 80s. Having been encouraged for decades to borrow dollars to import raw materials in order to produce goods for export (and also to facilitate the conversion of their oligarchs’ domestic profits into US assets), the governments of the Global South are now being bankrupted by the vastly increased cost of servicing their dollar debts.[19] The Global South faces an appalling choice. Default on their dollar debts, which means they won’t be able to buy the energy, food and raw materials they need to feed their people, run their factories and plough their fields. Or get another dollar loan from, say, the International Monetary Fund with which they can pretend to repay their existing dollar loans under two inhuman conditions: first, by handing over control of their essential sectors, such as water, electricity, to oligarchs masquerading as ‘investors’; second, by pushing domestic fuel and food prices up so high that their people will go hungry. Either way, these so-called developing countries are being forced to surrender to the dynamic of underdevelopment.