Yanis Varoufakis - Capitalism and Social Democracy are both GONE (as we knew them)

[Fleetinglife]

Varoufakis makes some interesting quick material analysis observations regarding the current global economic system and it's current stun locked paradigm while being invited to guest briefly on David Pakman's show, here is the interview:

Here are some of the most important points Yanis makes from an economists standpoint:

1. A lot of changes have happened since the pandemic outbreak almost two years ago now on a quantitive level not so much qualitative, for example within each of the countries in the world and between each of them all separately, social inequalities have skyrocketed. That's a quantitive effect, meaning we had this problem before but now they have been magnified yet again in the aftermath of another crisis for the global economic system.

2. ''If you think about it, the crisis which had begun in Wall Street in 2008 and caused the FED, the ECB, and the other central banks of the world, to band together and start printing mountain ranges of money in order to support the financial sector that what happened effectively in the first semester of 2009 under Obama, Gordon Brown in England and so on, was that the effectively state's central banks replaced private profit in order to float the financial sector that caused huge inequalities. Those who were in the money markets never had it so good, those who were not suffered a lot of almost permanent stagnation, and Covid-19 exacerbated that, turbocharged that now.''

3. ''We are now in the process of another major shock to the system, which is this time a QUALITATIVE one, a qualitative shock, because, between 2008 and 2020, the central banks have been stabilizing the financial markets in the way I just described above ?.

But now they are between the anvil and the hammer. The central banks. Why?

Because they have zombified states and corporations. So my country [Greece], the government of my country, is completely zombified, totally bankrupt, and it relies on the European Central Bank to keep printing money to keep it afloat, to a large extent.

You could say the same thing to a lesser, but also you could say to a large extent happened to the federal government of the United States. US's debt relies to a very large extent on the FED's capacity and willingness to continue to roll it over. Same thing in England, same thing in Japan to a large extent.

But because we had serious supply chain disruptions, as you mentioned, and the fact that we have now a serious cost-push inflation, not demand-pull inflation, but cost-push inflation, the central banks have found themselves and put themselves in the, damned if they do and damned if they don't situation.

The central banks, if they continue to refloat the financial markets, are going to be fueling inflation, which is going to create significant political and social problems.

If they stop doing that, then corporations and states that rely on this extending and pretending of their debt are going to go under.

And this is going to be the qualitative effect that we are going to be remembering in 10, 20 years' time regarding this period, this juncture.

4. The most nuanced and sensible position is this one is that if you use deficit spending, debt-fueled investment properly, correctly, sensibly, for economically stimulative programs, investments that is, of course, a good thing to do.

It's now 13 years since 2008 and during those 13 years, you can, just by saying this, it concentrates the mind, that we have never had so much money floating around in the history of humanity, Never. Humanity as a whole has been saving 30 percent of its income. Not so much the Americans, the Greeks, but the Chinese, the world generally.

Corporations, look at Apple, they have some like 200 billion dollars saved, I mean it's insane that a corporation should have savings. Corporations should have debt, they should be borrowing to invest, and when Apple has two hundred billion in a stash, you know there is a problem with capitalism.

So for, you know, 13 years now we had all this money sloshing around.

Again, it's very inequitable distributed, but humanity in total, we have all this money, in comparison to the liquidity which is available.

We had never had such low levels of investments.

When you go to countries like Sierra Leone, or Greece, countries which are poor and bankrupt, of course, Sierra Leone much more so than Greece, you know it makes perfect sense, it's not pleasant but it makes perfect sense that the investment is low.

But when you look at countries such as Germany, which is swimming in money, never in the history of Germany did Germany have so much money. And yet the level of investment in the things that they need, like you know 5G, renewables. 

In the US, the infrastructure has been dilapidated. You have huge quantities of money and very low levels of investments. And that has been the case now for 13 years.

5. Yanis: ''Now you know what this means, this means that as a species, we failed to make use of the available resources in order to generate our capacity to weather storms, economic storms, Covid, climate change, etc.

So now to start worrying about debt is a bit, too little, too late, in a sense.

So to those that say, oh well, look at, you know the FED continues to print money, and the federal government is running a huge deficit. Yeah, but you know what? You were not worried when Wall Street was creating gigantic quantities of private debt before 2008, when that blew up the world it landed us where we are now.

So let's focus on the one thing that really matters, investment. Investment in things that human beings need. And I am not talking about SUVs, I am not talking about, you know, more airports. I am talking about renewable energy. I am talking about artificial intelligence that can help us, rather than enslave us. I am talking about social care, I am talking about health care, education. The things which will make a life for humans better on this planet and which will allow this planet to continue to allow us to exist on it in terms of climate change.

6: Yanis: You know it's not like we don't have money or the resources. You know this is why we are a stupid species because we are not impecunious. We have the resources, we have the money, the savings are there. We are not just putting it into use. I mean think about it. For the last 13 years, in order to stimulate the economy, our central banks have been printing money. Let's not judge them for that. They've been printing money. The question is what did they do with this. They gave it to Bank of America, to Deutsche Bank, to Barclay's Bank. 

And what did the banks do? They looked at little people out there, medium-sized, small-sized businesses, and said. They said, no, no no, we are not going to trust them with the money. So they picked up the phone and called Google, Apple, Volkswagen, Siemens, who already have money sitting there doing nothing.

And they said to them, Look, we will give it to you for free because, you know, the commercial banks got it from the central banks at the negative interest rates or next to nothing, right?

So Apple said: ''Okay, give it to me. I am not going to invest it because if I wanted to invest, I would have invested my own money. So they take the money, and they go to the stock exchange and they buy back their own shares, right? Share prices go up. This is a complete waste, this not creating things humanity needs.''

7: ''Countries like the United States, like Germany, and so on, should do what Roosevelt did in 1933, with the New Deal, use public finance in order to press into the service of things humanity needs, the existing money.

When it comes to countries like Argentina and Greece. We have a common fate. We have a debt, that we can never repay. Even if God and angels descend upon the planet, they can not repay that debt, it cannot be repaid, it has to be haircut. It's what Wall Street banks do to each other, every day, they restructure debt, they cut it.

So we need now debt forgiveness for countries that cannot repay them because, you know, even from a selfish perspective of rich countries the only way they can get some money back, of what Argentina and Greece owe them is if there is growth and it can never be any growth if you have the hedge funds, New York Judges, International Monetary Fund, pressuring the Argentinian government to continue to squeeze the people of Argentina.

It's like beating up a sick cow, expecting it to get more milk. You're not going to get more milk. The cow will die, Clever strategy.''

DP: ''Do you believe that we are already in a post-capitalist world?''

8:YV: ''We lefties were brought upon this world in their infinite stupidity that we came here to overthrow capitalism and replace it by socialism. And to our consternation, we discover or I am discovering now that capitalism did itself in. It overthrew itself. And now we have something which is much closer to feudalism. And you know, my fellow lefties, hate me for saying this, because they think that, my goodness you know, if we are here not to overthrow capitalism, what's our purpose in life?

And the answer is, to come clean and accept that now capitalism has been allowed, to a large extent by the failures of the leftover decades and centuries to morph into something far more oppressive, far more exploitative, and far more dangerous for the human species.

I call it techno-feudalism.

DP: ''Talk what you mean by that, techno-feudalism?''

9:YV Well, for example, think of what happens the moment you enter Amazon.com, you exit capitalism, you enter something that resembles a feudal fiefdom, because it is a digital world belonging to one man and his algorithm, his algorithm determines what product you are going to see, what other product you are not going to see if you are a seller, how you can sell it, how you can not sell it, whom you can approach amongst customers, and whom not. Imagine it's like a little bit, walking outside your building now and discovering that the city in which you are every single building belongs to one person. The air belongs to that person.  The statement belongs to that person and that person also has the capacity to turn your head, to make sure you see what he wants you to see. That's not capitalism. It's not even monopoly capitalism. It's digital feudalism, techno-feudalism. And if you think that already going back to what we are saying earlier, central bank money has replaced private profits, so profits have been replaced by central bank money and markets are in the process of being replaced by digital platforms.

If you take profits and markets out of capitalism, you don't have capitalism. You have something called techno-feudalism.

DP:''Lefties like me that don't see the overthrow of capitalism, and replacement with socialism as the goal, but rather this sort of intermediate step of social democracy in the northern European mode or model, do you see that as even a plausible path forward?''

10:YV: I hate to say this, but I think this is not going to happen. Because social democracy worked while capitalism was in rude health. The social democrats in Europe that you are referring to are people like Billy Brown, Chancellor of Germany, wonderful man, all of Parliament of Sweden. Bruno Kreisky in Austria, The Labour Party in Britain in the 60s and 70s.

...

DP:  ''So let me make sure I understand correctly because this is an important distinction. A social democracy based on industry and workers who produce things can work. But once the economy shifts to be a one-off, as you called it, techno-feudalism and banking and financial instruments as profit-generating elements, social democracy can't rest on top of that?''

YV: So whether you are Bernie Sanders, Elizabeth Warren, or you and me? If the four of us were given the government of the United States today, you know, it would be almost impossible to create a functioning social democracy without attacking the very foundations of what I call techno-feudalism. I mean what do you do with Facebook, or Meta as he calls it now? What do you do with Wall Street? How do you regulate? You cannot regulate. They are 10 steps ahead of you. It is impossible to break up. You know, Theodore Roosevelt, broke up Rockefeller's Standard Oil, right? Every, state's Standard Oil is a separate company, every town's Standard Oil is a separate company. 

You cannot do that with a networked company like Facebook, the whole point about Facebook is that your friends on Facebook, you know, come from everywhere. You cannot break up this company. And by taking WhatsApp out of Facebook, you don't get to accomplish much because WhatsApp is not profit-making anyway.

So this digitalized financialized world we live in is simply not prone to the social democratic remedies of the past.''

DP: ''What do you think about the rise of cryptocurrency?''

 

 

 

 

 

 

Edited February 1, 2022 by Fleetinglife

[JosephKnecht]

Thanks for the transcription. 

 

[Fleetinglife]

11:YV: "When Bitcoin came out, when Nakamoto published his famous paper, I poured over it, I studied it for quite a few weeks and I found it fascinating. I found it ingenious. 

But in an interview he gave for the Wired Magazine, I said that it is a fantastic solution to a problem we have not discovered yet. 

By that what I meant, and I stick to that assessment, is that it is not a currency. 

Crypto currencies are not currencies and they cannot be and they should not be. 

They cannot replace dollars and pounds and euros and they should not replace them. 

It would be catastrophic. 

It would be catastrophic if we replace fiat money with crypto currencies. 

That would create a new oligarchy, and it could cause massive depressions, primarily because the quantity of those currencies cannot be adjusted to economic conditions. 

So imagine if we had ethereum or bitcoin instead of the dollar and euro in 2020, when lockdowns reduced incomes by 15%

What would you know, if we didn't have the capacity to print money and throw them at the problem. 

The recession of 2020 would be much, much worse than it is now. 

DP:"But the advocates of Bitcoin would say, no, no Yanis that is feature, not a bug, by having a limited supply, you are not going to have inflation problems that printing additional money creates. This what they would say."

Yanis:"But yeah, that just goes to show just how ignorant they are, how dangerously incompetent they are. 

I mean I hear such sad stock into it. 

Look, think what happened in your country in 1929, under the Herbert Hoover administration. 

Yes, that's exactly what the BitCoiners say, the Hoover administration, the moment Wallstreet went pear shaped and you know the Great Recession started, which then turned into the Great Depression. 

What the administration did was to follow the lead of the BitCoiners of the gold bugs, to say: "Ah, okay now what we need to do is tighten our belts, certainly not print the money and let the market look after itself. 

The result was the Great Depression, the Grapes of Wrath. 

And you know if that mentality was ruling roost in the FED in the 2020s, we would have a lot more victims, a lot more deaths of hunger, actually, a lot this kind of, I call it the dangerous fantasy of apolitical money, that Bitcoin is and evangelists of various cryptocurrencies are. 

But having said that, I think that the block chain is remarkable, and smart contracts along the ethereum line can be very useful when it comes to creating various decentralised systems of keeping records to begin with, mutually trustworthy records. 

Also, when it comes to money, I am a strong advocate of central bank, block chain based digital currencies which I think will be the future."

 

 

Edited February 2, 2022 by Fleetinglife

[Fleetinglife]

4 hours ago, JosephKnecht said:

Thanks for the transcription. 

 

No problem! I also did it for myself so I would have the transcript of the convo saved somewhere to use it as reference point for my possible future thoughts, conversations and writings about it. 

Also to use it as a dispelling myth for someone not enough knowledgable, or critical about it, how maybe too much evangelizes about any of the topics raised in this convo ?

This probably, IMHO, one of the most useful and most resourceful of Pakman's episode, that I have personally seen up until now and this point, and not an echo chamber, narrative reinforcement, regluing, solidifying, conformation bias, already agreeing and on almost the same identical wave length when it comes to thinking and feeling about current world issues and problems stuff guest, that I have seen pertaining to guest invites, since so much facts, useful info and important data points raised allowing some one to form a big picture, holistic and interconnected understanding of the actual current state of the world and world economy and how it is currently seen as a prevailing view to have to in order to properly function - operate and dispel some myths and hope clingy illusions informed by ruling class narrative and ideology that some people still harbour and cling to in only a twenty some minute snippet video - just goes to show what a holistic, deep economic thinkers mind such as Yanises is capable of doing in such a short time frame to an unsuspecting viewer, inducing a paradigm and how the world operates fundemental shift in a not so well informed, taught viewer and redirect him immediately to a more productive way of thinking about it and options for acting in it, again IMHO. ?

Edited February 2, 2022 by Fleetinglife

[PurpleTree]

ye watched that too.

Yanis Varoufakis is great

[Fleetinglife]

29 minutes ago, PurpleTree said:

ye watched that too.

Yanis Varoufakis is great

Yeah, really, really (??) deep, holistic economics thinker who went mainstream in order to inform and educate and service the public, I often see him openly challenge and often dispel some of the unconsciously held and unrecognised biases, assumptions of US based Marxists and thinkers (for example a popular one of the US Empire in decline), for example even people like Richard Wolff, in regards to the state of the economy worldwide, US's current influence and role in the world, economically wise, and the prognosis and possiblities of future world headings. 

Edited February 2, 2022 by Fleetinglife

[PurpleTree]

5 minutes ago, Fleetinglife said:

Yeah, really, really (??) deep economics thinker who went mainstream in order to inform and educate and service the public, I often see him openly challenge and often dispel some of the unconsciously held and unrecognised biases, assumptions of US based Marxists and thinkers (for example a popular one of the US Empire in decline), for example even people like Richard Wolff, in regards to the state of the economy worldwide, US's current influence and role in the world, economically wise, and the prognosis and possiblities of future world headings. 

yea i don't agree with him on everything but i'm glad that we have him and his viewpoint, also he's entertaining.

[Hardkill]

I also watched that whole vid, but what really concerns me is when he said that social democracy is dead. I kinda understand what he is saying. However, if social democracy isn't ever going to work in the long-run, then what kind of government and economic system are we supposed to have? 

Now, I feel more pessimistic about the future of our world.

Edited February 2, 2022 by Hardkill

[randomguy123]

@Hardkill  I'm currently reading his newest book 'Another now', in which he in depth describes a fantasy reality where things were equal and the economy was fair. It's a great read, although i didn't really care for the made up story surrounding the big debate (which is about a quarter of the book). It so fascinating to see him just dispel all your illusions about how the economy works and how it's being ran. He also states ways in which we could claim back the economy and actual steps we would have to undertake in order to do so.

The whole thing does leave you with a sense of hopelessness, as what has to be done to even approach a fair system is still way more coordinated and difficult, then i feel like would be possible in the world of today. It makes you feel like such a moron, because things are hyper complex and the amazons and googles of the world are actively conspiring to churn as much money and power out of the system. Meanwhile we sit here with our friends, trying to convince them to vote socialist, which in all honesty for all you know might make shit worse.