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Thread: Yanis Varoufakis - New Bottle, Old Keynesian Wine

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    Default Yanis Varoufakis - New Bottle, Old Keynesian Wine

    I have been enjoying Yanis Varoufakis's blogs (introduced here by apjp) and I think his latest, which is a transcript of his recent talk (with Pearse Doherty and Fintan O'Toole) at the new SF headquarters (the Shelbourne).

    But essentially, for all his stance as critic of mainstream economists and of the ECB and EFSF, his own viewpoint is still that capitalism can be made to work, by adopting the right technical solutions.

    He advocates an ECB 20 year bond to clear all debt above the level of the Maastricht agreement, along with ECB-backed investment bank that raises the quantity of finance put in to European firms.

    I recommend his talk, which gives a marxist-influenced historical account of the development of finance capital that is well worth reading, as it shows the various means by which capitalism has borrowed from the future and produced fictious capital in an attempt to sustain a severely ailing, terminally sick system which imo has reached the end of its historical tether.

    http://yanisvaroufakis.eu/2011/09/23...-hotel-dublin/

    I'm forcibly struck by what Varoufakis leaves out of his analysis. He describes well the way that a massive credit bubble has been created, in an attempt to sustain the system, and is now collapsing, leaving every bank in Europe bankrupt. He also describes well the panic and bewilderment of EU financial "leaders."

    But there is no reference to the shift of manufacturing to the east and to the enormous increase in global productive capacity and increased costs of production that have come with technology. Fundamentally, the world economic crisis is one of overproduction and depressed average rate of profit, not of underinvestment.

    A couple of Chinese factories, the size of large towns, can produce enough mugs for the entire needs of the world, in short order. But there is so much highly competitive production, so many companies driven out of business, that on average, very little if any profit is made.

    Capitalism also constantly moves money from the many to the few, with greater and greater inequality, and this also chokes up the economy as the majority of people have less and less to spend. But redistribution by taxation, on its own, can't overcome the problems of overproduction and reduced profit rate. And while capitalists are in power, they will resist any such redistribution.

    Because profit comes from peoples' labour (physical and mental), the only way that capitalism has of raising the rate of profit is to cut wages and make people work harder (reduced retirement age, longer hours, intensified work rates). We are seeing this being applied across Europe and the US.

    We have immense global productive capacity, and an anarchic and crisis-ridden means of financing and organising it. So at the very historic point at which feeding, educating and housing everyone appears to be attainable, huge numbers of previously well-off people are being thrown into poverty. The answer's imo are not in the issuance of more debt and in the financing of more and more competitive investment.

    Before minding banks, we need to safeguard production, and peoples' skills.
    Production needs to be organised and distributed so that enough is produced to meet everyone's needs - if that can be done in a two or three day working week, people should be able to head off and play with their children, play sports and music, go back to education or whatever they need.

    For this to happen, the main means of production - factories and land, and mineral and oil resources - need to be in the control and ownership of the majority, and developed in the interests of the majority.

    This is something I've never seen Varoufakis say and I'm pretty sure I never will.
    Last edited by C. Flower; 23-09-2011 at 05:00 PM.

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    (Tiny) Tim Geithner was thrown out of the EU Finance Ministers Meeting in Poland on his ear on Friday.for pushing hyperinflationary Federal Reserve QE 3 swap window funds on Europe,. As confused as the finance ministers are the were all refusing to sip from this poisoned challice.

    Now,Yanis Varoufakis, shows his true colors, by defending Geithner and his offer

    http://yanisvaroufakis.eu/2011/09/19...llective-peril.

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Quote Originally Posted by C. Flower View Post
    I have been enjoying Yanis Varoufakis's bogs (introduced here by apjp) and I think his latest, which is a transcript of his recent talk (with Pearse Doherty and Fintan O'Toole) at the new SF headquarters (the Shelbourne).

    But essentially, for all his stance as critic of mainstream economists and of the ECB and EFSF, his own viewpoint is still that capitalism can be made to work, by adopting the right technical solutions.

    He advocates an ECB 20 year bond to clear all debt above the level of the Maastricht agreement, along with ECB-backed investment bank that raises the quantity of finance put in to European firms.

    I recommend his talk, which gives a marxist-influenced historical account of the development of finance capital that is well worth reading, as it shows the various means by which capitalism has borrowed from the future and produced fictious capital in an attempt to sustain a severely ailing, terminally sick system which imo has reached the end of its historical tether.

    http://yanisvaroufakis.eu/2011/09/23...-hotel-dublin/

    I'm forcibly struck by what Varoufakis leaves out of his analysis. He describes well the way that a massive credit bubble has been created, in an attempt to sustain the system, and is now collapsing, leaving every bank in Europe bankrupt. He also describes well the panic and bewilderment of EU financial "leaders."

    But there is no reference to the shift of manufacturing to the east and to the enormous increase in global productive capacity and increased costs of production that have come with technology. Fundamentally, the world economic crisis is one of overproduction and depressed average rate of profit, not of underinvestment.

    A couple of Chinese factories, the size of large towns, can produce enough mugs for the entire needs of the world, in short order. But there is so much highly competitive production, so many companies driven out of business, that on average, very little if any profit is made.

    Capitalism also constantly moves money from the many to the few, with greater and greater inequality, and this also chokes up the economy as the majority of people have less and less to spend. But redistribution by taxation, on its own, can't overcome the problems of overproduction and reduced profit rate. And while capitalists are in power, they will resist any such redistribution.

    Because profit comes from peoples' labour (physical and mental), the only way that capitalism has of raising the rate of profit is to cut wages and make people work harder (reduced retirement age, longer hours, intensified work rates). We are seeing this being applied across Europe and the US.

    We have immense global productive capacity, and an anarchic and crisis-ridden means of financing and organising it. So at the very historic point at which feeding, educating and housing everyone appears to be attainable, huge numbers of previously well-off people are being thrown into poverty. The answer's imo are not in the issuance of more debt and in the financing of more and more competitive investment.

    Before minding banks, we need to safeguard production, and peoples' skills.
    Production needs to be organised and distributed so that enough is produced to meet everyone's needs - if that can be done in a two or three day working week, people should be able to head off and play with their children, play sports and music, go back to education or whatever they need.

    For this to happen, the main means of production - factories and land, and mineral and oil resources - need to be in the control and ownership of the majority, and developed in the interests of the majority.

    This is something I've never seen Varoufakis say and I'm pretty sure I never will.
    He is quite simply the only professor I have read up on worth listening to. If you are a Marxist, or a Keynesian Marxist like Allende was, the only way you can get any remotley radical teachings is to head to Athens to study the Masters and or doctorat PHIL. in ECON.SCIENCE or else take a masters on Finnish communism in Helsinki. Despite Yanis's own opinion which is interesting but perhaps not correct depending on what we mean by correct and what our interests are(yours and mine being the end of capitalism), his course is quite simply the best in europe, and the most radically diverse one on paper.

    My advice to you is to go there and study under him-if you ever find 2-4 years to do so. I hope I get that chance in future. The best thing about this guy is that he is open to being wrong. Personally I think someone who obviously knows at the very least the basics of these different economic systems should become an economist anyways. Yanis's course actually promotes the discussion and analysis of various radical tendencies from the soft left to the hard left(keeping in mind that Yanis is very radical by today's neoliberal standards). His Twitter numbers were 900 odd when I first looked him up some months back. Now he is about 4-5'000. No mean feat for an economist. Hopefully he catches up with the self publicists like mcwilliams soon. When I do my masters, I intend on referencing his works-even if I don't get to study in Greece at all.

    In my view the solution is not less production for Ireland but more. Yes the world as a whole is producing too much, but I think we need to adopt a series of mid term emergency production plans to make the country less internationally dependent on imports. Perhaps a mix of Socialism in one country and a great leap forward. It must be remembered for all the arguments of the economic advances of capitalism in terms of output and technological ingenuity, Stalinist Russia advanced more quickly economically in terms of sheer output than any other society in history. The soviet model of self financing is also a worthy one in my view. Not that I am not an internationalist-I just think economically we might need to put ourselves first for a while once an inevitable uprising civilly or otherwise takes place.

    Personally I believe the country will crack within weeks, probably before xmas. The whole court case sagas over Ireland's gross violation of human rights, the inevitable plea of the state's inability to pay as regards the upcoming student grants court case, and the ongoing legal challenge to the EU IMF deal which will hopefully be taken in a number of weeks or months, and the increasing numbers of educated and vastly impoverished rural young men and women will see the place explode. Or Implode rather. Then you and I gain a wider audience for what we want to see. Direct democracy being a given part of it anyways I would think.

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    But Apip, this isn't just theoretical, lesser of however many evils, academic teaching.. At the very point that Geithner's heavy handed hyperinflationary demands were being rejected Varoufakis was pushing the whole package. Over the months his writings about what is wrong with the banking institutions has been useful, but then when he pushed this 1923 style hyperinlationary euro bond bailout his past record counts for 0. The best you can do for him is to demand he correct himeself. It's far better to do that then to ignore this or give him a free pass based on his past record. Don't you think?

    Again, here's the speech he made in Dublin

    http://yanisvaroufakis.eu/2011/09/19...lective-peril/
    Last edited by C. Flower; 24-09-2011 at 07:08 AM.

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Quote Originally Posted by rebellin View Post
    But Apip, this isn't just theoretical, lesser of however many evils, academic teaching.. At the very point that Geithner's heavy handed hyperinflationary demands were being rejected Varoufakis was pushing the whole package. Over the months his writings about what is wrong with the banking institutions has been useful, but then when he pushed this 1923 style hyperinlationary euro bond bailout his past record counts for 0. The best you can do for him is to demand he correct himeself. It's far better to do that then to ignore this or give him a free pass based on his past record. Don't you think?

    Again, here's the speech he made in Dublin

    http://yanisvaroufakis.eu/2011/09/19...lective-peril/
    This seems to be an earlier blog post - the Dublin speech is linked in the first post of this thread.

    Both Geithner and Varoufakis advocate a massive recapitalisation of the banks by means of what he himself describes as "a trick." We should know by now that there is a connection between money and value, which however elastic it may appear to be when money is being created by the "leverage" that Varoufakis advocates, eventually reasserts itself in a forceful and destructive way, by rapid deflation. So he is just trying to come up with a bigger and better kick of the can down the road and does not address any of the fundamental and historic issues of the crisis.

    As far as I know, the EU did not turn down Fed liquidity and 400 billion of it was provided to keep the European banks creaking along a little while longer. But there has been little reporting of it, so please correct me if I'm wrong.

    Varoufakis's term "Bankruptocracy" to describe the new, privileged poor, formerly rich, is spot on. I will keep reading his posts for gems like that.

    The fact that Sinn Fein is promoting this economist is helpful in telling us what their own economic thinking is - fundamentally no different to the present political status quo.

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Quote Originally Posted by C. Flower View Post
    This seems to be an earlier blog post - the Dublin speech is linked in the first post of this thread.

    Both Geithner and Varoufakis advocate a massive recapitalisation of the banks by means of what he himself describes as "a trick." We should know by now that there is a connection between money and value, which however elastic it may appear to be when money is being created by the "leverage" that Varoufakis advocates, eventually reasserts itself in a forceful and destructive way, by rapid deflation. So he is just trying to come up with a bigger and better kick of the can down the road and does not address any of the fundamental and historic issues of the crisis.

    As far as I know, the EU did not turn down Fed liquidity and 400 billion of it was provided to keep the European banks creaking along a little while longer. But there has been little reporting of it, so please correct me if I'm wrong.

    Varoufakis's term "Bankruptocracy" to describe the new, privileged poor, formerly rich, is spot on. I will keep reading his posts for gems like that.

    The fact that Sinn Fein is promoting this economist is helpful in telling us what their own economic thinking is - fundamentally no different to the present political status quo.
    I wouldnt say no different. SF have always seemed to me since they became a force in the south to be a keynesian middle left party. Names like Fintan O'Toole, Yanis and Pearse Doherty go well together because they reflect each others views. Euroskeptics to a degree, and about the same leftward scale as the Danish left. Whether a SF led govt. would bring real changes we will have to see. I think they will be voted in soon, and if anything positive comes from it then great. Not a definitive solution party by any means tho.

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Quote Originally Posted by C. Flower View Post
    Varoufakis's term "Bankruptocracy" to describe the new, privileged poor, formerly rich, is spot on. I will keep reading his posts for gems like that.

    The fact that Sinn Fein is promoting this economist is helpful in telling us what their own economic thinking is - fundamentally no different to the present political status quo.
    Right from right after the European Finance Minister coference. This is not to say that the finance ministers have any idea of what to do-- they are divided, confused and have no idea how to keep propping up the dead EU corpse. But they did know enough to chase Geithner and his federal reserve, hyperinflationary leveraging out of their confernce.
    Eurozone officials decisively rejected U.S. Secretary of the Treasury Timothy Geithner's plan to hyperinflate the world full of dollars after two days of talks in Wroclaw, Poland, which presently holds the rotating presidency of the EU.
    As Bloomberg News put it, this morning, Geithner "floated a variation of a 2008 policy he developed while at the New York Federal Reserve that would expand the reach of the European Financial Stability Facility using leverage in a partnership with the ECB..." This idea didn't fly with the Germans, in particular. "The EFSF's sole purpose is the financing of states and that's in order as long as it's done via the capital market," said Bundesbank President Jens Weidmann, in remarks to reporters, today. "If it's done via the central bank it constitutes monetary state financing," which is not allowed under Eurozone rules. "We don't think that real economic and social problems can be solved by means of monetary policy," added German Finance Minister Wolfgang Schaeuble," who was standing right next to Weidmann. "That has never been the European model and it won't be."

    The media coverage did not really do justice to the nasty treatment that Geithner got. Contrary to news reports, Geithner was not invited to the European finance ministers session in Poland, he bullied his way in, basically inviting himself. And his presence was not welcome. Austria's Finance Minister Maria Fekter, who recently said she fully supported the Glass-Steagall breakup of the big banks, was most blunt. She declared, "I found it peculiar that even though the Americans have significantly worse fundamental data than the Eurozone, they tell us what we should do, and when we make a suggestion... they say no straight away."

    I too had followed Varaufakis' website for his insights into what has been going wrong with the "bankruptocracy". I must also admit that I likes Fintan O'Toole's turn of phrase, when last winter, he spoke of sado monatarism.But I am fed up to here with O'Toole, and I had early on an inability to break from the boundries of the dying monatarist, imperialist system in both of them.

    I don't think SinnFfein invited to Varaufakis to Ireland because they agreed with his solutions, but because he is Greek, and has been exposing the demands on Greece by the same Troika that is raping Ireland. They may have even been surprised by his defense of the Geithner plan, as I admit I was. In Pearse Doherty's remarks after the conference he came out unequivicly for "fiscal sovereignty" and also, just hays after the meeting, as I have documented on this site, Sinn Fein, some of the Independents and Socialist wrote a letter to the Dail calling for a referendum on the European Stability Mechanism. They obviously, from the content of the letter, weren't calling for such a referendum because they were in favor of the ESM, but are totally against it.
    Last edited by rebellin; 24-09-2011 at 03:11 PM.

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Quote Originally Posted by rebellin View Post
    I too had followed Varaufakis' website for his insights into what has been going wrong with the "bankruptocracy". I must also admit that I likes Fintan O'Toole's turn of phrase, when last winter, he spoke of sado monatarism.But I am fed up to here with O'Toole, and I had early on an inability to break from the boundries of the dying monatarist, imperialist system in both of them.

    I don't think SinnFfein invited to Varaufakis to Ireland because they agreed with his solutions, but because he is Greek, and has been exposing the demands on Greece by the same Troika that is raping Ireland. They may have even been surprised by his defense of the Geithner plan, as I admit I was. In Pearse Doherty's remarks after the conference he came out unequivicly for "fiscal sovereignty" and also, just hays after the meeting, as I have documented on this site, Sinn Fein, some of the Independents and Socialist wrote a letter to the Dail calling for a referendum on the European Stability Mechanism. They obviously, from the content of the letter, weren't calling for such a referendum because they were in favor of the ESM, but are totally against it.
    Thanks. You were there at the talk ? Is there a transcript anywhere of what was said by Pearse Doherty ?

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Quote Originally Posted by C. Flower View Post
    Thanks. You were there at the talk ? Is there a transcript anywhere of what was said by Pearse Doherty ?
    No, I wasn't at the talk, unfortunately. Although I was very interested in it. I was hoping that someone who frequents this site and had expressed interest in it in advance would post a report about the whole thing. But I haven't seen any.
    I had found a transcript of what was said by Pearse Doherty and was looking for it again before posting , but i couldn't find it. I'll look again in my notes.

    It was strange to me, at the time, that Pearse Doherty only reported what he said, and that a couple of days later Veroufakis only reported on what he said, and that I hadn't seen anything about what Fintan O'Toole said. In retrospect it is now clear that they didn't agree with each other.

    By the way, here's a detailed report on what Geithner was proposing and Veroufakis was saying should be adopted:
    http://www.larouchepac.com/node/19445

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Quote Originally Posted by rebellin View Post
    No, I wasn't at the talk, unfortunately. Although I was very interested in it. I was hoping that someone who frequents this site and had expressed interest in it in advance would post a report about the whole thing. But I haven't seen any....

    It was strange to me, at the time, that Pearse Doherty only reported what he said, and that a couple of days later Veroufakis only reported on what he said, and that I hadn't seen anything about what Fintan O'Toole said. In retrospect it is now clear that they didn't agree with each other.

    By the way, here's a detailed report on what Geithner was proposing and Veroufakis was saying should be adopted:
    http://www.larouchepac.com/node/19445
    Likewise. I'll try twitter and Face Book.

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    I haven't had time to listen to the whole thing yet, but this seems to be the audio of the meeting featuring Doherty, Varoufakis and O'Toole we've been searching for.

    http://politico.ie/social-issues/789...s-o-toole.html

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Quote Originally Posted by rebellin View Post
    I haven't had time to listen to the whole thing yet, but this seems to be the audio of the meeting featuring Doherty, Varoufakis and O'Toole we've been searching for.

    http://politico.ie/social-issues/789...s-o-toole.html
    Excellent. Thanks !

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Seen this yet?
    C. Flower paid me the complement of penning a critique, entitled New Bottle , Old Keynesian Wine, of my Shellbourne Hotel talk (14th September 2011) as well as of the essence of our Modest Proposal. I reproduce this critique here in its entirety, followed by my reply. Before anything else is said, let me thank C. Flower for taking the time to script what is a hugely important critique.
    http://yanisvaroufakis.eu/2011/09/25...rful-critique/
    Last edited by C. Flower; 26-09-2011 at 01:05 PM.

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    Quote Originally Posted by PaddyJoe McGillycuddy View Post

    Thanks Paddy. I'll put the reply up here for discussion on the thread : and to keep the loop intact...

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    Default Re: Yanis Varoufakis - New Bottle, Old Keynesian Wine

    I'm very pleased to have Yanis Varoufakis's reply. I'm particularly interested that he has written on the decline (or otherwise) of the average rate of profit.
    I've only just seen this, so I'll take some time reading it before making a response.

    Arresting the Freefall rather than a Blueprint for the ‘Good Europe’: The Modest Proposal defended against C. Flower’s powerful critique

    Utilising my right-to-reply, I shall start by conceding that neither my Shellbourne Hotel speech nor indeed the text of our Modest Proposal puts emphasis on capitalism’s chronic ills. Having said that, it is not true that I have not said (or never will say) anything on the subject. As proof, below I offer a small, extremely eclectic, anthology of relevant quotes that absolve me, I trust, of the alleged sin of omission. So, why is it that in my Shellbourne Hotel talk I left most of these, strongly held, thoughts out, confining them to the margins of my musings?

    The answer is: Because these are not revolutionary times. Some may think that we have arrived at the moment in history when it is incumbent upon progressives to issue a clarion call for capitalism’s replacement by a rational, and thus fairer, way of organising social production. That a revived socialism’s moment has come. It is not my view.

    Why not? First, because the Left remains defeated, following 1989. Our vision of that more rational socio-economic system with which to replace really existing capitalism remains blurred and unconvincing. Secondly, and crucially, because a period during which capitalism is in freefall is not a period kind to progressive projects. The only forces that can gather pace, organise and conquer are the forces of xenophobia, discord and regression. That was what 1929 taught us.[1] It was also a lesson that many of us learnt, the hard way in the UK, during the late 1970s and early 1980s when the rise of debilitating unemployment (under Mrs Thatcher’s able guidance) wiped out all social opposition to the spivs-in-power and to a massive financial-real estate bubble that effected an equally massive redistribution of income under the disguise of modernisation and ‘rationality’.

    If I am right, the human cost of allowing capitalism to shoot itself in the foot (the way it is doing today) will be enormous and, in the end, when the dust has settled, there will be too little energy left among those who could effect progressive change to get on with it.

    For this simple reason, I have become an advocate of the importance of saving structures that I disdain; e.g. the eurosystem. For if the euro collapses today, a post-modern 1930s beckons during which the nastiest part of Europe’s underbelly will prevail. In short, I feel it in my bones that, just like during the Second World War progressives and enlightened conservatives had a common task (to unite against Nazism), so too now we need urgently to build a broad coalition that arrests the freefall. Once it is arrested, and this is precisely the purpose of the Modest Proposal, we can then resume the debate amongst members of that coalition, even our feuding, regarding what comes next; what the Good Society ought to look like.

    In summary, the Modest Proposal is not a blueprint for a better, rational Europe. It is rather a blueprint for arresting the freefall into a black hole at the bottom of which only xenophobia and aggregate misery lies. It seeks to utilise existing, often ludicrous institutions (e.g. the EFSF, even the chronically regressive ECB) to that purpose. I may be wrong in my estimation of what needs to be done. But, in my defence, it is not for wont of ignoring capitalism’s inherent irrationalities.

    The promised short anthology of my views on capitalism’s inherent flaws follows:

    In 1991 I published a book, Rational Conflict (Blackwell), devoted to the argument that conflict, inefficiency and illiberty are the inevitable (and thus rational) outcomes of capitalism’s fundamental irrationality.

    In 1995 I concluded a paper in Science&Society (entitled “Freedom within Reason“) thus: “Of course we have all oppressed and we have all been oppressed at some stage of our lives. But the crucial point is the presence of systematic patterns of exploitation built into relatively primitive social relations. The structure of such social relations feeds into the constituents of unfreedom rendering constitutional, or axiomatic, liberty symbolic of what is unattainable under the existing socio-economic organisation. If Reason is the product of History, as Hegel would claim, then capitalism sets limits within which Freedom and Reason cannot breathe.”

    In my 1998 book Foundations of Economics: A beginner’s companion (Routledge) I argued (see Chapter 10) that the social democratic ambition to civilise capitalism runs into a brick wall because “… attempts to temper capitalism’s hunger for inequality damage the machinery of capital accumulation which keeps it going. Thus they will never succeed in civilising the beast because the State’s interventions will simultaneously be too feeble as a counter-weight to the systematic exploitation which goes on and too much since they will be hindering the natural self-correcting mechanism of capitalism (i.e. the periodic surges in unemployment and the resulting inequity/poverty).”

    Further into the same 1998 book I wrote: “[International capital's] continuing capacity to extract … ‘rents’ depends on a patchwork of highly industrialising formerly underdeveloped countries which coexist with massive Third World immiseration as well as the de-industrialisation of the older industrial regions of the First World. Through this prism, international trade is one of the planks of an international capitalist system which thrives on exploitation and wastes monumental proportions of the world’s human and natural resources.”

    In another essay also published in Science&Society (2008) and entitled “Capitalism According to Evolutionary Game Theory“, I wrote: “The notion that capitalism is efficient but unfair is dismissed angrily, replaced by the portrait of a social system which is one evolutionary stage behind the productive capacity of the machinery that it, itself, brought into being. Due to this ‘evolutionary backwardness’, capitalism wastes human resources (in the form of chronic and fluctuating unemployment), devalues humanity (by reducing our relations to commodity fetishism), restricts real liberty for most, and requires human sacrifices upon its altar (e.g. war) in order to maintain some degree of compatibility between (i) what the economy can produce and (ii) what consumers have the purchasing power to absorb.”

    Building on this argument, Chapter 4 of our recent book Modern Political Economics: Making sense of the post-2008 world (Routledge, 2011, co-authored with J. Halevi and N. Theocarakis), claims that: ” No one designed capitalism. It simply evolved, liberating us in the process from more primitive forms of social and economic organisation. It gave rise to machines and methods that allowed us to take over the planet. It empowered us to imagine a future without poverty where our life is no longer at the mercy of a hostile Nature. Yet, at the same time, just like Nature spawned Mozart and HIV using the same indiscriminate mechanism, capitalism also produced catastrophic forces of discord, alienation, and environmental degradation. It generated acute crises (as the next chapter will illustrate) and produced, in the same stride, new forms of wealth and of deprivation. In evolutionary terms, capitalism, and in particular the way it hinges production onto the labour contract, is too primitive a system. As the next chapter will argue, calamities like the Crash of 2008 and the collapse of the 2009 Copenhagen Conference on climate change are the tip of the melting iceberg. Less well seen is capitalism’s wastefulness of human and natural resources, as well as its encroachments on genuine liberty. The main reason? Because capitalism is one evolutionary stage behind the productive capacity of the amazing ‘machinery’ that it, itself, brings into being. Humanity’s current task is, thus, to do that which a virus cannot: To design our continued evolution and steer its path in a direction of our choosing, if only for the planet’s sake.”

    Finally, in my latest book, The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy (Zed Book, 2011), I wrote (see Chapter 2): “[I]f value requires human agency, then we just spotted a major source of instability buried deep in the foundations of our market societies: The more successful corporations are at replacing human labour with magnificent machines, and at disciplining human labour to perform with machine-like efficiency, the lower the value that our societies will be producing. They may churn out huge quantities of goods and shiny artefacts that we all crave. Only the value of this avalanche of goodies will be tending to zero, just as the machine economy in The Matrix is a value-free zone, despite the vast output produced by its mechanised workforce.”

    [1] Let it also be said that I reject the simplistic view that 1929 and 2008, the two major crises of capitalism, can be adequately explained as the outcome of the falling rate of profit. Not wishing to bore you here more than I have already done, interested readers can refer to Chapter 5 of Modern Political Economics: Making sense of the post-2008 world, Routledge, 2011
    http://yanisvaroufakis.eu/2011/09/25...rful-critique/
    Last edited by C. Flower; 25-09-2011 at 07:33 PM.

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