Saturday, 19 November 2011

Varoufakis: on the death of the global Minotaur and the demise of the eurozone



I hope I’m not turning this blog into something of a Yanis Varoufakis’ fan site; but I really do find his outpourings illuminating and entertaining; not that I agree with a lot of what he says – not so much his analysis of the recent history and current state of global capitalism, but the political conclusions he draws from it all. But that’s fine. Above is another interesting talk from the professor, this time from 9 November at Columbia University in New York. As well as going into some detail regarding his metaphor of the Minotaur to explain US economic hegemony post-1971, he also exposes the eurozone for what it is – a plan to create a ‘Greater Germany’, which would protect and enhance Germany’s export-led economic model – and predicts that the 26 October agreement – supposed to ‘bail-out’ Greece and insulate other debt-ridden eurozone economies – will not preserve the euro but expedite its demise. Varoufakis may be being too pessimistic – ultimately his pessimism leads him to believe that fascism in Europe will make a comeback – but you want a public intellectual to be controversial and provocative, to suggest to us that the foundations of the civilised societies we have become accustomed to are not as firm or enduring as we think they are.

9 comments:

Makis said...

Don't forget, John, that the more 'controversial and provocative' Varoufakis is, the more likely he is to get invited to all these talks in New York, Houston, etc.

John Akritas said...

Maybe, M, but I wouldn't overdo the cynicism. He has an argument, worth supporting or rebutting and let's take it at face value. Besides, it's always good to draw people out of their comfort zones.

Hermes said...

Off topic but tragic news that Neoklis Sarris is dead...

http://taxalia.blogspot.com/2011/11/blog-post_6154.html

Hermes said...

Here is an article by the equally brilliant Panagiotis Ifestos on the death of Sarris:

http://www.antibaro.gr/node/3487

The work Sarris did on warning Greeks on the Annan Plan was of historical significance.

Hermes said...

I still have not managed to listen to the full discussion held at Columbia University which included Varoufakis. However, he seems to be going over the same ground in other interviews and blog entries. A couple of points on him. He is relatively young, cool, charismatic and successfully weaves hard economics with broader culture. Therefore, he is an attractive speaker. He also has a book to promote. Finally, he is also probably looking for some temporary teaching positions outside of Athens. Of course, all this does not make his argument less effective, but there is a “political economy” at work in his very high profile lately. He is appearing everywhere!!

As I mentioned a while back, Varoufakis’s origin’s in Marxist thought is quite obvious. Although, his narrative on the global economy has an element of truth with the subtext being that American economic strength was driven or facilitated by political imperatives. Naïve economists think politics have no bearing on economics but unfortunately this is about 80% of the profession and concentrated in places where it suits them to deny the role of politics in economics such as the United States and to a lesser extent, the United Kingdom. But as a good little Marxist overwhelming part of the blame lies with the United States. However, he fails to adequately address the impact of China and the emerging world on deficits, the welfare state, competitiveness in developed countries. Does he not realize that the introduction of over 2 billion people into the world economy would destabilize developed countries; particularly, vulnerable ones like Greece that either export low value added primary products or expensive low value added manufacturing products which are easily reproduced by Eastern Europeans or Indians at a fraction of the cost? His narrative on Greece, also betrays his Marxist roots. He is right that the architecture of the EU is flawed and that Germany is narrow minded and incapable of leadership; however, he fails to adequately emphasize the contradictions and weaknesses in the Greek economy which were created by Greeks, and to some extent Varoufakis played a role in maintaining this failed system.

When PASOK took over in the early 1980’s, they did the right thing by allowing large sections of society (the Left) to participate in a modernized Greece. However, rather than build a system which provided equality of opportunity but rewarded meritocracy, they created a society of entitlement. Rather than maintain political power by providing a future vision of Greece to citizens they subsidized and handed out gifts to their clients. Of course, elements of this were always present in Greek society but they were magnified starting from 1981 onwards. But the overriding problem was that the Greek elite lacked ability and imagination and the Greek people accepted this out of laziness and lack of intelligence. In fact, the elite was really a more sophisticated reflection of the society. Varoufakis hardly mentions this problem because it is a problem largely of the Left. Of course, there were very successful social democracies in northern Europe so it is not a problem of the Left. But a problem of a type of Left that developed in Greece which had commonalities with bureaucratic capitalism of Spain, Portugal and Italy. Varoufakis skirts this issue and he is the worse for it.

John Akritas said...

For sure, H. If we were going to be critical of Varoufakis, then we'd say that he is like a lot of (the better) Marxists, inasmuch as Marxism's critical stance towards society allows him to make a lot of penetrating and provocative insights but
you're either badly nostalgic or a limited intellectual if you still refer to yourself as a Marxist – which he does – and thereby endorse a doctrine which is, ultimately, as ludicrous as it is disastrous. His dabbling with Sinn Fein and rather hysterical article on the ascent of LAOS – with all its dire warnings of fascism, completely overlooking the fact that the main threat of fascism in Greece comes from the left – show him in a more negative light.

John Akritas said...

I keep meaning to mention that Stuart Holland, Varoufakis' cohort regarding the Modest Proposal – on eurobonds, europeanisation of the banks and so on – when he was a Labour MP in the 1980s and 1990s was one of the most outspoken supporters of the Cyprus cause.

Hermes said...

Further to my comment yesterday, Varoufakis never stops going on about the poor design of the EU, Germany and the United States. However, he hardly ever mentions the poor economic, social and political model Greece has adhered to since 1974 which his Greek Progressive Socialists have the greatest burden of responsibility in having created. Often, he will still lay the blame at outside powers, but there are many European states who have to deal with the EU, Germany and the United States and do not have the same problems as Greece. When is he going to confess that it was largely his class of Greek Progressive Socialists that created this mess.

I read his post on LAOS and I must say I find it extraordinarily ridiculous and as you say hysterical.

http://yanisvaroufakis.eu/2011/11/18/the-serpents-egg-hatchlings-in-greeces-postmodern-great-depression/

It amazes me that that logic goes right out the window when these so called Progressives all of a sudden discuss right wing politics, nationalism, immigrants, Fascists. This post really does him a disservice and shows him for what he is, an extremely political partisan commentator that cares infinitely more for his class than for Greece.

Hermes said...

Personally, I find Nikos Lygeros, another game theory expert, far more satisfying than Varoufakis:

http://lomak.blogspot.com/2011/11/blog-post_19.html

And the compare of this show Cassus Belli is also a good sort in a kind of Maggie Thatcher kind of way!