What is money and who rules the world? | Yanis Varoufakis | Escaped Sapiens #46

who really runs the world today is it politicians or multinational Banks or is it social media and Tech Giants in this conversation I speak with economists politician and author Janus verifakis who served as the Greek Minister of Finance during the 2015 Greek credit crisis we discuss how economies crash the winners and losers of bank bailouts dysfunctions within the EU and the real power that politicians have access to in the face of their political Rivals and the rising influence of social media and Tech monopolies I'm Shane Farnsworth and this is the escape sapiens podcast these conversations are supported by the Andrea Von Brown Foundation if you enjoy what I'm doing please consider subscribing liking and sharing this content and now he's Giannis Pharaoh Focus I hope you enjoy [Applause] escaped sapiens [Music] just to make this more pleasurable though would you like a little bit of an overview or are you just happy to jump here let's go see because I was originally going to ask you questions like what's any questions you'd want just don't give me any advanced warning so what's the best place to go swimming in Greece then there is a Cove on island of the island where I live which is where I've asked my wife to scatter my ashes when I'm done um I don't even know it's cold because it's about an island there's no name but at least not that I know for me that's the spot but I'm not going to tell you how to find it I'm not going to give you the coordinates because it's a very well kept secret but but wait what's what's the beautiful thing about the island what draws you to it well look we we live on an island um about a stone's throw from Athens and because it where we are it looks to the other side of Athens so you can't see the ugliness of the cement belongs and we can see the beautiful mountains of the pillow monies it feels as if we are a very very long way from civilization but we're not we're only one hours Ferry right and then on a little boat we sailed to attack this tiny Island which is you know 20 minutes away at 15 knots and on the other side of the island there is this little Cove with Deep Blue Waters and pine trees coming all the way down to the Sea and that's like being you know A Million Miles Away um and it's the the human scale the trees are you know my height a bit taller maybe double my height the Stones The Rocks the fish they're all you know site as I said at the human scale they know sharks there are no currents it is just like it was designed by some Divinity for us so that that's my the best I can do so when you're dealing with politics and the economy all day just getting back away and I am away I'm I'm in Paradise and also the proximity the fact that it's so close I can do this every day almost well especially when you're not anywhere near Greece you can't do it but but let's let's jump into the economy and politics then so there's there's two real questions I want to ask you and they're very basic I basically want to ask you what money is and who who holds power in the world so these are the two uh questions and I thought I'd start off very at a very basic level you used to be or you've worked as an economics professor and and so what I want to know is in your mind is economics more like the study of psychology or more like say physics in your mind okay big questions what's money the best definition of money I've come across is by Karl Marx he defined money as the alienated ability of humankind I think it's such a poetic and accurate description because money uses it's a bit like in physics since you're a physicist it's a bit like light well centuries they were deep divisions between scientists on whether it's a stream of particles or a wave so you had huge disagreements Newton thought it was particles Max and thought it was a waves democrates particles people started with waves until Einstein comes on and says guys it's both which is very difficult for the human mind to wrap itself around the idea that it can be both two things that are contradictory uh now in physics you can actually prove these hypotheses we conduct experiments under control conditions and you can actually prove it money is very similar in the sense that it's got two different Natures that seem absolutely incompatible with one another and yet money is both those things hmm the equivalent of the part particle theory of light for money is that it is a thing that money is a thing it's a commodity yeah you have wheat uh you have corn that can be used to eat it can be used to plow the fields in the form of seeds that's capital but it can also be used in order to exchange so you exchange you know a pound of of corn for a bundle of butter or something so there is a tendency to think of especially the gold bugs those who you know believe that money has to be something tangible like gold like a metal it must be substantive not the figment of our imagination like digital money uh or paper money um they tend to think of money as a thing a commodity uh a tangible and then there is a completely different review that money is nothing more than a transferable form of debt so if you look at archaeological evidence there is plenty of it that money did not emerge as I think but it emerged as a form of debt in Syria in the Mesopotamia there were we we have evidence that the first form of um widely widely widely um used money uh were shards of um clay with number sign and the idea was that the hegemon the landlord the king the Thailand whatever would use these pieces of clay with numbers on to pay Advance payment of the wheat the corn that had not already been produced that would be produced after the Harvest to workers so workers would go home at the end of each day every week with one of those pieces of clay with a number and that's how numbers were invented that's how accounting happened this is how writing was discovered or invented uh the first instances of writing had to do with these um payment systems so if it had in the number two it meant two pounds or ounces or something of wheat was owed to you because you'd worked in the fields so you'd have to wait for it now the beauty of it was of course but you didn't have to wait to cash it in for wheat you could use these pieces of clay go to your next door neighbor and say listen you've got a code can I have some of its milk and here is you know a piece of clay that is like a title did to an ounce of wheat in three months time uh so what is money is it um a thing is it the promise that and the answer is that it is both in the same way that light is both so that's the best I can do in order to introduce our audience to the complexity of money and why I love the definition of marks that it is the alienated ability of humankind it's been alienated from us it's been abstracted but it reflects our ability to do things individually and collect uh your second question I forgot because I'm getting old well we'll get into that towards the end of it so ultimately we'll touch on that's where we're going to end up okay hopefully we may not but uh it depends where we we take things but okay so so this this abstraction then so this is sort of how I picture money as sort of a um sort of a shared fiction and I guess the next sort of obvious question that I want to ask is when our economy crashes when we go through some turbulent Economic Times what's happening there is it that the abstraction is breaking down that our shared fiction is breaking or is something else going on it's sort of at the lowest level well the the share of fiction breaks down because promises have been made that cannot be kept this that's what's going on that's what the crisis is so um to the extent that the liquidity of an economic system is a form of debt that is transferable what's that it's a promise you give me the pint of milk and I promise you something at the end of the month um some wheat or you know pounds or Sterling or whatever um now in the old epox eras uh you would have um War you would have pestilence you would have bad weather that was the cause of the crisis really earthquakes you didn't have a collapse of economic forces feeding into a kind of domino effect the wear occasions when poverty or overextending a military effort you know kings that made too many progresses to their people and to their soldiers as to how much loot they would get if they pursue a war together and then if the war didn't go well all these promises broke down but this was not an endogenous economic crisis was not a crisis of the economy it was a crisis of politics it was a crisis of the weather it was a crisis of the you know a military campaign gone wrong it was the Advent of capitalism that gave rise to purely economic crisis the reason for that is um but there's been a great transformation somewhere around the 18th century when we moved from feudalism to capitalism uh because if you think about it under feudalism the order of play was rather straightforward first you had production The Peasants toiled the land they produced Goods agricultural Goods so that was the production phase production came first second came the distribution phase the Lord would send the sheriff to The Peasants you know armed and dangerous and the sheriff would steal a percentage of the Harvest on behalf of the landlord it was just pure theft on behalf you know legalized theft that's what feudalism was right so he had distribution this second phase violent phase at least potentially violent pays determine how much of the produce would stay with the peasants how much would go with the landlord and then the third phase was financialization the landlord could not eat all that stuff so the landlord would sell it in rudimentary markets that were marginal to production but nevertheless important get cash and use that cash either to Amana his soldiers or to build a better Castle or to found a church or to lend it because the laws were the money lenders as well because they were the only ones who had money um so you had production distribution and financialization in societies like that it was impossible to have an endogenous economic crisis but with the Advent of capitalism the transformation when the peasants were expelled from the land they were replaced by sheep in England and Scotland and Wales because wool was an international commodity by then due to the discovery of international trade Wars and the creation of international trade routes you have the creation of a working class which is landless they've been evicted they they live in slums now outside the the land the land now is commodified it is uh leased to form a peasants or to the sheriff or whomever who now becomes a proto-capitalist who hires laborers now and pays rent to the landlord but these proto-capitalists um to make business work to start production first they had to borrow because they had to pay wages up and upfront so that the workers would not die of hunger not because they were nice people but because otherwise they wouldn't be able to get them to work and also they had to pay the landlord rent before the Harvest came in so suddenly what you have is a complete reversal it used to be production distribution Finance you know it's Finance distribution and finally production and this reversal Unleashed tremendous productive powers uh workers were forced to to be far more efficient the entrepreneurs the proto-capitalists because they were struggling themselves to keep their nose under above water uh they had to improve efficiency they had to invest in Machinery um in order to enhance labor productivity because they were in competition with one another and anyone who didn't do it simply went bankrupt um so because Finance now is that the at the beginning of this production process Finance is the linchpin for this new system called capitalism Bankers begin to emerge as the liquidity for the providers of the system the lubricants the lubricators of the system and the the more this is this system becomes efficient the greater the cut that the bankers retain so the way I've described this is um in in a book a few years ago was to say that it is a bit like um Bankers had time traveling hands they would push their hand through the membrane of the timeline and extract value from the future that has not been created yet bring it to the present to fund the production that will produce the values of the future and that of course made them Central in this chain and allow them to become very rich and the more they lend the more valued extracted from the future to bring to the to the present the Richer they go but that meant that at some point they extracted so much value from the future that the president could not deliver it could not the person could not repay the future and that's when promises are broken that's a issued that cannot be repaid and when those accumulate at some point like grains of sand that you lay in one on top of the other at some point there's going to be an implosion and that's an economic crisis at that point uh you have a situation where the alienated ability of humankind is in crisis it's in the vortex and you've got unpayable debts and that's when you have the eradication of that because that's that cannot be paid it will not be paid um so in in 2008 where we had the bailout of the banks I I want to understand sort of how dirty this process was because if I under if I follow what you're saying what what I understand is happening is that the banks have a whole bunch of assets that they've accumulated that are not good they're toxic in some sense like loans that will never be repaid this sort of thing and so then the Central Bank steps in and buys them all out at some uh price that's sort of in some sense if I understand you putting the hand into the future I want to understand ah no no it's not the same thing because you see when you put your hand into the future you you extract value to bring it in to produce new value what happened with the central banks was none of that it was simply printing money to make failed bets whole not the same thing there was never any productive benefit from doing this this salvaged the banks by creating money to replace their busted flushes their busted wages they're busted bets I guess then the question that I have is ultimately who wins and who loses who who who is it that's paying uh to buy out those busted bets the uh the toxic assets well you see it depends on what's happening in the rest of the economy as well I'm quite relaxed about you know for giving debts and writing them off you have to do it as I said an unpayable debt will not be paid so you need to write it off there are two ways of writing it off one is to just write it off really very simple say okay and this IOU is going to be torn up because it cannot be paid that to me is the honest and uncomplicated way of doing it but if you want to pretend that that is sacred and it will be repaid then the only way pretending that an unpayable that can be repaid is by constantly rolling it over lending the busted entity the failed Banker for instance money can continue to give him liquidity in the form of you know shorter medium term long term debt so as to allow him to pretend that he is honoring the ious that he's issued now again it really is no skin of my nose if whether you excuse him an event or whether you roll it over so the question is what else is happening however around this little drama because the tragedy of 2008 and Beyond was that while we had socialism for the bankers you know the central banks were printing State money to give it you know almost philanthropically to the bankers they were imposing harsh austerity on the Innocence other people who had not done nothing wrong and who had not benefited for years and years and years through financialization through um betting on impossible horses in the financial sector so when you have socialism for the very few who happen to be the financiers and austerity for everybody else you end up with a catastrophe that we've experienced over the last 15 years because the finances get their money there's the ethical question as well right the people who created the crisis get power and money and the people who were this who suffered the crisis and who never benefited it from the makings of the crisis the many are suffering austerity they can't put food on the table they can't you know go to sleep at night because they're so surrounded so much in the clasps of angst about how they're going to make ends meet by the end of the week but besides the ethical Point there's a microeconomic point of view as well because the industrialists the people who benefited from socialism for the very few for the oligarchy look at you know they they're they have all this money which is being printed by the central banks and given to them right but they're never going to invest it because not because they don't want to invest they would like it they would like to invest it but they look out there and they see the masses the multitudes being impecunious and finding it very hard to make ends meet and they think I'm going to produce snazzy expensive products for them they won't be able to afford it so if you're a Volkswagen in 2009 you're not going to say I'm going to produce an alternative to a Tesla and expensive 100 000 electric car because who the hell is going to buy it look at them I'll make little golfs with stupid little polluting diesel engines as I was doing before I will fake the their exhaust fume measurements as well and you know make money out of that out of the little people with you know small dirty little cars about sell to them so you've got very low levels of Investments and that also ogres really badly for the green transition because for 13 years we have not invested in the green transition as we should have and we can see the effects on the environment now you can see it on electricity I mean we have other invested for the 13 years so the tragedy the the crime of the of 2000 of the post 2008 period it's not just that you have excused those uh busted wages of the finances and that you have printed money as if in the context of a socialism for that it should give to them it's also that their austerity you've imposed upon people in the European Union people in the United Kingdom people in the United States I mean here in this country where the Champions were stated world record record holders when it came to study to idiotical studies self-defeating instead um the result is that you have very low levels of investment and when you have very low levels of vision of investment what does this mean it means the demand is low and it means that the only way you can keep finances in health in little Commerce or alive or zombified may is to keep printing money to give to them because they are not going to get it from the little people because the little people don't have any and because there's no investment to produce new wealth for the bankers to benefit so for 13 years after 2008 we have had rude health in the financial markets which was however driven by state money that was printed and printed and printed to keep the finances while the rest of the economy was shrinking so how long can you push this for what's what's the if there's sort of two questions I want to ask the first is you know what would you have done instead what's the alternative you know did you have to inject the money up that level of a bank so could you could have you given money to the lower the people who made the you know did you have to inject money at the level of the banks or could it have been at the level of the people and what is the long-term impact uh if we continue to do quantitative easing we we continue to give austerity to the to the people and not the banks well the the the the first question that came out of your mouth was how long can this last for the answer was Uncle pandemic because now it's it's all collapsing on around us we can see that but before I explain why that is happening uh let me answer your other question what could we have done instead and I think you already embedded into your question the proper answer the first thing you do is of course you say you save the banks because banks are not like other businesses if a bike shop shuts down okay you don't have bikes but a bank for better for worse I think for Worse the bank's own the payment system get credit you know whatever you want to buy coffee these days or buy a book or go to the movies or whatever you need to make a payment and you make a payment you make a payment using a debit card or the credit card um or even some ATM from which we you withdraw money so and that's all all owned by the banking system by the oligopoly or of the banksters so you need to save those Banks you can't allow the ATMs to shut down the payment system took collapse because then you'll have another Great Depression like we had after 1929. and only monsters Nazis and fascists emerged from that but it's one thing to say you should say the banks it's quite another to say that you must save the bankers so what I would have done you know that would have picked up the phone and call them and say I've got some good news and I've got some bad news we will save the bank that's a good news the bad news we're not going to save you you are out so shareholders um are wiped out Boards of directors are from fired they are nationalized and they're saved and this is not Pie in the Sky stuff this is precisely what happened in 1998 in South Korea you know the Korean State got into into the field private Banks took them over drove out the the boaters directors I remember I was having a very interesting conversation with the finance minister of South Korea and I asked him how did you do that because we are having such a difficult I mean you know Bankers are so powerful people so powerful people I mean they are more powerful than they have more power than us Ministers of Finance you know they can fight us he said well we used in a very validable institution we have in Korea so what he said well the Marines I said the Marines him and had them leave the building at gunpoint and I thought that's a very good idea so they saved the banks and within a year and a half they had sold them back to the private sector because they were not marxists they were not left-wing lingers like me but they didn't save the bankers so the the the the message to Bankers was if you um if you steer your bank onto the rocks and it starts thinking we will save the vessels but not you so because uh okay that was the number one thing that I would like can I ask just quickly did that have a lasting effect so what happened in 2008 and later on did the did Korea have a sort of softer Journey as a result of that prior policy absolutely look at the data Korea had next to no crisis in 2008 and what had happened in 1998 shielded Korea from the Vegas or Wall Streets in the city of London what's happening in the European Union um gone from from strength to strength um and it wasn't just South Korea it was um six years before South Korea it was Scandinavia the Scandinavian banks in 1992 went bust all of them they had made some stupid decisions and they all went bust Swedish Banks Danish Banks Norwegian Banks Finnish Banks and the states back then Social Democratic back then no longer um they they bailed out the banks got rid of the bankers nationalized the banks and then sold them off in within two years back to the private sector to different bankers um and they didn't have the same problems in 2008 that the Anglo the anglosphere had as well as the European Union uh so that's one thing I would do save the banks not the bankers the second thing I would do and we already foreshadow that in your question if I wanted to boost demand I would not give it to the finances I wouldn't print money to give to the finances I would give it to little little people I mean Donald Trump did it and then Joe Biden continued with the checks in the mail to little people the Australian government did it in 2009 under Kevin Rudd and the result was that Australia did not have a recession in 2009 because every household you probably call that got something between 10 and 20 000 Australian dollars it missed me unfortunately I was a little bit annoyed about that yeah yeah all my friends got the yeah um so you know even during the pandemic when the Central Bank of Europe was printing as if there was no tomorrow I was warning them I was saying you're creating a gigantic bubble in real estate because the money comes will go from the central bank to the finances from the finances to their mates their mates are going to take the stock exchange or buy Flats in Berlin asset prices will go through the roof that will create us the price inflation uh that will increase the shortfall actually reduce further investment and that's going to string aggregate supply of goods and services and then at some point some of that money will leak into the economy and it's going to be inflation and then you'll be stuck which is where they are hmm so the alternative proposition was um why don't you just um send some like 500 years I proposed or a thousand years or two thousand years depending on the length of the pandemic send it to people's bank accounts and the most astonishing answer I got from German colleagues politicians and bankers and so on these games we can't do that so why can't you do it he said we don't have the know-how to what because our social security numbers are not connected to our banking system and therefore technically we cannot even send the money even we can't do what Trump invited it and I thought my goodness this is a state of Europe are you know the great German efficient State cannot even find its citizens and give them some money they can take the money they can't give it so let me ask okay so this this makes me think of something else that I'm quite curious about which is that why is it that we don't in in the in Europe we don't have big Tech competitors so for example there's no you know French Twitter there's no why why is it that uh on these technical grounds people seem more competent in in the United States why why is it that you have these you know blossoming tech companies that are missing here well the hegemon always produces Cutting Edge the Technologies before America rows almost every important technological breakthrough was made in Cambridge Oxford University College London in Britain Britain was the Empire It produced the technological advances before that it was Rome so there's nothing terribly um surprising about that size also matters you have a very large economy in the United States you've got English you will the size of America you put English so if you were going to start Twitter um in France it wouldn't really go over that far um Twitter went far because the from the from day one it was used by US Greeks by Australians by yeah the Portuguese and so on and so forth uh and first mover Advantage is everything so once you've created Facebook there can't be another Facebook even in the United States even in the United States if you and I had a much better software for a Facebook competitor it wouldn't matter because if if if anyone wants to join um something like Facebook they will go to where their friends are so there is the first mover Advantage which is really very strong now the only character that has developed competitors real competitors substantial competitors very strong competitors to Big Tech is China but that's because it there was a political project to do so they understood really very well that if they if the whole of the Chinese political economy and Society and enter Facebook Twitter you know buy everything from amazon.com and so on any possibility of autonomous growth and development in China is gone Europe never understood that and um you know we now are in a kind of um semi-war between Europe and America over social media you've got um you know the European commission constantly sniping at Twitter at Facebook at Google at Apple you know imposing fines Miss vestager should as well I mean she's right on many of the issues that she's got but as you pointed out uh this is just a defensive War there is no attempt or capacity of the European Union despite the fact that we are more than the Americans put together very richer than the Americans put together we have a lot of Technologies we cannot bring it together and create uh you know either compared to Amazon.com or to Alibaba in China so with every crisis and every technological Advance Europe falls behind both China and the United States of America it still surprises me that you say this because you know we had for example um Myspace which was taken over by Facebook and I guess now Facebook shares are really tumbling in the last weeks and I I guess Tick Tock is sort of rolling over YouTube so there are examples of of other tech companies rising up but yeah that's true that's true but but do you have Spotify do you think um the EU is is taking appropriate steps then to break up these monopolies or no you think they should go further or how should how should they how should they help companies in their own sort of domain develop competitors how about having a lobot on it to begin with and start being afresh because you know the the the the situation with the European Union is beyond a joke uh they have completely failed to rise up to the gay challenges of the time and those what are the great challenges of the time the banking crisis of 2008 the European Union made a completely another mess of it and the result now is that we have 13 years of centrifugal forces there in the European Union of ours and that has never subsided they just threw a lot of putting the money on the problem and they're married but without solving the underlying centrifugal forces that are tearing us apart so banking crisis disaster um green energy catastrophe catastrophe let me think about you have something called the European Union but we do not have um an energy plan for Europe Germany has its own plans and we saw how great those were and when Putin invaded the Ukraine um passage its own [Music] nuclear based plan half of the nuclear power stations now that they're necessary because of the height and price of natural gas are now defunct they're out of commission um Greece is its own plan it's a bit pathetic I mean it's so there's no such I wish we had a European Union we do not we have something that pretends to be a unit artificial intelligence nothing zero there is no plan for artificial intelligence there are pockets of AI here and there uh but nothing like the concentrated investment on AI that the Japanese have that the Koreans have that the Chinese have of course the Americans um you've got a lot of rent seeking in in Europe there is hardly any entrepreneurship happening they're all you know the the big wigs are simply trying to extract whatever value has already been created without producing new value and the with and and we do not have a government we have a bureaucracy whose job in Brussels is to behave like the bureaucracy of a cartel the nearest parallel analog to the European Union commission is OPEC the organization of petroleum export encounters they have a bureaucracy their purpose is to coordinate the activities of the different countries with a view to Simply maximizing the extraction of Ransom and the rest of the world but it's it's they this can never be the source of innovative thinking about creating new values it's only Innovative thinking about how to Corner existing markets that's what the European Union commission is and whenever they have a good idea because there are some good ideas that come out of the commission um since I remember in the 1990s they've all been deleted by Berlin all of a sudden every single one of them in some European Union Council has been vetoed I believe and if not by Berlin by one of the 100 maidens of Berlin because sometimes Berlin doesn't want to be seen to be the the bad guy oh girl uh in the case so they they asked the Slovak or the the Dutch to do video it on their behalf so so then what does the US have that the EU is lacking what is it that makes the US function which doesn't allow the uh the EU to function a similar way treasury bills you know the treasury the U.S treasury we have a central bank here in Europe and they have a central bank but if you think of how we constructed it it was as if constructed by morons in order to serve slaves because what we did we created the central bank without a state behind it there is no state that can have the back of the European Central Bank and you have 19 States now it's 20 States that use this Central Bank for the money but cannot rely on it in case there's a banking crisis to bail them out because it's by its Constitution it's not allowed to bend them out so they had bandico the constitution of the ACP the charter they should be in order to bail them out but to do this they had to get permission from Berlin to do it so it's a catastrophe it's exactly what Alexander Hamilton in the United States was trying to avoid and success succeeded in avoiding situation where you have different states different formal colonies uh supposedly one country but without common debt common debt is everything it's what binds States together what binds the British together is not so much you know the Royal Family it's it is the bound and the fact that the north of England and the south of England share the debt the national debt that's what gives substance to countries along with languages and traditions and and conventions and and all that jazz as they say I don't want to sound too conspiratorial you mentioned that the system is created as though by morons but could it be that it was constructed in this way to force Federation further down the line is there some sort of intent behind a system which seems not to work currently in your mind look the there were some smart people who thought of the Euro and the European Central Bank in those terms and one of them was uh president of France 80s and 90s um I have done good authority I've written about this who's a friend of mine was in the room in 1992. when the master treaty which is the foundational Treaty of the Europe and the European Central Bank was signed there was a discussion between the president of France from and the president of the European commission at the time Jack delore who was a friend of materan and who had been his Finance Minister many years before with a friend of mine in the room and Jacques de Laurel representing the European commission at the time was trying to convince the French president that it is important to have two pylons two legs for the Eurozone one should be the central bank to guarantee monetary stability and another one should be uh something like an investment Ministry or a treasury that would bother on behalf of the whole of Europeans of the whole of the Eurozone area in order to invest to be the so there would be the stability leg and the growth or development leg uh which of course meant a political union it meant that if you have a common debt you have to have common rules yeah who borrows you need to have a common Parliament or parliamentary process to approve the common debt and transformation around and said what you said he said listen Jack um that would be great to do that we can't do it we don't have the political clouds today at the moment what we can do is we can create the monetary Union and this is where you know the old Fox um proved yet very clear vision of the future he said when the next large financial crisis comes our successes will have to choose between letting this whole thing collapse or federating or doing what you're suggesting so this is precisely what you're saying however something's wrong and he was wrong for reasons that a British Cambridge economist had foreseen in 1971. in April 1971 Nicolas Calder was his name a well-known Economist of the Cambridge tradition who was actually unified he wanted the European Union to come together and he was writing that paper as somebody was wired about the future of the European common market but back then the European union today so this is now April 1971 just before a few months before the collapse of the Bretton Wood system and the fixture exchange rates when the Europeans could see that it was happening that the exchange age would no longer be fixed they needed the exchange rates to be fixed because the European Union was a cartel they were designed to sell to fix the price of code to fix the price of steel to fix the price of cars if exchange rates between France and Germany and Italy and Holland go up and down it's very difficult to fix prices okay so they needed the fixed exchange rates of the Americans were providing under the Breton woods but and they could see that these fixed exchange rates would blow up so they were already planning a common currency or fixed exchange days in Europe as a Prelude to the euro back in 1971 and Calder in the new Statesman said this he said it would be a gross mistake I don't have his names now his words in my head to deliver but but I can assure you you can look it up I've fully published that paper as well in my books uh in a couple of my books he said if we make the mistake of thinking that through a monetary Union we create a stepping stone towards Federation we will have killed off maybe in that those are the words used we will have annulled the possibility of a political union because he explains a modern Union without a political union is like putting the card before the horses a monitor Union without the political union in common debt is going to create a gigantic financial crisis by itself and when it hits we are going to suffer massive centrifugal forces politically socially at the level of discourse and the Europeans will not be able to put politically to unite after that and I think that this is exactly what happened I I suppose you're alluding to the rise of uh sort of right-leading politicians and not just look after you know when when the banking crisis happened it started in Wall Street as it usually does like 1929 it started in 2007 2008 in Wall Street then very soon after that we realized that the French and the German banks were kaput gone okay um a dominant effect starts once a German and the French banks are bankrupt they can no longer roll over the Greek government debt the Italian government debt the Irish government that because this is who was they were the banks that were lending those States and then there is of course a feedback loop because once there is a new once a new the the the the front page of newspapers is full of news of the Greek States Bankruptcy and everybody knows that the Greek State owes 120 130 billion euros to the German banks and another 100 to the French banks then that makes the position of the French and the German banks even worse and then what happens is then politicians starts start pointing accusatory fingers at one another the German politicians are pointing their fingers at the Greeks you mess this thing up it is because you were so spent thrifting because you sung and played the puzuki Under the Sun in the summer and it didn't work and then the Greeks turn around and the point and accusator fingers of the German and beginning we are Nazis you've never been anything other than answers that's it it's finished at that moment you have centrifugal forces at the cultural level the political level the ethical level you know the every level and you go now to any German or to any Greek any Dutch woman or French person I say do you think it's a good idea that we should Federate in Europe they say bugger off immediately which would not be the case before 2010. so I think that Nicolas calderou was completely present so sort of shot ourselves in the foot I I noticed that uh so in in respect for the time uh we're gonna have to wrap up fairly soon can I just uh ask with a few and with a few quick questions about power so the main one is who holds the power today is it musk is it Biden is it the head of the IMF or Goldman Sachs where does power really reside today the hardest aspect of contemporary Society to comprehend is that we live in a capitalist world or post-capitalist world where power has been concentrated tremendously in side the confines of a new form of capital without any human being mask Biden whoever being in command of it if you look at Musk on a minute by minute basis if you actually watch him work you can see that this is a Driven Man who's got enormous resources at his disposal but given his ambition and he is different projects he's very constrained he feels the pressure he doesn't feel like somebody who can do anything he doesn't feel like God similarly Jeff Bezos he's got you know hundreds of billions stashed away in terms of wealth right but he too feels constrained so this is a great tragedy in the great politics like an ancient Greek tragedy if you're watching or Shakespeare if you are watching this Experian playing Richard III what do you see you see the powerful men on a stage who nevertheless they are great tragedies that they the more power they have the more powerless they feel and it's the nature of the game which extracts power from the many concentrates in the hands of the few who are tragic figures and therefore powerless this is how I understand the capitalist post-capital system we live in and that's why I'm I continue to be a leftist who thinks that capitalism is neither natural nor Pleasant uh or stable for that matter in the end we've created magnificent machines that had the capacity of being of slaves I'm I'm a tech Enthusiast I love Machinery I love technology but in the end we become the slaves of the machines and that is not simply to say that this is the rich versus the poor there is of course the rich versus the poor we see this on a daily basis but in the end even the rich even the Elon musks of the world the Jeff bases of the world they are also victims of this enslavement of the whole of humanity to an artifacts a kind of Dr Frankenstein who've created the thing this capitalist thing which um has taken over and is threatening in a very existential list condition did you also feel that sort of at your core uh in in the place of the Finance Minister of of Greece did you feel that you had less or more power than than what you anticipated When you entered the role oh I had exactly as much power as I had anticipated precisely zero I knew I would have none I knew I would have none because remember the only reason why I was elected was because we had a massive bankruptcy and I had become the Finance Minister of the most bankrupt state in the world after Puerto Rico Maybe okay so I knew that I wouldn't have any power the only Power I had was a part to say no not to put my signature on another credit card on behalf of my vehicle and that's why I was so demonized and so despised by the powers that be they could not believe that they had I had the audacity not to take their money okay guys so let me let me end by asking you I mean you you took the job so you must I mean it's a moral imperative yeah so so let me let me end by asking it's actually sort of two questions how do you decide as a Marxist or a socialist which trenches to die in so so for example do you buy shares do you uh do you um shop in Amazon you know where do you decide on moral or ethical grounds no I'm not going to go down that path so that's the first question and to wrap up let me answer it because I'll forget it personally I don't buy shares I have a natural and antipathy an ideological opposition to share markets that's why my my last book which was a science fiction novel and other now where I try to imagine a different world there are no share markets uh so no I don't believe in horse races I don't believe in the stock of change I hate derivatives I would don't do it only you know everybody shares indirectly when I come stop it due to the superannuation fund buying shares on my behalf without asking me right but I would never buy consciously and purposely purposefully shares do I buy amazon.com stuff of course to survive if I simply eat and consume products produced under socialist socialist order which doesn't exist uh when do I choose uh to do something like for instance accepting the Ministry of Finance well that election in January 2015 was the election of a political party that had a reason from four percent to almost 40 percent in two years as a result of the popular Rebellion against the dead bondage of whole people the reason I said yes was because for four years I was criticizing what the parts that we were doing my proposals similar to what I was discussion with you about what will do with the banks what what to do with um fairly wages you know how to empower the many uh these purposes were accepted and embraced by a young man who's going to be prime minister very improbable prime minister because as I said up until two years before he had four percent of the vote uh and people were eating out of rubbish beans as a result of this enslavement that bondage it was like Greece had become like something like like a Victorian warehouse and I was elected I didn't think I was going to you know affect the transition from capitalism to Socialism or anything stupid like that I had one task that I wanted to accomplish and I was planning to design the moment that task was accomplished or the moment I realized I could not accomplish it and the task was to haircut the Greek debt so that we'd no longer took more credit cards on conditions of further austerity that for some people to eat other rubbish bins you know my ethos tells me do it this is a job that you should try to do even if the probability of success is low you so let me let me finish by just asking you simply what makes you happy and what makes you look forward to the future what what is it that really drives you and and gives you hope well besides being with the people that I love and then listening to the music that uh permits me to forget who I am for me good art good music good cinema must help me forget who I am but this I I need to lose myself in it so when I lose myself in good stuff stuff that other talented people have created I'm I think I'm my happiest and that's why I'm married to an artist as well um but more generally I'll give you the answer that um um Captain Picard gives in the next generation of Star Trek which is of course a major source of philosophical insights for me because I'm a Trekkie I don't know whether you know that I'm a fanatical when he's asked so the the they they find in space in one of the episodes and the very last episode of season one they they find some uh Frozen people from the 20th Century Century industrialists who froze themselves and had themselves their bodies covered in space in case they're rescued and fixed and you know cured in the future of course this happens 21st century and one of these uh unfrozen men businessmen from the 20th century says to picardo so you have no money here um there are no markets everybody gets what you know their basic needs covered um so what do you do what's the point of your existence and because as my friend to improve yourself I think anything that you're doing to improve yourself in a self motivated way you know you play the piano a little bit better you write a better article a better book you learn how to appreciate a beautiful sunset you know more maturely than you did the previous day or the previous year that's the stuff of life you make the world just that little bit a little bit more beautiful Giannis it's been an absolute pleasure welcome back anytime thanks for coming on thank you Shane that was fun [Music] [Music] foreign

Channel: Escaped Sapiens

Views: 223,281

Keywords: Podcast, Science, Futurism, Sustainability, Shane Farnsworth, money, power, politics, European union, brexit, grexit, credit crisis, greece, mark blyth, world leaders, banks, crisis

Id: IccRwqTThMU

Length: 62min 41sec (3761 seconds)

Published: Fri Dec 16 2022