Yanis Varoufakis | Cambridge Union

rejoice stop whinging about the state of your nation this is a remarkable moment for British democracy you should be celebrating because you see there are two ways of being obnoxiously nationalistic the first one I experienced in this town back in the 1980s when I took up a minor appointment and one of the fellows in one of the college's welcomed me by saying how does it feel my young lad as a person of a Greek predicament to have been inducted into polite society that's you know obnoxious nationalism you know the sense that the aristocracy used to have in this country that yeah this was an exceptional country exceptionalism unfortunately in the same country today over the last three years for reasons that you are utterly familiar with there is a different kind if you want the inverted version of that exceptionalism you'll tend to lament that your country is exceptionally awful that your democracy has failed that your Parliament your institutions are in a state of disrepair the two exceptional isms are equivalent ditch both of them Britain is not the best country in the world and it is certainly not the worst country in the world indeed what has been happening over the last three years is a demonstration that parliamentarianism and the rule of democratic process is alive and well in this country in a way which is not the case in the rest of Europe and I'm saying this as a remainder as somebody who even though no one can accuse of being a lackey of Brussels Brussels will be very was indeed exceptionally impressed and somehow undermined by the fact that in 2016 I was campaigning against Britain nevertheless as someone who has fought with Brussels a lot more than Boris Johnson ever will I campaigned for romaine i standed in front of you as a committed European East and I'm saying to you that British democracy is in a much better state than German democracy French democracy Greek democracy Portuguese democracy Spanish democracy and the reason is one that livers and bricks the tears always try to play up and that is not a bad thing that the reason is that you have a sovereign Parliament it is not powerful but it is sovereign and there is a profound difference between the sovereignty of Parliament from the power of the nation you can have a small country which is powerless and yet it's Parliament can be sovereign and this is precious think of Iceland tiny pipsqueak of an island nation but what is the difference between Ireland Iceland Spain Greece France that the Parliament in Iceland was sovereign in 2008 when the financial sector collapsed and the Parliament stood up to the bankers to the International Monetary Fund to the financial sector and said you are being expropriated you messed up you went bankrupt we are not going to bail you up tiny little Parliament of a tiny tiny tiny little state has a capacity to do that so I suspect that what I'm trying to do is I'm trying firstly to infuse a little bit of enthusiasm in Europe deflated hearts about democracy in this country and secondly to try to build a bridge between levers and remains because both have good arguments and both found they're good arguments or narratives upon awful destructively false numbers and statistics but the levers and the reminders are trying to inspire you to support them using fraudulent economics and fraudulent statistics and it is your duty to stop the from developing it is your duty firstly to stop that wave that tsunami of pessimism about the state of British democracy aid and abet the Civil War like atmosphere that is being cultivated by people who don't care very much about brexit or by the EU but who use this opportunity in order to pursue hidden agendas regarding their vision of Britain or whether it's open and the stopping is a matter of debate so let's start at the beginning shall we Winston Churchill 1949 I believe he gave a speech in Switzerland in which he said that it is absolutely essential that we create a United States of Europe this has been quoted again and again again what has not been quoted as much was the next sentence which was that Britain should not be in it because we are with Europe he said if I recall his words precisely we are not off Europe I mean Churchill is certainly not one of my idols but nevertheless he caught an important dimension of the incongruity between the United Kingdom and the European Union capitalism sprung out in this country spontaneously nobody wanted it the church didn't want it the King didn't want it the lords didn't want it the Barons didn't want it nobody actually planned it that's why it was contained it emerged as a result of a combination of the international trade routes the the Pirates that then turned into civil servants the establishment of by necessity of Britain of England at the time as a maritime power together with the enclosures the enclosures created a working class that gave commercial value to the land because suddenly the land could cultivate wool while actually could feed sheep that produce the wool the wool was traded internationally by merchants stemming from Southampton and from other great ports in this country so suddenly the Lord could look at an acre of land it could know how much economic value it could produce in terms of wool which was priced internationally suddenly an acre of British land of English Welsh Scottish land acquired a price for the first time in history there was a price involved a certain rate of return so that that was the beginning of capitalism and indeed most of the powers that be at the time in Britain were against captain the royal family was undermined by suddenly there was a schism between political power and economic power for the first time in the history of the world political power was not identical to economic power once upon a time he were Lord you were rich and you rich it must have been that because you were a lord for the first time you could be a dirty merchant that would not be allowed into the clubs in London let alone the you know Windsor Castle and have more power economic power than the Lord's or indeed the king so that's how capitalism imagined this country how did it emerge in Germany Kaiser decided that Germany must compete with England and that the German state should introduce capitalism into Germany it was a top-down state enterprise if you look at the beginnings of the European Union remember the first name of the European Union the European communities of Coal and Steel what's this it was a cartel what was the point of it like OPEC when OPEC was formed the Organization of Petroleum Exporting Countries what was the intention to limit competition to make sure that the producers and sellers of oil were not competing against each other fixed the price agreed on a profit margin distributed the profits amongst themselves the economic rents not even profits economic gains the amount of value that they were extracting from the world economy this to be classic actly how the European Union begun in 1950 so when Churchill was saying you know folks you did this to the continental Europeans but we're not going to be part of it because we're not of this here the point historically from the point of view economic history it was completely correct but then you know sewers took place Britain was bankrupt the United States was looking at British politicians talking about the special relationship and feeling pity for British politicians because there was never such a thing as a special relation between the UK and the US it was only a figment in the imagination of politicians in this country so gradually you drifted into the European Common Market you know Common Market him evolved since then if this was 1974 I would have voted against Britain entering the European Economic Community indeed I voted well I was never given a vote because the Greeks were not given a vote to enter the European Economic Community one day we woke up and we were in the European Economic Community but has there been a referendum in Greece I remember as a 15 year old I was demonstrating against entering the European Economic Community so Tony Benn who was one of my idols in this country when I was when I moved to Britain in 1978 was and also a mentor of Jeremy Corbyn proof which I have to confess this is full disclosure moment Jeremy Corbyn is a great friend of mine Jeremy and I have both been influenced massively by Tony but Tony Benn was against the entry of Britain into European Economic Community I have no doubt that if Tony Bennett lived today he would have been on our side against brexit because it is one thing to say you should not get him and it is quite another to say you should get out because when you get out 43 years later you don't end up where you would have been had you not entered this is for any one of you that has ever touched mathematics is the difference between dynamic analysis and static analysis they're not the same thing and if you confuse the two you are in serious trouble so having said that while watching and participating the debates in 2016 during the referendum I was appalled by the fact the fact that my site was formerly represented by people like Tony Blair David Cameron my good my goodness right every time they open their mouth I thought okay we're going to lose that breaks it will win every time David Cameron supported remain I thought that's it breaks it will win and who who were the other figures that supported remain Christine Lagarde from the International Monetary Fund welcome joy Blair from Berlin it's like saying to the Brits vote to get out you know I mean never watched Fawlty Towers never if you haven't watched Fawlty Towers you make a mistake of supporting brexit by opposing it from Berlin there was one important argument in favor of brexit that remain is never ever addressed and that is on going back to an earlier theme the theme of sovereignty of Parliament you've heard you've read articles in the Financial Times in The Guardian The Observer and so on and the acumen is ain't the era of globalization were too small a nation to talk about sovereignty nobody's over again they are conflating and confusing sovereignty with power the brick city has had a good Burkean that's Edmund Burke point about the importance of maintaining the sovereignty of our parliamentary process as European East that for me means that we should have a European Parliament that is sovereign the tragedy of the European Union and my criticism of the European Union is we don't have a sovereign power Parliament we have a European Union Parliament which is not a parliament it's a parliament only named so when Nigel Farage stands in it and lambaste the institution that is paying his salary he's right but his wrong to suggest that the solution to this is to get out because once you're in I remember I was here in 2015 and I I came up with I think it was in there's this chamber with the term Hotel California for those of you who remember the song and the last verse you can check out anytime you like but you can never leave once you've been in meshed in the European Union for 43 years all you do by getting out you're creating you're causing a lot of harm upon the people who are sick and tired of the lack of the lack of democracy so the very same narrative that appeals to people's democratic instinct and to the sovereignty of Parliament is implementing a brexit that is going to damage the life prospects of those very same people and I very much doubt that the result of brexit is going to be the return of sovereignty to the British Parliament look at the British Parliament yet there is a may well there was a plethora of errors on her part but one of them was to essentially not violate but annul the sovereignty of British Parliament in the process of getting Britain out of the European Union in order supposedly to restore sovereignty of Parliament but let us now let me address the future because historical analysis is only worth it if it helps us pave the ground for a decent promising hopeful future you have an election coming up on the 12th of December I think that is a very very good thing because this election is going to give you the voters in this country an opportunity for clarity the systemic press is denigrating both Boris Johnson and Jeremy Corbyn but I must say that these two men whether you like them or not this is not a matter of personal preference they represent two clear choices and indeed they represent the only clear choices that there are Boris Johnson is totally right to say that if you want to remove Britain from the European Union and to strike trade bills with the United States China other countries you need to keep hard breakfast on the table because let's face it you never enter a negotiation unless you are prepared to envision a situation where you walk out of the regulation and you say no to the other side that means you've got to be ready to break off relationships with the party with with which you are negotiating if this is going to be a negotiation and not a complete surrender so Boris Jones is completely right on that way it's completely wrong is that heart breaks it would be preferable to remaining closely linked and unlined to the European Union but that's my opinion that's not his opinion I respect his opinion and I think that it is a very respectable opinion that we should treat with respect while disagreeing with it if you choose to disagree with it at the same time my side of politics I mentioned my relation with Jeremy Corbyn who's been lambasted over three years now for dithering for not being clear so that he's not clear remember before what you're too young to remember but let me tell you or remind you if you have some kind of memory of the fact it was a few weeks before the referendum in in 2016 when Jeremy was on a television panel and one of those BBC typical BBC journalist mr. Kobe you are claiming to be in favor of remain but on a scale from zero to ten how enthusiastic are you about the European Union Jeremy did a little bit I have to admit and he said six I would have said to - but think about had the question bin I'm a Greek politician right and the Greek patriot I believe at least that's what I think if you were to ask me how enthusiastic are you about the Greek state on a scale from zero to ten I would say one Patriots have a duty to oppose their government when we think that our government is inflicting harm upon the many upon the nation that does not mean that we want to dissolve our state it does not mean we are against our government as a concept it means we're against this government and it means that we are perfectly capable of saying as a Greek citizen that the Greek state sucks excuse my French but it does I can't think of a better expression the Greek state is corrupt it's inefficient it destroys the soul of the civil servants it is often open to abuse and as a patriot I want to change that I'm not going to say that I'm a total zero I scale from zero to ten I'll give it 9 because I'm a patriot then I would be an anti Patriot if I thought that my state is not up to scratch similarly as a European East I give Europe Europe officially Brussels on a scale from zero to ten I gave it to a bit more yeah double than what I give a great stake but that doesn't mean I want to dissolve the European Union and to get out of a European Union because you know we have institutions in the European Union like the European Investment Bank right which is four times the size of the World Bank and its capacity to fund the green new deal that this continent needs whether you're in the EU or out of it if we didn't have the European Investment Bank we should invent it so why would I want to get out of the year you know I have an institution like that like Boris ones so the 12th of December gives you a very clear choice between two visions the vision of Boris Johnson which is a version of Thatcherism with Singaporean elements and I'll explain in a minute what I mean by that with a narrative of reversing austerity right you've heard that austerity is finished now the Tory party has become the most profligate party of government in the history of the United Kingdom if you look at what they are promising in terms of expenditure if at the labour party had promised that in the previous years they would have been laughed out of court so this is the combination okay first trade deal with the United States which has nothing to do with tariffs you have to remember that trade deals are unrelated to trade because let's face it tariffs are very low these days so even if you eliminate them there will be no appreciable difference in trade because of the elimination of tariffs they key to free trade agreements like TPP TTIP and so on is the regulatory and one it is the fact that the British government and the British Parliament will no longer be sovereign because a multinational with its base in Delaware in the great state of Delaware it's going to have the the right to sue the British state when it comes to some contract to some regulation regarding food safety they will have the right to sue the British state and to bypass the British power Parliament in an independent private tribunal whose judges or advocates will be appointed by the multinationals that is what is a stake so what Boris is saying is that moving that direction is going to open up Britain to investment by multinationals similar to Ireland forgetting that Island only attracted multinationals because it is part of a single market and it combines low tax rates with being a member of the single market while at the same time boosting expenditure in order to buy the votes of label levers that are essential to ball is being elected on the 12th of the 12th yeah you know what this is a recipe for the Boris recipe a recipe for increasing the dependence of the stain of of your fates upon strangers upon the kindness of strangers you are already running a current account deficit of 6% of GDP you already depend on inflows of capital that come into this country and are buying you out you are already depending on the model of low productivity low wages low regulation zero hour contracts cheap labor do you want more of that because this country will never be Singapore because Singapore combines liberalisation and birtherism with a geographical proximity to China effectively it's a gateway to China you will never be the gateway to China unless this country develops sales and you sail away away from these beautiful waters and you approach Taiwan or Hong Kong if you want to do that consider it as a project my friend Jeremy on the other hand and I'm being blatant about that what is he proposing he's proposing two things first to take the sting of a heart breaks it out of British policy to give people a choice between two options neither of which are toxic one is to stay in the EU and the other is to stay in the customs union in a single market I'm very pleased that after many years and months of trying to convince the Labour Party some of us had an impact in the announcement that took place yesterday that freedom of movement will be preserved so to nontoxic outcomes you won't notice the difference whether one or the other gets voted in a referendum by the Labour Party by the way I'm not going to mention the Lib Dems because very relevant come on folks they are proposing to revoke article 50 by an act of Parliament if you really want to poison British democracy forever you know try to use up a referendum without another referendum and see what you get and in any case they're only doing this because they know that we're going to be elected so any politician who makes promises on the assumption that they will not be elected do not deserve to be discussed in this guy-- chamber I shall conclude the way I started stop whinging celebrate the fact that this country whether you are with one foot outside the EU or not has a prospect of becoming a leader in green transition and green investments already you're doing pretty well relative to the rest of the Europe the European Union in terms of renewables this is the country that has managed this year to surpass 50 percent of energy produced by renewables you have a great deal of scope in doing this let's have a discussion about the role that the City of London should play let's have a discussion about the new constitution of this country that you need to write down because an unwritten Constitution doesn't work you can see that you need to discuss the possibility of turning this country into a genuine Federation in order to stop it definitely fugle forces that are pulling it apart you need to discuss the possibility of English assemblies maybe one English Parliament to complement the Scottish Parliament there is so much that the people of this country can do in order to take advantage of this democratic tsunami that is emerging out of the Black Sea debate never yeah the finances have taught us in 2008 that is always a good idea never to let a good crisis go to waste they didn't let it go to waste they made you pay for them why don't we use brexit as a fantastic opportunity to reinvigorate British democracy and make British democracy once again a beacon of hope for us Europeans the rest of us on the continent of Europe could keep treating pal with contempt thank you very much thank you Yanis for your speech obviously on a very hot topic right now as you said last night and thank you also for taking such a decisive stance on all of the issues you talked about I think a lot of politicians come here and say everything and nothing at once um okay so we're gonna start off with a bit of moderated QA and I'd like to sort of begin by talking about a topic which you touched on in your speech and which we also talked about a bit when we were discussing potential topics for you to talk about here and that's the green New Deal so you've discussed it a lot obviously as part of diem25 and I think with extinction rebellion and increasingly a lot of climate activism happening in Cambridge and also throughout the world we can see or while I would argue that but it's sort of climate activism is gaining momentum but do you think the idea of a European Green New Deal specifically is gaining momentum and whichever way you swing why well you know why better than I do I'm pushing 60 you youngsters know that you're facing a future that is quite dystopian and I am immensely energized when I walk when I look at what happens every Friday in Sweden in Germany in this country with young children straight out of school striking for climate policy politics climate friendly politics the problem with demonstrations is that they are half the story the other half is what do you say when a BBC journalist shoves a microphone in the face of a fifteen-year and says okay so what do you think should happen okay you don't like what's going on you want you want politicians and and the adults who are behaving like children that's why the children have to behave like adults to do something about so what should we do then you need a plan this is where the green new deal comes in allow me to say that because we our generation has failed so spectacularly and now we are probably very close or beyond the point of no return from climate catastrophe we need urgent action the politicians have a tendency to adopt the terms in order to deny the substance look at the European Union they appointed mr. France Timmerman as the Commissioner in charge of the green you till now the European Union has a green new deal but there's no money involved with that and they put me settlements in charge mr. team elements is the archbishop of austerity he was the one who invented austerity as a response to the financial crisis of 2008 so of course there will be no money for that's why we must prevent or you must prevent the youngsters you must prevent the usurpation of your slogans in order to deny the substance of your demands you must demand for your generation the next generation a minimum of 5% of total income of GDP even to be spent in electrification and in the green transition minimum should be a 8 percent worldwide if you look at the political parties except labour recently you see that they're costing is no more than 0.4 0.5 percent of GDP in other words too little too late - irrelevant - offensive the so the big question is where's the money coming from for the green new deal and I think the answer is public finance that does not mean government's taxing you but you've got to realise that there's a fantastic opportunity at the moment because if you look at the City of London as we speak in the City of London there is one trillion pounds maybe zero point nine trillion pounds you know 900 billion pounds which is doing nothing it's money which is sloshing around in the financial accounts of the of the city doing damage because by moving around going around and round and round you know paper pushing it bits up share prices and house prices in the South of England but that's not invested right that simply price price at an asset inflation and no one is motivated enough is optimistic enough to take this money no merchant banker no a large corporation and put it into to press it into the uses that we need like creating good quality jobs in the green energy sector for instance right so what you need is a kind of sponge a public sponge something like a public investment bank that issues bonds the bonds soak up this liquidity and then the money's being used on the banking principles on the on the principle that investment must return a certain degree of profit 2% 3% 4% that's legitimate while building up electrification you know the Chinese are doing it in the last year I mentioned that yesterday in this room in the last year only China has produced from new sources of renewable energy electricity equaling the total kilowatts produced by France and Germany it's a huge amount of additional electricity from new renewables in one country why because they have a plan in Europe we don't have a plan in Europe we have anything but a plan so this is what the extinction Rebellion people youngsters you Cambridge students you should be pushing towards pushing into the service pressing into the service of the next generation liquidity which is there we're not talking about taxation we're talking about and this was the original New Deal that's why the New Deal has to be revived in spirit Roosevelt in the midst of the Great Depression noticed though there was excess liquidity because the rich always have money it's just that during the depression during a deflationary period they are too scared to invest it because they think that the hoi polloi the riffraff out there won't be able to afford the goods and service that will be produced if they invest so they don't invest so the money accumulates and what did rosewood do he used US Treasury bills equivalent bonds in order to soak up that liquidly and create work program and there isn't why the United States in 1932 1933 94 34 did not follow Europe down the road to fascism and you know militant xenophobia it's precisely that we should put this to use regarding this generations needs yeah and I think definitely the greeny do is such a such a sort of cross generational thing I think at this point like you're saying stressing the stressing the participation of the youth but also I mean having figures like you heading it up and and speaking about it it's so important well actually figures like you you folks because you know we are a failed generation we are now living our last days and we have a chance to empower you to take over you should not be giving us a vote of confidence we have to give you a vote of confidence so they do take over we're gone we're finished okay my last question the moderator part because I know that everyone will want to ask questions his about sort of your career in politics obviously in sense that you have been involved in economics and politics I think both as an academic and also in as the Greek Minister finance for example and I think that brings use of breadth of experience and obviously is the Greek Minister of Finance you had to negotiate with the troika it's my question for you is how do you think the experience of negotiations sort of colored your political perspectives and your sort of academic perspectives moving forward from that we could have this conversation for many hours but allow me to be very succinct firstly when I was in those rooms with some of the most powerful politicians and bureaucrats in the world I reminisce the days of the Academy because in a university setting the beauty of it is that as an academic as a student what you do is you put forward hypotheses in a tutorial in a seminal context and the job of your tutor of your fellow students of your fellow academics is to take it apart - yeah to take it to pieces to disprove your hypothesis because this is what we do to one another this is how knowledge progresses by with standing the test of your colleagues friendly assault and what you what you need to do to have is an openness to the criticism of others and the readiness to change your mind if you don't have that openness and that readiness you're a useless academic you're a useless scholar but just for a moment imagine that you move from like I did from this setting to let's say a television volume yeah BBC question time and let's say that during BBC question time which I had the privilege to be part of a number of times you know one of your co-panelists comes up with a very powerful argument something you think gosh they're right I'm wrong if you're representing the Conservative Party or the Labour Party of the Lib Dems whoever and you say this on air you're fired immediately gone so effectively politics is predicated upon a closed mind so this is the first response you know what was I thinking of when I was in there I was thinking you know my best arguments I really cannot do anything to shift these people because if they do get shifted by my argument they will lose their job and that is a very asphyxiating feeling to have and the second one was I was impressed by the mediocrity of the technocrats because when that was in one thing people say to me what is it that you found unexpected I expected that when I I would move into a discussion with the top technocrat of the International Monetary Fund yeah whose job was to discuss with me debt restructuring v80 you know technical things I was expecting to encounter peregrines of technical prowess if they were my students I would have failed them in the first semester of the first year whoa well moved from that to the audience Q&A Thank You that point about whose minds actually the interesting I've never thought about of that I got like that at all but yes everyone in the audience Stephanie has a lot of questions to ask you so I'm going to open to audience questions the order that I'm taking people it's woman first them and so who wants to start start with at the front you need you need the micro because I've thoroughly enjoyed your book having my daughter about economy so I really wish you asked what made you to switch her focus from studying economics as an economist to politics and would you give the same advice to your daughter thank you well firstly I would never advise my daughter to do anything because if I did advise it to do something which I thought you should do she would never do it right it is a guarantee secondly well why did I go into politics because of the intense suffering of people around us I never intended to go into politics you know I was fifty something it had never occurred to me it was to allow me to cut to the chase the bankruptcy of the Greek state the Greek banks the Greek families and companies and in the middle of this bankruptcy looking at the oligarchy trying to remain staunchly in authority by pushing new debts upon the indebted as and using those debts for the oligarchy to reproduce its authority and I thought okay now being closed up in the wonderful rooms of a university and indulging my theoretical impulses it would be immoral to continue okay we have the next question from back there please wait for a mic before you start speaking we have the yellow vests in Cambridge village Jean have moved from France hi thank you very much um I just want to ask is Bernie Sanders still your preferred candidate on the current presidential race in the US is Bernie Sanders still your preferred candidate in the u.s. presidential race yes yes well can we let's keep it amongst ourselves but he still the person that combines sincerity clear vision and analysis and the capacity to speak to the heart of the dispossessed in the Midwest Elizabeth Warren is somebody I appreciate very much I don't think she's the capacity to speak to people between the two coasts and therefore I think that she would lose to Donald Trump and that would be a disaster I hope I'm wrong as I said I have the deepest respect for her and let's face it it was very Sanders that opened up the road for these all these wonderful women in the Democratic Party to rise up from Elizabeth Warren because Elizabeth Warren would not be a serious candidate now had Bernie Sanders not four years ago broken the mold of the Clinton ID conservative Pro world straight Democratic Party I will be very happy if Elizabeth Warren gets up and wins but I have to say to your question at this point in time Bernie still has my vote shall we have the proper um you've sent many times and you said it in your speech now that deflation breeds monsters and when you're talking about how the US didn't follow the path of Europe in the 30s that was part of the reason that they didn't employ these kind of deflationary economics and I remember very vividly in your book the weak suffer what they must you made that point in the term and Finance Ministry of former Nazi building and they didn't even get it been right so I just wonder what you think can be done to connect in people's minds between neoliberalism and austerity and the economic consequences and then the very real political consequences that follow from that the only way of getting to people that do not want to listen is by appealing to their self-interest remember Adam Smith saying in the wealth of nations that we never address others or should never address others by referring them to the common interest the common will our needs we must always speak to them about what's good for them and try to connect what's good for them with what's good for the many so in in Germany for interest because I do a lot of political work in Germany since 2015-2016 what works is to ask people who are have been voting for Angela Merkel and Christian Democrats and who are no longer supporting them and now have shifted to the right to the quasi fascist alternative route Iceland to say to them you see III believe that you should never treat this respectfully those that you disagree with even if they are turning towards fascism because they are not fascists they are victims of fascism if they've become lured by it and ask them why are you no longer supporting Angela Merkel thirdly why why are you turning again why do you hate the European Central Bank and the answer of course is that I have worked heart in their lives they put yeah ten twenty thirty thousand euros in the bank and now they're suffering negative interest rates and then to say after that okay now why do you think that interest rates are negative they say all because it's mario draghi that Italian who is pushing down interest rates in order to keep buying Italian bonds to save his his compatriots who should be ditched what kind of thing hang on a sec but in your country you've got a mountain of money which is not being invested and very the lowest level of investment relative to the liquidity of available now you believe in demand and supply don't you you know that if the supply of shoes is huge and the demand of shoes is low the price is going to fall right there all the believers liberal they say yes so when the demand for money is very low that's investment funding and the supply of money is huge what do you think is going to happen to the price of money which is the interest age when to fall but unlike the the price of shoes which is which when it falls it equilibrates supply demand when the interest rate goes out down it doesn't because investors you know freak out they think oh if the interstate has become negative means things are terrible so the invest even less so this is the reason right so the problem is look very low investment now the market is not so you engaged them it's very tough very difficult you will probably end up with egg on your face but you know democracy was never meant to be an easy game and the act of the the process of persuading is both intense retiring and highly satisfying on the one occasion in every ten or twenty when you succeed in getting through to people but you will only get through to them if you don't do a Hillary Clinton which is to call them deplorable because they are voting for people that are deplorable um should we go for out the back there hi there thank you for your talk I missed a very focus just parking yes you have backs it to one side for a minute and you mentioned some critters that criticisms of Boris's domestic policies can you speak up a bit oh yeah sorry yeah you mentioned some criticisms of Boris's domestic spending policies for example and not doing with braixen right now I'm wondering if we can now turn the scrutiny on to your friend Jeremy Corbyn and if that's possible in impartial ii and i was wondering what you think of his domestic economic policies and whether they could be sensible in any way or practicable well firstly the economic policy is belongs to another friend of mine john macdonald and I think that John has done a remarkable job in putting together a team over the last three years that has forged an economic policy manifesto that is highly sophisticated initially John McDonald was lumped together with you know the loonie left but even the financial times in the last six months every time they referred to John McDonald and the economic policy that he's come up with they do so with huge respect if you look at the public finance that is proposing if you look at the Dunstan investment bank that he's proposing I speak to bankers in the city of London and most of them say to me yeah well I don't like John McDonald he's a Marxist you know so-and-so but the proposal is good we need it in this country so in terms of the economic policies if you look at what he's effectively saying that you need to spend suddenly between 200 billion and 300 billion over the next two years so then Green transition you need to spend up now of course if you lump two hundred three hundred billion on to the taxpayer you've destroyed the taxpayer and you will never be able to get this money by taxing the rich because the rich are very adept at not being taxed they would find a way of getting out they are already out but he's not talking about using taxation on its own a tiny fraction of that will come to taxes most of it will come through public bonds and make people they say but hang on a second if you issue all these bonds effectively you're bidding up interest rates and you're going to cause inflation but not when you have 900 billion of idle cash in the City of London so I think and also another dimension which I find very interesting is this idea of taking 10% of shares of large companies and putting it into a social welfare fund a social wealth fund slight disagreement I have with both Jeremy and John on this is that they want the shares of a large British company the 10% to go into a fund that belongs to those who embrace so the employees share the dividends I think that that fund should belong to the whole of society and the dividends should be dispersed not just amongst the insiders the trade union is the employees but also amongst care workers people living on the street and so on and so forth because let's face it most capital today is socially produced it's no longer privately produced if you think about Google every time you search on a Google engine you add to the capital of Google but you're not getting any of the profits of Google right any of the dividends so increasingly as capital e socially baggy fractured society should get more and more shares giving it property rights over the returns to that capital you ask me however to be critical of Jeremy I'll make one criticism he knows that I've said this to him what this country needed from the leader of the Opposition a year ago six months ago when the dogs brakes it was wearing you folks down emotionally psychologically what he should have delivered is a speech of for Britain in which he would outline a vision for where Britain should be in the next 10 years its relationship with Europe a Labour Agenda for Europe independently of brexit because I keep saying that but whether you stay in the EU or leave the you you will be an important part and parcel of the European Union so Labour's should have a labor agenda for Europe and that speech had yeah speeches are important occasionally when they signal a major discontinuity in the historical trajectory I would have wanted him to go out there to be more of a leader than if that than a responder of developments in this docks brexit okay so I think we have time for one last question so shall we go forth there hi at the Business School we're teaching a course in financial technology to regulators from central banks and securities organisations in 30 different countries and I read in your book really interesting phrase which is that you don't think there's a single person who fully understands the financial sector so given that sort of limited capacity for people to understand all of the moving parts what would your message be for for the regulator's that they need to be radical tampering around the edges of the financial sector is simply never going to work because the finances are always going to have better technologies better lawyers and better accountants and the central bank ever will that's why you need we need I think as a society to reconsider the whole way in which private money is being minted because we all know don't we by I hope we do that 96% of money is produced generated by the financial sector not by central banks so you need to take control well we need as a society to take control of money making and one way of doing this for instance would be rather than having those capital ratios where the denominator is manipulated by models that the finance is paid and therefore they can do anything they want in the end if they can done if you can manipulate the denominator of a ratio you can make the ratio have any value you want right so kick this out and impose I would impose an 18% equity ratio upon every bank they would kick and scream and I will say that this is going to eat into their capacity to produce loans to the private sector rubbish all it will do is it eat into their capacity to produce magnificent profits for them during the upturn and huge losses during the downturn that then are being passed on to the taxpayer so be radical is my answer okay so thank you so much Janice obviously for coming it's Cambridge and for sharing your thoughts with us wasn't having me in a row

Channel: undefined

Views: 56,355

Rating: 4.7850547 out of 5

Keywords: Cambridge Union, Cambridge University, Yanis Varoufakis, Democracy in Europe Movement 2025

Id: kzx0XSXV0FQ

Length: 54min 10sec (3250 seconds)

Published: Sun Nov 10 2019

Reddit Comments

[u/LordHughRAdumbass]

Come on slaves! Be positive! Have hope! Otherwise you will put the whole plantation system at risk. And then where will your dinner come from? /s

Degrowth; Rewilding. It's the choice of a new generation. And it's cheap. It only costs the death of the Boomer generation and the silly dreams of the younger generations, Hint: your dreams were just transplants anyway.

[u/IceGoingSouth]

It didn’t use to be too late when Boomers were very young. How come this Climate Change thing keeps changing all of a sudden? And why are young people so worked up about it?