Is Capitalism Devouring Democracy? (Yanis Varoufakis)

Is Capitalism Devouring Democracy?
Author	Yanis Varoufakis
Spoken on	2018
Source	https://www.youtube.com/watch?v=gGeevtdp1WQ

Foreword by ProleWiki

This is an in-progress transcription. Many proper nouns and uncommon words and so on are not correct. Feel free to listen to the original talk linked in the Library box and add corrections

I could see Wolfgang Schäuble, the German Finance minister was looking at me with the you know eyes. Uh that felt like laser beams And he, he gets the floor and he said, 1 sentence 1 sentence, which is the 1 that I'm going to leave you with.

Elections. Cannot be allowed. To change economic policy.

Got it.

My response was this is excellent news to the Chinese Communist party because they believe that too.

And I then came up with a proposal. This is why they hate me of the very modest and said in that case Walla, um, let's ban elections. In bankrupt countries. Let's assume, you know, come out and declare that in the European Union, you you can only have democracy if you're a credible country. If you're a debt of country, no democracy elections cannot be allowed to change anything. Because we have a loan agreement, huh? We have a debtor's person. Let's put Greece in the warehouse. I did't say all these things, but I did say the thing about the Chinese Communist Party.

[Mary Stack, introducer]

And I quote from his preface. I've always believed that if you're not able to explain the economy in a language, which young people can understand, Then you're clueless yourself. This from its author. Jana. Sparkus a man. Not only known not to mince his words, but 1 of him, in fact, wrote the book in Greek in 9 days.

I'm Mary stack, the director of Cambridge forum tonight was assisted in navigating the murky Waters of capitalism and to quote Yanis come to terms with the Beast that dominates Our Lives. We are privileged to have the best of teachers, a philosopher and international Economist Yanis Varoufakis. And I'm very much looking forward to the conversation that we're going to have.

[Yanis Varoufakis]

Uh, but I've been asked to give a presentation. So are we? Because I sometimes I like to do, as I'm told not very often. Uh, The title. But there's been other types and some of you saw it outside and walked into our might as well honor of the title. Uh, is a question. Is capitalism devouring democracy? Allow me to to to begin with a slightly different question. Have you noticed how in the last few decades? The quality of politicians has stumbled. Not just in this country everywhere.

For God's sakes, even I became a politician in 2015.

There is a marked diminishing in the rhetoric in the capacity of politicians to inspire and indeed in the power that they have. Now, I don't believe that this is due to, um, a degeneration of the DNA of humanity, uh, or of, uh, those who are interested in politics, what we have been observing Is the shrinking of what I shall refer to as the political sphere.

There used to be a time before, capitalism. When there was 1 sphere, the sphere of power, It was impossible to separate economic power, from political power, the king. Had both military both yeah, military power. Military power. Uh, produced political power, and political power. And economic power were 1 and the same thing. There's no Uh, great mystery. Really as to why there was no economics.

150 years ago?

The thing about Harvard University, did not have any economics Department in the 19th century? Why? Because there was no need for it before. Capitalism came of age. Before capitalism. The political and economic sphere were 1. It was only with the enclosures in Britain. That you had a remarkable transformation of society that great transformation. The shifting from feudalism to capitalism. Effectively. The Peasants were, uh, evicted from the land replaced by sheep because of the international trade routes that were creating an international market for wool. And some Commodities like wool like steel, like uh, uh, uh, uh, spices and so on were emerging as International Commodities with prices that were determined that the level of the international trade routes system And, And all the other Commodities were Commodities Goods. Uh, were effectively sidelined. So the The lord of the land.

In in Yorkshire or in uh, you know, in Manchester had absolutely no. Incentive to retain those peasants.

Planting idiotic little, you know, vegetables, when they could just Chuck them out of the land, replace them with fat sheep. Uh, whose wool suddenly had any International, uh, value exchange value. But the enclosures created the working classes, they it created the commodification of Labor Up Until then, people worked very hard but they didn't sell their labor. Uh, we had a very interesting Reversal of uh, the timing. Of economic production and distribution and the feudalism. We had work production first. People actually. Toiled through the work of the land and they produced The Harvest production came first. Then came distribution, the lord of the land of the, or the manner or whatever would send the sheriff in and take his cuts. From the Harvest.

How much he would take and how much he would leave behind was a political issue. It had to do with military power. It had to do even with the benevolence of the Lord. It had to do with the extent to which the Lord needed to keep the peasants on sight in case, another Lord tried to usurp his property rights over the land. It was a political diplomatic, ethical, the religious economic. Process that determined distribution after production and then finally the Surplus that the Lord amassed was sold in nearby markets and that created a financial Surplus for the Lord, which then he leant out. So if we had production, Distribution. And then, finally,

Finance.

But with The enclosures and the eviction of the peasantry. We had the exact opposite. Because suddenly the Lord, the last thing that Lords wanted to do is to work or to be entrepreneurial. So

The replacement of the peasants with the Sheep meant that suddenly every acre of land, had an economic value and exchange value, a price that did not exist. That was not the case before. Why did it acquire this price? Because you knew how many sheep you could graze on an acre, you know? How much more or less would you would produce International markets were providing the equilibrium price of the world? So you knew how much exchange value money. You could gather per acre of your land, And of course, then once that price was established, That exchange value per acre was established suddenly land became a commodity To be rented, out to be sold to be purchased. There was no real estate market before that land was either, uh, either you inherited land, in which case you had it. And if you never inherited the land, you never got it. And the only way of effectively getting land that you didn't have was through War through Conquest. Or if the king decided to grant you a p plot of Life. There was no such thing as a market for land, and there was no such thing as a market of Labor, the enclosures, the Eviction of the peasants created. Land as a commodity and of course, labor as a commodity because the evicted peasants.

Actively they were roaming around the country knocking on doors saying, I will do anything for work for work for a piece of bread. That's the first labor market. That had never happened before in the history of humanity. People with nothing selling their labor time. That's the beginning of capitalism.

With this, you have the, uh, separation of the economic from the political Sphere, for the first time. In our history as a species. Because suddenly, you had Merchants who acquired huge power.

Through the accumulation of, uh, uh, Financial surpluses Because the internationalization of those trade routes, the emergence of these few Commodities. As International Commodities, that bestowed substantial Financial Surplus. Upon those who handle them. Whether? They were the, merchants, the ship owners or the Lords of the land, uh, whose land now was used in order to Captivate it inverted. Commas wool.

Time, you had this separation, you had Lords who Political power and Social Power. Was now becoming increasingly disproportionate to their economic power. You had those, you know, dirty Merchants as they consider them. There is the the riffraff. Ugly dirty, merchants.

Acquiring.

This quantities of economic power that had nothing to do with their social status. They were not allowed in the palace, they were not allowed in Parliament, they were not allowed in the, in the, you know, in in, in the gentleman's clubs in London. And suddenly, they had a lot more economic power than the Lords. So, the economic and the political sphere separated, and within the realization, you throw into this, mix James Watts, great invention, the steam engine. And this process just goes berserk and you have globalization which K marks in the and free the angles in the manifesto described in the most poetic language. When they say that capital must Nestle everywhere. It must settle everywhere. It must enter into a relations everywhere. So, and it was interesting because when Marx and Engels were writing that it hadn't happened yet, Uh, but they for, so the process that we live in. Globalization. And with globalization, now we have well, With this process of globalization, you have the establishment of these completely to uh separate to spheres. Now, interestingly in the 19th century, you will recall this

Uh, Well, you live in a very historic town, um,

Literally, Was. A philosophy, a political philosophy at odds with democracy. To be a liberal. A genuine liberal. You were, you must have been very skeptical about democracy if not completely and utterly anti-democratic the whole point about liberalism Was how to preserve the right to. Track barter and exchange in Adam, Smith's famous famous expression. Which, Was a right that. The Liberals, including John Stuart Mill, a very liberal person. Very Progressive person, for his age, he considered The ideal of democracy, what is democracy, is the rule of the many, to be a great impediment. If not a great threat to liberalism, So this, when we talk about liberal democracy today, we're talking about something that in the 19th century. Was a contradiction in terms.

Meant that you did not believe in democracy.

Now, what was it that brought about a change a transformation suddenly liberals? Started. Embracing the idea of democracy. It was economic crisis financial and economic crisis beginning especially in this country, but also in Europe in the 1840s Because the moment capitalism started turbocharging itself. With the creation of what I will. Uh, um, relate Described as networked companies with the advances in electromagnetism. We you know, Electric engines, the telegraph, all the communication technology electricity grids when electricity comes into uh production. And we move Beyond steam, that's the Second Industrial Revolution. To create when Edison created his Empire,

He created a networked company. Remember, from the electric bulb to the power Generating Station to the grid. Everything was part of this. When we talk about Google now and Apple has been uh Mega companies. Well the mega company was invented with the Second Industrial Revolution but think about it to set up a company like Edison or later and reports and so on you needed a lot of Finance. You need a lot of money. So, suddenly

The new reversed order. Becomes very significant because now ever since the peasants were thrown out of the land ever since the enclosures in Britain, The Lord rented out, least out an acre or a few acres to an ex present and said, okay, I will charge your rent. You raise the Sheep here, and Uh, you keep the, the difference there is residual payments. So once you pay for the land me, Once you pay the workers, the ones that have been expelled and now are working for a piece of bread. Subsistence wages. Once you pay for the, for the, for the sheep, for the, the the shearing scissors, whatever it is that you're using your Capital Equipment. What you keep in the end is yours is your profit. So suddenly this Proto-entrepreneurs were forced.

They didn't choose to do it. They were forced to become entrepreneurs. But how do you become an entrepreneur? First, you borrow And usually, you borrow from the landlord.

The the landlord lends, you the money to pay him rent.

With interest.

So you see the reversal? Instead of Finance coming at the end we used to have production then exchange or distribution and then finally Finance. Now we have financed first first the at the beginning there was a loan Once the loan comes in, you hire the workers, you pay the rent. Immediately you have distribution so you have financed first distribution. Second, the last thing that happens is production. So, finally acquires a very special place in capitalism. Now, the beauty and ugliness of finance of banking is that it Is a magical process.

So, once we move to, from the landlord to Edison and Henry Ford, It is impossible to finance capitalism simply by the accumulated wealth of some rich person like the Lord. There was never enough money in the hands of any Financial. To provide Edison with a capital, with the money, he needed in order to set up his Network firm. So, you needed Banks to conjure up money from nothing. And this is how Finance has been working ever since the Second Industrial Revolution. How

By creating money from thin air, there is a common fallacy in the, in the popular culture that we live in that banks, operate like votes. Whereby. Uh, you and I put our savings in And somebody else goes to the bank. And borrows money that comes from our savings and that the banker made the profit as a result of the Difference between the interest rate that he pays us for the depositing, our money into his vault, and the interest rate that he charges, the person that is borrowed money. In order to invest in a shop in a factory, whatever that is not

What is going on?

If you go to the bank tomorrow morning and you get a loan from Bank, the money is going to come out of thin air, the bank will create it out of nothing.

It's really very simple. You get a 100,000 to buy a house, to buy whatever. Yeah, to to invest in a business. What will happen is somebody's going to type 100,000. Yeah, 1 0 0, 0 0 0 and do your bank account. So, it's Contra up. The ancient Greeks had a word for money, nomisma (νόμισμα) or coin, which comes from the verb. Nomiso. Which means to imagine So it's totally defined the value of money as a common fiction.

Since the ancient times, this is exactly what it is. So the banker simply types, the money in there, Uh, you put your card in the ATM, suddenly, you know, you have a 100,000, somebody type a 100,000 on the on, you know, on on the system. And then what you can do is you can use a web banking, you can wire the money, uh, you if you buy a car or a house, it goes to the bank account of the vendor. If um, you invest in a shop, it goes to the landlord to another bank account with the same banking system doesn't matter, whether it's the same bank or not. So, These digits that were typed into your account, simply are transferred to another account. That's all that happens. Now, the hope of the banker is That you are going to use this money productively, you're going to earn money from that. And then you will give the banker the money that will affectively. Yeah, tie up that loose end with interest. Now, to the extent that this works and it really works magnificently in my book. I relate this In the form of the a a a m of a science fiction metaphor. It's a bit like a banker being the uh specially gifted magician who has a very long arm and can push his arm, it's usually a. He so allow me not not to say she or he right? Um, Through the timeline.

He pushes his hand into the future, grabs value. That has not been created. Yet brings it snatches it from the future, brings it into the present and gives it to you. Hopefully, you do productive things and you create the value that will repay the future. This is my preferred metaphor for what Bankers do. But once they learned the Beauty and the, the glory of doing this, and they are privileged in a privileged spot because they can take value from the future. Bring it to the present. They don't do any work themselves. And because they are the mediators between future and present value.

The ultra rich and not are only underage But Central in Societal processes, political processes. Yeah, so if, if you do this and it works, why not? Do more of it, keep snatching more value from the future, and bringing it, to the present more and more at some point, the present can no longer produce the value that it needs to produce in order to repay the person. And the at that point. Suddenly, yeah, we, those of us who have borrowed money or some of us, Have no capacity to repay it. A recession begins. People that work for us, lose their jobs. They cannot repay their own loans and then suddenly, The book of the bank is full of loans that are non-performing

At that point, if you and I or those of us who have some money in the bank, Realize that this is happening. We Panic. We rush to the bank. This is a bank run. We ask for the cache. The cache is not there. And then you have the financial crisis that we had in this country and in Europe from the 1840s onwards. Now, the

To a very large extent, the United States of America. The way you understand your own country. Now is the product of there is political response to a sequence of financial crisis, beginning from the 1840s Even the creation of the Federal Reserve in the beginning of the 20th, century was a result of yeah. JP Morgan saying I've had enough of bailing out my mates. Let's create um a Federal Reserve that is going to be doing the job and of course he created it and it was all stitched up amongst the the the bankers think of that of of of of all the great institutions of this country like, you know, Social Security food stamps there, there is out of 1929. It's what brought this nation together, what? Created the United States of America. The way you understand it. It's a sequence of financial collapses. That puts together Um, Nations and politics and Democratic processes. So, We let me. Go back to the beginning. We used to have 1 sphere of power. It was. Political economic cultural military power had many different uh facets but it was once fear in which it uh emerged. From. Then it separated into 2 spheres. The political sphere and economic sphere. And as it did.

The political sphere was increasingly democratized. Why? Because of the important decisions were moving to the economic sphere. So legitimacy political legitimacy. And the capacity of the regime of the system that we live in to maintain itself to be sustainable through the common belief. Amongst the people that this is a legitimate system was based on democratization of giving people, the idea that they had control over the communities, the nation their politics. But this democratization was only accepted by the proponents of liberalism, to the extent that all the important decisions were migrating, from the political sphere, as the political sphere was de democratized. Women understand that? It's like, you know, the feminization of sir, sir, sir. Profession when women moved into teaching teaching lost its power. When they moved into Health where in Greece now the a majority of judges are women. And you should see the judicial system collapsing. So it's a very, very similar process that we see. Power is migrating from the economic sphere to the political sphere and the political sphere is democratized. Increasing it. Now, something fundamental happened beginning in this country in the 1970s,

After the end of Britain Woods which was what what was Bretton Woods? You don't, let's not get complicated. It was the globalization of the new deal. Roosevelt's New Deal in 1933 which was what was the basic idea?

About the financial Genie, the banking Genie back into its bottle. To. Make banking boring.

Effectively to ban Bankers from doing things that

Allow too much money to be created and too many bubbles to be build up.

Mobilizing Idol, savings. The idle Savings of the Richer members of society at putting those idle serving savings. Turning them into a force

Public interest infrastructural works. Public Works.

Education, Social Security and so on. That was the New Deal in 1944 towards the end of the war. The new dealers extended that new deal.

In internationally as Europe was

Turning them into a force. In the public interest infrastructural works. Public Works. Education, Social Security and so on. That was the New Deal in 1944 towards the end of the war. The new dealers extended that new deal.

In internationally as Europe was, uh, Just a pile of Ashes, Japan. You don't need me to explain what happened to Japan 1945. So Britain would it was a magnificent system, think about it. The United States. Uh, official though, in DC, effectively designed a global capitalist system that was like a planned economy. You have fixed exchange rates 4% interest rates forever, 20 years or 4% interest. There's no ups and downs. It was maybe plus or minus 0.1%. So you knew what your mortgage rate would be in the next 20 years.

All right, you you if if you wanted to change dollars for British pounds, you knew how many pounds you would get, you can get the same quantity year in year out. So it was a world which was a nightmare for finances. And of course, that was by Design. Uh, did you know that in the Bretton Woods conference and you New Hampshire in 1944?

Roosevelt.

Imposed 1 single rule. On his own the rest. He left to his minions.

They were represented from 100 different countries. Most of them already. They were not even liberated yet. They were under occupation because it was 1944, the second world war and not ended experts, diplomats politicians and so on.

1 species of humanity was banned from entering. The Washington hotel.

Bankers. A whole monetary global system was created on condition. That Bankers would not be part of it. Interesting. Yeah. If if anybody proposed this today they would be immediately be branded as raving communist lunatics. This was bread and woods 1944, you know, it's important to to think back about possibilities when we think of what is possible. Well, what happened in 1944 is better words in 1930 1931. In this country would have been completely and her. Yeah, pie in the sky. So anyway,

Uh, but that system collapsed. In towards the end of the 1960s. Officially 15th of August 1971 with Nixon's announcement that it's kaput. It's finished. Uh I'm not going to go into this but what happened? After that was A very interesting. Fascinating a reversal in the flow of trade and money around the world. For the collapse of bread and woods what was happening with this? Is this how was designed America was a surplus country? The country was surpluses with profits with

A special. After the second world war was the only credit of the country? The only country that had the Surplus is financial. San Francisco Services of goods and net exporter. And what the United States Administration did as part of Bretton Woods was to say, okay, the only way of preventing a return of the Great Depression to this land by 1949, they they were very worried about 1949 because it was 1929, plus 20. Uh the only way of preventing it is to make sure that okay number 1, we convert all the factories from uh military production to civilian production, producing white goods, instead of tanks and bullets producing cars. Instead of Is. Right. But that's not enough because the those those factories during the war economy. Were so productive in this country that they would were capable of producing. So many washing machines, tractors and cars that Americans would simply not have enough use for them.

The only way of preventing the, a great, the Great Depression from returning was by selling them to the Europeans. But the Europeans didn't have money. So new dealers being very practical. People said, well, we'll give them the money. It got called the martial, a plan C recycling for 20 years United States was recycling about 70% of American profits in Japan and in, in Europe, because this is how what you do if you're a clever Hegman. What you do is you, you make sure that the only way that you can continue to have surpluses Visa is somebody else is to finance them. Because if you don't, then they won't be able to afford to buy your, your stuff, then you won't be able to have Services. The problem was however that those Services disappeared by the late 60s, America shifted from a surplus position to the deficit position. Both the government went in deficit and the American economy developed the trade deficit.

It is fascinating that

What happened after the collapse of Britain Woods had been imagined by some smart fellows in this country?

Remember, Henry Kissinger.

Yeah.

Exactly my feelings, but he was a He was. He's a smart cookie, right? And in 1970 9770 a year before the end of Bretton Woods, he was still he was not yet. Uh, Secretary of State, he was still head of the uh National Security Council. Of course, you know, he's a cold warrior geopolitical, thinker. Thinks in terms of you know a bit like me would have in the 19th century uh he comes from the same part of the world as the same accent.

So he asked all the people that were working for him. That pertinent question. Now that the United States is going is shifting into a deficit position. He used to be a Servant. Now, we're going to become a deficit country. How can we maintain our Global hegemony? Because it has never happened in the past. All Empires superpowers fell, once they became deficit countries or economic blocs. So he was worried about that he didn't give a damn about economics but he cared about power.

A young man. Wrote a memo.

Thick Waters of a page in reply because the most brilliant reply and the 1 that really explains what happened between the 1970s and 2008 in the world and of course in the United States. His answer was it doesn't really matter.

Whose surpluses are being recycled. What really matters to maintain and control is to be the 1 who is recycling other people's surpluses?

Get it.

It, we we, we can maintain our superpower status are as long as we do the recycling of surpluses, even if the surpluses are not ours. Think about it. This is exactly the model that we have been living through between the 97th and 2008. America turned into a deficit carrier. Now Donald Trump is complaining. Oh, you know we have a huge trade deficit with China with Germany. We need to eliminate it. Either, he's completely unschooled. Or he's lying or both.

I added a third option.

Because look, I mean the globalization would not have happened without the American deficits. The American deficit trade deficit operated like a gigantic vacuum cleaner that was sucking into this country. The networks of Germany of Holland or France of Japan and later, of course of China Keeping those factories going, a full bust.

And this deficit kept increasing. It is this increasing American trade deficit that kept globalized globalized, capitalism in rude health.

Now, of course. The question then is, how was it being paid for? Because Greece had a big deficit and look at what happened to us.

Well, this is the exorbitant privilege of the United States of America.

At the very same time that the trade deficit was expanding. The rest of the world was sending to this country. 70% of all profits. The Germans made the Dutch Maid, the Japanese made and the Chinese men are making 70% of global profits are coming were coming into Wall Street. Seeking higher returns.

Used to purchase us treasury bills. You know, American government debt. And so that you had a pure recycling Loop. So recycling was discovered by this young man. Whose name by the way is Paul vulkar.

Who then became the chairman of the Fed. And we just a week before he assumed the position of chairman of the FED in a lecture he gave at the University of war in England, he said this is the time when a controlled disintegration of the world economy is in the interest of the United States of America verbatim of my heart because so exciting

The control this integration of the world economy, so that's what he meant. So you had this amazing system where You have increasing imbalances globally. America growing, its deficits. Germany and Japan. And then, China growing growing in surpluses, when you, when we increase our deficit, we are creating an imbalance when somebody else is increasing their Surplus. That's an imbalance.

And globalization was based on this financialization, what's financialization? When why did the Wall Street? Why was Wall Street allowed to go crazy?

Why were all the checks and balances that the new dealers introduced and brettonwood was introduced? Why did they go to the dogs? Why did Larry Summers? I believe he's got some connection with this place. Why was he allowed to commit a crime against logic and Humanity? To unleash the Wall Street, Bankers from their shackles, the result being 2008, The answer is. Because without unleashing the Wall Street Bankers, it was impossible to close that Loop. The only way you could have this model of the world economy where the United States deficit was keeping the rest of globalization going.

With the rest of the world, sending its surpluses into Wall Street, for Wall Street, to close the loop and pay for the deficit. Was to let the Wall Street Bankers do as they pleased. And when you do, let the Wall Street Bankers do as they please you know what they do you give a banker a few billion every day for 5 minutes. Just part 5 billion with a banker for 5 minutes every day. This is to invite them to create very sophisticated pets, using that 5 billion every day that they are always going to win.

If I were to give you 5 billion every day for 5 minutes, you will work out ways of making a load of money.

Um, you know And exponentially. Increasing load of money anyway. The problem is that they built so many pyramids of financialized. Derivatives on top of tsunami of capital that the rest of the world were saying that it combusted in 2008. And the result was

We are facing. So

The point I'm making is that first, you had the Political The Joint sphere of power, then that bisected into the political and economic sphere. Then after the 1970s, the end of Britain would, the economic sphere, But also, Divided and multiplied between the industrial sphere and the financial sphere. And all power ended up with Finance because if you allow Bankers to push the hand into the future so much majestically frequently and without any kind of control to bring Value, that has not been produced yet into the future and effectively to appropriate it themselves. And then you also say to them that they are too big to fail and when they fail You know, then austerity for all is combined with socialism for the bankers. Then they have no reason. Why not to keep undermining capitalism again and again, and again. So remember the question with which I I asked I I I started why do politicians seem to be so much less talented today than they were, you know? 40 years ago, 20 years ago, 30 years ago. But the answer is because the political sphere. Is completely powerless.

The Spheres that now have acquired power and economics and magnificently the financial sphere. So if you're a young talented person who who wants to change the world, who wants to do things, it's not very ideological or historical historically minded who wants power. What do you want to be president of the United States or CEO of Goldman Sachs?

CEO of Goldman Sachs. I remember the, the 1 long conversation, longish conversation I had with Barack Obama. When I was, uh, the Finance Minister of Greece. The first thing he said to me was I feel sorry directly for the Greek people and we are behind you, but there's not much I can do to help. Okay. And then he he immediately without me saying anything, he went into a solid key justifying himself by saying that, you know, when I got elected. I realized there was nothing I could do because Wall Street had just imploded and I had to save them and that was, he said, political poison for me. Now, I don't know whether he believed it or not. Uh and I can't see how he can explain the fact that he appointed the Larry Summers to sort out the mess. Uh, unless of course, you know, you adopt, the cynical view that, um, it takes, uh, a murder to work out how the criminal justice system should be reformed.

Um,

So the the this is a effectively, the point I'm making.

So is capitalism consistent or Um,

Sustainable, within a democratic. Polity. Can it coexist with democracy? Absolutely not. Because capitalism is generating.

This shift of power away from the political sphere. And even if you have fantastically, Uh, scripted constitutions. Beautiful congresses with wonderful procedures and so on.

Power is going to shift away from those processes, they're going to become thick lifts for a system where power lifts somewhere else in my first meeting of, uh, Finance ministers in Europe.

I was exposed to this harsh reality which I always knew, but it's 1 thing to know it as a radical Lefty that not, you know that theorizes and uh, puts forward, you know, various working hypothesis, uh, in an academic environment. It's quite another to be told straight to your face. That with the beauty of those few months I spent in government was exactly that. I didn't have the theorize anymore. I I I went to my first meeting. Of the Euro group, the Euro group is the meeting of the European, uh, Union Finance, Ministers of the countries that share the same currency the year. So, I walked in there and I tried to be as moderate. And as sensible. And as friendly? As anyone who comes from a country that is bankrupt and whose new government has a title or the party that won Coalition of the radical left. Yeah. So there I was the Minister of Finance representing the Coalition of the radical left in that cesspool. Of conservatism and I try to be yeah. All I said was

That. We have we are facing um a challenge colleagues.

There is the principal I said of continuity.

In democracies in Liberal democracies, in other words. We're not going to start at years zero just because we were just elected. We have obligations to you. That previous governments, Greek, governments have have assumed And which of course we were against our party was against. But nevertheless. Our state because of the principle of continuity. Still has these obligations to you and therefore I cannot dismiss them. I have to take them seriously. I am obliged by the principle of continuity to the at the same time. There is another principle, the principle of democracy.

I could see that they would didn't like that very much. I, and the principle of democracy is very simple. I have a mandate for the people of Greece to challenge all these obligations that we have, this particular fiscal, uh, and monetary policy that you've been imposing upon my country which led to a Great Depression, which led me to be here. Because if we didn't have a Great Depression, the Greeks were not stupid enough to vote for me.

I mean they didn't just become left Wingers, you know. Well, our party went from 4% to 40% in 2 and a half years because of the Great Depression. I didn't put it in those very words but you can imagine but more or less. This was my man. I was, I was trying to be extremely uh, open to them and moderate and consil. With the Finance Minister of Japan. Okay.

And I said, well, what happens in the Democracy, when 2 principles Clash, the principle of continuity and the principle of democracy? Well, we sit around the table like civilized people and who find the compromise. This is what democracies do liberal democracy. Yes. I sit down the French Minister loved what I said, of course.

Just complete hot air. Yes, yes, yes, yes, yes, yes, yes. Yes yes, yes. Yes. I could see what can serve with the German Finance Minister. He was looking at me with you know, eyes, uh, that

Felt like laser beams and he he gets the floor and he said, 1 sentence 1 sentence, which is the 1 that I'm going to leave you with.

Actions cannot be allowed to change economic policy.

Got it.

My response was this is excellent news to the Chinese Communist party because they believe that too. And I then came up with a proposal, this is why they hate me more than I said in that case wolkan. Um, let's ban elections. In bankrupt countries. Let's assume, you know, come out and declare that in the European Union. You can only have democracy if you are a creditor country. If you're a debtor country, no democracy elections cannot be allowed to change anything. Because we have a loan agreement. Yeah, we have a debtor's prison. Let's put Greece in the warehouse, I think, say all these things, but I did say the thing about the Chinese Communist Party And also the proposal that we suspend elections while a country is in the red, In the European Union, that would be more honest. So the reason why I'm mentioning this is That.

So, I play was right.

Capitalist. The globalized financialized capitalism that we have created elections cannot be allowed to change economic policy. Because, Economic Policy simply Springs out of the processes that I described. That leave absolutely no room for anything beyond a semblance of a democratic process that legitimizes

Uh, the lack of democracy we live in pure unCloud oligarchies, which they require for legitimation purposes. And for their reproduction that we think that we live in democracies, now, the tragedy is That capitalism. Is being overthrown.

Not by the best. We are useless. Progressives left, Wingers are a catastrophe. We has every anybody in the Life of Brian Monty Python's movie. Remember the opening scene where they all hate each other. The the Jews are the Jews of The Liberation. Front of Judea again, whose worst enemy. It is The Liberation, um, people's front of Judea. That's that's a left. We are Sectarian we hate each other more than we hate anything else. Yeah. No. But and of course and when we did overthrow capitalism, we created the ghoul. So we are, you know, we're a disaster. Doesn't mean we we shouldn't try again and to do it properly in democratically. Uh but let's face. It capitalism is overthrowing itself. With no help from us. And it's doing it in 2 ways, firstly. Think of 2008 this financialization process that I described.

Imploded, under the weight of its own hubris. And the result is a never-ending crisis. Don't believe anybody who tells you that the 2008 crisis ended, it never ended. It is continuing

It is mutating. It's stating different forms. It migrates goes to different parts of the world, it takes, for instance, in Germany. It takes the form of negative interest rates that are eating into the Pension funds of the average. Middle class, person could intense against the political system and votes for the fascists of the alternative for Dutchland. They don't have an employment, but they have this sense of deflation of their hard-earned savings, that creates, uh, the rise of xenophobia racism and the alright in my country. We have a Nazi party in Parliament because we have a Great Depression.

Because we have an employment rate of 30%, and we have no interest rates because nobody's Landing to anyone. Because everybody's bankrupt. Yeah. Uh, in China you have um,

An investment rate, the proportion of GDP of national income. That goes into investment. It's gigantic. It's not 48%, 48 cents to every dollar and in In in China goes into investment. Now, investment is a good thing, but over Investments simply means that the Chinese authorities have given up on the west because let's face it. The only reason why you don't have a great depression in this country today is because in 2008, which was your version, our version of 192029, 2, things happened differently to what happened in 1929 1 was that the Federal Reserve started printing money. As if there's no tomorrow didn't happen, 1929? And the second thing was China, boosted its investment ratio so high in order to rebalance global capitalism, they did it very well.

But, Sustainable. So Europe is not sustainable. China is not even sustainable and the United States today, which is celebrating growth growth. You have 2 and a half percent growth, all the things that shouldn't grow grow. The things that should grow are not growing. You do not have any in any serious investment in good quality jobs in this country, you have wage stagnation. You have a situation people say, oh it's you know this idiocy of the democratic party that put in 1 the election. Again, I feel like, come on, wake up, I am finding, you cannot say that the idiots put it, I mean, you can say that, but then that's it. You lose them forever. And it's also not true. People say to me. Well how do you explain the Trump 1? How many economists? The number that I think is most spectacular in this country? Is that in 2016?

More than half of the family families in this country could not afford the cheapest new car, which cost 14,000 Either they didn't have the money or they didn't have the money and they were did not have the credit ratings necessary to borrow for 14,000 more than half of the families, cannot afford the cheapest car.

Because Obama Faith spectacularly to shift the burdens of the crisis of the financial sector on to the 0.1%.

So I've spoken far, far too far for far too long.

Let's end on a positive note.

Shall we?

Technically. It's really very simple. How to solve the problem? Or how to begin a process. We need a new deal.

Except that this must be an international unit. Exactly as a new deal was in 1933 but globally, that's not new bread and woods or anything International New Deal. So, we need a new bread and woods. We need progressives in this country progressives in Europe. To get their act together and start collaborating because, you know, the bankers are very good at being internationalists. They love each other and they work very closely together. The fascists are fantastic, you know, Trump loves lean. Orban.

The alternative for Deutsche the love each other. We cooperate, they they have very good only, we progressives. Failed to get together. And start believing that it is possible to do that, which has already been done before. It's not buying the sky stuff now. This in order to amilyar the effects of the ongoing crisis after 2008, Then once we stabilize the world like burden would stabilize the world after the second world war. Then we can start thinking about post capitalism because we must Capitalism is overturning itself. Not only through its crisis but also through the technologies that it is creating 3D printing. Artificial intelligence. The internet will make sure that in a few years, there will be no need to have a corporation. Cooperation will have will lack their own data. The only reason why you have General Motors is economies of scale. Economies of scale that dying because of the new technologies that capitalism is created. So Capital, you are going to have a situation in which

We are going to have magnificent productivity. Magnificent capacity to produce stuff, but the large majority will not be able to buy any of it. So that would be a crisis of, not just the poor and they have not but also the halves

But we must never believe that because it was going to be a crisis of capitalism because capitalism is going to undermine and overthrow itself. Good things will happen. In the 1930s, capitalism has been loaded and Nazism happened. So, We can have.

1 certainty. Capitalism cannot maintain itself. Something else another system of organizing economic, and political life is going to follow. And we better make sure that the way in which we choose as a species as a Humanity. That different way of doing things is selected democratically because even though democracy, uh, takes too long as Oscar, Wilde said, socialism would never happen because it takes too many long evenings.

Uh, and Insidious. There's no doubt about that. If you've been to a political meeting, you know how tedious it is. It's the only choice we have. Thankfully, we have, we are creating the technologies that will make these debates. Both more manageable and more hopeful in terms of delivering a future that resembles as I say in the book Star Trek, and not the Matrix. Thank you.