[In May 2013 I had the pleasure of addressing the 6th Subversive Festival in Zagreb on this topic. It is only now that I have managed to write up that talk and to expand it in some significant ways.[1]]


Europe is experiencing a slump that differs substantially from a ‘normal’ capitalist recession, of the type that is overcome through a wage squeeze which helps restore profitability. This secular, long-term slide toward asymmetrical depression and monetary disintegration puts radicals in a terrible dilemma: Should we use this once-in-a-century capitalist crisis as an opportunity to campaign for the dismantling of the European Union, given the latter’s enthusiastic acquiescence to the neoliberal policies and creed? Or should we accept that the Left is not ready for radical change and campaign instead for stabilising European capitalism? This paper argues that, however unappetising the latter proposition may sound in the ears of the radical thinker, it is the Left’s historical duty, at this particular juncture, to stabilise capitalism; to save European capitalism from itself and from the inane handlers of the Eurozone’s inevitable crisis. Drawing on personal experiences and his own intellectual journey, the author explains why Marx must remain central to our analysis of capitalism but also why we should remain ‘erratic’ in our Marxism. Furthermore, the paper explains why a Marxist analysis of both European capitalism and of the Left’s current condition compels us to work towards a broad coalition, even with right-wingers, the purpose of which ought to be the resolution of the Eurozone crisis and the stabilisation of the European Union. In short, the paper suggests that radicals should, in the context of Europe’s unfolding calamity, work toward minimising the human toil, reinforcing Europe’s public institutions and, therefore, buying time and space in which to develop a genuinely humanist alternative.

Keywords: Eurozone Crisis, immanent criticism, dialectics, Marxism

1. Introduction: A radical confession

Capitalism had its second global spasm in 2008, setting of a chain reaction that pushed Europe into a downward spiral that is currently threatening Europeans with a vortex of almost permanent depression, cynicism, disintegration and misanthropy.

For the past three years, I have been addressing exceptionally diverse audiences on Europe’s predicament. Thousands of anti-austerity demonstrators in Athens’ Syntagma Square, staff at the Federal Reserve Bank of New York, Green Parliamentarians in the European Parliament, Bloomberg analysts in London and New York, schoolchildren in deprived Greek and American suburbs, the House of Commons in London, Syriza activists in Thessaloniki, hedge funds in Manhattan and London’s City, the list is as long as our European leaders’ retreat from humanism and reason is persistent. Despite the audiences’ diversity, the message has been consistent: Europe’s present crisis is not merely a threat for workers, for the dispossessed, for the bankers, for particular groups, social classes or, indeed, nations. No, Europe’s current posture poses a threat to civilisation as we know it.

If my prognosis is correct, and the European crisis is not just another cyclical slump soon to be overcome as the rate of profit picks up following the inevitable wage squeeze, the question that arises for radicals is this: Should we welcome this wholesale subsidence of European capitalism, as an opportunity to replace capitalism with a better system? Or should we be so worried about it as to embark upon a campaign for stabilising European capitalism? My answer has been unequivocal over the past three year and its nature is betrayed by the above-mentioned list of diverse audiences that I sought to influence. Europe’s crisis is, as I see it, pregnant not with a progressive alternative but with radically regressive forces that have the capacity to cause a humanitarian bloodbath while extinguishing the hope for any progressive moves for generations to come.

For these views I have been accused, by well meaning radical voices, as ‘defeatist’; as a latter-day Menshevik who tirelessly strives in favour of schemas the purpose of which is to save the current indefensible European socio-economic system. A system representing everything a radical should admonish and struggle against: an anti-democratic, irreversibly neoliberal, highly irrational, transnational European Union that has next to no capacity to evolve into a genuinely humanist community within which Europe’s nations can breathe, live and develop. This criticism, I confess, hurts. And it hurts because it contains more than a kernel of truth.

Indeed, I share the view of this European Union as a fundamentally anti-democratic, irrational cartel that has put Europe’s peoples on a path to misanthropy, conflict and permanent recession. And I also bow to the criticism that I have been campaigning on an agenda founded on the assumption that the Left was, and remains, squarely defeated. So, yes, in this sense, I feel compelled to acknowledge that I wish my campaigning were of a different ilk; that I would much rather be promoting a radical agenda whose raison d’ être is about replacing European capitalism with a different, more rational, system – rather than merely campaigning to stabilise a European capitalism at odds with my definition of the Good Society.

At this point, it is perhaps pertinent to issue a second-order confession: to confessing that… confessions tend to be self-serving. Indeed, confessions are always on the verge of what John von Neumann once said about Robert Oppenheimer, upon hearing that his former director at the Manhattan Project had turned anti-nuclear campaigner and had confessed to guilt over his contribution to the carnage in Hiroshima and in Nagasaki. Von Neumann’s caustic words were:

“He is confessing to the sin in order to claim the glory.”

Thankfully, I am no Oppenheimer and, therefore, it will not be too hard to avoid confessing to various sins as a means of self-promotion but, rather, as a window from which to peruse my view of a crisis-ridden, deeply irrational, repugnant European capitalism whose implosion, despite its many ills, should be avoided at all cost. It is a confession with which to convince radicals that we have a contradictory mission: to arrest European capitalism’s free-fall in order to buy the time we need to formulate its alternative.

2. Why a Marxist?

When I chose my doctoral thesis, back in 1982, I chose a highly mathematical topic and a theme within which Marx’s thought was irrelevant, by design. When, later on, I embarked on an academic career, as lecturer in mainstream economics departments, the implicit contract between myself and the departments that offered me lectureships was that I would be teaching the type of economic theory that left no room for Marx. In the late 1980s, unbeknownst to me, I was hired by the University of Sydney Economics Department so as to keep out a left-wing candidate. Then, after I returned to Greece in 2000, I threw my lot in with George Papandreou, hoping to help stem the return to power of a resurgent Right hell-bent on pushing Greece back into a xenophobic stance (both domestically, with a crackdown on migrant workers, and viz. foreign policy). As the whole world now knows, Mr Papandreou’s party not only failed to stem xenophobia but, in the end, presided over the most virulent neoliberal macroeconomic policies that spearheaded the Eurozone so-called bailouts thus, unwittingly, causing the return of Nazis to the streets of Athens. Even though I had resigned as Mr Papandreou’s adviser early in 2006, and turned into his government’s staunchest critic during his mis-handling of the post-2009 Greek implosion, my interventions in the public debate on Greece and Europe (e.g. the Modest Proposal for Resolving the Euro Crisis, that I co-authored and have been campaigning in favour of) does not have a whiff of Marxism in it.

In view of this long path through academia and the policy debates on Europe, one may be puzzled to hear me come out of the proverbial closet as a Marxist. Such pronouncements do not come naturally to me. I wish I could avoid hetero-definitions (i.e. being defined by someone else’s worldview and method). Marxist, Hegelian, Keynesian, Humean, I have a natural tendency to say that I am none of these things; that I have spent my days trying to become Francis Bacon’s bee: a creature that samples the nectar of a million flowers and turns it, in its gut, into something new, something of one’s own, something that owes much to every single bloom but is defined by no single flower. Alas, this would be untrue and no fit way to begin a… confession.

In truth, Karl Marx was responsible for framing my perspective of the world we live in, from my childhood to this day. It is not something that I volunteer to talk about in ‘polite society’ much these days because the very mention of the M-word switches audiences off. But I never deny it either. In fact, after a few years of addressing audiences with which I do not share an ideological milieu, a need has crept up on me recently to talk candidly about Marx’s imprint on my thinking. To explain why, while an unapologetic Marxist, I think it is important to resist him passionately in a variety of ways. To be, in other words, erratic in one’s Marxism.

If my whole academic career largely ignored Marx, and my current policy recommendations are impossible to describe as Marxist, why bring up my Marxism now? The answer is simple: Even my non-Marxist economics was guided by a mindset influenced heavily by Marx. A radical social theorist can challenge the economics mainstream in two different ways, I always thought. One way is by means of immanent criticism. To accept the mainstream’s axioms and then expose its internal contradictions. To say: “I shall not contest your assumptions but here is why your own conclusions do not logically flow on from them.” This was, indeed, Marx’s method of undermining British political economics. He accepted every axiom by Adam Smith and David Ricardo in order to demonstrate that, in the context of their assumptions, capitalism was a contradictory system. The second avenue that a radical theorist can pursue is, of course, the construction of alternative theories to those of the Establishment, hoping that they will be taken seriously (which is what later 20th Century Marxist economists have been doing).

My view on this dilemma has always been that the powers-that-be are never perturbed by theories that embark from assumptions different to their own. No established economist will even pay attention to a Marxist or neo-Ricardian model these days. The only thing that can destabilise and genuinely challenge mainstream, neoclassical economists is the demonstration of the internal inconsistency of their own models. It was for this reason that, from the very beginning, I chose to delve into the ‘guts’ of neoclassical theory and to spend next to no energy trying to develop alternative, Marxist, models of capitalism. My reasons, I submit, were quite… Marxist.[2]

When called upon to comment on the world we live in, as opposed to the dominant ideology regarding the workings of our world, I had no alternative but to fall back on the Marxist tradition which had shaped my thinking ever since my metallurgist father impressed upon me, when I was still a child, the effect of technological change and innovation on the historical process. How, for instance, the passage from the Bronze to the Iron Age sped History up; how the discovery of steel accelerated historical time by a factor of ten; and how silicon-based IT technologies are fast-tracking socio-economic and historical discontinuities.

This constant triumph of human reason over our technological means and nature, which also serves periodically to expose the backwardness of our social arrangements and relations, is an irreplaceable insight that I owe to Marx. His historical materialist perspective was reinforced in the most interesting and unexpected of ways. Anyone who has watched a Start Trek Voyager episode, entitled ‘Blink of an eye’, will recognise a wonderful forty-five minute depiction of historical materialism at work; a startling narrative on the process by which the development of the means of production begets technological advances that constantly undermine superstition and creates historical spurts which, non-linearly, give rise to new stages of civilisation.

My first encounter with Marx’s texts came very early in life, as a result of the strange times I grew up in, with Greece exiting the nightmare of the neo-fascist dictatorship of 1967-74. What caught my eye was Marx’s unsurpassable, mesmerising gift for writing a dramatic script for human history, indeed for human damnation, laced with a very real possibility of salvation and authentic spirituality. While reading lines such as…

“[m]odern bourgeois society with its relations of production, of exchange and property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer, who is no longer able to control the powers of the nether world whom he has called up by his spells.” (The Manifesto of the Communist Party, 1848)

…it was like encountering a coming together of, on the one hand, Dr Faust and Dr Frankenstein, and, on the other, of Adam Smith and David Ricardo, creating a narrative populated by figures (workers, capitalists, officials, scientists) who were History’s dramatic personae, agents that struggled to harness reason and science in the context of empowering humanity while, contrary to their intentions, unleashing demonic forces that usurped and subverted their own freedom and humanity.

This dialectical perspective, where everything is pregnant with its opposite, and the eager eye with which Marx discerned the potential for change in the seemingly most constant and unchanging of social structures, helped me grasp the great contradictions of the capitalist era. It dissolved the paradox of an age that generated the most remarkable wealth and, in the same breath, the most conspicuous poverty. Today, turning to the European crisis, the crisis of realisation in the United States, the long-term stagnation of Japanese capitalism, most commentators fail to appreciate the dialectical process under their nose. They recognise the mountain of debts and banking losses but neglect the opposite side of the same coin, its antithesis: the mountain of idle savings that are ‘frozen’ by fear and thus fail to convert into productive investments. A Marxist alertness to binary oppositions might have opened their eyes…

A major reason why established opinion fails to come to terms with contemporary reality is that it never understood the dialectically tense ‘joint production’ of debts and surpluses, of growth and unemployment, of wealth and poverty, of spirituality and depravity, indeed of good and evil, of new vistas of pleasure and new forms of slavery, of liberty and enslavement; of this melange of binary oppositions that Marx’s dramatic script alerted us to as the sources of History’s cunning.

From my first steps of thinking like an economist, to this very day, it occurred to me that Marx had made a ‘discovery’ that must remain at the heart of any useful analysis of capitalism. It was, of course, the discovery of another binary opposition deeply within human labour. Between labour’s two quite different ‘natures’: (i) labour as a value-creating (“fire breathing”) activity that can never be specified or quantified in advance (and therefore impossible to commodify), and (ii) labour as a quantity (e.g. numbers of hours worked) that is for sale and comes at a price. That is what distinguishes labour from other productive inputs such as electricity: its twin, contradictory, nature. A differentiation-cum-contradiction that political economics neglected to make before Marx came along and which mainstream economics is steadfastly refusing to acknowledge today.

Both electricity and labour can be thought of as commodities. Indeed, both employers and workers struggle to commodify labour. Employers use all their ingenuity, and that of their HR management minions, so as to quantify, measure and homogenise labour. Meanwhile prospective employees go through the wringer in an anxious attempt to commodify their labour power, to write and re-write their CVs in order to portray themselves as purveyors of quantifiable labour units. And there’s the rub! For if workers and employers even succeed in commodifying labour fully, capitalism will perish. This is an insight without which capitalism’s tendency to generate crises can never be fully grasped and, also, an insight that no one has access to without some exposure to Marx’s thought.

3. Science-fiction becomes documentary

In the classic 1953 film The Invasion of the Body Snatchers, the alien force does not attack us head on, unlike in, say, H.G. Wells’ The War of the Worlds. Instead, humans are taken over from within, until nothing is left of their human spirit and emotions. Their bodies are all that remains as shells that used to contain a free will and which now labour, go through the motions of everyday ‘life’, and function as human simulacra ‘liberated’ from the unquantifiable quirkiness of human nature. This process is equivalent to the transformation that is necessary in order to turn human labour into an input not dissimilar to seeds, electricity, indeed to robots. In modern parlance, it is what would have transpired if human labour had become perfectly reducible to human capital and thus fit for insertion into the vulgar economists’ models.

Come to think of it, each and every non-Marxist economic theory, that treats human and non-human productive inputs as interchangeable and qualitatively equivalent quantities, assumes that the de-humanisation of human labour is complete. But if it could ever be completed, the result would be the end of capitalism as a system capable of creating and distributing value. For a start, a society of dehumanised simulacra, of automata, would resemble a mechanical watch full of cogs and springs, each with its own unique function, together producing a ‘good’: time keeping. Yet if that society contained nothing but other automata, time keeping would not be a ‘good’. It would be an ‘output’ for sure but why a ‘good’? Without real humans to experience the clock’s function, there can be no such thing as ‘good’ or ‘bad’. A ‘society’ of automata would, like the mechanical watch or some integrated circuit, be replete with functioning parts, demonstrating function but nothing that can be usefully described as ‘good’ or ‘evil’, indeed of ‘value’.

So, to recap, if capital ever succeeds in quantifying, and subsequently fully commodifying, labour, as it is constantly trying to, it will also squeeze that indeterminate, recalcitrant human freedom from within labour which allows for the generation of value. Marx’s brilliant insight into the essence of capitalist crises was precisely this: the greater capitalism’s success in turning labour into a commodity the less the value of each unit of output it generates, the lower the profit rate and, ultimately, the nearer the next nasty recession of the economy as a system. The portrayal of human freedom as an economic category is unique in Marx, making possible a distinctively dramatic and analytically astute interpretation of capitalism’s propensity to snatch recession, even depression, from the jaws of ‘growth’.

When Marx was writing that labour is the living, form-giving fire; the transitoriness of things; their temporality; he was making the greatest contribution any economist has ever made to our understanding of the acute contradiction buried inside capitalism’s DNA. When he portrayed capital as a “… force we must submit to… [i]t develops a cosmopolitan, universal energy which breaks through every limit and every bond and posts itself as the only policy, the only universality the only limit and the only bond,”[3] he was highlighting the reality that labour can be purchased by liquid capital (i.e. money), in its commodity form, but that it will always carry with it a will hostile to the capitalist buyer. But Marx was not just making a psychological, philosophical or political statement. He was, rather, supplying a remarkable analysis of why the moment labour (as an unquantifiable activity) sheds this hostility, it becomes sterile, incapable of producing value.

At a time when neoliberals have ensnared the majority in their theoretical tentacles, regurgitating incessantly the ideology of enhancing labour productivity in an effort to enhance competitiveness with a view to creating ‘growth’ etc., Marx’s analysis offers a powerful antidote. Capital can never win in its struggle to turn labour into an infinitely elastic, mechanised input, without destroying itself. That is what neither the neoliberals nor the Keynesians will ever grasp! “If the whole class of the wage-labourer were to be annihilated by machinery”, wrote Marx “how terrible that would be for capital, which, without wage-labour, ceases to be capital!”[4] The closer capital edges toward its ‘final victory’ over labour, the more our society resembles another science fiction movie. One that was foreshadowed by, yes, Marl Marx: The Matrix.

What is unique in The Matrix is that, in it, our artifacts’ rebellion was not just a simple case of creator-cide. Unlike Frankenstein’s Thing, which attacks humans irrationally out of its sheer existentialist angst, or The Terminator series’ machines, which just want to exterminate all humans in order to consolidate their future dominance on the planet, in The Matrix the emergent empire of machines is keen to preserve human life for its own ends; to keep us alive as a primary resource. Homo sapiens, notwithstanding that it invented human slavery, and despite our unparalleled track record of inflicting unspeakable horrors on our brethren, could not have even imagined the despicable role that the machines would assign it in The Matrix: Strapped onto contraptions that immobilised us to save energy, the machines force-fed us with a blend of nauseating nutrients suitable for maximum heat generation.

However, the machines were soon to discover that humans do not last long when their spirit is broken and their freedom utterly deprived. Our curious need for liberty was, thus, threatening the efficacy of their human-driven power plants. So, the machines obliged us with what Marx would have called a ‘false consciousness’. They forced not only nutrients into our bodies but also illusions that our spirit craved into our minds. Ingeniously, they attached electrodes to our skulls with which they fed, directly into our brain, a virtual, yet utterly realistic, life that, as humans, we could cope with. While our bodies were still brutally plugged into their power generators, feeding them with electricity sourced from our body heat, the machines’ computer program known as The Matrix filled our minds with an imaginary, illusory yet very ‘real’ ‘normal’ life. That way our bodies, oblivious to reality, could live for decades, to the great utility of the machines responsible for generating enough power to sustain their new world. Human oblivion proved a crucial factor of production in the Matrix Economy.

“Machines have acquired the governing power over human labour and its products”,[5] was the way Marx described the ‘rise of the machines’ as a cross between an ancient Greek and a Shakespearian tragedy that evolved against the background of an industrial revolution in which the few owned the machines and the many worked them. Marx’s point was that, in the universe of capital, we are already trans-human. The Matrix is no futurology. It has been part of our reality for a while now! It is a top-notch documentary of our era or, to be more precise, of the tendency of our era to bleach out of human labour all those characteristics that prevent it from becoming fully flexible, perfectly quantified, infinitely divisible. As for Marx, his role was to provide us with the option of the ‘red pill’;[6] a chance to stare in the face, without the soothing illusions of bourgeois ideology, the ugly reality of a system that produces crises and deprivation as a matter of course, by design, and certainly not by accident.

Read any management manual, any paper in some journal on the economics of education, every paper that has come from the European Union on training, schools, universities, productivity enhancing programs, competitiveness etc. What you will immediately recognise is that we are already living in our own version of The Matrix. The inexorable efforts of capital to quantify and usurp labour have infected all these documents which are sponsoring a society in which people are aspiring to becoming automata. An ideology whose programmatic extension is the transformation of human work into a version of the thermal energy that permits the machines greater leeway to function and to manufacture other machines that, tragically, lack any capacity to generate… value.

In this sense, our Matrix can only be provisional since the nearer it gets to the perfected movie version the more likely a monumental crisis becomes, as economic values fall through the floor, a Great Recession arrives, and the rise of the machines is reversed when investment in them becomes negative. From this Marxian perspective, returning to the movie again, the band of liberated humans in the guts of the machine society (who lead the human resurrection against the machines) symbolises the human resistance to becoming human capital; the irreducible inherent hostility toward quantification that remains embedded inside the hearts and minds even of those who spend all their energies trying to become commodified on behalf of their employers. The delicious irony in this is that the very hostility that capital is attempting to eradicate in labour is what makes labour capable of producing value and allows capital to accumulate.

4. What has Marx done for us?

Paul Samuelson once denigrated Marx by calling him a minor Ricardian. Almost every school of thought, including some progressive economists, like to pretend that, though Marx was a powerful figure, very little, if anything, of his contribution remains relevant today. I beg to differ.

Besides having captured the basic drama of capitalist dynamics (see the previous section), Marx has given me the tools with which to become immune to the toxic propaganda of neoliberal enemies of genuine freedom and rationality. For example, the idea that wealth is privately produced and then appropriated by a quasi-illegitimate state, through taxation, is easy to succumb to if one has not been exposed first to Marx’s startlingly poignant argument that precisely the opposite applies: wealth is collectively produced and then privately appropriated through social relations of production and property rights that rely, for their reproduction, almost exclusively on false consciousness. Similarly with the concept of ‘autonomy’, that resonates so well in this ‘postmodern’ world of ours. It too is produced collectively, through the dialectic of mutual recognition, and then privately seized. If only Marx had been taken seriously (by, it must be said, the Marxists as well as by his detractors), much of the hot air that accumulated over the years in the annals of cultural studies would have been avoided.

Phil Mirowski has recently[7] highlighted, quite eloquently, the neoliberals’ success in convincing a large array of people that markets are not just a useful means but also an inalienable end in itself. That while collective action and public institutions are never able to ‘get it right’, the unfettered operations of decentralised private interest generates a kind of secular-cum-divine providence that is guaranteed to produce not only the right outcomes but also the right desires, character, ethos even. The best example of neoliberal crassness is, of course, the debate on climate change and what to do about it. Neoliberals have rushed in to argue that, if anything is to be done, it must take the form of creating a quasi-market for ‘bads’ (e.g. an emissions’ trading scheme) since only markets ‘know’ how to price goods and bads appropriately. To understand both why such a quasi-market solution is bound to fail and, more importantly, where the motivation comes from for such ‘solutions’, one can do much worse than to become acquainted with logic of capital accumulation that Marx outlined and Michal Kalecki adapted to a world ruled by networked oligopolies.

In the 20th Century, the two political movements that sought their roots in Marx’s musings were the communist and social democratic parties. Both of them, in addition to their other errors (and, indeed, crimes) failed, to their detriment, to follow Marx’s lead in a crucial regard: instead of embracing liberty and rationality as their rallying cries and organising concepts, they opted for equality and justice, bequeathing freedom to the neoliberals. Marx was adamant: The problem with capitalism is not that it is unfair but that it is irrational, as it habitually condemns whole generations to deprivation and unemployment and even turns capitalists into angst-ridden automata who are, also, enslaved by the machines that they supposedly own, living in permanent fear that unless they commodify their fellow humans fully so as to serve capital accumulation more efficiently they will cease to be… capitalists.

So, if capitalism appears unjust this is because it enslaves Matrix-like everyone, workers and capitalists; it wastes human and natural resources; it churns out unhappiness, illiberty and crises from the same ‘production line’ that pumps out remarkable gizmos and untold wealth. Having failed to couch a critique of capitalism in terms of freedom and rationality, as Marx thought essential, social democracy and the Left in general allowed the neoliberals to usurp the mantle of freedom and to win a spectacular triumph in the contest of faculties and ideologies.[8]

Staying with the neoliberal triumph, perhaps its most significant dimension is what has come to be known as the ‘democratic deficit’. Rivers of crocodile tears have flowed over the decline of our great democracies during the past three decades of financialisation and globalisation. Marx would have laughed long and hard at those who seem surprised, or upset, by the ‘democratic deficit’. What was the great objective behind 19th century liberalism? It was, as Marx never tired to point out, to separate the economic sphere from the political sphere and to confine politics to the latter while leaving the economic sphere to capital. It is liberalism’s splendid success in achieving this long-held goal that we are observing today. Take a look at South Africa today, more than two decades after Nelson Mandela was freed and the political sphere, at long last, embraced the whole population. The ANC’s predicament was that, in order to be allowed to dominate the political sphere, it had to accept impotence over the economic one. And if you think otherwise, I suggest that you talk to the dozens of miners gunned down by armed guards paid by their employers after they dared demand a wage rise.

5. Why erratic? Marx’s two unforgivable errors

Having explained why I owe whatever understanding of our social world I may possess largely to Karl Marx, I now want to explain why I remain terribly angry with him. In other words, I shall outline why I am by choice an erratic, inconsistent Marxist. Marx committed two spectacular mistakes, one of them an error of omission the other one of commission. These mistakes are important to this date because they hamper the Left’s effectiveness in countering organised misanthropy, especially in Europe.

Marx’s first error, the one that I suggest was due to omission, was that he was insufficiently dialectical, insufficiently reflexive. He failed to give sufficient thought, and kept a judicious silence, over the impact of his own theorising on the world that he was theorising about. His theory is discursively exceptionally powerful, and Marx had got whiff of its power. How come he showed no concern that his disciples, people with a better grasp of these powerful ideas than the average worker, might use the power bestowed upon them, via Marx’s own ideas, in order to abuse other comrades, to build their own power base, to gain positions of influence, to bed impressionable students etc.?

To give a second example, we know that the success of the Russian Revolution caused capitalism, in due course, strategically to recoil and to concede pension schemes and national health services, even the idea of forcing the rich to pay for masses of poor students to attend purpose-built liberal colleges and universities. At the same time, we also saw how the rabid hostility to the Soviet Union, with a series of invasions as the prime example, stirred up paranoia amongst socialists and created a climate of fear which proved particularly fertile for figures like Joseph Stalin and Pol Pot. Marx never saw this dialectical process coming. He just did not consider the possibility that the creation of a workers’ state would force capitalism to become more civilised while the workers’ state would be infected with the virus of totalitarianism as the hostility of the rest of the (capitalist) world towards it grew and grew.

Marx’s second error, the one I ascribe to commission, was worse. It was his assumption that truth about capitalism could be discovered in the mathematics of his models (the so-called ‘schemas of reproduction’). This was the worst disservice Marx could have delivered to his own theoretical system. The man who equipped us with human freedom as a first order economic concept; the scholar who elevated radical indeterminacy to its rightful place within political economics; he was the same person who ended up toying around with simplistic algebraic models, in which labour units were, naturally, fully quantified, hoping against hope to evince from these equations some additional insights about capitalism. After his death, Marxist economists wasted long careers indulging a similar type of scholastic mechanism, ending up with what Nietzsche once described as “the pieces of mechanism that have come to grief”. Fully immersed in irrelevant debates on the transformation problem and what to do about it, they eventually became an almost extinct species, as the neoliberal juggernaut crushed all dissent in its path.

How could Marx be so deluded? Why did he not recognise that no truth about capitalism can ever spring out of any mathematical model however brilliant the modeller may be? Did he not have the intellectual tools to realise that capitalist dynamics spring from the unquantifiable part of human labour; i.e. from a variable that can never be well-defined mathematically? Of course he did, since he forged these tools! No, the reason for his error is a little more sinister: just like the vulgar economists that he so brilliantly admonished (and who continue to dominate the Departments of Economics today), he coveted the power that mathematical ‘proof’ afforded him.

If I am right, Marx knew what he was doing. He understood, or had the capacity to know, that a comprehensive theory of value cannot be accommodated within a mathematical model of a growing, of a dynamic capitalist economy. He was, I have no doubt, aware that a proper economic theory must respect Hegel’s dictum that “the rules of the undetermined are themselves undetermined”. In economic terms this meant a recognition that the market power, and thus the profitability, of capitalists was not necessarily reducible to their capacity to extract labour from employees; that some capitalists can extract more from a given pool of labour or from a given community of consumers for reasons that are external to his own theory.

Alas, that recognition would be tantamount to accepting that his ‘laws’ were not immutable. He would have to concede to competing voices in the trades union movement that his theory was indeterminate and, therefore, that his pronouncements could not be uniquely and unambiguously correct. That they were permanently provisional. But Marx felt an irrepressible urge to quash people like Citizen Weston[9] who dared worry that a wage rise (achieved through strike action) might prove Pyrrhic if capitalists push prices up subsequently. Instead of just arguing against people like Weston, Marx was determined to prove with mathematical precision that they were wrong, unscientific, vulgar, unworthy of serious attention.

There were times when Marx realised, and confessed, to having erred on the side of determinism. Once he moved to the third volume of Capital, he saw that, even minimal complexity (e.g. allowing different degrees of capital intensity in different sectors) derailed his argument against Weston. But so committed was he to his own monopoly over the truth that he steamrolled over the problem, dazzlingly but too bluntly, imposing by fiat the axiom which would, in the end, vindicate his original ‘proof’; the one with which he had battered Citizen Weston over the head. Strange are the rituals of emptiness and sad are these rituals when performed by exceptional minds, like Karl Marx and by a considerable number of his 20th Century disciples.

This determination to have the ‘complete’, ‘closed’ story, or model, the ‘final word’, is something I cannot forgive Marx for. It proved, after all, responsible for a great deal of error and, more significantly, of authoritarianism. Errors and authoritarianism that are largely responsible for the Left’s current impotence as a force of good and as a check on the abuses of reason and liberty that the neoliberal crew are overseeing today.

6. Mr Keynes’ radical idea

Keynes was an enemy of the Left. He liked the class system that spawned him, wanted nothing to do (personally) with the riff-raff ‘downstairs’, and worked hard and cleverly in order to come up with ideas that would allow capitalism to survive against its own propensity for, potentially, deadly spasms. An open-minded, free-spirited, bourgeois liberal thinker, Keynes had the rare gift of not shying away from a challenge to his own presuppositions. In the midst of the Great Depression, he was quite happy to break free of the Marshallian tradition that was his legacy. Upon noticing that employment sunk deeper the lower the wage fell, and that investment was refusing to rise even after a long period of zero interest rates, he was prepared to tear up the ‘textbook’ and re-consider capitalism’s ways.

His radical re-thinking had to begin somewhere. It began when Keynes broke ranks with his peers by doing the unthinkable: By revisiting the spat between David Ricardo and Thomas Malthus and taking the side of the clergyman. In no uncertain terms, in the midst of the Great Depression, he wrote: “[I]f only Malthus, instead of Ricardo, had been the parent stem from which nineteenth-century economics proceeded, what a much wiser and richer place the world would be today!”[10] With this inflammatory statement, Keynes was adopting neither Malthus’ stand in favour of aristocratic rentiers nor his theological views about the redemptive power of suffering.[11] Rather, Keynes embraced Malthus’ scepticism regarding (a) the wisdom of seeking a theory of value which is consistent with capitalism’s complexity and dynamics, and (b) Ricardo’s conviction, which Marx later inherited, that persistent depression is incompatible with capitalism.

Why did Keynes not converge to Marx’s position, who after all was the first political economist to explain crises as constituents of capitalist dynamics? Because the Great Depression was not like other downturns, of the sort that Marx had explained so well. In Capital Vol. 1 Marx told the story of redemptive recessions occurring due to the twin nature of labour and giving rise to periods of growth that are pregnant with the next downturn which, in turn, begets the next recovery, and so on. However, there was nothing redemptive about the Great Depression. The 1930s slump was just that: a slump that behaved very much like a static equilibrium – a state of the economy that seemed perfectly capable of perpetuating itself, with the anticipated recovery stubbornly refusing to appear over the horizon even after the rate of profit recovered in response to the collapse of wages and interest rates.

Keynes’ gem of a ‘discovery’ about capitalism was twofold: (A) It was an inherently indeterminate system, featuring what economists might refer to today as an infinity of multiple equilibria, some of which where consistent with permanent mass unemployment, and (B) it could fall into one of these terrible equilibria at the drop of a hat, unpredictably, without rhyme or reason, just because a significant portion of capitalists feared that it may do so.

In plain language, this meant that, as far as predicting slumps and their overcoming by market forces, “we are damned if we know!” That we have no way of knowing what capitalism will do tomorrow even if, today, it is going from strength to strength. That it may very well fall flat on its face and refuse to rise again. Keynes’ ‘animal spirits’ notion represented a deeply radical idea, capturing the radical indeterminacy buried inside capitalism’s very DNA. An idea that Marx first introduced, with his analysis of labour’s dialectical nature, but then, in the process of writing Capital, crushed so as to establish his theorems as mathematical, indisputable proofs. Of all the passages in Keynes’ General Theory, this idea, of capitalism’s self-destructive capriciousness, is the one we need to retrieve and use to re-radicalise Marxism.

7. Mrs Thatcher’s lesson for today’s European radicals

I moved to England to attend university in September 1978, six months or so before Mrs Thatcher’s victory that changed Britain forever. Watching the Labour government disintegrate, under the weight of its degenerate social democratic program, led me to an error of the first order: to the thought that perhaps Mrs Thatcher’s victory would be a good thing, delivering to Britain’s working and middle classes the short, sharp, shock necessary to reinvigorate progressive politics. To give the Left a chance to re-think its position and to create a fresh, radical agenda for a new type of effective, progressive politics.

Even as unemployment doubled and then trebled, under Mrs Thatcher’s radical neoliberal ‘interventions’, I continued to harbour hope that Lenin was right: “Things have to get worse before they get better.” As life became nastier, more brutish and, for many, shorter, it occurred to me that I was tragically in error: things could get worse in perpetuity, without ever getting better. The hope that the deterioration of public goods, the diminution of the lives of the majority, the spread of deprivation to every corner of the land would, automatically, lead to a renaissance of the Left was just that: hope!

The reality was, however, painfully different. With every turn of the recession’s screw, the Left became more introverted, less capable of producing a convincing progressive agenda and, meanwhile, the working class was being divided between those who dropped out of society and those co-opted into the neoliberal mindset. The notion that the deterioration of the ‘objective conditions’ would somehow give rise to the ‘subjective conditions’ from which a new political revolution will emerge was well and truly bogus. All that sprang out of Thatcherism were the spivs, extreme financialisation, the triumph of the shopping mall over the corner store, the fetishisation of housing and… Tony Blair.

Instead of radicalising British society, the recession that Mrs Thatcher’s government so carefully engineered, as part of its class war against organised labour and against the public institutions of social security and redistribution that had been established after the war, permanently destroyed the very possibility of radical, progressive politics in Britain. Indeed, it rendered impossible the very notion of values that transcended what the market determined as the ‘right’ price.

The lesson that Mrs Thatcher taught me the hard way, regarding the capacity of a long lasting recession to undermine progressive politics and to entrench misanthropy into the fibre of society, is one that I carry with me into today’s European crisis. It is, indeed, the most important determinant of my stance in relation to the Euro Crisis that has occupied my time and thinking almost exclusively over the past few years. It is the reason why I am happy to confess to the sin that is apportioned to me by radical critics of my ‘Menshevik’ stand on the Eurozone: the sin of choosing not to propose radical political programs that seek to exploit the Euro Crisis as an opportunity to overthrow European capitalism, to dismantle the awful Eurozone, and to undermine the European Union of the cartels and the bankrupt bankers.

Yes, I would love to put forward such a radical agenda. But, no, I am not prepared to commit the same error twice. What good did we achieve in Britain in the early 1980s by promoting an agenda of socialist change that British society scorned while falling headlong into Mrs Thatcher’s neoliberal trap? Precisely none. What good will it do today to call for a dismantling of the Eurozone, of the European Union itself, when European capitalism is doing its utmost to undermine the Eurozone, the European Union, indeed itself?

A Greek or a Portuguese or an Italian exit from the Eurozone will soon develop into a fragmentation of European capitalism, yielding a seriously recessionary surplus region east of the Rhine and north of the Alps while the rest of Europe is in the clasps of vicious stagflation. Who do you think will benefit from this development? A progressive Left, that will rise Phoenix-like from the ashes of Europe’s public institutions? Or the Golden Dawn Nazis, the assorted neo-fascists, the xenophobes and the spivs? I have absolutely no doubt as to which of the two will benefit from a disintegration of the Eurozone. I, for one, am not prepared to blow fresh wind into the sails of this postmodern version of the 1930s. If this means that it is we, the suitably erratic Marxists, that must try to save European capitalism from itself, so be it. Not out of love or appreciation of European capitalism, of the Eurozone, of Brussels, or of the European Central Bank but just because we want to minimise the unnecessary human toll from this crisis; the countless lives whose prospects will be further crushed without any benefit whatsoever for the future generations of Europeans.

8. Conclusion: What should Marxists do?

Europe’s elites are behaving today like a hapless cast of clueless leaders who understand neither the nature of the crisis that they are presiding over nor its implications for their own fate – let alone for the future of European civilisation. Atavistically, they are choosing to plunder the diminishing stocks of the weak and the dispossessed in order to plug the gaping black holes of their bankrupted bankers, refusing to come to terms with the impossibility of the task. Having created a monetary union that (A) removed all shock absorbers from Europe’s macro-economy and (B) ensured that, when the shock comes, it would be gigantic, they are now investing in denial hoping, irrationally, for some miracle that the gods may deliver provided sufficient numbers of human lives are sacrificed on the altar of competitive austerity.

Every time the troika bailiffs visit Athens, Dublin, Lisbon, Madrid; with each pronouncement of the European Central Bank or of the European Commission on the next turn of the austerity screw that must be effected in Paris or in Rome; Berthold Brecht’s line comes to mind: “Brute force is out of date. Why send out hired murdered when bailiffs will do?” The question is: How do we resist them?

Always alive to the Left’s collective guilt over the industrial feudalism to which we condemned millions of people for decades, in the name of… progressive politics, I shall nevertheless draw a parallel between the Soviet and the European Unions. Despite their great differences, one thing they do have in common: the uniform ‘party line’ that runs seamlessly from the top (the Politburo or the Commission) to the very bottom (every junior minister in each member-state, or the last commissar, parroting the same inanities). Both Soviet and EU apparatchiks share a Christian sects’ determination to acknowledge facts only if they are congruent with prophesy and their sacred texts. Mr Olli Rehn, for example, who is the European Union’s commissioner with responsibility over economic and financial affairs recently had the audacity to accuse the International Monetary Fund for unveiling errors in the computation of the Eurozone’s fiscal multipliers because such revelation “…undermined the European people’s confidence in their institutions”. Not even Leonid Brezhnev would have dared make such a public statement! 

With Europe’s elites deep in denial, disarray, and with their heads buried ostrich-like in the sand, the Left must admit that we are just not ready to plug the chasm that a collapsing European capitalism will open up with a functioning socialist system, one that is capable of generating shared prosperity for the masses. Our task should then be twofold: To put forward an analysis of the current state of play that non-Marxist, well meaning Europeans who have been lured by the sirens of neoliberalism, find insightful. And to follow this sound analysis up with proposals for stabilising Europe – for ending the downward spiral that, in the end, reinforces only the bigots and incubates the serpent’s egg. Ironically, those of us who loathe the Eurozone have a moral obligation to save it!

This is what we have been trying to do in with our Modest Proposal.[12] When addressing diverse audiences ranging from radical activists to hedge fund managers, the idea is to forge strategic alliances even with right-wingers with whom we share a simple interest: an interest to end the negative feedback loop between austerity and crisis, between bankrupt states and bankrupt backs; a negative feedback effect that undermines both capitalism and any progressive program for replacing it. This is how I defend my attempts to enlist to the cause of the Modest Proposal the likes of Bloomberg and New York Times journalists, of Tory members of Parliament, of financiers who are concerned with Europe’s parlous state.

The reader will allow me to conclude with two final confessions. While I am happy to defend as genuinely radical the pursuit of a modest agenda for stabilising a system that I despise, I shall not pretend to be enthusiastic about it. This may be what we must do, under the current circumstances, but I am sad that I shall probably not be around to see a more radical agenda being sensibly adopted. Lastly, a confession of a highly personal nature: I know that I run the risk of, surreptitiously, lessening the sadness from ditching any hope of replacing capitalism in my lifetime by indulging a feeling of having become ‘agreeable’ to the circles of ‘polite society’. The sense of self-satisfaction from being feted by the high and mighty did begin, on occasion, to creep up on me. And what a non-radical, ugly, corruptive and corrosive sense it was!

My personal nadir came at an airport. Some moneyed outfit had invited me to give a keynote on the European crisis and had forked out the ludicrous sum necessary to buy me a first class ticket. On my way back home, tired and already with several flights under my belt, I was making my way past the long queue of economy passengers, to get to my gate. Suddenly I noticed, with considerable horror, how easy it was for my mind to be infected with the sense that I was ‘entitled’ to bypass the hoi polloi. I realised how readily I could forget that which my left-wing mind had always known: that nothing succeeds in reproducing itself better than a false sense of entitlement. Forging alliances with reactionary forces, as I think we should do to stabilise Europe today, brings us up against the risk of becoming co-opted, of shedding our radicalism through the warm glow of having ‘arrived’ in the corridors of power.

Radical confessions, like the one I have attempted to script here, are perhaps the only programmatic antidote to ideological slides that threaten to turn us into cogs of the machine. If we are to forge alliances with the devil (e.g. with the IMF, with neoliberals who, nevertheless, object to what I term ‘bankruptocracy’, etc.), we must avoid becoming like the socialists who failed to change the world but succeeded in improve… their private circumstances. The trick is to avoid the revolutionary maximalism that, in the end, helps the neoliberals bypass all opposition to their self-defeating nastiness and to retain in our sights capitalism’s inherent ugliness while trying to save it, for strategic purposes, from itself. Radical confessions can be helpful in striking this difficult balance. After all, Marxist humanism is a constant struggle against what we are becoming.


Keynes, J.M. (1933,1972). “Robert Malthus: The First of the Cambridge Economists,” penned in 1933, in The Collected Works of John Maynard Keynes, Vol. X: Essays in Biography, London: Macmillan.

Marx, K, (1865,1969). “Wages, Prices and Profit’ in Value, Price and Profit, New York: International Co.

Marx, K. (1844,1969). Economic and Philosophical Manuscripts, in Marx/Engels Selected Works, Moscow, USSR: Progress Publishers

Marx, K. (1849,1902). “Wage-Labour and Capital”, first published in the Neue Rheinische Zeitung, April 5-8 and 11, 1849. [Delivered as lectures in 1847] Edited with an introduction by Friedrich Engels in 1891. Translated by Harriet E. Lothrop, New York: Labor News Company

Marx, K. (1972). Capital: Vol. I-III. London: Lawrence and Wishart

Mirowski, P. (2013). Never Let a Good Crisis Go To Waste: How Neoliberalism survived the financial meltdown, London and New York: Verso

Varoufakis Y. (2013). Economics Indeterminacy: A personal encounter with the economists’ peculiar nemesis, London and New York: Routledge

Varoufakis, Y. (1991). Rational Conflict, Oxford: Blackwell

Varoufakis, Y. (1998). Foundations of Economics: A beginner’s companion, London and New York: Routledge

Varoufakis, Y., J. Halevi and N. Theocarakis (2011). Modern Political Economics: Making sense of the post-2008 world, London and New York: Routledge

Varoufakis, S. Holland and J.K. Galbraith (2013). A Modest Proposal for Resolving the Euro Crisis, Version 4.0, see


[1] This paper is based on a keynote speech by the author delivered on 14th May 2013 at the 6th Subversive Festival in Zagreb, entitled “Confessions of an erratic Marxist”. For a video of that presentation, click here.

[2] For examples of the resulting research, see Varoufakis (2013) and Varoufakis, Halevi and Theocarakis (2001).

[3] See Karl Marx (1844,1969), Economic and Philosophical Manuscripts.

[4] Marx in ‘Wage-Labour and Capital’, first published in the Neue Rheinische Zeitung, April 5-8 and 11, 1849. [Delivered as lectures in 1847] Edited with an introduction by Friedrich Engels in 1891. Translated by Harriet E. Lothrop, New York: Labor News Company, 1902.

[5] See Karl Marx (1844,1969), Economic and Philosophical Manuscripts.

[6]Towards the beginning of The Matrix, an urban guerilla who helped our Thomas Anderson, aka Neo, escape from suited ‘agents’ offers him a stark choice between two pills. If he took the blue pill, he would be returned to his bed and awake in the morning thinking the whole thing was a nightmare before resuming his ‘normal’ life. If however he opted for the red pill, he would learn the truth about his life and society. In a triumph of reckless curiosity over the lure of simple pleasures, Neo turned down the prospect of blissful ignorance offered by the blue pill, opting instead for the cruel reality promised by the red one.

[7] See Mirowski (2013).

[8] For more on this argument see Varoufakis (1991) and Varoufakis (1998).

[9] See Marx’s Wages, Prices and Profit, in which Marx’s debate with Citizen Weston is narrated by Marx himself.

[10] See his essay on Malthus, “Robert Malthus: The First of the Cambridge Economists,” penned in 1933, in John Maynard Keynes (1972). The Collected Works of John Maynard Keynes, Vol. X: Essays in Biography, London: Macmillan. The quote appears on pp. 100-1. Originally published in Essays in Biography, 1933.

[11] Malthus made his name by prognosticating that population growth would outstrip the Earth’s resources, despite our better efforts, and therefore that famine was an essential ‘equilibrating’ mechanism. As a man of the cloth, he explained this as part of God’s design: The suffering of the masses, the swollen tummies of the inebriated children, and the exhausted faces of the grieving mothers were a divinely afforded opportunity for humans to embrace good and fight evil.

[12] See Y. Varoufakis, S. Holland and J.K. Galbraith (2013). A Modest Proposal for Resolving the Euro Crisis, Version 4.0


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  11. Κύριε Βαρουφάκη
    In my point of view one should address indeed diverse audiences and right-wingers but inside the people, among those who suffer, not among different social strata (“from radical activists to hedge fund managers”). The majority of the common people are neither “Left” nor fascists. They are just ordinary people, they will surely laugh if you talk about socialism. No one will laugh if you talk about democracy, the need to take their lives back. This is not a left or right property, this is a necessity even for the most conservative family that finds itself in poverty and unemployment. The abolition of debt by the sovereignty of the people, democratization of the parliamentary dictatorship we live in, decent jobs, the right for a democratic country to have its own currency. These are not left or right demands. They are not even scientific They are deeply democratic, they arise spontaneously from the heart of the society. A marxist’s task is to immerse himself inside the living reality of the majority and formulate these demands concretely, dialecticaly (meaning not being able of having the one without the others) and scientifically. Interestingly this is a notion of dialectics coming not from Marx or Lenin, but straight from Socrates. The needs and desires of a mother, conservative or liberal, left, right or (and you tend to forget) just apolitical, for her children in hours of poverty like these, is the only immanent critique there is, the good dialectician (or radical, if you please) needs only to capture it and give it such form that will elevate the consciousness of the people even further.
    This is my objection to your proposals. I fully agree with your remarks on Marx and him getting under the spell of mathematics and models. But it is the democratic struggles of the people, spontaneous or organized, trade unionist or political that made the only immanent critique of capitalism. Even their most immature demads carried the seed of capitalism’s destruction.
    Thus, with all due respect, i do not believe in an “alliance with hedge fund managers” however tactical it may be. There are two social powers in this world: gigantic accumulations of capital and the people. You can’t control the one without the other.
    I will try to read your book however although im a complete amateur in economics.

    Γιώργος Κ.

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  13. “It is a confession with which to convince radicals that we have a contradictory mission: to arrest European capitalism’s free-fall in order to buy the time we need to formulate its alternative.”

    The alternative can only come with capitalism’s downfall – unfortunately Yannis. Else, what do we have? By your own assertion, capitalism ‘arrested’ of its ‘free-fall’ is simply… more capitalism!!

    Is it not?

    Any successful rehabilitation of European capitalism would only lead to more European capitalism. And more capitalism will not buy the time to develop an alternative, it will only buy more time for capitalism to debauch the biosphere further. Until the next crisis, and the next round of angst ridden confessions by erratic Marxists.

    Can I ask;
    Would you rather pain in perpetuity?
    Wouldn’t you rather pain toward an end?
    If we’re to suffer, then why not suffer the birth-pangs of the new?
    Why just suffer for the sake of further suffering?

    If its about formulating an alternative, the historical ‘windows of opportunity’ are rare, and would certainly disappear after capitalism’s triumphalist return.

    Look around you.
    Right now.

    There’s a window.

  14. Capitalism during the past few decades has evolved beyond our wildest imagination, through networking and its vast and unprecedented complexity it has now transformed into something resembling a “super-entity”, a “beast” with a mind of its own, shaping the very fabric of our perception and creating a whole “new universe”. It has risen out of our most inner seas of instability, chaos and fear to dominate upon everything. Such a beast you can’t fight it, you can’t outsmart it, or use it strategically. Leave it there to be and don’t try to disturb it, change it, or influence it. It would be a total waste of energy because at the end all of our efforts are destined to fail. And in that great pain we will face, it will be indeed a great lesson for mankind to take and a necessary step in our long evolution.

    All I want to say is that there is hope and in the hard struggle that awaits all, we will not stand alone. The solution so many are desperately searching to find has already been given to us. For the time being it lays hidden and concealed from the eyes of the many. Like a seed it waits patiently on the fertile ground the proper time to give the good fruits for the hungry souls of this world to eat and drink. And those good fruits that we will all receive for free will not be watered and cared with greed, blood, hatred and lies.

    Those fruits will be cared and watered with the purest forms of love and of self sacrifice…

  15. It is funny that, starting to read your long and most inspiring text, I was reminded somehow of your older post about Mrs. Thatcher directly after her death. And then the story continued here.
    This is the most brillant essay so far on the subject, and should really, among the Left, be widely spread! There were many points where I could agree, as I am personally working with what you describe as postmodern era, (another topic many left-wingers used as their personal trap, and many indeed did it that way, this is off-topic, like you warned in your last paragraphs – they became just anti-Leftists, spoilt, felt they were suddenly “so important” while producing mostly – warm wind). And there were many many paragrahphs from which I simply learnt a lot. Thank you so much!

  16. Great of you to share this. Since growing up I felt that Marx had been a great critic, relevant, accurate, poignant, but a lousy leader. Marxian analysis of Capitalism, including its ills, is timeless. Yet I never encountered either in texts or in Soviet propaganda or in the daily demeanour of Communist or other leftist youths at school or university, any shred of inspiration. Renounce the injustices of capital, they said. Okay, then what? The world belongs to the proletariat. Workers of the world unite. Really? That is your vision? I don’t want to be part of the proletariat. No-one does. I’m hopelessly elitist and decadent. Everyone should be! That is the point of life. The struggle of the ethical life is how to be unique and special and decadent and a bon-viveur while simultaneously allowing everyone else to be so. How to set up not the phoney machine that pumps misery into the excess of a narrow class but the living organism where every member participates in the network, shares in the flow, has their own affirmation and story. This is not fluffy whimsey. It is a serious, even existential, economic problem.

    The Marxists never addressed that, at least not prominently, and the anarchists who did were not taken seriously or were swiftly shot down. It was left to the libertarians to take the stage, of whom a handful might share the humanist vision of empowering everyone with a good life but the vast majority of them recite shallow apologetics for the sadistic doctrine of ignoring the plight of your fellow human beings. Equality of opportunity not outcome, a fair result from a sequence of fair transactions, and such thinly veiled praise to a machine that functions, as a first approximation, like a lottery of good. People have stopped believing in a wondrous life for everyone, the idea which Marx didn’t portray with enough vigour or inspiration, and fell to the belief that it’s a dreary life for all, as in the folk understanding of Marx, and an inspired life for one, like Steve Jobs. We have submitted to the lottery, and to spectacles for those who don’t win.

    I don’t think we have coherent answers for this existential challenge, and merely picking up the fragments is a monumental task. Clues as to what a good life might resemble that is also just and inclusive to all might be found in the stoic and epicurean legacies, as well as the latter-day anarchists and bohemians, and yes even modern libertarians, the honest ones. I believe the economic organisation of a good society has to be conceived not in aggregates, maximising or optimising scalar quantities, but as a network. A progressive economics has to be about connection, flow, signals, balance and stresses in the network, capacity and response to change in connections, and the certainties or uncertainties of future flows. Theories about money and production that lead to stale accumulation in our economics about piles of scalars, begin to work and lead to new insights in a future economics about relationships, flow, and connection.

    I also feel that a new narrative can be made that is touching. It must be made. While people recognise the language of the aggregates, GDP, deficit, and so on, as totalitarian, we readily understand unemployment or racism as problems of connection. Nonsense arguments about austerity, transfers, and the burden of taxation may hold unopposed, but not against a clear picture of surplus recycling, investment, production, consumption, and confidence as economic flows. The story of accumulation of one quantity, money, or fame that is narrowly related, has to be challenged by a story of multiple paths and pinnacles of achievement, multiple sources of affirmation, that are necessarily and by will too complex to reduce to a single hierarchy. Freedom is collective, not as in mass but as in network.

    • Hi Pavlos & Thankyou for your insightful comments…

      I particularly take note of “Equality of opportunity not outcome, a fair result from a sequence of fair transactions, and such thinly veiled praise to a machine that functions, as a first approximation, like a lottery of good. People have stopped believing in a wondrous life for everyone”…I think to stop the “downward spiral”, humanity somehow needs to reimage a different future but i dont know if that’s possible anymore?

    • I am sorry to say this, but your otherwise well-written, even inspirational at times, response includes statements which bespeak profound misunderstandings and/or misreadings of Marx. The quip “I don’t want to be a proletarian” in response to the Manifesto’s call for the proletarians of the world to unite is just, I am sorry, silly. That you missed or did not appreciate the wonderful, evocative, utopian elements in Marx’s oeuvre is not his (or anybody else’s) fault, I’m afraid. And to claim that “equality of outcome” is in any way, shape or form part of what Marx characterized as “the desirable” is simply, positively ignorant. You must admit that you either have not read enough Marx from the original, or have failed to pay attention.

  17. “These few hints will suffice to show that the very development of modern industry must progressively turn the scale in favour of the capitalist against the working man, and that consequently the general tendency of capitalistic production is not to raise, but to sink the average standard of wages, or to push the value of labour more or less to its minimum limit. Such being the tendency of things in this system, is this saying that the working class ought to renounce their resistance against the encroachments of capital, and abandon their attempts at making the best of the occasional chances for their temporary improvement? If they did, they would be degraded to one level mass of broken wretches past salvation. I think I have shown that their struggles for the standard of wages are incidents inseparable from the whole wages system, that in 99 cases out of 100 their efforts at raising wages are only efforts at maintaining the given value of labour, and that the necessity of debating their price with the capitalist is inherent to their condition of having to sell themselves as commodities. By cowardly giving way in their everyday conflict with capital, they would certainly disqualify themselves for the initiating of any larger movement.

    At the same time, and quite apart from the general servitude involved in the wages system, the working class ought not to exaggerate to themselves the ultimate working of these everyday struggles. They ought not to forget that they are fighting with effects, but not with the causes of those effects; that they are retarding the downward movement, but not changing its direction; that they are applying palliatives, not curing the malady. They ought, therefore, not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market. They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical (sic) reconstruction of society. Instead of the conservative motto: ‘A fair day’s wage for a fair day’s work!’ they ought to inscribe on their banner the revolutionary watchword: ‘Abolition of the wages system!'”

    Yeah, no, I don’t see it Yani, not one bit!

  18. I am also an ‘erratic Marxist’ but being so does not grant one ‘carte blanche’:

    “But Marx felt an irrepressible urge to quash people like Citizen Weston[9] who dared worry that a wage rise (achieved through strike action) might prove Pyrrhic if capitalists push prices up subsequently.”

    The above appears to misrepresent both Citizen Weston’s argument and Marx’s riposte. To imply that Marx (or even Engels) did not appreciate that mere increases in wage rates, however achieved, would/could be a. short-lived and b. Pyrrhic strains credulity. If capitalists manage to push prices for the commodities they sell subsequently and maintain them there, capitalism as Marx (and everybody else) understood would already have ceased to obtain.

  19. If ghosts visit, a solemn hour, whispering council.
    Stand us on the battlefield in your stead.
    Choose a place where the enemy’s victory is irresistible.
    The day of collecting the dead remains, can be struck from your calendar
    but the taint of massacre in the dark outside minds won’t be easily washed away
    the rot of it poison.

    Yanis, At the axis of this year thank you for the distant camaraderie of your efforts. Scott

  20. @Chris Coles
    You claimed that you had plenty of ideas but no financing, here is solution to finacing problems. You are making a fundamental mistake. You are clamoring against public buearocracy and its entrenched wastefulness, while on the other side you are clamoring against unwillingness of capital to invest into productive start ups. Even tough you are right on both sides, you are abandoning the issue that it takes public buearocracy to enforce using capital to employ capital into productive start-ups. It is obvious that capital found its own needs and does not want to invest into production as you would want. The state has to direct it there. How?
    Here is the answer;
    from about 100 brightest british economists and financiers.

    There is no issue of savers and investment not conecting. Savings can not be invested since such investments are too risky and pose a threat to savings. Banks create investments (credits/ print money for investments) while savings go into bank reserves at the FED which replaces them with Treasuries and takes them back into circulation (invest). Banks invest new money into their own bonuses, they credit each other while only 3% is invested into production (from the video). The solution is not to forcefully destroy that, but to create competition by state owned banks that will direct credit creation into productive investments, long term and to social needs.

    Trying to find a blame is a sysyphean endavor with stagnating consequences. Instead of blaming each other let’s poke the monetary system that determines outcome. As FDR did in a crisis, create state banks that direct investments only to usefull endavors, by which he overcame financing problems. State ovned developement banks can use Treasuries to start and to use as borrowing reserve requierment, allowing to make credits with very low borrowing cost (interest rate). It can allow such loans to default without cost to the bank or state. It can create local banks too for local needs.

    • This cannot happen in the Eurozone though.Or at least in the periphery of the eurozone.Not as long as the current structure remains.

    • State owned banks, you must be kidding right?
      In places like Greece anything state owned is an entrenched oligarchy.

  21. Greece: money and support only for the banks

    The Greek banks have been bailed out with billions exceeding 90% of country’s GDP since 2008. When citizens suffer from heavy taxes, unemployment strikes the Greek society, Greek economy faces deep recession and Greeks sink in poverty, it appears that Greek governments do have money, but only for the banks. Billions were given in bailouts, but no one knows where the money went and how they were exploited. The only thing that is certain is that they didn’t go where they should go: to the real economy.

  22. Pingback: Yanis Varoufakis: Confessions of an Erratic Marxist in the Midst of a Repugnant Eurozone Crisis | naked capitalism

  23. [” It began when Keynes broke ranks with his peers by doing the unthinkable: By revisiting the spat between David Ricardo and Thomas Malthus and taking the side of the clergyman. In no uncertain terms, in the midst of the Great Depression, he wrote: “[I]f only Malthus, instead of Ricardo, had been the parent stem from which nineteenth-century economics proceeded, what a much wiser and richer place the world would be today!”[10] With this inflammatory statement, Keynes was adopting neither Malthus’ stand in favour of aristocratic rentiers nor his theological views about the redemptive power of suffering.[11] Rather, Keynes embraced Malthus’ scepticism regarding (a) the wisdom of seeking a theory of value which is consistent with capitalism’s complexity and dynamics, and (b) Ricardo’s conviction, which Marx later inherited, that persistent depression is incompatible with capitalism.”]

    That was very interesting…and enlightening. I’m getting increasingly attuned to writings relating history’s pillars of economic thought to the Malthusian issue.
    Two centuries later, the issue is still taboo and I’d regard that as the real tragedy .
    I wonder when will INET begin to address the topic…in no uncertain terms…

    How about you Yanis ?
    Have you considered “really” getting at the root cause ?

    A french engineer named Jean-Marc Jancovici addressed a parliamentary commission February 2013. He stated that European economic growth is from now on –over; projecting a pattern of recession one year, followed [perhaps] by some *little* rebound the next. The reason: Europe is already strangled by energy supply.
    The politician on his left was livid as the exposé unfolded.

    What is it that makes intellectuals auto-censure (or wall off a part of their brain) so as to go out of their way to avoid stating in a clinically cold, scientific and pragmatic way, the real situation humanity is in ?

    Anyway, thanks for the post. Wonderfully informative. Rest assured the candidness was appreciated…

    • @WorldisMorphing
      Thats a very linear view of Europes energy plight.
      The EU was never Industrial in the strict sense of the word.
      What I mean by that is the UK despite its trade culture was a almost closed coal / production center until lets say Suez or we can go back to Edwardian times to be precise ….or perhaps post 1970 when it first began importing coal.
      (However it opened up its agricultural sector in the mid 19th century with the repeal of the corn laws)

      Anyway ……….Europe however was always a entrepot economy – much like Amsterdam in the 1600s etc etc …..a added value economy using imported .primary goods.
      However its a added value economy of vast size.
      Entrepots of such a scale cannot begin to function as the world is not big enough.

      Much of its plight is a result of taking advantage of IEA “efficiency” advice.

      We can see this with non IEA memeber Iceland.
      It burns more diesel in its fishing fleet then its road transport.

      However Ireland (a model pupil of the IEA) burns 10 times as much diesel on the cores added value products (cars and trucks) as it does on its entire agricultural and fishing industry.
      If iceland joins the IEA /EC ………..”the cores” boats will transit to Icelands fishing grounds and return its basic goods /raw materials to the core…in return it will give credit tokens (with interest) to the Icelanders so that they can purchase the cores added value products – the primary added value product of Europe is of course the car.

      Europe is a gigantic scarcity machine.
      There is no real energy crisis when looked at from this perspective … its a crisis of structural inertia of the production / distribution / consumption chain that has merely been exposed by the decline of the North Sea.

    • I’m sorry, but the evidences brought forth by that engineer are absolutely, unquestionably, overwhelming.
      Linking his conference wouldn’t do you any good since it’s in french, but I’ll give you the link to the English translated part of his website:

  24. Also, taking a piece of Hollywood trash like The Matrix seriously seems to indicate a mind somewhat “unhinged”, which I guess we’re all experiencing these days as things just get worse and worse. As far as the so-called Left goes, Spiked-online is very good to read, in my opinion.

  25. “Keynes’ ‘animal spirits’ notion represented a deeply radical idea, capturing the radical indeterminacy buried inside capitalism’s very DNA”

    I’m not sure that’s really correct. For Keynes,”radical indeterminacy” is in social and physical reality itself, not just capitalism. Paul Davidson is great about this, esp. when he talks about how economics is “non-ergodic”, for example.


  27. I feel rather like Maju after reading this confessional piece. I don’t see any possible way of getting from HERE – to THERE, by trying to ‘save capitalism from itself’. I live in hope that at least the EZ will collapse, and if the EU must collapse to make that possible, so be it. Rebuilding ‘social Europe’ might be possible if democracy was restored to the countries, but with democracy usurped Europe-wide by ECB, EC, there is no way to interrupt the neoliberal project overtaking Europe – it’s the neoliberals who have ALL the reins of power. And as you said, Yanis, “…it occurred to me that I was tragically in error: things could get worse in perpetuity, without ever getting better.” which is exactly the course that has been charted by the neoliberal project – ‘worse in perpetuity’. I’m reminded of a remark of Ryoichi Sasakawa, Japanese businessman, politician and fascist, when he got of prison for Class A War Crimes after WWII, “…yes our fascist project failed, we thought we could usher in fascism by military might, now we know that was the wrong approach. But we have not given up. This next time we will convert the world to fascism by financial and economic means, and we will not fail.” (Frontline interview, 1987)

    Yanis, you acknowledge that you likely won’t live to see that ‘better world’ that might lie beyond this current cataclysm, and I, being 20 years older than you, have no hope whatsoever to see that better world. Perhaps that’s the reason I want the EZ to fail… soon, so that rebuilding social Europe at least has a chance to commence. When I moved to France in 2005, I could not even faintly see what was coming down the road – I was starry eyed with France’s political independence, social vitality, economic productivity, etc, etc, ‘the greatest country in the world’. Now, 8 years later – not so much.

    It is important to acknowledge that the neoliberal project is fascism-lite. It is important to acknowledge that if it succeeds it could plunge the world into a modern feudalism that could last hundreds of years. The neoliberal elites are planning just such a scenario. And, right now, they have all the power – financial, political, and monopoly of violence – plus they’ve successfully co-opted the narrative. And the power of narrative may be the most important of all.

    • “I live in hope that at least the EZ will collapse, and if the EU must collapse to make that possible, so be it”.

      Be reassured: it will happen. The problem is how and where that will lead us. Or where will us make that conflict lead the continent (and maybe the World).

      Personally I do not live in hope of that, rather fear if anything – because, we must admit: it’s very scary when a socio-political system collapses and you live in it. My hope is instead that we will be able to redirect such collapse in a regenerating direction. Not sure if it was Galbraith or Laszlo who stated that “revolutions only throw down rotten doors”. Possibly the former, while the latter may have said that “revolutions are like social emergency brakes”. Citing from memory in any case, my point is that, while social collapse is hardly desirable, even for a revolutionary like myself, these are opportunities for regeneration via revolution.

      And in this context of clearly unavoidable socio-economic collapse caused by the degeneration of an unfair system which has reached its own limits, we must look forward to make it happen. Not a mere awaiting but conscious and willful making it happen. In my country there’s a saying: “ezina ekinez egina”, which translates as “the impossible is done through action” and we sit now at the very gates of one psychological “impossible” itself, which is civilizational collapse and maybe even human extinction, a very undesirable “impossible” that has become painfully likely, but, for that very reason, we sit also at the gates of another “impossible”, which is revolution: the only thing that can saves us from that ultimate undoing of everything human (in the good sense of the term). However, unlike the first ex-impossible, this impossible has to be done: it will not happen alone. Popular uprisings can and will of course be quasi-spontaneous but the problem is not so much uprisings but how to make them successful and what to build on them. This is of course not on the hands of any single person but we all share the responsibility of making it happen in a creative, effective and of course humanistic way.

      Otherwise I’m in agreement with you, David. Fascism is coming from top to bottom, as always, the main problem being that, even with their “improved means”, they still do not have any plan that can save humankind from the worst of itself (nuclear and other environmental ongoing mass catastrophe: this is beyond human-on-human exploitation but rather about planetary collapse because of extreme abuse). So if this “new” (but old) fascism manages to succeed, the almost certain outcome will be extinction. They just don’t have any plan that can allow our species to survive its own nightmares.

      It’s quite ironic that the fascist confession you quote comes from Japan, a country devastated by the Fukushima catastrophe but where they just try to go on as if nothing ever happened. “Extend and pretend” is all their plan: quite pathetic! But also extremely dangerous.

    • Hi George,
      I rather agree with Prof Varoufakis that the field of study we call economics & finance is a theology / religion with beautifully complex set of equations. The original idea was to develop a deeper understanding of how markets operate & deals are made under certain conditions…Alas greats like Marx, Hayek, Keynes & other have pointed out in their own way the complexity of the “human animal”

  28. Your opening comment “Europe’s present crisis is not merely a threat for workers, for the dispossessed, for the bankers, for particular groups, social classes or, indeed, nations. No, Europe’s current posture poses a threat to civilisation as we know it.” Is very accurate and some parts of your debate strongly resound with my understanding of past difficulties, particularly regarding the Thatcher years.

    However, what you write encompasses, precisely; what I believe to be the great mistake made by Marx, which has been, historically, continually repeated thereafter, even by an otherwise eminent professor. Marx wrote about capitalism; when in point of fact, what he was describing was another form of medieval feudalism. Indeed, if you take your article and replace all but the first use of the word capitalist, (in the very first sentence), with feudalist, and capitalism with feudalism, you will immediately see the difference and that change, in turn, will show you how to replace the mistake with the truth of the situation we all face.

    When you write of the sudden realisation that you were walking past those unable to afford to pay for your expensive seat in an aircraft, (paid for by your wealthy sponsors), what you have signally failed to understand is that, right from the outset, 1st Class air travel was not promulgated by successful business people; it was all a product of government administrators; themselves wishing to emulate the wealthy. Take a close look at the history of the development of air travel here in the UK; it was always about the movement of administrators throughout the Empire.

    By far the majority on board the expensive seats on an aircraft, ship or railway train; are allocated, either to the administration of a nation; or to business administrators of businesses “owned” by the financial system.

    This is a common mistake. Real, true entrepreneurs, made it to their success, not by spending vast sums on travel; but exactly the opposite, by NOT spending on extravagance. The bankers you so well describe did not, entrepreneurially, create their banks; they became administrators of them, the same again for major listed companies; in EXACTLY the same manner as the national administrators of the nations. Each side has taken exactly the same career route to their own personal success. No risk, keep to the rules, take full control over any and every aspect of the surrounding economy.

    That is not capitalism, (though I do admit it is the description they give to it). No, that is classic feudalism. Marx was describing all the hallmarks of feudalism.

    In a true free market business environment, no entrepreneur can ever trade out of public view as all their transactions have to pass through an open auction. The farmer buys and sells their animals or feed, or equipment publicly and they always have to submit to the price that that market, that day, will pay; moreover, right out in full public view, you can go and watch.

    Modern finance, banking, insurance, real estate; as with national administration; always refuses to abide with a free market, constantly devising ways to overcome and control, absolutely, all aspects of their work. The national administrator runs alongside that financial system constantly devising rules that keep the whole thing running sweetly for their own internal interests; rules they then turn in law.

    What we face today is a complex, layer laid upon layer, of law, created by administrators; who refuse any public contact, (here in the UK under official secrecy), where the determination of the resulting laws are presented as the only acceptable solution; not to the woes of the ordinary people; but to the ongoing needs of the administration.

    The problem we face has been a return to medieval feudalism, not capitalism.

    Turning to the entrepreneur; the creator of the new business and thus new job creator. They are an entirely different species of intelligent individual. They are, at the outset of their career, almost certainly very poor and do not have access to the necessary capital stock to enable the creation of their onward progress. They often do not have any academic qualification; have no academic status, no outside academic income, often no assets whatever. By far the majority of new jobs created are in the 1 – 10 employee company. To call these people a derogatory term, “Capitalist” is perhaps the greatest disservice anyone can do for their nation. These are not capitalists, they are the adventurers seeking to better themselves and to in so doing, create new employment amongst their fellow peer group within their local community.

    Yes, so often reviled. Yet look closely. Their employees are free to walk away from their employment to another employer. Indeed, that was the origins of “a weeks notice to quit”.

    And there you have the very mechanism whereby feudalism takes control. By restricting access to the capital stock with which they might compete against existing employers; and by adding those multiple layers of rules, now law, you keep the potential new adventurers from making their first start. Then add the existing business must be bought by venture capital to be sold on as a slave business into an existing competitor, or existing financial institution or bank under mergers and acquisition, M&A, and you have every reason to refuse any further investment into direct competition; now the employee cannot move to new employment as there is none.

    Yes, even a successful games company will be owned by a financial system that will have every reason to refuse direct competitive investment against their now very successful “business property”.

    Feudalism creates multiple opportunities to impose absolute market power over every aspect of a national economy. National administrators run alongside using the same terms to impose conditions upon the savings of the people to ensure THEIR total control over their side of the feudal economy.

    The only viable solution is the creation of a fully free enterprise economy where every owner of a business, owns that business, where every aspect of their trade is made through open, public, free markets, over which no one may take control; where no one may refuse further competitive investment against any existing successful business.

    Given the date when Marx wrote his works, it is understandable that he confused feudalism with the use of free market capital; it is indefensible that a modern professor of economics has failed to understand the difference between ordinary people that thrive upon the adventure of the freedom of business ownership, (and enjoyable employment of their local peers within such), and those that impose medieval feudalism incorrectly described as capitalism.

    I am not impressed; you have a great deal yet to learn. Marx is an intellectual “Red Herring” that must now be confined to history. We have to move forward into a new century of better understanding of the motivations of the ordinary, adventurous, very small business creator; who is certainly NOT what you keep describing as a capitalist.

    They are the very essence of the productivity of a successful, and dare I say it; a free nation.

    • Chris,

      I agree with your description of our current system as something resembling feudalism. What I don’t understand is how you can be so apologetic of a free market system, which is just as impossible to achieve as true communism.
      How exactly is what you are writing any different from what Milton Friedman writes in “Capitalism and Freedom”?
      What does ‘to better themselves’ really mean for these entrepreneurial adventurers you describe? Doesn’t it imply that becoming better means becoming richer?
      And what about the employees? Wouldn’t they have to be free agents themselves by making it their ‘business model’ to sell their labour on that free market? And do you really think that those worker-entrepreneurs would recieve the same level of status as their ‘customers’? Or wouldn’t they rather remain members of a ‘lower class’?
      How is this not another way to distinguish between an elite few and their subjects via the allegedly ‘natural selection process’ of the free market?
      How would this be any different from what the neoliberal ‘feudalists’ have been telling everyone for the last fourty years, impying that there is a somewhat natural distinction to be made between the weak and the strong and that the latter can only grow to their full potential by succeeding in a free market environment and thus need to be left alone by rules and regulations in order to conduct their business in service of the ‘greater good’?
      Doesn’t it all boil down to a roughly disguised form of social darwinism, no matter what means of distinction is used to justify the ‘elite’ owning the means of production and ruling over everybody else? And how is this supposed to bring freedom for society as a whole and not just to a select few? Do I really need to quote Rousseau here?

    • Wow! I have certainly stirred up the veritable Hornet’s Nest here. Both of you completely miss the point; free markets were always a quite natural development within a small community. For a good example try reading: The English Village Community by Frederic Seebohm, LL.D., F.S.A., Longmans, Green, And Co. 1896. Or, again, re-read chapters 4, 5 and 6, The Road Ahead from a Grass Roots Perspective.

      My thesis is firmly based upon the total freedom of EVERYONE to be enabled to succeed, each on their own terms.

      Perhaps this will also help. I wrote it for the meeting with the OECD last week; but did not get the chance to present it.

      Passing on the Nation in Good Standing:

      Two cultures; Red Indian and Japan, teach that the land must be held in good standing for those that follow. That no one has the right to take entirely for their own use; rather, what we have in hand today has to be passed on in good standing to those that follow; our children and grandchildren.

      Accumulating a fortune, without keeping the underlying assets that created the opportunity to amass it, in good standing; contravenes that concept. If you make such but leave the land impoverished; you have in point of fact failed in your duty to the wider community that gave their blood, sweat and tears to make it all possible.

      A farmer that grows crops, without attending to the quality of the soil; will eventually fail as the soil is depleted.

      Why did I get involved in this debate back in the 1970’s, a very long time before I created the concept of The Capital Spillway Trust? It was, as a British inventor; I simply could not find any satisfactory source of investment.

      Every time I put together a plan that would create employment for both me and others around me, the one thing that was always missing was the funding to set it all into motion.

      Next; no one that is poor wishes to remain so. NO ONE!

      Being poor is very much like the energy state of the electron; you have to be able to inject energy to raise the electron to a new energy level. Yet, in the economic sense, again and again one hears of people constantly bemoaning the lack of initiative of the poor; blaming them for their condition. How many times have I heard the phrase: “it is all about choice; they made the wrong choices”?

      Very few today, see their own accumulation as an opportunity to reinvest back into their local community; by far the majority see instead their opportunity to invest into “Markets”. Yes, even many here today.

      That is not to in any way reflect against anyone as an individual; it is instead to reflect the underlying philosophy of the group.

      The “Group” live, ostensibly, in a free nation; yet remain fully committed to retention of their economic power over the individual when it comes to investment.

      Another lesson, in 1994, I was interviewed by two bankers at the behest of the Governors office of The Bank of England; they told me: “it was the government’s responsibility to create jobs”.

      Showing just how far away we were from the origins of the whole idea of investment of capital back into a nation.

      Such events taught me, over more than a half century; that we have to learn to understand the powerful effect of freedom; particularly of the freedom entrained within the concept of Free Enterprise
      As I state on my web page

      Free enterprise? – Free enterprise is founded upon the concept of the manager of the business owns the business.

      Ownership is an inalienable freedom; the right to own your own life, work, home, thoughts, et al. In which case, freedom also applies to the inventive and industrious, as the right to own the product of their industrious intellect.

      No different to an artist or writer; owning the right to their work. Thus free enterprise is an inalienable freedom; the right to own the business they have created. Just as employees are free to work, or not, in any such free enterprise.
      You personally accumulate by retaining control; you re-invigorate, by letting the investment renew the freedom of the underlying nation to also prosper. In which case, for the underlying nation to remain free; there has to be a recognised balance between the quite natural tendency to accumulate and the need for renewal.
      Yet, in truth, there is very little sign of such within anything to do with the modern economy; whether driven by government or private institutions.
      A government driven economy becomes so entrenched within vast bureaucracy’s intent upon spending other people’s money that they lose sight of their responsibilities and start to borrow to cover their failures. Today their borrowing has, arguably; bankrupted the entire Western economic system.
      On the other hand, a market driven economy, with only a notional, rather than a real commitment, towards investment into a free nation; has, in turn, lost complete sight of the long term responsibility to ensure they leave the land in good standing for those that follow.
      Neither works. Neither has any real view of the potential of the poor to make something of themselves; if only someone would step forward to invest in them.
      Now; let us start to debate the real problems facing us.
      In the UK we have 1 million young people unemployed.
      Europe has 10 million in the same condition.
      I will bet my right arm that the US has, at least, another 10 million young people without a job.
      Whether we like to admit it or not; a government driven economy based upon borrow to spend; has bankrupted almost all of the national economies.
      While at one and the same time; whether many of you wish to face the truth of it or not; a market driven economy has signally failed do deliver; with the embedded concept of Venture capitalism being a very large part of that failure
      – Why?
      For the simple reason; trying to define the actions of the poor by refusing to invest in their freedom, has left a vast vacuum of lost opportunity. Or, to put it another way, the fields of our nations are now so depleted of investment; they will not sustain the present population; let alone the future children or grandchildren.
      As I see it, the way forward is to return to the principle of leaving the land as one finds it; in good standing for the following generations.
      We have to move quickly to re-generate the soil of the land; we have to replace the lost investment; while at the same time, we have to set the people free. And remember, most of them are poor.
      How do we do that?
      Take a substantial proportion of the embedded over-leveraged, low quality funds currently circulating within the markets and re-invest it back into the grass roots of all of the local community economies. Investment under free enterprise terms, as new equity capital investment, entirely driven by the poor who are left to make their own decisions.
      That we have to learn to have the courage to let them try and even fail; that even when they do fail, as the investment is made as equity capital; it remains in circulation to re-invigorate the soil of the wider economy.
      Returning to the matter of balance I raised earlier; when an individual makes a decision to invest, they carry the entire burden themselves; but if they join another, say, 10 million in a group of savers; each risk is reduced to 1/10,000,000th making the entire exercise a matter of risk now spread right across the entire nation. A 100,000 Euro investment by the individual; becomes a single penny investment by the saver.
      There is your balance.
      For the long term, all we need to do is change the underlying rules for the use of savings held by major funds from one where they presently; favour either lending to further government borrowing; or continuing to support venture capitalism;
      To one where everyone accepts the need to return sufficient investment; to invigorate the soil of the nation; such that it once again can support the aspirations of the population with the courage to go out there, and try to create new free enterprise employment..
      Today, right now; we need at least 6 million new free enterprise based employers of an average of five new employees.
      That is the challenge I long ago accepted.
      Now, to move forward, I need others to stand alongside me to make it all happen.

    • Very well said. And feudalism is the main problem in Greece and it manifests itself with the left wing, the center and the right. The left in Greece controls the syndicates and the universities and wrecks havoc any time its interests are not catered to. The center-left took over government under the first Pasok government and eventually entrenched itself with the financial interests and became what we see today.

      The far left is waiting in the wings today but it is not ready yet to squash its own feudalism, the control of the syndicates, the agitation and the propaganda that alters the face of what is the Greek University today.

      No they don’t see feudalism in their own actions, they only see it in the actions of others and that is why politically there is little hope in Greece.

    • Hmm… well I agree with Hubert, your own world-view is most unimpressive as it simply parrots the dominant narrative. Let true Capitalism have it’s day and all will be well!

      I’ve worked for small businesses all my life, and in every case the owners were essentially middlemen for upper echelon capitalists. The guys at the top dictate production by choosing what smaller companies they will contract with or whose products they will allow into their distribution systems. The small businessman takes money from the big players and feeds some of it to the wage slaves.

      There will never be a free market that lasts. Capitalists seek to get away from competition as quickly as possible and attempt to grow till they can dictate production. Some succeed and dominate the economy for generations. Until we move to user defined production (for use rather than for profit), this feudalistic system will continue.

    • Chris, like every libertarian I’ve known, you imagine a fantasy world:
      “My thesis is firmly based upon the total freedom of EVERYONE to be enabled to succeed, each on their own terms.”
      This is close to the world we live in, because “each on their own terms” means precisely that sociopaths will rule the world – pretty much what we have now. This libertarian fantasy of “total freedom” is why I refer to libertarians as closet fascists. The idea empowers sociopaths, mimics the ‘free market’ mongers, and promotes fascism. You’re a fascist, Chris, in your heart. Selling freedom is an essential part of the neoliberal project, as Yanis pointed out, and its success in bringing us neoliberal/fascism-lite is because of AynRandian philosophers like you.

    • This is an enterprenuer writing.
      I can tell you that my experience as an enterprenuer is somewhat different. Small enterprises are pushing the value of work down. We are surviving only by finding workers willing to work for smaller wages then in bigger enterprises. This is recognised by 1% and so they pushed for outsourcing which pushed wages and prices and Union membership down. That is how 1-10 employed businesses succede and how they became largest new job creators; by offering down pressure on wages and also destroying Union numbers.
      If it did not offer such benefits to 1%, small businesses would not be thriving.

    • @Chris,

      I apologize for jumping on your post before the way I did.
      I just seem to get upset too easily nowadays everytime someone tries to advertise the free market as a solution to the current crisis. I guess this is owed to the fact that most arguments along this line that I listen to and read about are usually nothing more than another justification in disguise for rich people getting richer by exploiting the not so rich people.
      I believe yours is not that kind of argument and I remember now that we had another exchange on this blog about your Ideas and I appreciate you not just firing accusations back at me but explaining again what you are actually proposing.

      So, maybe you are right. Maybe the system you have in mind would really be a better and much needed alternative to the way things are organized in our perverted form of feudo-capitalism today.
      I only see one major flaw in your concept:
      It all depends on everyone accepting that it is in their own interest to ‘leave the land in good standing’ as you put it so nicely and which I fully agree with.

      I am not saying that this would be impossible to achieve somewhere in the more distant future. But I really doubt that you could get people to realize it today, given the insane amount of brainwashing they have been subjected to for decades now. More importantly: Who could ever accomplish such a massive work of enlightenment without being cast aside as just another idealist who fails to acknowledge how the system was really meant to be.

      As I am annoying even myself by repeating it again and again: Trying to change this system is like fighting a religion. As much as I hate it, I fear it can only either be changed from within or it will have to be completely destroyed in the hope of building something new in its place. I don’t think that there can be some kind of peaceful revolution anymore. The stakes are too high for that now, especially on a global scale.

      Then again, maybe I have become just as cynical as everybody else and therefore just as much of a victim of the neoliberal propaganda machine. In this case I would love to be proven wrong.

    • May I be so bold as to open to a question I pose towards myself; why do I post my viewpoint on such as here with Yanis Varoufakis?

      The answer is important; I do it to ensure I am exposed to as wide a range of debate as possible. That I wish my thinking to be challenged as it both helps me to understand other related thinking and it forces me to accept that strange word from a SF movie; “Input”.

      Hubert Marcks.

      I apologize for jumping on your post before the way I did.
      I just seem to get upset too easily nowadays ……
      Hubert, no problem whatever, you should read some of my posts when I am having an “off day” they even make my own hair curl. 

      Jordon from Croatia

      This is an enterprenuer writing.
      I can tell you that my experience as an enterprenuer is somewhat different. Small enterprises are pushing the value of work down. We are surviving only by finding workers willing to work for smaller wages then in bigger enterprises

      I am very familiar with the sub-contract culture of large business and you are correct in your description of it. Much of that stems from managers that take no responsibility for anything as the easy route is to always sub-contract and then pass all the problems downstream to the sub-contractor, who, as you accurately point out, are forced into reducing wages to survive.

      Thus the sub-contractor is caught between a classic rock and a hard place; a deeply suppressed income, controlled by their much larger customer and the non availability of a reliable source of equity capital to fund their own industrial ambitions. My view is that the only way to break that cycle is to enable all such small companies to have access to funding for new developments and is the primary reason why I created a set of such rules for such onward investment. See The Road Ahead from a Grass Roots Perspective, Chapter 3, The Basic Rules for a Capital Spillway Trust. Particularly, 3.7 Capitalising Inventions.

      David Sheegog

      Chris, like every libertarian I’ve known, you imagine a fantasy world:
      “My thesis is firmly based upon the total freedom of EVERYONE to be enabled to succeed, each on their own terms.”
      This is close to the world we live in, because “each on their own terms” means precisely that sociopaths will rule the world – pretty much what we have now. This libertarian fantasy of “total freedom” is why I refer to libertarians as closet fascists. The idea empowers sociopaths, mimics the ‘free market’ mongers, and promotes fascism. You’re a fascist, Chris, in your heart. Selling freedom is an essential part of the neoliberal project, as Yanis pointed out, and its success in bringing us neoliberal/fascism-lite is because of AynRandian philosophers like you.
      David, in a VERY real sense, you are correct; I do live in a fantasy world. All inventors do. Our entire lives are dictated by a brain that constantly asks the question; “What If?” or “Why Not??”

      My world is dictated by the thought that there is always a solution. Once I had a great friend, (now passed on), who liked to say; “Chris, you have “Bounce”, you always seem to be able to pick yourself up and dust yourself off to start a new day.”

      My view is there has to be a workable solution and by setting out mine, I open it up to a wider audience that even sometimes accuses me of being “Fascist”. But that allows me to try and explain myself in a new way that will, hopefully allay your own perceptions of me.

      I have never read Ayn Rand; though, from what I have read about her writing, I cannot agree with her thinking which is, (as I understand it), based upon only the best deliver success. That is, to my mind; utter rubbish.

      Yesterday, I had a great conversation on a bus, (I am very poor, have no car, no family, no fine house; I just live in two rooms in a wonderful village surrounded by some very nice neighbours. No one funds me, I have no associations with any “Large” organisation or political party), with a young man who is disabled and I came away from that conversation with a clear belief that he had as much right to a successful life as anyone. We parted, laughing together as friends, with the intent to continue the conversation next time we meet.

      Those of us that consider ourselves industrious and intelligent carry the responsibility to carry forward the aspirations of everyone in our local communities. Not to rise above; instead to ensure they have as much chance as anyone else. No one can rise above their own financial or intellectual poverty without someone else carrying into their lives the prospect, and the means, to improve their lives. No one!

      It is that responsibility that I have dedicated myself towards, now for some decades; on the basis that if I could not succeed with all my attributes; then how could someone with less?

      By far the majority in any society are not blessed with a Ferrari between their ears. That is not to denigrate them, it is life. Indeed, I will argue that the burden of that Ferrari is not something that the majority wish to carry. By far the majority are wonderful individuals who wish nothing more than to be able to live a full life, bring up a family, and create a sound and stable home. Those of us with the ability to lead; hold the responsibility to ensure the majority can succeed to their own level; to their own personal aiming points.

      I am NOT a Fascist.


      ……. There will never be a free market that lasts. Capitalists seek to get away from competition as quickly as possible and attempt to grow till they can dictate production. Some succeed and dominate the economy for generations. Until we move to user defined production (for use rather than for profit), this feudalistic system will continue.
      My view has already been presented; I believe in a TRUE free market economy; not one built upon feudal control. That the only way to short circuit the existing system is to ensure the delivery of access to the capital needed to ensure ANYONE may compete against any existing company.

      Chris Coles.

  29. There is other alternatives ………..suppressed for good reason.
    But Yanis is not going to go there.
    A bottom up injection of social credit rather then a top down approach although I accept some Dirigisme is needed given the skewed nature of global trade, lack of local commerce and most importantly the wrong capital investments in the wrong areas which now has a unstoppable inertia as all activity flows to financial capitals which can only direct their corporate monsters to sell us products we cannot afford.

    Belloc and the rest were correct
    I simply don’t trust yee guys………yee represent total evil in my eyes – which happens to be proven by events over these past 400 years or so.

    • Chris, you just keep preaching that libertarian bullshit, but anyone who has examined it knows that when you scrape lightly on a libertarian you find a fascist underneath. You make a good case for modern feudalism vis-à-vis Marx’s definitions of ‘capitalism’, but your hanging on to ‘entrepreneur world’ as a solution to what ales us is nonsense. And YOU are the “indefensible… professor”, Chris, trying to keep Ayn Rand’s discredited philosophy alive.

  30. Pingback: Please Tell Us About Site Anomalies + Three Fixes for Readability Issues | naked capitalism

  31. Excellent post. Importance of binary / dialecktical/ dual understanding of everything social is crucial. Asset is a liability in accounting, conservativism is liberal on another hierarchical level, money is debt to someone else, spending is income to someone else, to lead is to slave to someone/thing else, capitalism offers socialism to someone else…….

    All that can be much easier to comprehend if economics took the money flow, not products and services, not production and consumption, as the crucial study. Banking accounting, sectoral ballances, money creation taken trough the prism of Marxist analysis shows such dialectical understanding of money flow.

    One important point in analogy to Matrix is that in the Matrix movies there was no corruption as you described your own toughts on entitlement as such corruption in a binary option. Once you are out of Matrix, there is no return. In real life there is.
    Matrix also describes conflict between automatons and free people in the end when all Matrix members are same looking faceless Smiths.
    Agents Smith’s purpose is to win and with the win it can erase itself from existence. Just as he won over Neo, he realised it was the time to erase the program that kept him alive, freeing everyone else. That was also the new begining of the cycle of enslaving and freeing as intended by Creator and Oracle. Reflexivity causes the same outcome over and over.
    Just as the rise of extreme right produced the rise of extreme left. (extreme is bad word choice) So the rise of communists in 1917 produced the rise of Fascists in other places in 1920s. Today the rise of fascists will reflex in rise of communists of today. But both of them point out to possible exit from capitalism.

    As capitalism hurls toward automatization, it also hurls toward erasing itself once it wins everything. It will not need labor to spend on, but it will also not have the buyers of production by automatons. So it will have to develop new mechanisms of distribution of production. One of such mechanisms was for labor to own shares in ownership by privatizing retirement plans. Or by investing in stocks. They went incorectly in distributing those shares (stocks) whcih was supposed to kill two birds with one stone. Destroy the power of Unions against owners, because members of Unions became stock owners. And second, to provide distribution of automated production which drives production. Duality/ dialectic/ binary option again.

    Everything social is dialectic/ dual/ binary option: Asset is a liability in accounting, conservativism is liberal on another hierarchical level, money is debt to someone else, spending is income to someone else, to lead is to slave to someone/thing else, capitalism offers socialism to someone else……. Also important is surplus creates deficits somwhere else/ sharring surpluses produces more surpluses(that is also true on many levels of capitalism and with different terminology used). It is the nature of accounting which we look at and analyse without realising mathematical consequences of divison of levels of a balance sheet.
    1 level; Treasuries are liabilities of CB(government) –>
    2 level; and assets of banks.–>
    3 level;The money banks used to buy Tsy’s are liabilities of the banks –>
    4 level; and assets of people and corps. and so on and on….

  32. Thank you so much for this post.
    I really wish people who have any kind of influence on the powers that be would listen to you and the remaining few of your independent colleagues. But I can’t help but feel that this would be like wishing for pope Urban VIII. to listen to Gallileo Galilei claiming that the Earth was a sphere instead of a plane.

    But while civilization at the time of Galilei went on to make a change and finally accept new ideas – unfortunately also including to the invention of capitalism – we are now approaching a new dark age, as I already wrote in some other lengthy comments here.
    It doesn’t matter any more which kind of heretical deviation from the god given truth of capitalizm a critical mind is being accused of. Wether one prefers to call it marxism, keynesianism or Occupy the Caiman Islands – it is still widely regarded as heresy by the political and economic elite of the industrialized world and thus met with ignorance at best or deemed a matter for the holy inquisition if push comes to shove.

    As long as the proponents and chief authors of the current mainstream of economic policy remain faithful to the circular arguments and tautologic rhetoric which govern the core assumptions their fancy mathematical models are based on, nothing short of an alien invasion, a devastating plague or a global war that wreaks total destruction upon civilisation as a whole will change their minds and those of their devoted followers within the global entrepreneurial and political elites.

    As much as I appreciate independent thinkers like our host still maintaining a sense of reason and having the much needed decency to consider human beings anything else but cogs in a giant profit-mechanism, I fear that their voices are being drowned out by a rising cacophony of passionate praise for the glory of the market which is becoming not only mainstream thinking for the elite but also for the masses and thus turning even more into a religious belief system.

    But maybe that’s just me reading those german newspapers again…

  33. Yianni,

    I read this and I must confess I am a bit perplexed as it seems that the best capitalist countries are by far better off than the ones like Greece that have chosen a perma-left wing agenda (like permafrost). Looking at Switzerland I see unemployment of 2% and fantastic economic stability. You know what to expect and the system does not switch on you every other month. Looking at the UK I also see a great high quality employment machine similar to some of the best parts of the US. Many parts of the US, NY or SF for example are also great pockets of high quality employment and fantastic opportunities.

    What counts in all these places in addition to the obvious geographical advantages is stability and opportunity.

    Greece as you well know is a country that has an equal number of people living abroad as expats. Most of them have done very well and have a strong sense of pride in their country. Greece also has a leading position in a prominent industry – shipping and has a fantastic future in its other industry – tourism, and a great climate for agriculture. It is also probably one of the most beautiful countries to visit.

    If you had a smart and stable system in Greece you could easily leverage the advantages the country has. You could easily be a banking and finance center, an education center, and also expand tourism year round and leverage the shipping business.

    But if you envelop the system in government bureaucracy, permanent left wing agitation, uncontrolled syndicalism you end up with a huge mess and then instead of leveraging what you have, you loose it to Switzerland the UK and other countries.

    Yianni, they have a big smile on their face every time they see the Greeks waving their red flags, as they know that all the wealth from Greece will be permanently stored in the perma-safe heavens (perma-sunshine).

    All it takes Yianni is for Greece to wake up one day and start doing things right. You as a professor would love to teach in a University that works. The Greek University has not worked for decades to its full potential and it has always been overcome by left wing radicals and politics. How can you even start to compete with the likes of the UK and the US when the most basic things do not work. Why even bother to talk about high ideals when there are basic things that can be done to improve things independent of Germany. These things can be done today and your friends the radical Marxists have been opposing them all the way.

    In the US they lived through the Vietnam crisis in their Universities and they moved on. In Greece the Universities have been in a permanent crisis for well over 40 years. The opportunities lost are tremendous and they are there across so many other sectors.

  34. Maybe the problem Yanis is that you are trying to “save” something that is not there or worth saving. The EU is a legal construct, a set of rules/laws known as the “aquis communautaire”. In seeking entry to the EZ each country had its own reasons. The Germans sought to pay for the cost of integrating East Germany and operate with a subsidized/undervalued currency the euro (whose unsubsidized intrinsic value is higher than a $1.80 vs. the $1.30-$1.40 today’s range). The Greeks joined for other but similar commercial reasons. Personally, I see zero (in fact subzero) mandate to save “European capitalism” because I don’t think that’s what you want to save. What you want to save is Europeans from the abuse of other Europeans and such has very little to do with capitalism and everything to do with political ideology and blind fanaticism of the Valley of the Rhine type.

    • Well said Dean. Europeans do not want more socialism, they don’t want Brussels to be dictating what they do indifferent to their problems and issues. They don’t want Germany to control monetary policy and permit 28% unemployment in Greece for the shake of preserving inflation in 5% unemployment Germany.

  35. Interesting read as always professor.

    How would you connect Marx’s insights about the unique nature of labour to your recent submission in Lifo about the automation of production (ie drone delivery, software helpdesk etc etc).

    In my economist-educated mind labour’s “fire-breathing” element mostly boils down to the workforce generating demand on the flipside for its accomplishments (goods).

    Maybe look at the value labour produces in the same light as a means of exchange. It’s got value because we think it does.

  36. “Capitalism had its second global spasm in 2008” – Corporatism had! With shares of gov spend > 50% in many countries it can hardly be called capitalism!

  37. Neoliberal dictatorship responsible for the growing inequality in Greece
    The destructive applied policies lead to an impoverished society while enhancing plutocracy
    Spain is in the first place, another country of the eurozone periphery which suffers from the destructive neoliberal policies

  38. Socialism is dead as socialism has won. This is a dialectic you should also pick up (although I do worry that all these dialectics are ego and intellectual conceit as we love the cleverness of them too much and are attracted to identifying and claiming them).

    There are still many dispossessed but there are many more people who have than before. Capitalism resonates as it is in tune with innate wants for freedom (in a small non political way) and something a little better for ourselves. This is more primordial than the more sophisticated ideas of socialism. Basic capitalism is a feeling whereas socialism is an idea. But the idea has had major gains.

    The current victory of socialism is in the radical monetary policy we see. Money is now truly fantasy and money is no longer a tool for preserving the wealth of a very narrow inherited rentier class privileged few. The next step is to embrace more fantasy in private debt. It appears to me that the UK is doing this with recent housing initiatives. Of course they are currently acting as an electorally timed spur to housing price growth but once that is over it will be a way of socialising the bad debts caused by falling house prices.

    Thatcher’s greatest tool was giving people their houses. This meant they must be part of the machine to afford to pay for the house. Making a home is so powerful an impulse that it has turned into madness as you say. That madness is near an end as either deflation or inflation kills the price escalator (I say deflation). As prices peak and fall in the UK (the most radical of industrial economies) we will see much political and social innovation (modest incremental revolution).

    Neoliberal capitalism has also delivered a trojan horse to non-neoliberals – it is called the internet and its shock troops are the social media services. This is politically so important as it provides a platform where ordinary, non-radical, freedom liking, self-bettering but socially/community minded people can get together and disapprove of what they see and push and persist with that disapproval. No longer do they need to channel their angst through a nutty sociopath (left or right) to rebel against the current. They can just keep on moaning and protesting.

    Socialism is dead as it has won as an idea but it is not a feeling that fits with the people well so there is no resonance in banging on about socialist ideas. Neoliberal capitalism is in the process of eating itself economically. But politics through the web and social media is entering a period of radical competition of wants and demands. The beauty is that the wants and demands come first and the ideas to fit them are then created, rather than ideology leading.

    mojovision out

  39. Thanks for this piece, Yanis. I must say I do not agree with it 100% but it is still a most interesting piece of though, economic, political and historical.

    I do agree quite strongly that splitting the Eurozone and the EU (without an alternative Euro-socialist project) will probably only bring big trouble of the fascist kind. I do agree with your Matrix comparison and even allows me to see the movie in a renewed and more favorable light (never understood before today the metaphor hidden in that irrational energy-extraction from human bodies argument, I must admit). And I do agree with the need to adopt Marx while criticizing him (he was no prophet, just a man – with all the limitations this human condition implies even to its brightest members).

    What I fail to agree, for example, with is with your justification of defeatism on Thatcher’s success. After all the ice-cream chemist was the main inspirer of the credit bubble and that credit bubble was what worked as buffer against her own ultra-capitalist policies. Smart but short lived. Well, long enough to see the demise of the USSR (which had become so stagnant and reactionary that could not adapt to the new Toyotist era) but no bubble lasts forever.

    Similarly to the USSR, the Western worker movement has been slow and often just unable to adapt to the new reality of Late (Toyotist) Capitalism with its near-infinite demand of flexibility (so unlike the rigid disciplinarity of its Fordist predecessor). But dialectics does never stop and new realities of struggle are no doubt arising, adapted to the new era. Even if the thesis absorbs or dismantles some forms of the antithesis, the antithesis and therefore the dialectic does not cease to exist.

    You are of course right when you say that going back to the past relative stability is impossible, neither in its Keynesian form nor in its degenerate Thatcherian variant (which just replaced welfare for easy credit, never really disrupting society as it is now, at least not for long and not with this depth of extreme disruption). But you don’t really seem able to follow your own line of thought from this point: if going back to the “good capitalist” past is impossible (and it is), why bother trying to return to it, as you seem attached to?

    Neither “democratic” nor fascist Capitalism has any solution other than (as you also observe) systematic looting and extend-and-pretend (and of course repressive violence, which can only hold up that much). With or without euro (EU, whatever) Europe is already evolving towards fascism. For example the highly impopular Spanish reactionary government has passed a barrage of neofascist laws including extremely severe restrictions to the right to protest in the streets (but similar trends are visible everywhere). But fascism is no solution to the dire trouble Capitalism has put itself (and us within it) in: repression alone can’t hold the waters for too long. Sadly, and unless we can stop it, it is a stage that we are bound to go through. I see no alternative other than socio-political revolution, and this one (excepting maybe Greece) doesn’t seem to be brewing in a coherent manner yet.

    And this fascism or quasi-fascism is happening inside EU and inside the Eurozone, so neither is a vaccine against it. It’s futile to ignore this reality because the same that it were the local and international capitalists who put Mussolini, Hitler and Franco on their militarist thrones, today it is local and international capitalists who are pushing for strong hand, as their last line of resistance. Unlike classical “Keynesian” fascisms, today’s fascism is ultra-liberal and will not restore social welfare in any way either but rather work like the putschists of Honduras, promoting the wildest forms of ultra-capitalism with no safety net whatsoever.

    That’s because the conditions are totally different from the 1930s. In fact today’s crisis has probably only one historical comparison: the long depression that preceded the French Revolution (and exactly the same fiscal problems: the poor can’t pay for all the expenses while the rich remain essentially untaxed and unregulated). We can just hope that today’s rhythms are faster because everything within Capitalism is much faster and intense than what happened in the Old Regime.

    Another thing I partly disagree with is in your rather simplistic association of Marx with Leninism. In a recent online debate among Autonomist Marxists about Marx’ ideas on the state and such, we had to conclude that Marxism-Leninism is an oxymoron because Marx was actually much closer in his ideas about the state to Anarchists than to Lenin. The original revolutionary Soviet model would fit well within Marxist though, for which the 1871 Paris Commune was the model, but the authoritarian (evolving to totalitarian) regime that Lenin and successors implemented is not Marxist at all but a sui-generis thing. Probably we should think of it as a system for capitalist accumulation at national level, apt for underdeveloped nations without a relevant bourgeoisie, but whatever.

    There was only a quite weak working class in 1917 Russia and the revolution was one of largely peasants. Even Lenin admitted that they might have failed in achieving a socialist revolution but, he prided, they had at least achieved a bourgeois one (of sorts). It is interesting that these late peripheral bourgeois revolutions were made under proletarian banners but they are not the real workers’ revolution. They could never be.

    And that brings us back to the original Marxism, in which the worker revolution was expected to take place first of all in the core highly industrialized countries, never in the semi-colonial periphery. And, if that part is correct, then we are here in Europe at the real crossroads right now. It can take some time for the objective revolutionary conditions (already way too real) to become subjective revolutionary conditions and real counter-power – after all a lot of people feels like yourself, hoping for a return to a past that can never come and scared of a future that looks absolutely horrible (and that will be even worse than expected if not tackled by revolutionary means) so they are not really reacting as they actually should… yet. They will eventually, I see no other way forward (except extinction – and not just civilizational collapse).

    Enough. Thanks for your patience. I just hope that my opinion is worth reading (for you particularly, Yanis) and thinking about.

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