Technofeudalism by Yanis Varoufakis

Author:Yanis Varoufakis [Varoufakis, Yanis]
Language: eng
Format: epub
ISBN: 9781529194500
Publisher: Penguin Random House UK
Published: 2023-10-05T00:00:00+00:00

The case of German cars and green energy

German car makers were dealt a double blow by the Great Inflation: rising fuel prices not only put their customers off but elevated the energy cost of making cars. The German press went so far as to agonise over the country’s possible de-industrialisation. While their angst was justified, their analysis missed the point.

German car makers will probably continue to produce as many cars in the future as they did in the past for the simple reason that they have been relatively swift to invest in the transition from manufacturing the petrol-powered automobiles of the past to the electric vehicles of our future. You might think, then, that the hastening of the shift to electric cars, caused by energy price inflation, would work in their favour. Not so much.

The kernel of German capital’s power and success is high-precision mechanical and electrical engineering. German car makers, in particular, have profited by building high-quality internal combustion engines and all the parts that are necessary to convey motion from such engines to a car’s wheels: the gearboxes, axles, differentials and so on. Electric vehicles are mechanically much simpler to engineer. Most of their surplus value – and the profit they afford – derives from the software that runs them and connects the car to the cloud and the data that derives in turn from that. The Great Inflation, in other words, is forcing German industry to produce goods that rely a lot more on cloud capital than traditional capital.

The problem, then, is this: compared to their American and Chinese counterparts, German capitalists failed to realise soon enough the benefits of investing in cloud capital – of becoming cloudalists – and lag far behind in this new game. In practical terms, they are manufacturing themselves out of a competitive position. Unable to collect sufficient cloud rents, German surpluses will suffer and so will the economy of a European Union – and its citizenry – reliant on German surpluses.

A similar story can be told about the energy sector. Once the pandemic receded and energy prices surged, Big Oil and Gas made a fortune. The fossil fuel industry has had a second wind, similar to that enjoyed by landowners during the Napoleonic Wars, due to the disruption of corn imports into Britain. But second winds do not last long. Just as capitalist profit overcame the short-term revival of feudal lords’ fortunes as the memory of the Napoleonic Wars receded, so the Great Inflation is already expanding cloud capital’s reach into the energy sector.

The fossil fuel industry is an unholy alliance of feudal-style contracts and terrestrial capital: it relies on licences to drill on particular patches of land or ocean bed, for which governments and private landlords receive old-fashioned ground rent. It also relies on old-fashioned capital goods, including oil rigs, tankers and pipelines, to feed fossil fuels into large, highly concentrated, vertically integrated power stations which, both aesthetically and economically, are not so dissimilar from a ‘dark satanic mill’ of the nineteenth century.

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