Yanis Varoufakis: Confessions of an Erratic Marxist in the Midst of a Repugnant Eurozone Crisis

Yves here. Even though Yanis Varoufakis has savaged the Trokia’s austerity policies that are driving Greece and other periphery countries into economic and social distress as well as fueling the rise of extreme right wing parties, some readers of this blog have criticized him for advocating reforms to pull the Eurozone out of its nosedive rather than call for a breakup. Here Varoufakis explains why he recommends a salvage operation.

By Yanis Varoufakis, a professor of economics at the University of Athens. Originally posted at his blog

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


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

1. Introduction: A radical confession

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

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

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

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

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

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

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

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

2. Why a Marxist?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3. Science-fiction Becomes Documentary

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

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

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

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

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

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

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

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

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

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

4. What has Marx Done for Us?

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

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

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

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

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

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

5. Why Erratic? Marx’s Two Unforgivable Errors

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

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

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

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

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

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

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

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

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

6. Mr Keynes’ Radical Idea

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

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

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

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

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

7. Mrs Thatcher’s Lesson for Today’s European Radicals

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

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

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

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

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

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

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

8. Conclusion: What Should Marxists Do?

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

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

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

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

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

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

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

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

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  1. Ben Johannson

    I agree. The left as a force for enduring, radical change has been vanquished and all the moaning which goes on against any reform because it enables the current paradigm is the product of fevered imaginings. I see a lot of that here, people incoherently babbling because a proposal which can help the suffering fails the Marxist purity test, that it would allow the continued commoditization of labor, etc.

    Those thinking this way are as much a part of the problem as the most incorrigible capitalist and are responsible for their own share of the evil afflicting the world.

    1. Malmo

      “I see a lot of that here, people incoherently babbling because a proposal which can help the suffering fails the Marxist purity test, that it would allow the continued commoditization of labor, etc”

      Marxist purity test? Are you channeling your inner MMT? Is that suppose to be meant as somehow a penetrating and thoughtful internecine insult to shut dissenters up?

      To clear matters up, the far right has nothing on many of those in the MMT camp whose moralizing, intolerant, blame the victim crypto leftism I find repugnant. I’ll let it be known to you and others of your ilk that I have no desire to replace the current regime and come under the yoke of technocratic MMT overlords, who, practically speaking, come off as pompous, productionist, academic control freaks who to my mind are no better than whom they seek to replace.

        1. Malmo

          I understand the descriptive part of MMT, and I have no quibble there. It’s the strident prescriptive parts proffered by some, not all, that I have more than a few quibbles with.

          1. from Mexico

            Well at least some of the MMTers, like Joe Firestone and Stephanie Kelton, are honest about that part of MMT which is prescriptive. They don’t try to pass off their moral and political imperatives as “science” like orthodox economists do. As Max L. Stackhouse puts it, economists,

            “however much they use what appear to be morally and spiritually sanitized formulas and complex economic models, bear within them values in a subtle mix with facts, moral presumptions in a complex blend with argument, matters of faith interwoven with matters of analysis. In fact, ethical, religoius, and specifically theological assumptions are not foreign to economic life or economic thought, but pervade them.”

            But in this interview, for instance, Stephanie Kelton fesses up to that part of MMT which is prescriptive:


            To me this is a sign of strength and honesty, not weakness, and I consider it to be far superior to the autistic brand of economics practiced by mainstream economists.

          2. John Zelnicker

            Then don’t make such sweeping indictments. Be more specific about your issues with MMT, at least like this post. Otherwise, it only reflects poorly on you when you are as strident as those you criticize.

      1. Ben Johannson

        That’s right. Anything going done to help the unfortunate is evil and you’ll hold your breath to keep that from happening, there’s a good fellow.

        1. Malmo

          If it was up to me I’d cut em a check, a living wage check from our fiats, with no strings attached. That’s evil? Would you rather them first do made up work that you deem needs done as a condition for the fiats?

    2. from Mexico

      How Marxists got lumped together with what Michael Hoexter calls neo-primitivists is beyond me. Hoexter expands on neo-primitivism in this post:


      Marx was as much of a Positivist, as John Gray explains, as any good captialist or Keynesian.

      Unfortunately, the words “Marxist” and “socialist” still carry quite a stigma. After all these years, McCarthy’s influence is still felt. The words still sting and serve as catch-all names for anything one deems unacceptable.

      But the valence goes both ways. And I suppose that Marxists, like MMTers, come in all stripes, and try to place the MMT or Marxist imprimatur upon a wide range of moral and political agendas. And the adherents of these two schools are perhaps as much to blame for all the misunderstandings as anyone. Referring specifically to the Marxists, I like how Hannah Arendt put it in “Karl Marx and the tradition of Western political thought”:

      To be sure, Marxism…has done as much to hide and obliterate the actual teachings of Marx as it has to propagate them…. Through Marxism Marx himself has been praised or blamed for many things of which he was entirely innocent….

      [F]rom the very beginning positions pro and contra fell into the conventional lines of party politics, so that to his partisans, whoever spoke of Marx was deemed “progressive,” and whoever spoke against him “reactionary.”

      1. Malmo

        Hoexter’s piece was excellent. I remember thinking after I read it, however, that there isn’t a snowball’s chance in Hell of seeing it come to fruition here in the states, at least in my lifetime. Heck, we can’t even get an agreement on a basic budget, how much less such a monumental undertaking. I hate to be a pessimist, but our country is much too balkanized along political lines to have any realistic hope of Hoxter’s vision being implemented, even in small part..I’ll admit, as a dreaded neo-primitivist myself, that I have mixed feeling on exactly what the best living arrangement going forward would constitute, especially in light of what’s actually possible going forward. It seems to mean the world’s DNA centers around corruption, oppression and injustice on a massive scale. I have a hard time believing even greater in scope centralized government will work to the benefit of all us little people, at least the way Hoexter and other envision. It’s the same way I have trouble seeing how getting cozier with the EU, as Varoufakis desires, will in any way benefit the little people. Leopards don’t change their spots.

        1. Ben Johannson

          Getting people work will help them. Whining from the safety of the café as the part-time custodian cleaning up your crumbs struggles to pay his rent is less than useful so please, don’t pretend you care.

          1. Malmo

            Since you’re so interested in the welfare of the part-time custodian what kind of compensation do you think he deserves under your having him work more scheme for his daily life? Is he worth at least what Prof. Wray makes or his time less valuable?

        2. from Mexico

          When it comes to the knock-down drag-out going on between the neo-primitivists and the Positivists, I must admit that I am conflicted. The battle is much more heated here in Latin America than it is in the United States. Just look at Brazil. Look at the Zapatistas in Chiapas. Here in Latin America it takes the form of developmentalists on one side vs. environmentalists and the defenders of indigenous peoples on the other, with both camps dutifully draping themselves in the virtues of Marxism.

          Marxists have been faithful to their catechism — the demise of capitalism — for a long time: ever since the days of Marx. That’s one of the reasons I find Varoufakis’ claim to be a Marxist not to be very credible. How can a Marxist champion the salvation of capitalism? That’s tantamount to a black man championing the salvation of the KKK. Something ain’t adding up.

          As Cassiodorus points out below, the notion that it might be lights out for capitalism seems to be completely unacceptable to Varoufakis. Cassiodorus sums it up beautifully: “it isn’t the shape of the world demanded by ‘radical thinkers’ that needs fixing, but rather it’s the possibility of ‘restoring capitalism’ that needs probing. Can a ‘healthy capitalism’ be restored now, forty years into the neoliberal era?”

          Varoufakis does not acknowledge how capitalism has been saved in previous eras. And having failed to acknowledge that, he subsequently fails to see how those escape routes have now been closed off. One escape route was that identified by Rosa Luxemberg in the Accumulation of Capital (1913). As Benjamin Kunkel explains, she observed that “imperial expansion across space must accompany capital accumulation over time. Without the prising open of new markets in the colonies, she argued, metropolitan capitalism would be unable to dispose of its glut of commodities, and crises of overproduction doom the system.” David Harvey explored this line of thought further, and In Adam Smith in Beijing (2007) Giovanni Arrighi expanded on this concept of a spacial fix to an even greater extent. But here’s the rub: with practically the entire planet now industrialized and producing, where is capitalism’s overproduction to be disposed of? The spatial fix is no longer an option.

          In addition Kunkel identifies another complicating factor for capitalism:

          “In the recently published Ecological Rift: Capitalism’s War on the Earth, John Bellamy Foster and his Marxist co-authors refer to the identification by a group of scientists, including the leading American climatologist James Hansen, of nine ‘planetary boundaries’ that civilisation transgresses at its peril.4 Already three – concentrations of carbon in the atmosphere, loss of nitrogen from the soil and the extinction of other species – have been exceeded. These are impediments to endless capital accumulation that future crisis theories will have to reckon with.”

          Kunkel closes by taking a swipe at Marxism, noting that “the outlines of an ecologically stable and politically democratic future socialism remain…blurry. At the moment Marxism seems better prepared to interpret the world than change it.” But he believes Marxist theorists are more realistic in acknowledging the potential problems than capitalist theorists. “But the first achievement is at least due wider recognition, which with the next crisis, or subsequent spasm of the present one, it may begin to receive.”


          1. from Mexico

            Another example of the schism within the left was the recent decision by Ecuador’s president Rafael Correa to allow oil and gas development of the Ishpingo and Tambococha fields in the Yasuni National Park.

            The develomentalists won out, but the environmentalists and defenders of the indigenous people, who will be dispossessed of their traditional lands which they have inhabited for hundreds if not thousands of years, were not happy. The former environmental minister, Edgar Isch, criticized the government’s decision, reminding it that Ecuador “has already sacrificed to produce oil to be exported to foreign powers.” “This sacrifice implies environmental damage and the genocide of diverse indigenous peoples,” the ex-minister charged.


  2. The Dork of Cork

    Radical change………..always a dangerous game.
    The question is – for who are we changing ?
    Yanis wants a further centralization of power…..even after all that has happened over these past 4 or 5 centuries

    The will to power has destroyed Europe.
    Its time to rid us of central banks and give the money back to the people.

    Let us not make the mistakes of the previous global glut of 1913/14

  3. David Lentini

    But the defeated Left offered much the same as we have now—”A fundamentally anti-democratic, irrational cartel that has put Europe’s peoples on a path to misanthropy, conflict and permanent recession.” The difference is largely in the names of the structures, not their functions. The élite controlled the distribution of goods and services, took the best for themselves, and left everyone else to scrap for the remainder.

    Perhaps we should stop thinking about production and distribution first, since that ultimately leads to some sort of élite control. Why not start with designing an economic system that serve democracy and human dignity? Now, that would be radical.

    1. Banger

      We cannot design anything without the elites. I’m a little tired of all this talk about the power-elites as if there was a way of cutting them out of the game. Part of this problem, in the U.S. at any rate, is that most people are stuck in a high school civics idea of how power works. Here’s a clue: that model doesn’t work on the “street.” Power is real. You can have a beautiful election full of all kinds of high-minded promises but when you get to Washington you get to deal with people with both actual and metaphorical guns who will kill your career or you if you F with them. That’s reality. It’s reality on the criminal street which, when I knew it, was full of the underside of life–crooked cops, crooked pols, crooked DAs and so on–now there were honest people as well in the system but when push came to shove the people with least amount of power got screwed and power came only from the ability to help your friends and punish your enemies–as simple as that.

      Essentially, we have to convince the elites that the road to happiness for them and their families has to come from making the collective work better. The alternative is to stage an armed revolt and I see no one on the left recommending that–only on the right.

      1. Benjamin

        Has there ever been a politician anywhere that simply refused to play the game? And how did it work out for them? Serious question, not sarcasm. It seems to me that ultimately the power does lie with the voters. Achieving and staying in power these days depends on spending as much money as possible to manipulate the masses, but they are the ones with the voting power in the end.

        So…why not just go straight to them? Be honest. Especially in this age of the internet, it might actually work. Report to the people every time a scumbag lobbyist tries to bribe you, recount in detail everything you hear said in shady backroom deals. Your poltical colleagues and opponents will of course deny everything and claim slander. But ask anyone in the street, they aren’t stupid, they know how this shit actually works. Making yourself the enemy of politicians and lobbyists in order to make yourself the friend of the voters.

        Worth a shot at least.

        1. Banger

          Doesn’t work that way. The last major politician to attempt that sort of thing died in a mysterious plane crash–Paul Wellstone. Even without going to that extreme how is one pol going to go up against thousands or skilled operatives that will fight you with everything they have? Mr. Smith Goes to Washington is a beautiful movie because in offers a basic vision of politics in America in day that was, compared to today, relatively innocent. Still James Stewart was shown, clearly, to have emerged out of sheer random luck and an unearthly pluck.

          The info on corruption and so on is well-known–even if your pol could manage to speak to each individual voter would they really want to know? I say they probably would not want to face the reality of their situation. They prefer to find some coherent narrative they can cling to and are largely uninterested in the truth because it implies having to take action.

      2. Ben Johannson

        This is exactly correct. We do not have an issue of how to develop a different economic system, we have a problem of how to live without hierarchy. Until that problem is solved, and it’s a joke that some on the “left” think they know how to do it, you work within the constraints of the existing system.

        Honestly I have come to the conclusion that armchair revolutionaries want things to get really bad for the masses, in the hope their glorious revolt will finally happen. Mal-adjusted children with copies of Dan Kapital is all they are.

  4. John Zelnicker

    Interesting post, but where is the rest of it? Did you mean to cut it off just before the quote by Von Neumann? That forced me to go to the original to see his caustic words where I found that the original was about 8 times longer. I can understand it might be too long to be fully posted here, but you could have at least included the quote and an indication (with a link at the end) that there was a lot more to it.
    By the way, I really like the new site. Particularly that it loads very fast. My compliments to your staff.

      1. susan the other

        Probably for our purposes the brief first part was good enuf. The rest of it was beautifully written but was long and prosaic. I wonder why Marx didn’t just come out and say that labor was capital and capital was financialization. Marx could have written about dialectical financialism and predicted the evolultion of “capitalism” more accurately. If labor is capital and only in the process of labor does its capital become “money” then the problem is the way capital evolves. Marx called it exploitation – but it looks more like a failure of reality and language. No? The environment, resources and natural world are also capital but Marx sees only productivity and money. All economists translate capital into money. And we wonder why analysis goes nowhere. We have simply been brainwashed to think that money is capital. So Prof. Varoufakis wants to save the progressive world of capitalism. It probably will have to be created from scratch because it does not yet exist.

    1. Yves Smith Post author

      How totally embarrassing.

      There was some coding in Yanis’ post (a mere instruction to center the Neumann quote) that disappeared the rest of the post. It was there in the backstage, all of it. I didn’t check because normally the sort of operation I did to grab the post never did what happened. Lordie.

  5. Banger

    Yannis is a truly caring and honest intellectual who is will to search and discover and then search again. His stance is fundamentally compassionate. He is not an ideologue but a pragmatist–he saw the suffering that the financial crisis caused and sought to convince the elites to not fall for the seductions of the corporate oligarchs but to care about the people of Europe as much as care about the corporations. The effort of Yannis and other Euro-intellectuals has largely failed. The EU is on the path the U.S. has taken which is to run away from social democracy as much as possible and encourage the growth of the right to channel rage at the European situation in a divisive and perhaps destructive direction as has worked so well in the U.S.

    The time has come, Yannis, is telling us (or so I believe) to have a new vision. Are we going to try to reform capitalism which is currently at a stage where corporate power is taking over the state and leading us to a neo-fedual situation? Or are we going to do something much more difficult and that is to articulate a new vision based on the consent of the governed?

    I believe we can establish a new vision by getting away from our childish obsession with old ideologies and opening our minds to alternative possibilities by adopting, first of all, the attitude of Thich Nhat Hanh who called for “deep listening” after the 9/11 attacks instead of responding with violence. Ideological leftists who claim to speak for “the people” actually don’t listen to them or understand their basic needs and attitudes–rather, they believe the proletariat should do this or think that. Well, most of the people I know who are working class are religious, well-,meaning and often prejudiced, racist, gun-loving and so on–but not always–there is a vast array of opinions there that change depending on mood. That’s reality. What they don’t trust are leftist intellectuals who don’t make their vision clear to them in a way they understand, or to put in more plainly, these people know leftist intellectuals don’t listen to them. Rightist intellectuals who are, mainly, opportunists parrot back prejudices like Bill O’Reilly–but at least he listens!

    We have to calm down and listen to everyone, including the power-elite, and urge us all to initiate real dialogue. The only group that I see that seems open to dialogue and the idea of deep listening is the Zeitgeist movement which has gotten very little interest from the left whether progressive or radical–though, mind you, there are people associated with it I don’t agree with but I like the fact they take in many visions. The left needs to stop advocating for various policies and needs to start the process of going on a vision quest. Besides, advocating for policies, at this point in history, is pointless at least for central issues. In Washington, at least, everything is gummed up and there’s not chance of movement in any direction. Let’s listen carefully now–starting with each other rather than constantly jump to conclusions and attack people like me who don’t like left-wing orthodoxy.

    Yannis is pointing the way–let’s encourage him to expand on this essay.

  6. diptherio

    Actually, what Von Neumann said about Oppenheimer was not, “original post for bibliography,” but rather that he “profess[ed] guilt to claim credit for the sin.” ;)

    Where is the rest, btw? It seems like this is just an intro…am I the only one who feels this way?

    1. auskalo

      You have to click on the blue “his blog” after Yves intro, diptherio.
      Here appears just half intro.

  7. don

    The left is too weak to overthrow capitalism (granted), but it is strong enough to save it (if in coalition with the right)? A strange world indeed.

    1. Cassiodorus

      In assessing the strength of the “left” in Europe it’s no doubt necessary to assess the strength of that portion of the “left” that is merely a front for neoliberalism. That portion, I suppose, is what makes the “left” appear so weak in Europe — never mind the US, in which nearly the whole of the “left” is a front for neoliberalism.

  8. The Dork of Cork

    The central banks are at the heart of the problem
    They see the local short range economy of commerce as a obstacle to their centralizing vortex of global control
    They therefore remove money from the local economy and create these strange exporting crazy counties such as Ireland & Germany with huge hidden losses (socialized throughout Europe) coming down the tracks expressed via wage deflation and goods inflation as depreciation of the surplus goods they produce become manifest on the books.
    Irelands ability to export its wealth and get junk goods it cannot consume may be reaching a limit or maybe not – nevertheless it is creating massive human turmoil.


    As I posted earlier Irelands electrical production figures are showing some very large YoY declines these past few months.
    Meanwhile the car traffic going into major towns such as Dublin & Cork is increasing.
    You see we must consume German tank …sorry car production……..

    How much longer can the war economy sustain itself through core capital Cannibalism ?
    One never knows……….this disaster may have another 20 years in it or it may end tomorrow….

  9. from Mexico

    Yanis Varoufakis is a neoliberal in Marxist drag.

    Let’s take his first rattle out of the box, for instance:

    ”Europe is experiencing a slump that differs substantially from a ‘normal’ capitalist recession, of the type that is overcome through a wage squeeze which helps restore profitability.”

    But since when has a “wage squeeze,” in the long run at least, ever “restored profitability”? And why is Varoufakis proseltyzing this neoliberal fiction? The reality is that what Varoufakis gives us is a deformed amputee of Marxism, touting the Marxist conviction that capitalist crises are crises of profitability, while surgically removing the part about the internal contradictions of capitalism which invariably lead to these crises of profitability.

    Since the late 1970s workers in the West have been subjected to 30+ years of serial “wage squeezes.” From the United States to Germany to Mexico (remember that Mexico, because of NAFTA, is now at least nominally part of North America) workers have been buffeted with an unending barrage of these “wage squeezes.” Labor, indeed, has paid an inordinate price in the crusade to “resotre profitability” to the hallowed owners of capital. And what have the fruits of all these wage squeezes been?

    But the story doesn’t begin with the wage squeezes. It begins with profit squeezes, and Varoufakis’s implication that profit squeezes are caused by runaway wages, and thus can be cured by “wage squeezes.” As Benjamin Kunkel explains, this creed

    ”enjoyed a heyday of plausibility in the early 1970s, a bygone era of labour militancy, near full employment and high inflation, allegedly spurred by the so-called wage-price spiral. Robert Brenner disputes, however, that a profit squeeze imposed by labour truly afflicted the early 1970s, and doubts whether, given the superior mobility of capital over labour, such a profit squeeze could ever take hold over the long run; capital would simply relocate to more docile markets. At any rate, what Brenner calls the Full Employment Profit Squeeze thesis hardly appears to caption the current picture of high unemployment and stagnant real wages across the developed world. (Robert Brenner, Economics of Global Turbulence, 2006).

    –BENJAMIN KUNKEL, “How Much Is Too Much?”

    But moving beyond Varoufakis’s dubious empirical claims we must ask: Is his assertion that profit squeezes can be cured with wage squeezes part of Marxist theory? Or is this from David Harvey, which speaks to the internal contradictions inherent in capitalism, more in line with Marxist analysis?

    ” Labour availability is no problem now for capital, and it has not been for the last 25 years. But disempowered labour means low wages, and impoverished workers do not constitute a vibrant market. Persistent wage repression therefore poses the problem of lack of demand for the expanding output of capitalist corporations. One barrier to capital accumulation – the labour question – is overcome at the expense of creating another – lack of a market.”

    –DAVID HARVEY, The Enigma of Capital

      1. ThroxxOfVron

        “Yanis Varoufakis is a neoliberal in Marxist drag.

        I would assert that Marx was in fact what would presently be identified as a neo-liberal.
        Marxism is merely an alternative path to ideological feudalism, repression and subjugation of the individual.
        Marxism is an ideological framework for oligarchy by bureaucracy purportedly in lieu of that of an institutionalized aristocracy.
        Marxism is crony capitalism from the perspective of the left.
        The state TERROR engendered by Robespierre and his Cronies ‘representing the French People’ during the totalitarian insanity of the French Revolution was indisputable proof.

        1. from Mexico

          Well that certainly is a popular line of thought, especially on the right side of the political spectrum.

          I’ll use a quote from Hannah Arendt to knock that ball back:

          “The fact that one form of totalitarian domination uses, and apparently developed directly from, Marxism, is of course the most formidable charge ever raised against Marx….

          It has become fashionable during the last few years to assume an unbroken line between Marx, Lenin, and Stalin, thereby accusing Marx of being the father of totalitarian domination…. I think it can be shown that the line from Aristotle to Marx shows both fewer and far less devisive breaks than the line from Marx to Stalin.

          The serious aspect of this situation, therefore, does not lie in the ease with which Marx can be slandered and his teachings, as well as his problems, misrepresented. The latter is of course bad enough, since, as we shall see, Marx was the first to discern certain problems arising from the Industrial Revolution, the distortion of which means at once the loss of an important source, and possibly help, in dealing with real predicaments that ever more urgently continue to confront us.”

          –HANNAH ARENDT, “Karl Marx and the tradition of Western political thought”

    1. Banger

      I think we are down to the issue alluded to by you here of disempowered labor. Just who disempowered labor? Labor has to share some of the responsibility for this. In the U.S. some labor leaders sold out personally to the bosses, others used their unions as sources of personal funds and other leaders had to deal with racial issues, generational issues and so on within the rank and file. Labor does not exist apart from the culture and cultural values they live in.

      I think you mischaracterize Yannis who I believe is genuinely trying to think outside the box here. This crisis is very different form other capitalist crises for a whole number of reason chief of which is that the world we live in is utterly unlike any other historical period man has ever known even more dramatically than previous capitalist economies. To put is simplistically, the element of ubiquitous popular culture displacing communities and even families has never been known. Strikes, during the age of labor militancy were successful because men, women and children all participated in a struggle at great risk to their well-being and even their lives. Today no labor leader or rank and file member want to put his or her life on the line for a common cause.

      Try listening to Yannis with more compassion–I think he may have been misguided, as he admits, in thinking there was a possibility of reform within the EU bureaucracy–clearly that is out of the question at this point unless things change pretty dramatically. But he’s searching and your enforcement of Marxist purity is a waste of time because only a narrow few are listening to that station–you and I will agree that Marxism in its fullness ought to be a key part of any discussion of our political economy and we all ought to try to bring some of these ideas into more general circulation–but the issue is, in my view, beyond even modern interpretations of Marxism and enters the real of philosophy and metaphysics.

      1. Malmo

        This is a sellout, plain and simple, and supremely naive to boot:

        “This paper argues that, however unappetising the latter proposition may sound in the ears of the radical thinker, it is the Left’s historical duty, at this particular juncture, to stabilise capitalism; to save European capitalism from itself and from the inane handlers of the Eurozone’s inevitable crisis”….”In short, the paper suggests that radicals should, in the context of Europe’s unfolding calamity, work toward minimising the human toil, reinforcing Europe’s public institutions and, therefore, buying time and space in which to develop a genuinely humanist alternative.”.

        1. JEHR

          This essay reveals a man working out his humane response to a crisis using everything he has learned and experienced and is not to be dismissed so lightly.

            1. ThroxxOfVron

              “At best it reveals Stockholm Syndrome.”

              A red cap is perversely swapped for the more modern looking hoody and All are implored to give polite attention to this apologist for expropriationists and gulag managers.
              Theft and violence cannot be transformed into charity and peace via fraudulent contrition or gymnastics of linguistic revisionism.

      1. ThroxxOfVron

        Call it what is was/is: a manufactured crisis, manufactured by crony capitalists and government bureaucrats. Fraud has nothing to do with capitalism. Government capture/regulatory capture are de-facto predicates for pursuit of ( neo-)feudalist policies.
        People that sell their children into slavery are not capitalists.
        People that rob their neighbors or install cartels to tax them are not public servants.
        Call feudalist and rentier schemes, criminal activities and thefts; -what they are.
        The ideological basis for an expropriation or violence cannot alter the nature of those acts no matter the language employed in attempts to obscure or excuse the perpetrators of those acts.

        The use of force to achieve an objective defines the achievement of that objective.

  10. JEHR

    This essay is a must-read!

    John Zelnicker, click on “his blog” link to read the rest. I hope you will take the time to read it all.

    In reference to Yanis’s writing, yes, indeed, Marx would recognize that the pensions which were collectively acquired by workers’ labour have been privately seized through fraudulent means by the elite, mostly bankers, to be used for their own hoarding purposes. Those things of value that the workers have produced collectively have been “stolen” by the elite.

    And the private seizure of public goods and property will continue apace until everyone decides not to take part in the game anymore: by not participating in the stock market, by not buying anything from large corporations with bad reputations, by refusing to be indebted to banks, by not using credit cards, by not using the TBTF banks, by not flying for pleasure, etc. Even if we collectively refused to deal with them for only one year, there would be an effect. The actions will cost us but would cost them more!

    1. The Dork of Cork

      The banks seized the state 4-500 years ago .
      They can tax you.
      In Ireland there is a plan to charge you a TV licence even if you don’t have a TV.
      Its the way of the world today.

  11. Cassiodorus

    Yanis says:

    “This paper argues that, however unappetising the latter proposition may sound in the ears of the radical thinker, it is the Left’s historical duty, at this particular juncture, to stabilise capitalism; to save European capitalism from itself and from the inane handlers of the Eurozone’s inevitable crisis.”

    I will gladly renounce my right to speak here (and, as an American with only partial knowledge of the situation, that would be pretty easy) if only doing so would convince Yanis Varoufakis that it is not “the radical thinker” that needs to be addressed here, but rather anyone who can do anything about the situation in Europe. I presume most of Europe’s political actors can be convinced to agree that poverty is bad and that Greek poverty needs to be addressed through emergency measures. The real question at hand, then, is one of whether capitalism can be saved from itself. If the ruling elites of Europe are as thoroughly united as they appear to be in favor of austerity planning, then why does Yanis Varoufakis imagine that they will somehow do an about-face, given their economic motives for insisting on austerity?

    1. Cassiodorus

      In other words, it isn’t the shape of the world demanded by “radical thinkers” that needs fixing, but rather it’s the possibility of “restoring capitalism” that needs probing. Can a “healthy capitalism” be restored now, forty years into the neoliberal era? I don’t see why.

  12. ThroxxOfVron

    The Left destroyed itself with neo-liberal neo-capitalist welfare statism.
    It was simpler to tax corporate profits and distribute crumbs than restrain corporatism; and thus the corporations were elevated and their security became a requirement for bureaucratic political preservation.
    Cartelization was a false leftist panacea and led to policy conformity and inflexibility.
    IMHO, Marx is entirely mis-understood. Marx understood that statism was as much about capturing human capital as it was about controlling production. Central banking and central taxation regimes are merely political fig-leafs for state cartelization or financialization and are wholly indicative of established Oligarchy.
    Bureaucrats within the corporations -including those ensconced within the hierarchies of city-states and nations; place far greater value on promoting and protecting their own ideological and financial imperatives than that of their so-called constituents and customers…

  13. steelhead23

    My first comment is that the Yanis’ essay is substantially truncated here. Second, anyone who is willing publicly to state: “Ich bin ein Marxist”, has my admiration, an economist who does so, doubly so. You see, long after the death of the Soviet Bear, Marxism, outside of academia, is a social stigma, functionally similar to pedophilia. I for one, would take the man to be sincere – or a pathological masochist. He is sure to be shunned by the entire neoliberal establishment. His stock has dropped considerably.

    Are we incapable of entertaining the central question – is regulated capitalism a better stepping stone to socialism than severe crisis? It is my view that in most crises, the powerful become more powerful and this was certainly the case post 2007-8. Hence fomenting crisis so that a beautiful Phoenix could arise from the ashes is mostly a fairy tale. On the other hand, constraining capitalistic “animal spirits” might alleviate human suffering, engendering support of more “vile” government regulation. At the risk of hijacking this thread, there is something I would like from Mexico to consider: The public broadly distrusts governments – with good reason. Governments, even free, open governments, lie to us, support our enemies (global finance) and increasingly threaten us with violence. The right wing has, for decades, presented a consistent ideological rumble that not only cannot governments do anything as well as private industry, but also that government efforts to constrain capitalisms excesses (be it the environment, labor, or finance) is always and manifestly harmful to the economy and everyone’s well-being. I argue that successful regulation, successfully managing capitalism, would do more to dispel this lie than would careful adherence to ideological purity, spouted from ivory towers, while the disparity in power continues. To make a football analogy – we need first downs before we can hope to make a touchdown.

    1. Cassiodorus

      Is it possible to avoid severe crisis at this point? Or is the debate in this blog about the sort of fantasy world “radical thinkers” should promote, without any reference to what is actually possible?

      1. steelhead23

        I believe that the Pecora Commission radically modified capitalism as it was then practiced. What is it, exactly, the precludes a modern Pecora? I am not disagreeing with you – as Dodd Frank shows – real change, while money rules the political process, is damned near impossible. If we could change that…..

        1. Cassiodorus

          For the past four decades the global growth rate has been on the decline while governments have been engineering Ponzi schemes to prop up the profit rate for their favorite corporations. What precisely does the Pecora Commission do to change this reality?

    2. JTFaraday

      “He is sure to be shunned by the entire neoliberal establishment. His stock has dropped considerably.”

      Well, I don’t know. Back in 2011 Nouriel Roubini told the WSJ that Marx was right and capitalism is destroying itself:


      That said, I don’t see anything noticeably productive happening for another generation almost– I don’t care what label anyone wants to put on it– but that’s my guess.

      I also haven’t ruled out the possibility that we’re a lost cause, although I prefer not to make that assumption.

  14. ThroxxOfVron

    “Besides having captured the basic drama of capitalist dynamics (see the previous section), Marx has given me the tools with which to become immune to the toxic propaganda of neoliberal enemies of genuine freedom and rationality. For example, the idea that wealth is privately produced and then appropriated by a quasi-illegitimate state, through taxation, is easy to succumb to if one has not been exposed first to Marx’s startlingly poignant argument that precisely the opposite applies: wealth is collectively produced and then privately appropriated through social relations of production and property rights that rely, for their reproduction, almost exclusively on false consciousness. ”

    This is utter rubbish, fundamentally ideologically criminal; and most easily provable so:
    IF I till a field, tend it, and harvest it: it is MY ‘production’ and not that of any Other Person let alone some ideologically obtuse concept of Collectivist activity expropriated by Myself post-production. I maintain that Other Individuals that did not labor have no right to the harvest whether they maintain so as individuals or as a mob aka state.

    1. steelhead23

      Bravo for you. However, is not your ownership of said land a socially-created abstraction? I would entirely agree with you that the fruits of your labors are yours – but is the fraction of your labor extracted via the marketplace (should you receive $5 per hundredweight for your potatoes, or 50 cents?) a theft of your labor, or is it only government taxation that is theft?

      1. ThroxxOfVron

        Must I own the land to have a right to till or forage to survive?
        How many fishermen -or corporations with fishing-boats- claim to own the sea?

        I would posit that fishermen should be as liable for taxation on where they cast as do I if I till under a reasoned and fair taxation regime. -That is of course IF One is inclined to commit that taxation regimes can be reasoned and fair.
        Maybe fishermen should be required to pay as do farmers.
        Maybe farmers should be exempted as are fishermen…

        Resistance against expropriation of the fruits of my labour should neither relegate Me to starvation or to incarceration. I maintain that I have the right to produce in some form to sustain my bare existence without molestation or taxation.

        More interesting to consider the circumstances and responsibilities engendered in land privatization/ownership and stewardship.

        White flight is a term bandied about to discuss the hollowed-out shell of abandoned ( post-industrial ? ) Detroit…
        Are ‘Owners’ only to blame or where wages and benefits compensation also in fact a partial extraction of value of those now abandoned industrial sites?
        How did the Industrialist and Employee ‘Owners’ of property in Detroit escape with ‘profits’ and leave behind superfund sites requiring mediation to be safe for uses beyond those previous uses that resulted in the wealth that was extracted and run away with? Maybe People should only be allowed to utilize or own resources that do not divest, destroy and pollute the property. i posit that unrestricted pollution as a by-product of resource extraction and/or flawed and unsustainable industrial economic models is a far larger problem than sustainable subsistence maintenance.
        The industrial era of Detroit was not nearly as profitable as revisionists maintain: the costs were left behind to be remediated by Other People that had no share in the profits extracted. Many locations are simply not fit for subsistence regimes due to contamination and pollution.
        BOTH the Corporate ‘Owners’ aka ‘Capital’ and ‘Labor’ left ruins unfit for habitation.
        BOTH have robbed those that would come after them seeking simple sustainable existences outside of the corporate/industrial construct…

  15. William Neil

    Well, this was just fascinating reading. Here’s the problem facing both Europe and the US, as I see it, and in the spirit of what Yanis is trying to pull off. The governing coalition in both places are Center -Right, and I have written at some length (“The High Ground: Gettysburg, 1863; “What Then Must We Do, 2013”) that the functioning of the US Congress, our government is as close to a stalemate or worse as the 1850’s. Thus, even though the Democratic Center shares little with the Right on social policies, they share a neoliberal core enough in economics to keep the gears of government turning however slowly. But the dynamic has been when the Center is pressed by the tactical audacity of the Right, we only come out of recurring “fiscal” crises – as in August and just now – with the center sacrificing by moving to the Right – ending unemployment benefits. Thus, if what Yanis is driving at – that to stabilze the system at risk here and in Europe does require some type of profound Keynesian stimulus of fuller employment through public works combined in the US with raising the minimum wage (will we even get to $10.00 per hour in the US and could that get through the house – public job creation ala New Deal WPA/CCC is like escaping the matrix – unthinkable to both Right and Center…)…so how is non-Utopian left pressure going to save the system enough under the specifics I am putting out…not far from Krugman’s laments and proposals…but he has dropped public works….

    The dilemmas I’m outlining here, the failure to get even serious traction for an updated save capitalism new New Deal have thrown a part of the left into a strategic and tactical retreat from the normal policy politics….which is why I spent considerable time reviewing Gar Alperovitz’s “What then must we do?’ which I noticed got some recent coverage here at NC which I didn’t have a chance to respond to…Does Gar A’s long march, under the radar screen to building new co-operative institutions represent a genuine path or an escape from building the pressure on that Center-Right stalemate to move closer to creating the missing demand that Krugman, Dean Baker and so many others call for….? I don’t try to resolve this question in my review, although I suppose it adds up to my sense that Gar A. thinks what Yanis has described is so bleak for the courses of normal left electoral politics that we have to just go and build the new institutions that will get us to that happy place between capitalism and socialism – which I chide him for evading the term “social democracy” – which Yanis also calls a failure…in no uncertain terms…but then what does he call the creation of greater demand and jobs that he surely implies even as he does not name it in this essay…

    I don’t know about the rest of the NC readership, but we are starting to see some movement on higher wages, with the cry of “long live the Pope” even breaking forth from secular leftists….so these are the tensions and my take is that those who intellectually and, importantly, emotionally, see no hope of budging the center-right, the dominant neoliberalism (with Hillary threatening a continuation of Carter, Clinton I and Obama), they will go and work on their co-ops and time share banking and so forth…but the urgency of the needs of 28 million Americans lucky enough to have jobs but working for $9.89 per hour or less implies an urgency that pulls me back to Yanis’ directions, if I have understood him correctly. The fascinating thing about Professor Alperovitz’s proposals is that they are more radical than the Keynsanians, but deliberately shy away from creative confrontations to bring pressure for change on existing institutions…see my review for how I think the Right will react…


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