As the Greek crisis is far from over, I decided to reach out to Yanis Varoufakis and get his perspective on the challenges of the past and present. Major issues hang in the balance today: the future of Europe in particular, and the question of capitalism in general. This was as much the case when Varoufakis left office, as it is right now.
White: There has been much debate on the European Left as to whether or not the change in Syriza’s policy represented a betrayal of the party’s original aims. Is that a fair characterisation? Do you think the leadership had any real choice?
Varoufakis: My resignation, on the night of the referendum, reflects a conviction that, indeed, there was a real choice – and my view that PM Tsipras made precisely the wrong one. Having said that, I am loath to use terms, like ‘betrayal’, which demonise the ‘other’ viewpoint. It is time the Left abandoned sectarian practices and language.
White: What do you think would have happened if the Greek government had refused to shift its position?
Varoufakis: We would have had an honourable, an economically viable, agreement – instead of a surrender that leads the continuation of the debt-deflationary spiral that deepens our insolvency and inflames further the on-going humanitarian crisis.
White: The majority of Greeks wanted to stay in the Euro, but they also wanted to end austerity. Despite Syriza’s pledge to do both do you think the two were irreconcilable?
Varoufakis: Quite the opposite. The only way Greece can remain in the Eurozone in the medium term is if we succeed in ending the continual decline of national income and the exodus of our best-educated young. And the only way this will happen is via a combination of a smart debt restructure, the end of self-defeating austerity, and deep reforms in public administration and the private sector.
White: The German sociologist Wolfgang Streeck has argued that the integration of Europe would almost inevitably take on a neoliberal form. In this view, the problems with the EU today represent the fundamental flaws of federalism. What do you make of this argument?
Varoufakis: The first part is correct. The second argument, about the ‘flaws of federalism’ is… flawed. Yes, it is true that the Eurozone’s design was based on a serious misunderstanding of how macro-economies function; a misunderstanding that was functional to the political agenda of those who wanted to shift power away from electorates and toward vested interests. However, the Eurozone’s design was not a species of federalism – it was, in fact, utterly antithetical to the principles of a democratic federation. It is the absence of a federal sovereignty that renders the Eurozone crisis-prone and politically toxic.
White: Would you welcome the breaking apart of the European institutions we currently have? Or do you think the EU should undergo reform instead?
Varoufakis: There is no doubt that they need to be reformed radically. But to create the political conditions for such reform first we need to re-deploy existing institutions in a manner that stabilises the four sub-crises afflicting Europe: public debt, banking, low investment and poverty.
White: Now the centre-right government in Portugal has been brought down by a new anti-austerity coalition led by the Socialist Party. How does this situation compare with Greece?
Varoufakis: The two countries, Greece and Portugal, are caught up in the same Eurozone-wide crisis and both have been subjected to dead-end policies that have been portrayed as success stories (with the Portuguese one bathed in more adulatory light). But there is a difference: Last January, in Greece, our government was elected with a clear mandate to oppose these dead-end policies. In Portugal this is not the case, as the Socialist Party seems determined, even before forming government, to avoid challenging the basic logic of a failed policy agenda.
White: Until recently it appeared that the centre-left was weak. Do you think the events in Portugal demonstrate hope for a resurgence in social democracy?
Varoufakis: No. Social democracy remains in tatters of its own making. It has yet to articulate a valid criticism of its contribution to the Eurozone’s terrible architecture as well as to the illogical manner in which Europe responded to the inevitable failures of that architecture.
White: We’ve seen China’s growth falter in recent months. Do you think we should anticipate another global economic crisis before the end of the decade?
Varoufakis: The crisis unleashed by the events of 2008 has not passed. For seven years now it has been migrating across the planet, gathering strength and transforming itself constantly. China’s slowdown is part of this process. The global economy is again in a dollar recession (i.e. global GDP shrunk this year in dollar terms by an amount not dissimilar to that observed in 2009). Europe may be the weak link but the whole global chain is under great stress due to the G20’s failure to deal with global imbalances and low aggregate investment. Nothing short of a new Bretton Woods can made a long lasting difference.
White: You’ve described yourself as an ‘erratic’ and libertarian Marxist. What does this mean in the 21st Century?
Varoufakis: Marx’s quarrel with capitalism was not that it was unjust but that it was inimical to human freedom and particularly inefficient at pressing our magnificent capacity for technological innovation into humanity’s service. He got capitalism right but failed to predict how his disciples, the Left, would exploit the power of his ideas to build political power structures that proved detrimental to human freedom and particularly inept at harnessing technological innovation. In the 21st Century, a blend of Marx’s freedom-based critique of capitalism and libertarian warnings against too much trust in bureaucracies seems to me a great weapon against the current political and economic dead-end. Decentralising technologies can help to make this ‘marriage’ work.
White: What have you been doing since you left office?
Varoufakis: Agitating for a democratic European Union…