Yanis Varoufakis: How the Pandemic Has Sped Up the Passage to Postcapitalism

[Winehole23]

In the post-2008 world, speculators – for the first time in history – don’t actually give a damn about the economy. They, like you and me, can see that Covid-19 has put capitalism in suspended animation. That it is crushing corporate profit margins while also the destroying lives and livelihoods of the many. That it is causing a new tsunami of poverty with long-term effects on aggregate demand. That it demonstrates in every country and every town the pre-existing deep class and race divides, as some of us were privileged enough to keep social distance rules while an army of people out there laboured for a pittance and at risk of infection to cater to our needs.


No, what we are living through now is not your typical capitalist disregard for human needs, the standard tendency of the capitalist system to be motivated solely by the needs of profit-maximisation or, as we lefties say, capital accumulation. No, capitalism is now in a new, strange phase: Socialism for the very, very few (courtesy of central banks and governments catering to a tiny oligarchy) and stringent austerity, coupled with cruel competition in an environment of industrial, and technologically advanced, feudalism for almost everyone else.
https://www.nakedcapitalism.com/2020/08/something-remarkable-just-happened-this-august-how-the-pandemic-has-sped-up-the-passage-to-postcapitalism.html

[Winehole23]

Following the crash of 2008, capitalism changed drastically. In their attempt to re-float the crashed financial system, central banks channelled rivers of cheap debt-money to the financial sector, in exchange for universal fiscal austerity that limited the middle and lower classes’ demand for goods and services. Unable to profit from austerity-hit consumers, corporations and financiers were hooked up to the central banks’ constant drip-feed of fictitious debt.

[Winehole23]

This was the process by which, from 2008 to 2020, the policies to re-float the banking sector from 2009 onwards resulted in the almost complete zombification of corporations. Covid-19 found capitalism in this zombified state. With consumption and production hit massively and at once, governments were forced to step into the void to replace all incomes to a gargantuan extent at a time the real capitalist economy has the least capacity to generate real wealth. The decoupling of the financial markets from the real economy, that was the trigger for this talk, is a sure sign that something we may defensibly label postcapitalism is already underway.

[Spurtacular]

:lol "Postcapitalism"

[Winehole23]

:lol "Postcapitalism"

There's no way you read through one minute after I posted.

No problem, here's a nutshell, Varoufakis actually describes a hybrid system:


No, capitalism is now in a new, strange phase: Socialism for the very, very few (courtesy of central banks and governments catering to a tiny oligarchy) and stringent austerity, coupled with cruel competition in an environment of industrial, and technologically advanced, feudalism for almost everyone else.

[Winehole23]

State support for elite wealth and financial markets, austerian misery for *almost* everybody else.

[Winehole23]

State support for elite wealth and financial markets, austerian misery for *almost* everybody else.The consistency this theme since 2008 looks Chinese-style to me.

[Ef-man]

The consistency this theme since 2008 looks Chinese-style to me.

Pearls before swine Winehole, you throw pearls before swine.

The power of Christ compels you derp, be gone, be gone! Quick, Winehole, the holy water!

[Winehole23]

Pearls before swine Winehole, you throw pearls before swine.

The power of Christ compels you derp, be gone, be gone! Quick, Winehole, the holy water!Capitalism v. Socialism drew a few replies, capitalism turning into socialism for elite rentiers and feudalism for everyone else, *crickets*

[Ef-man]

:lol


Capitalism v. Socialism drew a few replies, capitalism turning into socialism for elite rentiers and feudalism for everyone else, *crickets*

Like a cheap suit, derp folds.

[Winehole23]

:lol



Like a cheap suit, derp folds.He never held any cards, tbh

[ElNono]

In today’s world, it would be a mistake to try to find any correlation between what is going on in the real world (of wages, profits, output and sales) and in the money markets. Today, there is no need for a correlation between ‘news’ (e.g. a newsflash that some large multinational fired tens of thousands) and share price hikes.

This is somewhat what I was referring to in the other thread where we discussed economics books from a few centuries ago. They're good books to read what economies looked like back in the day, and for some small economies, they still have some relevant information.

However, our current financial system no longer behaves necessarily under the traditional rules. The advent of fiat and securitization of seemingly limitless products mean you can actually make money (if you have seed money) without the inherent risks of production (in the form of wages, output, sales, benefits, etc). Sometimes, much more money. And so the traditional rules no longer apply to these kind of economic markets. Even the labor market has been diluted greatly with the capitalist 'optimization' of globalization. Wealth of Nations didn't foresee (and rightly so) complete replacement of the local workforce with those of oppressed nations. And so the local economy doesn't behave in accordance with those unwritten rules. Those excluded now have to move on to either a services economy, producing and selling non-tangible goods, or re-train for a different industry, in what's likely a lower standard of living and/or eventually go through the same inevitable replacement.

We've seen a lot of people enchanted by demagogues promising the future is going to look like the past. It's not going to happen. It would require undoing and unlearning decades of advances in tech, science, etc, and it's simply an untenable position.

[Spurtacular]

There's no way you read through one minute after I posted.

Clutching your pearls won't get it done.

[Winehole23]

Clutching your pearls won't get it done.No topical comment.

A very typical Spurtacular post, wholly devoid of relevance beyond personal spite.

[Spurtacular]

No topical comment.

A very typical Spurtacular post, wholly devoid of relevance beyond personal spite.

Sure I have a point. These shysters need to rebrand sh** to try and validate their trash.
It's on par with SNL being rebranded from comedy to postmodernism.

[Winehole23]

Sure I have a point. These shysters need to rebrand sh** to try and validate their trash.
It's on par with SNL being rebranded from comedy to postmodernism.lol buzzwords.

You don't know shit about Yanis Varoufakis, and you didn't read the short talk.

STILL WAITING FOR A TOPICAL REPLY...other than the ever thoughtful El Nono.

[boutons_deux]

The world’s largest wealth manager explains how

the Fed has completely altered how the stock market works — and

says the S&P 500 can climb another 9% by next June



The Federal Reserve's unprecedented monetary easing decoupled the stock and Treasury markets, but it might play right into investors' hands, Mark Haefele, chief investment officer at UBS (https://markets.businessinsider.com/stocks/ubs-stock?utm_source=markets&utm_medium=ingest), said Thursday.
Treasury yields typically rise when stocks do, but the Fed's forecast of near-zero rates lasting for years led Treasurys to sink as stocks soared higher.
"Investors now face a stark choice" between following precedent and exiting stocks or believing in the Fed's influence and piling into the market, Haefele said.
If the equity risk premium falls to its five-year average and Treasury yields only moderately recover, the S&P 500 (https://markets.businessinsider.com/index/s&p_500?utm_source=markets&utm_medium=ingest?utm_source=markets&utm_medium=ingest) could jump as much as 9% by June, according to the investment chief.


https://markets.businessinsider.com/news/stocks/stock-market-outlook-ubs-haefele-federal-reserve-easing-boost-prices-2020-8-1029525440

[Winehole23]

reading the tea leaves, Varoufakis sees capitalism slipping into techno-feudalism


Perhaps the clearest sign that something serious is afoot appeared on August 12 last year. On that day, we learned (https://www.project-syndicate.org/commentary/covid19-and-postcapitalist-economy-by-yanis-varoufakis-2020-08) that, in the first seven months of 2020, the United Kingdom’s national income had tanked by over 20%, well above even the direst predictions. A few minutes later, the London Stock Exchange jumped by more than 2%. Nothing comparable had ever occurred. Finance had become fully decoupled from the real economy.





Then, after 2008, everything changed. Ever since the G7’s central banks coalesced in April 2009 to use their money printing capacity to re-float global finance, a deep discontinuity emerged. Today, the global economy is powered by the constant generation of central bank money, not by private profit. Meanwhile, value extraction has increasingly shifted away from markets and onto digital platforms, like Facebook and Amazon, which no longer operate like oligopolistic firms, but rather like private fiefdoms or estates.
That central banks’ balance sheets, not profits, power the economic system explains what happened on August 12, 2020. Upon hearing the grim news, financiers thought: “Great! The Bank of England, panicking, will print even more pounds and channel them to us. Time to buy shares!” All over the West, central banks print money that financiers lend to corporations, which then use it to buy back their shares (whose prices have decoupled from profits). Meanwhile, digital platforms have replaced markets as the locus of private wealth extraction. For the first time in history, almost everyone produces for free the capital stock of large corporations. That is what it means to upload stuff on Facebook or move around while linked to Google Maps.
It is not, of course, that traditional capitalist sectors have disappeared. In the early nineteenth century, many feudal relations remained intact, but capitalist relations had begun to dominate. Today, capitalist relations remain intact, but techno-feudalist relations have begun to overtake them.
If I am right, every stimulus program is bound to be at once too large and too small (https://www.project-syndicate.org/commentary/goldilocks-stimulus-myth-no-amount-just-right-by-yanis-varoufakis-2021-03). No interest rate will ever be consistent with full employment without precipitating sequential corporate bankruptcies. https://www.yanisvaroufakis.eu/2021/07/05/techno-feudalism-is-taking-over-project-syndicate-op-ed/

[Winehole23]

Yes, capitalism has undergone extreme makeovers at least twice since the late nineteenth century. Its first major transformation, from its competitive guise to oligopoly, occurred with the second industrial revolution, when electromagnetism ushered in the large networked corporations and the megabanks necessary to finance them. Ford, Edison, and Krupp replaced Adam Smith’s baker, brewer, and butcher as history’s prime movers. The ensuing boisterous cycle of mega-debts and mega-returns eventually led to the crash of 1929, the New Deal, and, after World War II, the Bretton Woods system – which, with all its constraints on finance, provided a rare period of stability.


The end of Bretton Woods in 1971 unleashed capitalism’s second transformation. As America’s growing trade deficit became the world’s provider of aggregate demand – sucking in the net exports of Germany, Japan, and, later, China – the US powered capitalism’s most energetic globalization phase, with a steady flow of German, Japanese, and, later, Chinese profits back into Wall Street financing it all.


To play their role, however, Wall Street functionaries demanded emancipation from all of the New Deal and Bretton Woods constraints. With deregulation, oligopolistic capitalism morphed into financialized capitalism. Just as Ford, Edison, and Krupp had replaced Smith’s baker, brewer, and butcher, capitalism’s new protagonists were Goldman Sachs, JP Morgan, and Lehman Brothers.
While these radical transformations had momentous repercussions (the Great Depression, WWII, the Great Recession, and the post-2009 Long Stagnation), they did not alter capitalism’s main feature: a system driven by private profit and rents extracted through some market.


Yes, the transition from Smithian to oligopoly capitalism boosted profits inordinately and allowed conglomerates to use their massive market power (that is, their newfound freedom from competition) to extract large rents from consumers. Yes, Wall Street extracted rents from society by market-based forms of daylight robbery. Nevertheless, both oligopoly and financialized capitalism were driven by private profits boosted by rents extracted through some market – one cornered by, say, General Electric or Coca-Cola, or conjured up by Goldman Sachs.