Yanis Varoufakis Quotes

The worst slavery is that of heavily indoctrinated happy morons who adore their chains and cannot wait to thank their masters for the joy of their subservience.

As Tony Benn, the British Labour politician, once suggested, we should constantly ask those who govern us five questions: What power have you got? Where did you get it from? In whose interests do you exercise it? To whom are you accountable? And how can we get rid of you?

Most politicians cannot be theorists. First, because they are rarely thinkers; second, because the frenetic lifestyle they impose on themselves leaves no time for big ideas. But most of all because to be a theorist you have to admit the possibility of being wrong – the provisionality of knowledge – and you know you cannot spin your way out of a theoretical problem.

My reason for writing it was the conviction that the economy is too important to leave to the economists.

Had history been democratic in its ways, there would have been no farming and no industrial revolution. Both leaps into the future were occasioned by unbearably painful crises that made most people wish they could recoil into the past.

When economists insist that they too are scientists because they use mathematics, they are no different from astrologists protesting that they are just as scientific as astronomers because they also use computers and complicated charts.

General Motors is alive and kicking today, it is because in 2009 President Obama’s administration wrote off 90 percent of its debt.

Leonard Schapiro, writing on Stalinism, warned us that “the true object of propaganda is neither to convince nor even to persuade. But to produce a uniform pattern of public utterances in which the first trace of unorthodox thought reveals itself as a jarring dissonance.

John Maynard Keynes, wrote the following: “The love of money as a possession … will be recognized for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.

All systems of domination work by enveloping us in their narrative and superstitions in such a way that we cannot see beyond them. Taking a step or two back, finding a way to inspect them from the outside, allows us a glimpse of how imperfect, how ludicrous, they are. Securing this glimpse keeps you in touch with reality.

Austerity is a morality play pressed into the service of legitimizing cynical wealth transfers from the have-nots to the haves during times of crisis, in which debtors are sinners who must be made to pay for their misdeeds.

Bullies blame their victims. Clever bullies make their victims’ culpability seem self-evident.

All babies are born naked, but soon after some are dressed in expensive clothes bought at the best boutiques, while the majority wear rags.

It is at this point in the book that the author famously laments that despite our ability to bring food from the earth, we are incapable of creating a system in which the hungry can be fed.

What does it mean to be a proletarian, really? [...] It means you are a cog in a process of production that relies on what you do and think, while excluding you from being anything but its product. It means the end of sovereignty, the conversion of all experiential value to exchange value, the final defeat of autonomy.

When our eyes fall on those who lack the bare necessities, we immediately sympathize and express outrage that they do not have enough, but we do not for a moment allow ourselves to think that their deprivation may be the product of the same process that led to our affluence

Regular crises perpetuate the past by reinvigorating cycles which started long ago. In contrast, (capital-C) Crises are the past's death knell. They function like laboratories in which the future is incubated. They have given us agriculture and the industrial revolution, technology and the labour contract, killer germs and antibiotics. Once they strike, the past ceases to be a reliable predictor of the future and a brave new world is born.

Los estudios de economía puede que utilicen modelos matemáticos y métodos estadísticos, pero se parecen más a la astrología que a la astronomía.

If you cannot imagine walking out of a negotiation, you should never enter it. If you cannot fathom the idea of an impasse you might as well confine yourself to the role of a supplicant who implores the despot to grant him several privileges

... toxic derivatives were underpinned by toxic economics, which, in turn, were no more than motivated delusions in search of theoretical justification; fundamentalist tracts that acknowledged facts only when they could be accommodated to the demands of the lucrative faith. Despite their highly impressive labels and technical appearance, economic models were merely mathematized versions of the touching superstition that markets know best, both at times of tranquility and in periods of tumult.

The Matrix is a reflection of our times, or at least our anxieties. It reveals our fear of a mechanization so complete, of a commodification of our bodies and enslavement of our minds so successful, that we are no longer even aware of it, having been made oblivious to our reality by the very technologies that rule us.

leverage – a fancy term for good old debt.

ALEXIS DE TOQUEVILLE once wrote that those who praise freedom only for the material benefits it offers have never kept it long.

Hindsight blurs history and tortures the mind with sterile hypotheticals.

In important ways, we resemble hamsters on their spinning wheels: no matter how fast we run, we are not really going anywhere. We might well conclude that the machines aren’t slaving away for our benefit; at times it even seems like we’re working furiously to maintain them.

Beneath the specific events that I experienced, I recognised a universal story – the story of what happens when human beings find themselves at the mercy of cruel circumstances that have been generated by an inhuman, mostly unseen network of power relations. This is why there are no ‘goodies’ or ‘baddies’ in this book. Instead, it is populated by people doing their best, as they understand it, under conditions not of their choosing. Each of the persons I encountered and write about in these pages believed they were acting appropriately, but, taken together, their acts produced misfortune on a continental scale. Is this not the stuff of authentic tragedy? Is this not what makes the tragedies of Sophocles and Shakespeare resonate with us today, hundreds of years after the events they relate became old news?

And yet it bewildered him that people truly believed capitalism to be about making things or providing services at a profit. He found it extraordinary how most people disliked speculators but thought of them as peripheral, as harmless bubbles on a steady stream of enterprise. They fail to recognize the very opposite is true, […] that enterprise long ago became a bubble on a whirlpool of speculation. That, in reality, workers, inventors and managers resemble driftwood buffeted hither and thither on a manic torrent of runaway finance.

Try mentally to travel to a faraway place, if not necessarily in order to move your world – though how splendid that would be! – but to see it clearly for what it is. Doing so will grant you the opportunity to retain your freedom. And to remain a free spirit as you grow up and make your way in this world, it is essential that you cultivate a rare but crucial freedom: the liberty that comes from knowing how the economy works and from the capacity to answer the trillion-dollar question: ‘Who does what to whom around your neck of the woods and further afield?

...a cynical person is someone who knows the price of everything but the value of nothing. Our societies tend to make us all cynics. And no one is more cynical than the economist who sees exchange value as the only value, trivializing experiential value as unnecessary in a society where everything is judged according to the criteria of the market.

There are times in politics when you must be on the right side and lose.

Corporatists like Robert Schuman and Jean Monnet were bent on constructing the Brussels-based bureaucracy as a democracy-free zone.

Upton Sinclair once said, ‘It is difficult to get a man to understand something when his salary depends upon his not understanding it.

We were divided and ultimately we were ruled.

When Gandhi was asked what he thought of Western civilization, he famously replied that “it would be a very good idea.

They are unanimous in their hate for me; and I welcome their hatred. (quoting FDR announcing the Second New Deal, 1936)

It is the mark of ancient societies that contemporary tribulations reinvent old fears.

The motives of the troika and Greece's domestic oligarchy are obvious. Debt is creditor power, and unsustainable debt gives creditors exorbitant power.

Without profit, they would have become slaves to their creditors

You are of course right, Yanis. These targets that they insist on can’t work. But, you must understand that we have put too much into this programme. We cannot go back on it. Your credibility depends on accepting and working within this programme.2 So, there I had it. The head of the IMF was telling the finance minister of a bankrupt government that the policies imposed upon his country couldn’t work. Not that it would be hard to make them work. Not that the probability of them working was low. No, she was acknowledging that, come hell or high water, they couldn’t work. With

Count Coudenhove-Kalergi put it succinctly in one of his speeches when he declared his ambition that Europe “supersedes democracy” and that democracy be replaced by a “social aristocracy of the spirit.”52

To put it slightly differently, small sovereign nations, like Iceland, have choices to make within the broader constraints created for them by nature and by the rest of humanity. However limited these choices might be, Iceland’s body politic retains absolute authority to hold their elected officials accountable for the decisions they have reached within the nation’s exogenous constraints, and to strike down every piece of legislation that it has decided upon in the past. (...) In this sense, small, powerless Iceland continues to enjoy full sovereignty while the comparatively omnipotent European Union has been stripped of all forms of sovereignty.

The black magic of banking destabilizes market societies. It massively amplifies wealth creation during the good times and wealth destruction during the bad times, constantly skewing the distribution of power and money. But to be fair, bankers are just that: massive amplifiers. The root causes of market society’s fundamental instability lie elsewhere, buried deeply in the weird nature of two peculiar commodities: human labour and money.

Brilliant and flawed, combining rare engineering talents with ridiculous public displays of ostentation, Musk is our era’s Thomas Edison – the man who, you may recall, electrocuted an elephant in order to discredit a rival.

The obscene sight of those who had played a major role in setting the scene for the Crash (men like Larry Summers, Tim Geithner, Ben Bernanke) effectively returning to the scene of the crime as ‘saviours’, wielding trillions of

The irony is that the liberal individual was snuffed out neither by fascist Brownshirts nor by Stalinist guards. It was killed off when a new form of capital began to instruct youngsters to do that most liberal of things: be yourself! (and be successful at it!)

Si nos interesa la salvación del planeta, aparentemente la solución pasa por encontrar una manera inteligente de recuperar la capacidad de los humanos de funcionar y de decidir colectivamente, para que dejen de «hacer los idiotas», es decir de mirar sólo sus intereses particulares.

The ancient Greek word for money, for currency, is 'nomisma.' It comes from the verb 'to imagine.'" "So money has value to the extent that we imagine that it has value, according to the ancient Greeks. They knew that more than 2,000 years ago, and we kind of forget that simple, important notion at times.

As I have frequently observed, there is a widespread belief in Europe’s north that the continent is populated by hard-working law-abiding ants on the one hand and lazy tax-avoiding grasshoppers on the other, and that all the ants live in the north while mysteriously the grasshoppers congregate in the south.

And here lies a delicious paradox: consent grew more powerful the more economic life was financialized. And as finance grew in importance, the more prone our societies became to economic crises. Hence the interesting observation that modern societies tend to produce both more consent and more violent crises.

It may seem paradoxical to you that preventing the destruction of the environment by market society’s preference for exchange value over experiential value should require us to convert every last remaining experiential value into exchange value, but this type of thinking and proposal is currently all the rage.

In a move that will remain in Irish annals as a stigma comparable to the potato famine, the Dublin government succumbed to ECB blackmail: make the German creditors of Ireland’s commercial banks whole, even a bank that was closed down and thus no longer systemically important for Ireland’s financial sector, or else.

And so it turns out that all talk of gradual moves toward a political union and toward “more Europe” are not first steps toward a European democratic federation but, rather, and ominously, a leap into an iron cage that prolongs the crisis and wrecks any prospect of a genuine federal European democracy in the future.

The financial press called it an ‘everything rally’. It went on for more than a decade. With shares in companies skyrocketing independently of whether the companies themselves turned a profit or not, the wealthy got immensely wealthier in their sleep. Then came the pandemic, giving the everything rally another almighty boost.

That a system evolved in a given environment only proves it’s best at replicating itself in that environment. […] That doesn’t make it a system that we should want to live in, nor, more importantly, is it any indication of its ability to survive over the longer term. Environments change, sometimes rapidly, sometimes because of the system’s own ill-effects. Out-competing other systems rather than living harmoniously with them can eventually be self-destructive. Viruses are a good case and point. [...] The question is not whether share-trading and capitalism have out-competed other systems up until now, but whether their effects are consistent with their hosts’ survival.

Liberalism’s fatal hypocrisy […] was to rejoice in the virtuous Jills and Jacks, the neighborhood butchers, bakers and brewers, so as to defend the vile East India Companies, the Facebooks, the Amazons, which know no neighbors, have no partners, respect no moral sentiments [the other book by Adam Smith] and stop at nothing to destroy their competitors.

Up until the end of the 16th century, even global trading outfits like the Levant Company were guilds or partnerships, whose members pooled their resources that none could accomplish in isolation. But then, on the September 24, 1599, in a half-timbered building off Moorgate Fields, not far from where Shakespeare was struggling to complete Hamlet, something momentous happened. A company was founded whose ownership was cut up into tiny pieces to be bought and sold freely and anonymously, like pieces of silver. Once could own a piece of the company without being involved of it, indeed without even telling anyone. The first global joint-stock company was thus born, undoubtly Tudor England’s most revolutionary invention. Its name? The East India Company.

Most Europeans like to think that American bankruptocracy is worse than its European cousin, thanks to the power of Wall Street and the infamous revolving door between the US banks and the US government. They are very, very wrong. Europe’s banks were managed so atrociously in the years preceding 2008 that the inane bankers of Wall Street almost look good by comparison. When the crisis hit, the banks of France, Germany, the Netherlands and the UK had exposure in excess of $30 trillion, more than twice the United States national income, eight times the national income of Germany, and almost three times the national incomes of Britain, Germany, France and Holland put together.8 A Greek bankruptcy in 2010 would have immediately necessitated a bank bailout by the German, French, Dutch and British governments amounting to approximately $10,000 per child, woman and man living in those four countries. By comparison, a similar market turn against Wall Street would have required a relatively tiny bailout of no more than $258 per US citizen. If Wall Street deserved the wrath of the American public, Europe’s banks deserved 38.8 times that wrath. But

Few progressive Europeans would argue against a democratic United States of Europe, with a proper government elected on a pan-European ticket and answerable to a proper parliament vested with complete sovereignty over all decisions and matters. But this is pure wishful thinking. The sobering reality is that it is not in the European Union’s DNA naturally to evolve into a federation.

My dear Eva,’ Iris replied, ‘universities are not about imparting skills. They are about producing flexible minions dying to do as they are told. You are there to manufacture young people willing – desperate – to be moulded to their future bosses’ priorities. And the first step is to get them to swallow without question your faith that markets are as natural as gravity and profit the only worthy aspiration.

The right to issue unlimited quantities of anonymously tradable shares, along with the institution of a liquid market for them, created something new: corporations with power so immense, it dwarfed that of their countries of origin, and could be deployed in faraway places assiduously to exploit people and resources. Shareholding and well-governed share markets fired up history, separating ownership from the rest of the East India Company’s activities unleashed a fluid, irresistible force. Unchecked, the East India Company grew more powerful than the British state, answerable only to its shareholders. At home, its bureaucracy corrupted and largely controlled Her majesty’s government. Abroad, its 200,000-strong private army oversaw the destruction of well-functioning economies in Asia and a number of Pacific islands and ensured the systematic exploitation of their peoples.

There was another reason why the dollar's hegemony grew: the intentional impoverishment of America's working class. A cynic will tell you quite accurately that large quantities of money are attracted to countries where the profit rate is higher. For Wall Street to exercise fully its magnetic powers over foreign capital, profit margins in the United States had to catch up with profit rates in Germany and Japan. A quick and dirty way to do this was to suppress American wages. Cheaper labour makes for lower costs, makes for larger margins. It is no coincidence that, to this day, American working class earnings languish below their 1974 level. It is also no coincidence that union-busting became a thing in the 1970s, culminating in Ronald Reagan's dismissal of every single unionised air traffic controller. A move emulated by Margaret Thatcher in Britain who pulverised whole industries in order to eliminate the trade unions that inhabited them. And faced with the Minotaur's sucking most of the world's capital into America, the European ruling classes reckoned that they had no alternative but to do the same. Reagan had set the pace. Thatcher had shown the way. But it was in Germany and later across continental Europe that the new class war - you might call it universal austerity - was waged most effectively.

¿Sería inteligente por parte de los astronautas envenenar el oxígeno de su nave espacial? Esto es exactamente lo que hacemos los seres humanos. Y lo llevamos haciendo desde hace trescientos años, desde que surgieron las sociedades de mercado, cuando los valores de cambio triunfaron sobre los valores experienciales y el beneficio (es decir, la «plusvalía ») adquirió un poder único y absoluto sobre las almas y las acciones de los seres humanos.

Could the Crash of 2008, then, be nothing more than our periodic chance to realize how far we have allowed our will to be subjugated to capital? Was it a jolt that ought to awaken us to the reality that capital has become a ‘force we must submit to’, a power that developed ‘a cosmopolitan, universal energy which breaks through every limit and every bond and posits itself as the only policy, the only universality, the only limit and the only bond’?

Forcing new loans upon the bankrupt on condition that they shrink their income is nothing short of cruel and unusual punishment. Greece was never bailed out. With their ‘rescue’ loan and their troika of bailiffs enthusiastically slashing incomes, the EU and IMF effectively condemned Greece to a modern version of the Dickensian debtors’ prison and then threw away the key. Debtors’ prisons were ultimately abandoned because, despite their cruelty, they neither deterred the accumulation of new bad debts nor helped creditors get their money back. For capitalism to advance in the nineteenth century, the absurd notion that all debts are sacred had to be ditched and replaced with the notion of limited liability. After all, if all debts are guaranteed, why should lenders lend responsibly? And why should some debts carry a higher interest rate than other debts, reflecting the higher risk of going bad? Bankruptcy and debt write-downs became for capitalism what hell had always been for Christian dogma – unpleasant yet essential – but curiously bankruptcy-denial was revived in the twenty-first century to deal with the Greek state’s insolvency. Why? Did the EU and the IMF not realize what they were doing? They knew exactly what they were doing. Despite their meticulous propaganda, in which they insisted that they were trying to save Greece, to grant the Greek people a second chance, to help reform Greece’s chronically crooked state and so on, the world’s most powerful institutions and governments were under no illusions. […] Banks restructure the debt of stressed corporations every day, not out of philanthropy but out of enlightened self-interest. But the problem was that, now that we had accepted the EU–IMF bailout, we were no longer dealing with banks but with politicians who had lied to their parliaments to convince them to relieve the banks of Greece’s debt and take it on themselves. A debt restructuring would require them to go back to their parliaments and confess their earlier sin, something they would never do voluntarily, fearful of the repercussions. The only alternative was to continue the pretence by giving the Greek government another wad of money with which to pretend to meet its debt repayments to the EU and the IMF: a second bailout.

Corporations go to great lengths to employ geniuses: technologists, designers, financial engineers, economists, artists even. I’ve seen it happen,’ he said. ‘But what have they done with them? They channel all that talent and creativity towards humanity’s destruction. Even when it is creative, Eva, capitalism is extractive. In search of shareholder profit, corporations have put these geniuses in charge of extracting the last morsel of value from humans and from the earth, from the minerals in its guts to the life in its oceans. And these brilliant minds have been used to cajole governments into accepting their raids on the planet’s resources by creating markets for them: markets for carbon dioxide and other pollutants – phoney markets controlled by their employers! Unlike the East India Company, the Technostructure does not need its own armies. It owns our states and their armies, because it controls what we think. The dirtier the industry, the richer and more despised, the more its captains have been able to tap into the rivers of debt-derived money to purchase influence and to blunt opposition. Previously they would buy newspapers and set up TV stations; now they employ armies of lobbyists, found think tanks, litter the Internet with their trolls and, of course, direct monumental campaign donations to the chief enablers of our species’ extinction, the politicians.

The real force that pushed history to breakneck velocity […] was not the share market. Share markets were simply not liquid enough to bankroll Edison-sized ambitions. At the turn of the 20th century […] neither the banks nor the share markets could raise the kind of money needed to build all those power stations, grids, factories and distribution networks. To get those vast projects off the ground, what was required was an equivalently-sized network of credit. Hand-in-hand, shareholding and technology led to the creation of shareholder-owned mega banks, willing to lend to the new mega firms by generating a new kind of mega debt. This took the form of vast overdraft facilities for the Thomas Edisons and the Henry Fords of the world. Of course, the money they were lent did not actually exist… yet. Rather, it was as if they were borrowing the future profits of their mega firms in order to fund those mega firms’ construction.

The East India Company was no apparition though; it was the template for many subsequent corporations […] Liberals betray themselves […] the moment they turn a blind eye to this kind of hyper-concentrated power. […] This is why trading in apples does not come even close to trading in shares. Large quantities may produce, at worse, lots of bad cider, but large amounts of money invested in liquid shares can release demonic forces that no market or state can control.

This is what they came up with in lieu of a solution: The ECB allowed the Greek government to issue worthless IOUs (or, more precisely, short-term treasury bills), that no private investor would touch, and pass them on to the insolvent Greek banks.21 The insolvent Greek banks then handed over these IOUs to the European System of Central Banks22 as collateral in exchange for loans that the banks then gave back to the Greek government so that Athens could repay the ECB.

You may well ask: when the bubble finally burst, why did we not let the bankers crash and burn? Why weren't they held accountable for their absurd debts? For two reasons. First because the payment system - the simple means of transferring money from one account to another and on which every transaction relies - is monopolised by the very same bankers who were making the bets. Imagine having gifted your arteries and veins to a gambler. The moment he loses big at the casino, he can blackmail you for anything you have simply by threatening to cut off your circulation. Second, because the financiers' gambles contained deep inside the title deeds to the houses of the majority. A full-scale financial market collapse could therefore lead to mass homelessness and a complete breakdown in the social contract. Don't be surprised that the high and mighty financiers of Wall Street would bother financialising the modest homes of poor people. Having borrowed as much as they could off banks and rich clients in order to place their crazy bets, they craved more since the more they bet, the more they made. So they created more debt from scratch to use as raw materials for more bets. How? By lending to impecunious blue collar worker who dreamed of the security of one day owning their own home. What if these little people could not actually afford their mortgage in the medium term? In contrast to bankers of old, the Jills and the Jacks who actually leant them the money did not care if the repayments were made because they never intended to collect. Instead, having granted the mortgage, they put it into their computerised grinder, chopped it up literally into tiny pieces of debt and repackaged them into one of their labyrinthine derivatives which they would then sell at a profit. By the time the poor homeowner had defaulted and their home was repossessed, the financier who granted the loan in the first place had long since moved on.

There are two kinds of politicians,’ he said: ‘insiders and outsiders. The outsiders prioritize their freedom to speak their version of the truth. The price of their freedom is that they are ignored by the insiders, who make the important decisions. The insiders, for their part, follow a sacrosanct rule: never turn against other insiders and never talk to outsiders about what insiders say or do. Their reward? Access to inside information and a chance, though no guarantee, of influencing powerful people and outcomes.

Remarkably, as with all historic transformations, no one planned it. No capitalist imagined becoming a cloudalist. No central bankers aimed at funding the cloudalists. No politicians saw the damage cloud capital would inflict upon democratic politics. In the same way that capitalism came about against the will of everyone, including the kings and bishops as well as the peasants, the rise of the cloudalists happened out of sight and behind the back of the vast majority, including the most powerful of historical agents.

Rather, an authentic drama was afoot reminiscent of a play by Aeschylus or Shakespeare in which powerful schemers end up caught in a trap of their own making. In the real-life drama I was witnessing, Summers’s sacred rule of insiders kicked in the moment they recognized their powerlessness. The hatches were battened down, official denial prevailed, and the consequences of the tragic impasse they’d created were left to unfold on autopilot, imprisoning them yet further in a situation they detested for weakening their hold over events.

So, how did these rulers manage to maintain their power, distributing surplus as they pleased, undisturbed by the majority? The answer is: by cultivating an ideology which caused the majority to believe deep in their hearts that only their rulers had the right to rule. That they lived in the best of all possible worlds. That everything was the way it was destined to be. That the situation on the ground reflected some divine order. That any opposition to them clashed with that divine power’s will, threatening to send the world spinning out of control.

But this was not a bailout. Greece was never bailed out. Nor were the rest of Europe’s swine—or PIIGS as Portugal, Ireland, Italy, Greece and Spain became collectively branded. Greece’s bailout, then Ireland’s, then Portugal’s, then Spain’s were rescue packages for, primarily, French and German banks. In bending its rules to rescue the PIIGS’s private banks (with the issue of the aforementioned IOUs), the ECB had given Chancellor Merkel and France’s President Nicolas Sarkozy some respite from having to go back to their parliaments for more taxpayers’ money for French and German bankers. But much more was now needed.

The stigma attached to the charging of interest was simply incompatible with the commodification of land and labour and with the Great Reversal. It had to be overturned – and so it was. The Protestants, who broke away from the Catholic Church in the sixteenth century, played a crucial role in this reversal. Protestantism emerged in opposition to the Pope and the cardinals’ monopoly of God. Protestants insisted that anyone could speak personally with the divinity, unmediated by an authoritarian, stifling Church. Suddenly, the person, the individual who is the director of his own affairs, became the pillar of that reformed Church.

Corporations are forced, by competition and by the fear of predators, to try to turn workers into machine-like production units; to make the hiring of a worker no different from the hiring of an electricity generator. And yet, however hard they try to turn humans into machines and to extract output from their ‘work’ (in the same way as they extract effort from a horse or electricity from a generator), it is an impossible task. The worker cannot discard her innate human quirks, rebelliousness, indeterminateness – not even if she honestly wants to. All the things that make her contribution to production inherently unpredictable are part of who she is.

In the case of the Irish banks, the private bonds that they had purchased were uninsured. In the case of Greek state bonds, their buyers also knew that these were Greek law contracts, meaning that they could be given a haircut (written down) by a future stressed Greek government. This is precisely why the interest rates were higher than in Germany. Higher risk, higher rewards. As long as the gamble was paying off, the German bankers reaped benefits that they shared with no one. But when the gambles turned bad, as Irish banks and the Greek state failed, they demanded that the taxpayers of Greece and Ireland pay up, as if they had bought insurance from them.

The moment American bankers stop lending dollars to Argentina, the country is unable to refinance its mountain of dollar debt. Again, Greece is similar. Even though it has the same currency as Germany, the euro, the chronic Greek trade deficit with Germany translates into a constant flow of loaned euros from Germany to Greece so that the Greeks can keep buying more and more German goods. The slightest interruption in the flow of new loans from the surplus country to the deficit country causes the whole house of cards to collapse. This is when the IMF steps in. Its personnel fly into Buenos Aires or Athens, take black limousines to the finance minister’s office and state their terms: we shall lend you the missing dollars or euros on condition that you impoverish your people and sell the family silver to our mates, the oligarchs of this country and the world. Or words to that effect. That’s when TV screens fill with images of angry, and often hungry, demonstrators in Buenos Aires or Athens. Time and again history has shown that the periodic economic recessions that result from trade imbalances poison the deficit country’s democracy, incite contempt for its people in the surplus country, which then prompts xenophobia in the deficit country. Simply put, sustained trade deficits – and surpluses, their mirror image – never end well.

While it would have been straightforward, and perfectly legal, to allow Irish banks or the Greek state to default to their private creditors (so as to respect the no-bailout clause), the authorities’ guilty desire to bail out the German and French banks (without telling taxpayers that this was what they were doing) led to the need to violate the no-bailout rule by concocting another rule: the no-default rule, which was never part of Europe’s original set of rules. (...) Both the freshly minted no-default rule and the original no-bailout clause were political whims of the strong disguised as legal constraints upon the weak. In reality, the strong break their rules at will and concoct new rules whenever they think it suits them.

the Big Three own, which include America’s major airlines (American, Delta, United Continental), much of Wall Street (JPMorgan Chase, Wells Fargo, Bank of America, Citigroup) and car makers such as Ford and General Motors. Together, the Big Three are the largest single shareholder in almost 90 per cent of firms listed in the New York Stock Exchange, including Apple, Microsoft, ExxonMobil, General Electric and Coca-Cola. As for the dollar value of the Big Three’s shares, it has too many zeros to mean much. At the time of writing, BlackRock manages nearly $10 trillion in investments, Vanguard $8 trillion and State Street $4 trillion. To make sense of these numbers: they are almost exactly the same as the US national income; or the sum of the national incomes of China and Japan; or the sum of the total income of the eurozone, the UK, Australia, Canada and Switzerland.

Very briefly, this simple, practical measure would be for a portion of the machines of every company to become the property of everyone – with the percentage of profits corresponding to that portion flowing into a common fund to be shared equally by all. Consider what effect that would have on the course of human history. Currently, increasing automation reduces the portion of total income that goes to workers, diverting more and more money into the pockets of the rich who own the machines. But as we have seen, this ultimately diminishes demand for their products, as the majority have less and less money to spend. But if a portion of the profits were to go automatically into the bank accounts of the workers as well, then this downward pressure on demand, sales and prices would be alleviated, turning the whole of humanity into the beneficiary of the machines’ labour.

In reality, states never repay their debt. They roll it over, meaning they defer repayment endlessly, paying only the interest on the loans. As long as they can keep doing this, they remain solvent. It helps to think of public debt as a hole in the ground next to a mountain representing the nation’s total income. Day by day the hole gets steadily deeper as interest accrues on the debt, even if the state does not borrow more. But during the good times, as the economy grows, the income mountain is steadily getting taller. As long as the mountain rises faster than the debt hole deepens, the extra income added to the mountain’s summit can be shovelled into the adjacent hole, keeping its depth stable and the state solvent. Insolvency beckons when the economy stops growing or starts to contract: recession then eats into a country’s income mountain, doing nothing to slow the pace at which the debt hole continues to grow.

In the meantime, it is useful to end this chapter by pondering a paradox. On the one hand, as already noted, economics is replete with eulogies to freedom (particularly of the market). However, on the other hand, the type of freedom that economics textbooks talk about is compatible with the science fiction image of rows and rows of persons attached to a pleasure machine which bombards them with utility (or, to be more respectful to ordinal utility, which keeps them at the very top of their preferences ordering). Less apocalyptically, it is consistent with a society in which individuals’ ideals have been reduced to purchasing commodities in gigantic shopping complexes guided totally by cravings manufactured in elaborate marketing clinics. Perhaps the most helpful conclusion to draw from all this is that the economic textbook’s model of rational choice is the culmination of the logic unleashed on the world by the emergence and domination of market societies (see Chapter 1 again). One question is worth keeping in mind when immersed in that logic: is a happy slave (a slave of feudal masters or, today, of the advertisers) capable of being free (whatever that person’s utility level)? So, if freedom is more than just desire-fulfilment what does it mean to be free? No one has the definitive answer but here is a suggestion: individual freedom may be the capacity to act freely, not only in order to satisfy the preferences that are there already (the utility machine can do this admirably), but in order to create new and better preferences—in order to improve one’s self. We can do this only if we care about more than the indulgence of our current desires.

The notion that elections cannot be allowed to change economic policy, indeed any policy, is a gift to [founder and leader of Singapore] Lee Kuan Yew supporters or indeed the Chinese communist party, who also believe this to be true. There is of course a long tradition of doubting the efficacy of the democratic process. But I would like to think that his tradition has been expelled long ago from the heart of Europe. It now seems that the euro crisis has brought it back. I urge you all to band together in a collective bid to resist it. Democracy is not a luxury to be afforded to the creditors and denied to the debtors. Indeed, it is the lack of democratic process in the heart of our monetary union that is perpetuating the euro crisis. Then again, I might be wrong. Colleagues, if you think that I am wrong, if you agree with Wolfgang, then I invite you to say so explicitly by proposing that elections should be suspended in countries like Greece until the country's programme is completed. What is the point of spending money on elections and asking our people to get all fired up to elect governments that will have no capacity to change anything?

After hovering in the ethereal world of mathematics and geometry, economics was forced to crash-land and take its place in the real world of political debate. Do economists wish to pursue the Good Society in the spirit of the social contract tradition which started some time in ancient Greece, reasserted itself in Europe with J.-J.Rousseau and found its apotheosis in John Rawls? Or do they wish for a social contract which effectively rules the State out as anything other than a provider of order and security—a tradition which began with Thomas Hobbes and culminated in Robert Nozick’s theory? Or, indeed can economists think of something in between? Thus economics is back into the mire courtesy of Arrow’s third theorem, which dispels any hopes of a Rational Society springing from some form of advanced utility maximisation. Economics can no longer escape the political, philosophical debates which resonate across the humanities—from literature to sociology and from politics to moral philosophy. This is a good thing. At last, economics can become interesting again after a century of continuous pedantry.

Austerity is a morality play pressed into the service of legitimizing cynical wealth transfers from the have-nots to the haves during times of crisis, in which debtors are sinners who must be made to pay for their misdeeds. Not

Perhaps a better term for what is still called the economy would be ‘agoranomy’, as in the laws of the agora – the marketplace.

Between them, the leaders of France and Germany had a stake of around €1 trillion in not allowing the Greek government to tell the truth; that is, to confess to its bankruptcy. Yet they still had to find a way to bail out their bankers a second time without telling their parliaments that this was what they were doing. As Jean-Claude Juncker, then prime minister of Luxembourg and later president of the European Commission, once said, ‘When it becomes serious, you have to lie.

the accusation was false, and although doubts still slithered through my mind like restless serpents

Greece was merely the laboratory where these failed policies were being tested and developed before their implementation everywhere across Europe.

After the press conference I would return to an empty sixth floor to engage in battle with the world’s most powerful creditors without secretaries, staff or indeed a computer. Thankfully, I had my trusty laptop in my rucksack. But who would furnish me with the Wi-Fi password?

only when the weak have decent reasons to defend the system that reproduces their subservience does the empire of the powerful

German officials knew it in 1964, as they knew it in 1992: for the French elites, a common currency with Germany was an attempt to neuter Germany, indeed to conquer the Bundesbank without firing a single shot. German decision makers, especially Bundesbank officials, would never allow themselves to forget that. But

What power have you got? Where did you get it from? In whose interests do you exercise it? To whom are you accountable? And how can we get rid of you?32 Ever

A speech on March 18, 1947, by Herbert Hoover, President Roosevelt’s predecessor, flagged America’s new policy on Europe. “There is an illusion,” Hoover said, “that the New Germany . . . can be reduced to a pastoral state. It cannot be done unless we exterminate or remove 25 million people out of it.”33

I was told once by a leftwing scholar that as a Marxist, you have to do two things: always be optimistic and always have a view about everything. That advice still sounds good to me.

But, you must understand that we have put too much into this programme. We cannot go back on it. Your credibility depends on accepting and working within this programme.2

Larry Summers is one such rare insider. His question to me was in fact an invocation to reject the lure of the outside. Underpinning his belief system was the conviction that the world can only be made better from within the black box.

As Jean-Claude Juncker, then prime minister of Luxembourg and later president of the European Commission, once said, ‘When it becomes serious, you have to lie.’4

Once caught in this web of power it takes an heroic disposition to turn whistle-blower, especially when one cannot hear oneself think amid the cacophony of so much money-making. And those few who do break ranks end up like shooting stars, quickly forgotten by a distracted world.