Economic Update: Varoufakis Critique of Capitalism Today

[Music] thank you [Music] Welcome Friends to another edition of economic update a weekly program devoted to the economic dimensions of our lives and those of our children I'm your host Richard Wolff today's program will be devoted in its entirety to an interview with Giannis varufacas he is a member even though I know many of you don't need this information I want to give it to you anyway he is a member of the parliament in Greece and he's a parliamentary leader of the party that he helped found known as the European realistic Disobedience front it belongs to the larger european-wide or organization democracy in Europe movement 25. uh I have known Giannis for quite some time we have worked together on occasion I have admired his intellect his writings in economics a field that I share with him and his leadership on many many levels over a long period of time I'll get into that in a moment so I count him as a friend and a colleague and someone who deserves the respect of a world that has fewer and fewer political leaders that deserve much of it in his own words Giannis varufacas was quote thrust into the public scene by Europe's inane handling of an inevitable crisis I love it in the few words he was able to get in a whole theory of how crises happen in capitalism on a regular basis and each time seemed to be handled by the bourgeoisie if I can say that as if it were a surprise and stunning and unique and somehow exceptional when it is none of those things in January 2015 he was elected to Greece's Parliament with the largest majority in the country and he served as Greece's Finance Minister between January and early July of 2015. during those tumultuous six months he fought against three institutions determined to oppose on the poorest of Greeks the harshest austerity in history those three institutions the international monetary fund the European commission and the European Central Bank Giannis varufacas resigned from the finance ministry when he refused to sign a loan agreement that perpetuated Greece's debt deflationary cycle a politician with principles who resigns when those are violated even by his own closest Associates who were struggling within that cereza period of Greek history in 2016 varufakis co-founded the Democracy in Europe movement 25 two years later in 2018 he launched its Greek electoral Wing that's that Disobedience front I mentioned and together with U.S senator Bernie Sanders he established the progressive International a global movement with 200 million Affiliated members worldwide he has constantly been speaking writing and politically active as a critic of the capitalist status quo I'm enormously proud and pleased to bring you Giannis to our microphones and to our cameras thank you Rick I'm also very very honored to be on your program again uh and as you know but maybe not everyone in our audience knows uh I have appreciated what you have been doing on the other side of the Atlantic for decades now which is to keep the flame going the flame of a Marxist critique of U.S capitalism of global capitalism uh you were amongst the very few economists who continued to make the point of the immigration of the American working class through a combination of wage austerity and financialization piling up huge loans upon them to keep the American dream going before in 2008 the whole house of cards came down and the working class of America was left with absolutely nothing destroyed dreams of the American dream of uh you know financialization that they would make it big by you know scaling up their mortgages your work at that front has been inspirational on this side of the pond here in Europe so thank you very kind of you thank you Giannis too let's jump in now and give our audience a chance to hear your thinking about it let's start with what is very much shaking this side of the Atlantic and maybe also your side the so-called banking crisis that we are in that was precipitated even though it's been building for a while it was precipitated by the collapse of the Silicon Valley Bank in in California the Signature Bank in New York perhaps also Credit Suisse in Switzerland and you have made a remark that I thought would be a good place to start your your comment at least as you are quoted quote let the banks burn tell us a little bit what you think is going on and what that quotation means let me preface my comments with the strong conviction that this is not a new banking crisis this is exactly the same banking crisis that we experienced in 2007 2008 it never went away it's not that it was fixed and now it's coming back uh the crisis of Wall Street or the smaller banks of the shadowy banking system both in the United States and across the European Union and the United Kingdom that crisis never went away all that happened was that sometime at the beginning of 2009 once the Obama administration had been sewn in and the G7 leaders and Central Bankers gathered in London under the Aegis of Assad Mr Gordon Brown and then labeled prime minister they decided essentially to print more than 30 trillion US dollars in order to refloat finance without fixing its structural problems because these problems are impossible to fix without effectively undoing the whole model of globalization that was built since the early 1990s so it's a bit like what it did in 2009 was a little like administering very large doses of cortisone into a cancer patient the tumor doesn't go away the patient seems perkier seems to be doing better crisis has not gone away indeed that I think that the crisis actually worse now because you know back in 2007-2008 we discovered did we not once we looked at others so JP Morgan of um Barclays Bank in Britain Deutsche Bank and so on they were full of fraudulent subprime and derivative trades there was predatory Landing there were Shenanigans it was just pure corruption which of course was inflated by the policies of Greenspun and the new um cabal that was ruling the United States and Europe since the 97s now since then if you when you mentioned uh the Silicon Valley Bank you mentioned um a number of banks including Credit Credit Suisse the Swiss Mega bank which has a very tackled past very sold it and crack past but nevertheless they were nothing as bad as Lehman Brothers or JP Morgan or Barclays nothing is bad if anything they were following the rules the rules that were set down for them by the Obama Administration by the European Central Bank by the regulatory authorities in the United Kingdom all that had happened was the policy of socialism for the bankers the 30 plus trillion that was minted by our central banks effectively to the float finance that had infected uh the whole of the corporate world uh essentially there was a combination of one thing first thing was the under investment massive under investment which was due to the austerity that went hand in hand the Australia for the many that went hand in hand with the association for the bankers and on the other hand the purchase by central banks of government bonds thus keeping their value artificially High the banking system was encouraged to purchase these bonds so there was this transfer of monies minted from the Central Bank onto the books of the private Banks but in the form of inflated public debt it this may sound very complicated to our audience it's not really complicated it's really very easy capitalism had fallen on its face it was refusing to get up the only policies that could have helped bring capitalism on to its legs again would be a kind of new deal roosevelty and New Deal a serious investment program a Works program a program of transferring money to the people that would actually spend it if they had it to the poor into the weak uh that never happened because Finance are never allowed the clintons of the world and the Browns of the world and the European unions of the world to do that so instead they pumped huge quantities of cortisone into our banking system and our public debt system and you know anybody who knows anything about medicine I know very little about medicine but anybody who knows everything about medicine knows that if you pump huge ones of cortisone into a patient it's not going to end well so we have the same crisis began in 2008 continuing today so let me come to the provocative title of my article let the banking system burn well there are two things you can do with the banks one is to continue to proper map socialism for the bankers the second thing is to deny them the Monopoly that they enjoy over our payment system and over our savings now if a banker out there wants to take the risk of borrowing money from you or from me in order to lend it to somebody else at a slightly higher interest rate I'm happy for them to do it but this is not what's going on what is going on now well now for youngs is that Banks force you to keep your money with them because they own the Monopoly of a payment system with digital Technologies today there's absolutely no reason why the FED could not give a digital wallet to everyone where they can store with a hundred percent safety their savings and effect transactions all they need is a PIN number to pass money from one person to another effectively you would have a digital Ledger that belongs to the fed and when you make a payment a sum of dollars will go from your little cell on that ledger to the coffee shops Ledger and that would be it that would be a remarkable Revolution it would cut off the middlemen the bankers it would allow us to say to Bankers well if you fail you fail we don't care you're never going to be too big to fail because you are not going to have the Monopoly over our payment system uh the tragedy is that even the bankers understand that there is a logic to this but of course the reality is that they have so much political power that they will not allow the fed or the European Central Bank to do it even though the fed and the European Central Bank I have this on good authority from within that they are experimenting with these these digital wallets um they know that it would be a very efficient way of running as a public utility or payment system but they also know that Wall Street has too much power over our governments so much power that they are going to utilize in order to stop the FED at the European Central Bank from doing that would you agree with the following sentence we are living through the decline of the American Empire and of its capitalist Center stay with us Giannis and to our audience as well stay with us after a short break we'll be right back to hear what Janis varufakis has to say in response to the question before we move on I want to remind everyone that economic update is produced by democracy at work a small donor-funded non-profit media organization celebrating 10 years of producing critical system analysis and visions of a more Equitable and Democratic world through a variety of media like the long-form lecture series I host called global capitalism designed to help others understand current economic events and Trends so they can explain the impact and effects capitalism creates across the globe to others global capitalism is available on our website democracy at work dot info there you can also learn more about everything we produce sign up for our mailing list follow us on social media and support the work we do please stay with us we will be right back [Music] welcome back friends to the second half of today's economic update we are speaking with Giannis varufakis member of the Greek Parliament and before the break I had asked him what he thinks about the sentence the American Empire is declining and with it its capitalist Center so let me turn it over to you again Giannis what do you think well in one sense the United States economic machine has been faltering and declining since the mid-60s as you know when the United States lost its Trade Surplus and the result of that was as we know that Richard Nixon on the 15th of August 1971 blew up the Britain systems the the wood system that the United States had created why because America was no longer capable due to it being a deficit country to maintain the global dollar-based system it had created after 1944. so in the sense there's been a decline um Eric Back in 1970 when Henry Kissinger was uh um not even in the state department he had put a question to his uh Entourage and the question was very similar to yours now that we're declining as an economic power how can we maintain our hegemony and the answer that was given to him by a young man back then youngish man Paul Walker you remember him right when he was acting as an advisor to Henry Kissinger at the National Security Agency uh Council so um it's really very simple we have to make sure that we maintain our hegemony by making other people pay for it which is the model after the 1970s which Paul volcker also helped establish once he had moved to the FED essentially if you think about it it's quite remarkable the American Empire is the first Empire in human history that has managed to make the wealthy of the rest of the world of the Concord if you want voluntarily voluntarily to send their wealth to Wall Street and therefore to close the loop the recycling Loop whereby the American trade deficit operates as a vacuum cleaner sucking into the American markets the net exports of everybody else Germany France Italy and of course Japan and primarily China uh with 70 of the profits of the Japanese the Italians the French the Japanese and the Chinese going back into real estate into the stock exchange and into the insurance businesses of the United States so to cut a long answer short the center of the American Empire is shrinking in terms of GDP of total income in terms of total investment in terms of the jobs that it can create good quality jobs within the United States all this is in Decline but the hijability of the United States does not depend on that there is a disconnect between the real economy of the United States and the power of the rentier class their entire American ruling class um what that power hinges on since it doesn't hinge on industry on actual income is on the capacity to maintain the hegemony of the dollar and the dollar payment system so as to ensure that the Surplus value produced in China in Japan in German and so on ends up in the United States not with the American people of course right you know this better than anyone else not with the working class in the midwest but with the very very few amongst the American regime all right I want to turn next to um your own activism something is going on in Europe uh having to do with the extraordinary movement of the French people into the streets against macron having to do even with the uh trade unions and the transport sector in Germany having to do with the Greeks in response to the railway catastrophe and the role of the government I want your opinion here in the United States we're speaking of a rise of labor militancy on a scale we haven't seen for 70 years is something comparable going on in Europe I have good news and I have bad news I'll solve the good news the good news is that yes in France and in Greece in other countries as well but primarily in these two countries um you know there's a tradition of that um to this the French had a revolution and then a few years later the Greeks had their evolution both connected to the American Revolution but that's going a long way back both in France and in Greece there is clearly uh a tidal switch the tide of your liberalism and the success of um you know toxic radical centrism have been reversed by the people out there in Greece you are right we had a massive accident killing 57 young people and this Railway accident it wasn't an accident it was almost predetermined as a result of the botched privatization of our railways that has turned the diet and now we have a majority of the people out there who are against privatizations and they um are clearly expressing a view in favor of read nationalization that is a big similarly in France macron's Reign has been punctured now he's lame duck he will continue the link duck because the demonstrators the very brave demonstrations seize the opportunity of railing against macron's pensional reforms by the way the conventional media the systemic media presents that reformers being moderate and it sounds moderate because what did macaron do he pushed the age limit when you go from a wage to a pension from 60 to 64. it sounds pretty moderate well it is not once you take into consideration the fact that the average poor Frenchman lives 10 years less than the average French male Richmond person so that means that by elevating the you deny a very substantial proportion of working-class man the opportunity to get any pension at all so this is the good news the good news is that our peoples here in Europe especially in Greece and France but in other countries too have turned the types which was essentially um submerging all opposition to the neoliberal toxic pro-oligarchic policies across Europe now the bad news the bad news is that we are nowhere near having returned to the height of 2014-2015 when we had hundreds of thousands of millions of people in Spanish cities occupying the piazzas remember they dignados we had Millions here in Greece over a period of three months we had the bloccupy movement in Germany back then the structural crisis of European capitalism was so deep the Euro itself our currency our single currency was very close to capitulating to uh falling victim of its own hubris uh and what happened was that we elected the government here in Greece which carried the hopes of every Progressive European on its back our government surrendered on that fateful evening of the 5th of July 2015. since then Rick our movements are just a shadow of themselves they are picking up again but we must not exaggerate yet the extent to which they are capable of putting an effective break effective break a final break on this runaway train of neoliberal inhumanity how do you I need to press you to be brief here but how do you account for how stable is the apparent European decision to support and fall in behind the United States in the war in Ukraine in the sanctions program against Russia and all of that what what is going on there has Europe given up being separate from the United States in the struggle with China is there any space for a European capitalism or is that disappearing it's disappearing it's very clear very clear the ruling classes here in India they will give up on the dream they had a dream the European classes had a dream of a degree of strategic by the European Union not have given up completely Donald Trump started a break when he effectively rubbished Europe's attempt to take an independent position because of Iran remember after Donald Trump won the White House and now with the war you know Tech macron macron is not gung-ho like you know Biden or like the British government he doesn't want to see the Ukrainian troops take over Moscow which is a Preposterous idea he would like to see what I would like to see which is um you know Abyss treaty but he can't dare to say that the moment macaron opened his mouth and says something like that he's going to be removed from the Elysee the you know Le Monde the the Bourgeois are going to destroy him if he dare say that so I think the answer is that with every crisis you've had in Europe over the last 20 25 years and the euro our galaxy has a lot to do with that but that's a big story and I won't delve into this with every class you've had the capacity of the European Union's bourgeoisie to become to have a voice of itself um is disappearing and it's just disappearing very fast in the time we have left another enormous question do you think that China is the emerging Global hegemon or do you think that some sort of multi-polar um different kind of global economic organization is emerging it's very very difficult to tell but you know what I think is really important regards regarding your question do you know who I think is the greatest impediment to China becoming a global hegemon it's a rhetorical question I'll answer it it's Chinese capitalists Chinese capitalists do not want the dollar to be dethroned as the exorbitant privilege currency why because all their savings and Investments are in the in in dollars and the demands of faculties produce in China in Shanghai in shenzie Guangzhou that Demand is due to the American trade deficit which sucks into the United States those products and Latin American trade deficit will not be able to be financed if they're in limbe the one the Chinese currency were to overtake the dollar so there is a clash we did a Communist Party of China between those representing labor and those representing Capital we have a massive class war within the Chinese Communist party and I find this absolutely fascinating because in the end China is the only country I know substantial country large economy where the working class um is actually fighting an effective class war even though it has to do this within the halls of the Chinese Communist Party against the representatives within the Chinese Communist Party of the bourgeoisie all right Giannis we've come unfortunately to the end of our uh half hour here I want to thank you very much for your answers I know it's much for us all to digest and think about but I hope that we will be able to call you again and continue our transatlantic collaboration and dialogue thank you very very much again my extreme pleasure thank you Rick thank you to my audience as usual I look forward to speaking with you again next week [Music]

Channel: Democracy At Work

Views: 104,401

Keywords: Richard Wolff, democracy, work, labor, economy, economics, inequality, justice, capitalism, capital, socialism, wealth, income, wages, poverty, yt:cc=on

Id: nZyJiOCIr1A

Length: 28min 40sec (1720 seconds)

Published: Thu May 11 2023