This week hub Book review Patrick Luciani examines two books, Technofeudalism: What Destroyed Capitalism by Yanis Varoufakis (Melville House, 2024) and Slow Down: The Degrowth Manifesto by Kohei Saito (Astra House, 2024) to examine the ideas of Karl Marx and how they continue to exist today—and why in practice they ultimately always fall short.

Capitalism has never had a good reputation, even though it pretty much rules the world. It’s an ugly word invented by its enemies in the 19th century, even though the history of private property and the free exchange of goods goes back centuries, including the Italian city-states in the Middle Ages. Adam Smith favored “commercial society,” but the left won that PR battle.

Throughout the 20th century, when Europe and North America were in economic distress, capitalism was a welcome scapegoat, even though it created manufacturing jobs and lifted millions out of poverty. Karl Marx was right about one thing: the bourgeoisie saved millions “from the idiocy of rural life.”

After the great success and influence of Thomas Piketty’s book from 2014 Capital in the 21st century, Inspired by Marx, the French economist turned Marx’s prediction on its head. Marx predicted that wild competition among companies would crowd out profits and end capitalism. Piketty, on the other hand, fears that capitalism is too successful because returns on capital constantly exceed economic growth, leading to a concentration of wealth in fewer hands. Hence his famous expression r > g.

Now we have two more books that continue the attack on the free market by avowed Marxists.

Yanis Varoufakis, former Greek finance minister in 2015 and now a YouTube star, claims in his book Technofeudalism that capitalism is already dead, killed by a new class of feudal overlords: the owners of cloud capital. He argues that we have allowed a few developers and owners of computing platforms like Google and Amazon to dictate the direction of technology to their advantage over everyone else.

These titans of technology have turned us into serfs, willingly giving up personal information for free. This new ruling class “draws its power from the possession of cloud capital, whose tentacles ensnare everyone.” Varoufakis takes the reader on a journey through the workings of techno-feudalism, peppered with insights from the mad Men television series and compares it to the rise of the Minotaur monster from Greek mythology, which rose “from the ashes of the Bretton Woods system”.

Varoufakis is a great storyteller with fascinating insights, including his mother’s observation that capitalism might reward workers for their productivity but not for their enthusiasm. Although he is a trained economist, the book lacks any data or evidence. Why should facts get in the way of a good story? Varoufakis thinks little of traditional economics, claiming it is more of a religion than a science.

As finance minister, he fought hard against every austerity program to get the Greek economy back on track. As it turned out, it was austerity that put the economy on its current growth path.

Ironically, although Varoufakis hates big media platforms, he made himself a star on YouTube, pontificating on all sorts of economic and political issues. The lure of fame was just too tempting to resist.

Another book influenced by Karl Marx that has found a following especially among young people is Slow Down: The Degrowth Manifesto by Kohei Saito, translated by Brian Bergstrom. To save the world from environmental destruction and the oppression of the poor, capitalism must be replaced by a form of degrowth communism. Saito blames capitalism for the climate crisis, forgetting that “to live is to pollute” and that we as a species have been alive long before the advent of capitalism.

He claims that neoliberal capitalism is all about overproduction and overconsumption, while green capitalism is a myth. He describes the Sustainable Development Goals (SDGs) as the opium of the people and useless in the fight for environmental protection – something he has in common with environmental sceptics.

Saito, who teaches philosophy at the University of Tokyo, wants to combine degrowth, or the annual reduction of production, with Marx’s theory to “update our vision of a post-capitalist world.” He argues that market economies create scarcity, while communism creates abundance. For example, if speculation on land was banned, prices would fall and voilà, more land for everyone. Forget the old Marx, his false predictions about the inevitable collapse of capitalism and the rise of the proletariat. Saito sees Marx as a thought leader who rejects colonialism and protects the environment.

On this last point, Saito completely ignores the fact that wherever Communism ruled, it left the environment in ruins. I doubt he has ever visited Cuba, Venezuela, or most of the Soviet Union – all of which suffered devastating environmental disasters. And if he has, he suspiciously fails to mention it. China is only cleaning up its act because of the wealth created by capitalism. For someone born in 1987 who was completely unaware of the fall of the Soviet Union, he still has time to visit these places and see for himself. And when he does, he might pick up some Alexander Solzhenitsyn to read.

In 1930, John Maynard Keynes said: “I predict that in 1950 all the finance ministers of the world will be talking about my ideas. But by then the problems will be very different and my ideas will be not only out of date but dangerous.” This is a lesson that Marxists never learned.

But today’s conflict or struggle is not between capitalism and communism, but between different types of capitalism. Economist Branko Milanovic, who is well-versed in the history of capitalism, reminds us that the real struggle is between two forms of capitalism: liberal capitalism, as practiced in the West, with democracy tempered by the rule of law, and the political capitalism of China, run by technical bureaucrats who maintain growth and have the power to punish political opponents. The winner of this struggle is only just beginning.