Yanis Varoufakis
We never had an “international order” and there was never an “international rule of law.” Where do we start: Iraq, Afghanistan, Vietnam before that?
My concern is that we’re putting too much — but also too little — emphasis on BRICS. It’d be a huge mistake for progressives to do what they used to do with the USSR, to imagine that, whatever its authoritarian aspects, at least it’s the counterweight to the United States. Let’s not think of the BRICS that way.
India’s Narendra Modi is a fascist. Saudi Arabia and the United Arab Emirates, who are edging closer to BRICS, have a currency that is pegged to the US dollar. With BRICS, they are creating a plan B for themselves, not for the world’s dispossessed. The most interesting part of the BRICS is China. It contains the most progressive and the most authoritarian forces on this planet. A huge class struggle is going on there as we speak.
In my recent book Technofeudalism, I offer an analysis of the new Cold War between the US and China. The essence of the new developments lies in what I call “cloud capital.” This is a kind of capital which is algorithmic, based on the internet, on Big Tech. It’s not like a robot that makes cars or a steam engine: for the capital that lives in your laptop or your phone is a produced means of behavioral modification, that grants its owners tremendous power to extract rents from workers, capitalists, and users alike.
That same cloud capital is the foundation for a new kind of payment system. And there are only two bundles of cloud capital. One is to be found in the US, the other is China. Nobody else has cloud capital worth talking about. If my hypothesis holds water, we are seeing a huge rivalry between these two mega cloud fiefdoms. And what really concerns the United States is this: the only reason why the United States has been hegemonic since the late 1960s and early ’70s, after they lost their trade surplus to the rest of the world, is because of the exorbitant privilege of the dollar. The payment system is in dollars, which means that the US faces no trade or budget constraint. Even though it has a huge current account deficit, it continues to buy stuff from the rest of the world because it pays in dollars that it prints — dollars that are recycled back to Wall Street and to American government debt as capitalists from all over the world send their dollars back to the US to buy US government debt, shares, and property.
The dollar payment system hasn’t been challenged so far. But the combination of Chinese cloud capital and Chinese finance, which is separate from US finance, can become an international digital payment system, alternative to the dollar. That’s why Saudi Arabia is interested in China and the BRICS: they want access to that alternative payment system because they saw what happens if you fall foul of Washington. You can have $300 billion confiscated, which is what happened to Russia after they invaded Ukraine. This is the reason why we have a new Cold War: because they are trying to quash the capacity of Chinese cloud capital to antagonize the dollar payment system.
