As the scientific and technological change accelerates, new challenges surge, and we are having growing difficulties in facing them. New technologies mean we can do more with less effort, but the results depend on who controls them and with what interests. The financial system, which can control virtual money on a world scale, also controls other areas, such as communication and information, leading to overall displacements of the system we built in the aftermath of WWII. Technological change far outpaces our capacity to build adequate new institutions.

Generalization of rentierism

When Jack Welch transformed General Electric from a producer of useful appliances into a financial "investor," multiplying profits with a reduced productive base, he influenced a profound change in American business culture, generalizing rentierism. At the center of productive companies now lies the shareholder.

In Brazil, we have successful imitators like 3G Capital, owned by Lemann, Sicupira, and Telles, among the country's largest fortunes, with roots in Brazil but headquartered in the tax haven of Luxembourg. We saw how far they can go with the Lojas Americanas scandal. Michael Hudson expanded the analysis with the concept of FIRE (Finance, Insurance, Real Estate), summarizing the various current forms of extracting social surplus through the areas of finance, insurance, and real estate speculation.

Brett Christophers is one of the major contributors to understanding how wealth extraction occurs without a corresponding productive contribution across seven sectors: finance, natural resources, intellectual property, digital platforms, service contracts, infrastructure, and ground rent. Inflation itself, still presented as a “market mechanism”, today constitutes a form of rentierism, insofar as oligopolization simply allows prices to be raised to increase profits: as an order of magnitude, more than 50% of price increases result from profit inflation. Let us remember once again that with immaterial money—mere information in a computer, a volatile fluid with no corresponding regulatory capacity—the loss of governance is widespread. The collaboration between the PCC and Faria Lima is nothing extraordinary when money is digital, and laws and regulatory mechanisms are in the age of printed currency1.

Impotence of regulation and control

Although there are setbacks in international collaborative processes in terms of material goods, subject to US tariffs, for example, the bulk of flows with high economic value relate to financial areas, technology transfer, patent rights, interest on international debts, and the like: the intangible dominates widely, and its scope is global: these are signals that travel on digital waves. We lack corresponding regulatory mechanisms.

The Bretton Woods agreements and the corresponding regulatory systems date back to another economic world (1944) and are simply toothless. The endless negotiations on the establishment of a global taxation system (BEPS – Base Erosion and Profit Shifting), the fact that the bulk of transnational corporations' profits are deposited in tax havens, and the fragility of the WTO—all point to global mis-governance. We have national laws facing a transnational system, tariffs on material transactions in the predominantly immaterial universe of control and extraction, including modern financial complexities that regulators fail to monitor and often don't even understand. Brazil's attempt to require information on large-scale Pix transfers, seeking to reduce illegality, met fierce opposition from numerous politicians: large-scale illegality wears suits and ties; they are noble elected authorities.

The fact that flows are global while laws are national, that control systems belong to the analog age while immaterial movements are at the speed of light (High Frequency Trading), and the fact that rentier interests have become dominant in the political sphere, distorting or obstructing laws, demonstrate the extent of the structural mismatch between the real rentier world and the political world structured by rules from the last century. It's a structural mismatch between the technological basis of the system of wealth generation and appropriation and the political and institutional superstructure that belongs to another age. The ease with which banks removed Article 192 of the Brazilian Constitution, which classified loan sharking as a crime, is significant. The ease with which they removed President Dilma Rousseff when she tried to curb loan sharking in 2013 is illustrative2.

The rentier extraction of wealth

The revolution in the very capacity to expand knowledge, science, and technology, through the processing of intangible information—the entire computer system, cloud storage, intelligent search, and planetary connectivity—poses new challenges. It's a different system, based on information and knowledge as the primary factor of production, controlled in a radically more centralized manner through planetary connectivity, and generating a private appropriation of social surplus on a larger scale through generalized rentierism. It's a structural, systemic transformation that takes us well beyond industrial capitalism.

When Varoufakis describes what we're experiencing as technofeudalism, meaning high technology, but feudal forms of wealth appropriation without a productive counterpart, he paints a realistic picture. The transformation becomes very clear when we realize that most of the wealth at the top of the social pyramid does not result from productive initiative, but rather from dividends and inherited fortunes: we are very close to the aristocracy that inherited fiefdoms through the merit of family blood. Sandel's analyses of the absurdity of considering fortunes as "merit" are perfectly realistic. This rentier aristocracy equally benefits from the system of relationships inherited from elite universities, from social interaction, and from the various forms of social fracture that lead us away from the simplifications that our economic condition depends on our efforts.

Rentier exploitation is incomparably more intense and illegitimate than capitalist exploitation for low wages, although it also utilizes them. The CEOs of large American corporations earn salaries around 350 times the average wage of their workers, making them indebted to shareholders and their high dividends. It's an unjust but articulate system that needs to be confronted, precisely, as a system. They like to call themselves capitalists, "investors," but it's borrowed legitimacy. In the system that currently dominates, industry and agriculture remain present, but their control is shifting. To repeat, it was not the workers who appropriated the production processes from below, but rather the rentiers who took over from the top3.

The displacement of the concept of nation and sovereignty

We've become accustomed to analyzing classes within the framework of nations, adding external drains labeled imperialism. Imperialism is no longer external; it's firmly entrenched in our large corporations, in health insurance corporations, in our pockets through credit cards, in practically every transaction we make. Immaterial money, merely information in computers, allows for instantaneous and opaque transfers. Some drains are more visible and recorded, such as the interest that weaker countries pay on external debt (draining, on average, 42% of the budgets in the 140 least developed countries). Much less visible are the drains to tax havens, where the equivalent of around 20 trillion dollars is hidden.

Drains through dividends affect practically all large economic groups in Brazil, such as the banks Itaú and Bradesco, large natural resource extraction companies like Vale and Petrobrás, health insurance like Hapvida, and countless other companies. The extraction process is managed through algorithms by asset management giants, predominantly American, such as BlackRock and similar companies. The dominance of North American social media allows for the drain that constitutes the activities linked to the attention industry we saw above. The control of information systems in general, just signals on cell phones or computers, has also become planetary. There is no going back to closing borders of virtual signals; the planetary articulation of the digital revolution must be understood with its new challenges, on this planet where the territorial borders we have organized around the world do not exist for satellites or fiber optic cable networks, or even the "clouds" of intangible information.

Redefining sovereignty, regulating the flows that can be regulated, and, in particular, organizing networks of solidarity between countries to reinforce controls, are part of the reconstruction of possible sovereignty. The concept of nation is shifting; we are a small planet subjected to global intangible flows and new instruments of exercising power, with the global value chains. And we clearly need to update all global governance systems, such as the United Nations and many other institutions, but this update, first and foremost, involves an alliance between countries subjected to global exploitation processes. The concept of economic space is shifting4.

The scale of the challenges

The path is clear: we need a society that is economically viable, but also socially just and environmentally sustainable. None of this is impossible. In economic terms, global GDP is expected to reach $115 trillion in 2025, which represents nearly $5,000 per month for a family of four. If we correct for the differing value of the dollar in purchasing power in different countries, global GDP in PPP Purchasing Power Parity, is equivalent to $180 trillion, or seven thousand dollars per month per family of four. For the first time in human history, what we produce is amply sufficient to ensure a dignified and comfortable life for everyone. This is essentially the result of scientific and technological advances, not of "markets."

The scale of the tragedies we face, therefore, is not strictly an economic issue, a lack of resources, but rather a matter of political and social organization. We also know what needs to be done. With the SDGs (Sustainable Development Goals), we have so many studies and research, and we have all the necessary technologies to face the challenges: explosive inequality, with so many useless fortunes, and environmental destruction, which has been rightly presented as a slow-motion catastrophe. The deepening of tragedies under these conditions becomes understandable precisely because of the mechanism we saw above: a decision-making process that prioritizes maximizing rentierism at the top, regardless of the impacts on inequality and the environment.

The reduction of wealth taxes, the halting of international transaction taxes negotiations, the strangulation of so many countries with foreign debt, the reorientation of governments and large banks toward increasing fossil fuel financing, the planetary loss of biodiversity, widespread water pollution, the plastics invasion and so many absurdities are all part of a logic in which maximizing short-term rentier returns prevents us from taking the necessary measures to face the deepening catastrophe. It is an age of impotence. It is important to understand that the world's decision-makers are aware of the challenges, so much so that they proclaim everywhere their adherence to ESG (Environment, Social, Governance), but they are trapped in the system, precisely because it is a system, a challenge far greater than individual stupidity. The problem is not Trump, but the forces that allow him to wield power, with similar tendencies in many parts of the world5.

These challenges represent a structurally powerful trap. Financial fortunes, based on basically unproductive rentierism, are draining resources so needed for the key challenges of deepening inequality and raising environmental dramas. Understanding the trap involves the fact that the key actors are powerless to face them, locked in rent-maximizing algorithms. And inequality is much more than an issue of so much poverty and suffering, for it means power at the top materializes into political control. In the US, we see it with the corporate control of politics, but also with the Supreme Court alignment. The basic balance of power has shifted, not only generating the dramas but hampering the capacity to face them. We are faced with the major challenge of rebuilding governance.

Notes

1 David Gelles, The Man Who Broke Capitalism; Michael Hudson, Killing the Host; Brett Christophers, Rentier Capitalism; Yanis Varoufakis, Technofeudalism.
2 L. Dowbor, The Age of Unproductive Capital; J. Stiglitz, The Road to Freedom; Thomas Piketty, Capital and Ideology; Peter Phillips, Titans of Capital; Hermes Zaneti, O Complô.
3 Yanis Varoufakis, Technofeudalism; L. Dowbor, Digital Revolution; Joel Kotkin, Neofeudalism; Nicholas Shaxson, The Finance Curse.
4 Noam Chomsky, Who Rules the World; Zucman and Saez; The Triumph of Injustice; Thomas Piketty, Une brève histoire de l’égalité; L. Dowbor, Digital Revolution.
5 Oxfam, Lucrando com a dor; Marcelo Medeiros, Os ricos e os pobres; UBS, Global Wealth Report 2025; WID, World Inequality Database; David Wallace-Wells, The Uninhabitable Earth; Jeffrey Sachs, The Age of Sustainable Development; Lester Brown, World on the Edge.