Technofeudalism: What Killed Capitalism

by Yanis Varoufakis

As Trump was to find out, China was no Japan. Being outside of America’s defence umbrella, its soil free of giant US army bases like the one in Okinawa, Beijing felt none of the need to defer to Washington that Tokyo revealed in 1985. Crucially, China also had its own Big Tech to bolster its position, especially its impressive cloud finance capabilities. Unsurprisingly, faced with Trump’s aggressive move, China held its own within the Dark Deal and continued to recycle Chinese profits into American assets. Not only did Beijing not succumb to pressure to revalue the yuan (as Japan had ruinously agreed to do with the yen), its Big Tech conglomerates, like Huawei and ZTE, licked their significant wounds and set about creating their own operating system and platform software. Despite the great costs involved, China’s rulers understood that their future relied on not handing over their cloud capital, and of course their cloud finance, to America.