"When ‘Bitcoin maximalists’, as you call them, wax lyrical about the inability to print money (and celebrate this inability as Bitcoin’s feature, rather than its bug), they are being terribly unoriginal – banal, I dare say. Capitalism nearly died in 1929, and tens of millions did die in the war that ensued, because of this toxic fallacy that underpinned the Gold Standard then and Bitcoin now. Which fallacy? The fallacy of composition, as John Maynard Keynes called it.
Its essence is a tendency to extrapolate from the personal realm to the macroeconomic one. To say that if something is good for me – if a practice is sound at the level of my family, business, etc. – it must also be good for the state, government, humanity at large"
""We seem to have forgotten how Marx and Engels had the nous and the ability, on the one hand, to admire and celebrate the technological and scientific wonders of their era and, on the other hand, grasp that these potentially liberating technologies were bound to enslave the many if they became instrumentalised by the very few. The two Germans believed in the emancipatory potential of the steam engine and of electromagnetism. But, they never believed that society would be liberated by the steam engine and/or electromagnetism. Liberation required a political movement that first overthrows the bourgeoisie and only then presses these magnificent technologies into the service of the many. This seems to me an excellent way of approaching today’s potentially liberating technologies, including blockchain"
"During the 20th century, and up to this day, workers in large capitalist oligopolistic firms (like General Electric, Exxon-Mobil, or General Motors) received approximately 80% of the company’s income. Big Tech’s workers do not even collect 1% of their employer’s revenues. This is because paid labour performs only a fraction of the work that Big Tech benefits from. Who performs the bulk of the work? Most of the rest of us! For the first time in history, almost everyone produces for free (often enthusiastically), adding to Big Tech’s capital stock (that is what it means to upload stuff on Facebook or move around while linked to Google Maps). And, moreover, this capital takes a new, far more powerful form"
Does this really make sense in terms of actual dollars? There is just no way that google spends less than 1% of its income on employees, right? Even 10% is way way too low. It’s probably closer to to 35% with another 25% or so going to keeping the lights on (data centers are expensive).
What am I supposed to make of the rest of the argument when it’s predicated on a number that is probably off by 50x?
You are 99% misreading/misunderstanding the quote.
They said WORKERS not EMPLOYEES
Sure, Google puts a lot of its revenue to its EMPLOYEES. But most of the WORK is done by the rest of the public giving Google all the content and data via the way the products utilize the searching and driving around and so on.
The claim is not what's internal to Google's business accounting. The claim is that they have externalized almost all the work to the unpaid users of the systems who actually produce the value overall.
(the quote is a tad confusing because they said "employer's revenues", that seems like an error in speaking/writing; the next part makes it clear what they are aiming to say)
> paid labour performs only a fraction of the work that Big Tech benefits from
We can nitpick the hyperbole of particular wordings. Did peasants on traditional feudalism work for free? I mean, they ostensibly got the military protection of the lords.
What if everyone gave their data to Open Street Map instead?
But sure, there's a point about users that generate the value in these tech platforms do also get value from the services. Whether the value is worth the cost is another matter. What's clear is that users don't have much say in the arrangement. The corporations have the organized power, the users are divided and disorganized. There's no users' union.
Any Google Maps user can switch to Open Street Map on a whim unlike feudalism peasants. Arguably, the current best economic theory basically says that because exchange takes place assuming users are rational enough, the exchanged value is identical.
One would need a stronger argument than calling it "work for free" here, when it is obviously not free.
Varoufakis was doing the hyperbole by saying "work for free" when he knows that people get some value. We can nit-pick the hyperbole, but the gist is still a fine enough point about the value being mainly from the users and extracted for profit by the platforms.
> Arguably, the current best economic theory basically says that because exchange takes place assuming users are rational enough, the exchanged value is identical.
I'll take that argument. If that's the best economic theory, it just validates my assertion that the field of economics is mostly a farce.
That "theory" is nothing but a say-so assertion that doesn't even try to look for evidence. It's unfalsifiable BS.
Some platforms provide great value. But the world is full of cases of middle-men and gatekeepers that have worked their way into that position and are little more than extractive. They might as well not exist. The reason people choose to go through them is for the value they get from the end exchange, not because they prefer to go through the middle-man. It all depends on the particular cases. The phenomenon of rent-seeking middle-men is not some myth.
What is the problem exactly with extracting value from easily available content created by many others? This is exactly what public education does, reading books, etc
Are you arguing about techno-feudalism or just being defensive about anyone criticizing businesses?
The whole discussion here is about the idea of power dynamics. It isn't about the boring waste-of-time topic of just attributing "value" conceptually. If you enjoy playing Mozart's music on the piano, that has "value" to you, but "extraction" is a poor metaphor, and there's no power dynamics at play, it's just life.
The only thing interesting in this topic is the question of concentrated power and who has power to control decisions about how things are set up in society. Google has set up an arrangement where they are extremely profitable and a relatively small number of people get to decide how their platforms work, and the divided users only have the choice to take-it-or-leave-it (and network effects push them into it, schools and businesses and others use the systems, you better also, and the mere fact of all the value captured there makes it hard for competition to arise).
This is a question of organizing, collective action etc. The executives at Google can make decisions and they have a whole organizational system to carry out their will. There's no organized power for the users. The label "techno-feudalism" doesn't argue that value doesn't exist or that the serfs are literal slaves.
He says his "techno-feudalism" is displacing capitalism because the fat controllers of the tech world get their labour for nothing.
The fact that people participate in global location networks, rely on other parties for their security and so on, is contingent; it might change (I'm ever the optimist).
It's perfectly possible to simply not participate in techno-serfdom. Unless you're professionally dependent on TwitFace.
I'm "relevant" to me; if I'm relevant to others, that's cool, but not a big deal. I don't have "competitors".
This "relevant" and "competitors" business seems to be about email marketing. There is no entitlement to use other people's mailservers and networks for your own private purposes.
This thread sounds like something from NANAE, around 2000AD.
I like Varoufakis a lot. To me one of the more interesting points in the article is the one he makes towards the end, that technological firms have switched from a capitalistic mode of production (extracting profits from markets) towards what he calls techno-feudalism (extracting rents outside the market).
It's always surprising to me that so few people seem to notice that tech platforms, where a lot of human activity is organized on now, to a large extent have completely left behind market mechanisms, instead relying on algorithmic prediction and planning, and replacing profit generation with financialization by either the state or a sort of aristocracy.
I think this is directly visible in the different generations of tech companies. Whereas Apple and Microsoft started out as companies that relied on selling units of products at a surplus for profit and had to pay labour expenses in the form of wages to a large base of salaried employees, the modern VC funded generation of platform firms does no such thing, rather you have VC investors finance the activity of platforms who don't generate profits at times for decades, and derive value directly from the experience of their users outside of any exchange of money, and the value is largely being generated by an unpaid base of workers who are not even in any employment relationship.
Is this really an accurate description of big tech? That doesn’t match my impression of Amazon for instance. I suppose FB has been machine learningized, but there wasn’t a market there to begin with nor is particularly clear to me that FB is exploitative in a labor sense (10$ profit per year per user in the US) regardless of any other ethical considerations. The algorithm does rule social media, but it always has and we’ve seen monopolies in all forms of media in the past. Social media’s influence has grown, but it only partially overlaps with big tech. Apple does have a closed garden (kingdom), but they are mostly in the business of making really good phones. Does this theory have any unique predictive power? Like, big tech has some problems, social media has some problems, and the fed has some problems - they sometimes intersect in interesting ways but not in the sense of a grand narrative.
> “Within our present oligarchic, exploitative, irrational, and inhuman world system, the rise of crypto applications will only make our society more oligarchic, more exploitative, more irrational, and more inhuman.”
Varoufakis assumes the current world system will continue to apply but on the scale of human history the current world system is a novelty and there is no reason to expect it to be stable in the long term.
True, the current system needs to create money at a whim so it doesn't want to bitcoin to flourish. It also needs to print money so it can't exist if bitcoin flourishes.
He does state that when (not if) we move beyond the current system, distributed ledgers will become a useful tool.
> I consider blockchain, and Ethereum-style mechanisms, as technologies that will prove extremely useful once private property in the means of production ends. But, on their own, these technologies will not liberate us from the extractive power of the few.
Author is full of big words but cannot obfuscate their lack of logic, which is pretty evident. For example in this quote first we say there is no utility, but then say maybe there is utility. This renders rest as meaningless big word soup.
"In that sense, NFTs offer nothing new within digital worlds, except perhaps that they turbocharge the ideology of capitalism (exchange value rules supreme). In the analogue world, NFTs have value only to the extent that bragging rights offer utility to those who care for them."
I found this long, and a bit difficult to read, but that's because it conveys a huge amount of knowledge (or is it really, just opinion?) that confirms many things I've suspected.
I've seen the Fed and Congress have a gun to their heads, and now the Wall Street gang, and the Tech Bros have the world held hostage. One can only hope that this hostage negotiation ends better than it did last time in 1929.
Question: what can I do as an individual who might believe our current system needs an overhaul but feels powerless? If only a small percent of the people in my society care, how can things change? Voting clearly does not help to make change, as the field has been captured by two ideologies that mostly fight just to ensure no third party can edge in. I see articles constantly that say things like this, but with zero effective solutions.
31 comments
[ 4.4 ms ] story [ 78.8 ms ] thread"When ‘Bitcoin maximalists’, as you call them, wax lyrical about the inability to print money (and celebrate this inability as Bitcoin’s feature, rather than its bug), they are being terribly unoriginal – banal, I dare say. Capitalism nearly died in 1929, and tens of millions did die in the war that ensued, because of this toxic fallacy that underpinned the Gold Standard then and Bitcoin now. Which fallacy? The fallacy of composition, as John Maynard Keynes called it.
Its essence is a tendency to extrapolate from the personal realm to the macroeconomic one. To say that if something is good for me – if a practice is sound at the level of my family, business, etc. – it must also be good for the state, government, humanity at large"
""We seem to have forgotten how Marx and Engels had the nous and the ability, on the one hand, to admire and celebrate the technological and scientific wonders of their era and, on the other hand, grasp that these potentially liberating technologies were bound to enslave the many if they became instrumentalised by the very few. The two Germans believed in the emancipatory potential of the steam engine and of electromagnetism. But, they never believed that society would be liberated by the steam engine and/or electromagnetism. Liberation required a political movement that first overthrows the bourgeoisie and only then presses these magnificent technologies into the service of the many. This seems to me an excellent way of approaching today’s potentially liberating technologies, including blockchain"
"During the 20th century, and up to this day, workers in large capitalist oligopolistic firms (like General Electric, Exxon-Mobil, or General Motors) received approximately 80% of the company’s income. Big Tech’s workers do not even collect 1% of their employer’s revenues. This is because paid labour performs only a fraction of the work that Big Tech benefits from. Who performs the bulk of the work? Most of the rest of us! For the first time in history, almost everyone produces for free (often enthusiastically), adding to Big Tech’s capital stock (that is what it means to upload stuff on Facebook or move around while linked to Google Maps). And, moreover, this capital takes a new, far more powerful form"
What am I supposed to make of the rest of the argument when it’s predicated on a number that is probably off by 50x?
They said WORKERS not EMPLOYEES
Sure, Google puts a lot of its revenue to its EMPLOYEES. But most of the WORK is done by the rest of the public giving Google all the content and data via the way the products utilize the searching and driving around and so on.
The claim is not what's internal to Google's business accounting. The claim is that they have externalized almost all the work to the unpaid users of the systems who actually produce the value overall.
(the quote is a tad confusing because they said "employer's revenues", that seems like an error in speaking/writing; the next part makes it clear what they are aiming to say)
> paid labour performs only a fraction of the work that Big Tech benefits from
From that perspective the quote above is a lie: workers receive service in exchange for data they generate. It is in his own Google Maps example.
What if everyone gave their data to Open Street Map instead?
But sure, there's a point about users that generate the value in these tech platforms do also get value from the services. Whether the value is worth the cost is another matter. What's clear is that users don't have much say in the arrangement. The corporations have the organized power, the users are divided and disorganized. There's no users' union.
Any Google Maps user can switch to Open Street Map on a whim unlike feudalism peasants. Arguably, the current best economic theory basically says that because exchange takes place assuming users are rational enough, the exchanged value is identical.
One would need a stronger argument than calling it "work for free" here, when it is obviously not free.
> Arguably, the current best economic theory basically says that because exchange takes place assuming users are rational enough, the exchanged value is identical.
I'll take that argument. If that's the best economic theory, it just validates my assertion that the field of economics is mostly a farce.
That "theory" is nothing but a say-so assertion that doesn't even try to look for evidence. It's unfalsifiable BS.
Some platforms provide great value. But the world is full of cases of middle-men and gatekeepers that have worked their way into that position and are little more than extractive. They might as well not exist. The reason people choose to go through them is for the value they get from the end exchange, not because they prefer to go through the middle-man. It all depends on the particular cases. The phenomenon of rent-seeking middle-men is not some myth.
The whole discussion here is about the idea of power dynamics. It isn't about the boring waste-of-time topic of just attributing "value" conceptually. If you enjoy playing Mozart's music on the piano, that has "value" to you, but "extraction" is a poor metaphor, and there's no power dynamics at play, it's just life.
The only thing interesting in this topic is the question of concentrated power and who has power to control decisions about how things are set up in society. Google has set up an arrangement where they are extremely profitable and a relatively small number of people get to decide how their platforms work, and the divided users only have the choice to take-it-or-leave-it (and network effects push them into it, schools and businesses and others use the systems, you better also, and the mere fact of all the value captured there makes it hard for competition to arise).
This is a question of organizing, collective action etc. The executives at Google can make decisions and they have a whole organizational system to carry out their will. There's no organized power for the users. The label "techno-feudalism" doesn't argue that value doesn't exist or that the serfs are literal slaves.
Perhaps they are being tricked into this, but that is a separate problem, which article does not address.
The fact that people participate in global location networks, rely on other parties for their security and so on, is contingent; it might change (I'm ever the optimist).
It's perfectly possible to simply not participate in techno-serfdom. Unless you're professionally dependent on TwitFace.
This "relevant" and "competitors" business seems to be about email marketing. There is no entitlement to use other people's mailservers and networks for your own private purposes.
This thread sounds like something from NANAE, around 2000AD.
It's always surprising to me that so few people seem to notice that tech platforms, where a lot of human activity is organized on now, to a large extent have completely left behind market mechanisms, instead relying on algorithmic prediction and planning, and replacing profit generation with financialization by either the state or a sort of aristocracy.
I think this is directly visible in the different generations of tech companies. Whereas Apple and Microsoft started out as companies that relied on selling units of products at a surplus for profit and had to pay labour expenses in the form of wages to a large base of salaried employees, the modern VC funded generation of platform firms does no such thing, rather you have VC investors finance the activity of platforms who don't generate profits at times for decades, and derive value directly from the experience of their users outside of any exchange of money, and the value is largely being generated by an unpaid base of workers who are not even in any employment relationship.
Varoufakis assumes the current world system will continue to apply but on the scale of human history the current world system is a novelty and there is no reason to expect it to be stable in the long term.
True, the current system needs to create money at a whim so it doesn't want to bitcoin to flourish. It also needs to print money so it can't exist if bitcoin flourishes.
> I consider blockchain, and Ethereum-style mechanisms, as technologies that will prove extremely useful once private property in the means of production ends. But, on their own, these technologies will not liberate us from the extractive power of the few.
I've seen the Fed and Congress have a gun to their heads, and now the Wall Street gang, and the Tech Bros have the world held hostage. One can only hope that this hostage negotiation ends better than it did last time in 1929.
Approval voting is the best simple-next-step reform.
Volunteer for town planning commission or whatever advisory group has an open spot in your town or county.
Run for board seat on town council. Easier is to apply for seat on local credit union board of directors.
Show up and be friendly and learn. Keep your world-changing ideas to yourself for a couple years while you learn.