The Brooklyn Rail

APRIL 2020

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APRIL 2020 Issue

Talking to My Sons about Varoufakis—and the Economy

Yanis Varoufakis
Talking to My Daughter About the Economy
(FSG, 2018)

In spite of intensive efforts by the owners of large corporations, financial institutions, and the media to maintain the power relationships of the status quo; we are experiencing a sea change in the attitude of citizens in the United States about capitalism and socialism. During this Presidential election year, we see in public discourse more and more people asking what kind of society we want to live in going forward, and what is the role of government in the development of that society. The disenchantment with capitalism and its inherent inequalities of wealth and power is beginning to overtake the fear of a socialist alternative.

Yanis Varoufakis’s book, Talking to My Daughter About the Economy: or, How Capitalism Works—and How It Fails, is a significant contribution to that discussion. It is a book he wrote in nine days in 2013 while vacationing in his home on Aegina, a Saronic island in Greece. Disgusted with the technical jargon of economists, the ups and downs of the economy, and “its forces [that] make a mockery of our democracies”; his purpose was to explain the functioning of the capitalist economy to his daughter in a logical common sense, critical approach and pose the possibility of making the world a better place. He is successful in this, and it is worth reading and discussing for all of us whether in agreement or disagreement with the book in its entirety. It has also prompted me to consider what I would like to say to my sons and daughters regarding both the book and the state of the world we live in today.

Varoufakis is intimately familiar with the workings of the international economy. He was a member of the progressive Greek party Syriza, served as Minister of Finance in 2015, and currently sits in the Greek parliament. Syriza was widely criticized earlier this decade for compromising its anti-austerity platform and capitulating to the interests of German financial institutions and European oligarchs. In 2018, along with Bernie Sanders, Varoufakis was a founder of the Progressive International, a movement to democratize political institutions internationally and combat the austerity programs imposed on nation-states by the World Bank and International Monetary Fund.

There is much to appreciate in Varoufakis’s book. His admirable accomplishment has been to demystify, in non-technical language, the concepts and ideological justifications of a “free market” economy. Throughout the book he uses cultural references, classical and contemporary (Faustus and Mephistopheles, Scrooge, Oedipus Rex, Frankenstein, Star Wars, and the Matrix), to create metaphors and reference points for deeper understandings of our current environment. The concepts of debt and profit, exchange and markets, finance and Bitcoin; the role of technology; and ultimately democracy itself are all presented in a coherent manner to walk us through his explanation of the capitalist economy.

One bone to pick from my reading of the book is Varoufakis’s tendency to universalize these concepts and social relationships. Capitalism is a specific mode of production rooted in modern times with a dynamic that is specific to its functioning. It is a system that has been justified by its defenders, and largely accepted by the public, as the natural order of things when in fact, understandings of “human nature” have varied throughout history and have been used to justify relationships of domination and oppression be it antiquity, feudal times, or modern society. The concept of debt, for example, which has become fundamental in our current economy, does not serve the same purpose today as it did in feudal times. Super imposing modernity onto history does not make for an adequate understanding of how we got where we are today. Historical analogies may be useful, but they do not allow an accurate understanding of how society today is significantly different in the functioning of its inequalities. Today’s supremacy of finance capital with its concomitant expansive debt and focus on short-term returns has affected the mode of production in ways that are not comparable to previous eras.

Also, in spite of his critique of the economy, the threat that capitalism as a social system poses to the well-being of humanity and the sustainability of our planet is significantly understated by Varoufakis. The giant companies of the United States, Western Europe, Japan, China, and the Russian oligarchs have monopolized production and distribution worldwide and made the capitalists of other countries subservient. In a state of abundance, executives and high-level employees appropriate an increasingly greater share of profits (will be outlined below) while more than 800 million people (one in nine persons in the world), 150 million of whom are children, suffer from malnourishment and hunger. This number has been increasing in recent years.1

As has been trumpeted in the last Presidential campaigns, inequality is rising. The 400 richest people in the United States now own more than 150 million people here. The top 0.1 percent own more than the bottom 80 percent. The top 10percent own more than twice the amount of the bottom 90 percent (Wolff, NYU. Zucman, UC Berkeley). Since 1980, the richest 0.1 percent of the world’s population have increased their combined wealth by as much as the poorest 50 percent or 3.8 billion people. (World Inequality Report)

There has been little to no discourse in public conversation nor, more significantly, in public education about how wealth in society is produced in reality. The fiction that somehow the rich deserve their wealth is a widely held myth perpetuated incessantly by the rich themselves and their corporate media sponsors. In the recent Democratic presidential debate, in reference to his $60 billion wealth, Michael Bloomberg declared indignantly, “I worked very hard for it.” Bernie Sanders’s retort is relevant: “It wasn't you who made all that money. Maybe your workers played some role in that as well.” Wealth in society is produced through the combined exploitation (utilization) of workers and nature, and the surplus produced is expropriated by the masters of industry and financial institutions through private ownership. The overwhelming numbers of workers who provide the services and goods that sustain the reproduction of society and its surplus have seen their share of total wealth fall in recent times. The fundamental driver of capitalist society is the constant effort to maximize profit and, for those who own the means of production, to appropriate the greatest share of wealth possible.

Capitalism, as a worldwide system, is neither good for people’s physical nor mental health. The ruling classes of nation-states continue to wage war on each other in their aggressive campaigns to secure natural resources and expand markets. The Watson Institute at Brown University estimates that 335,000 civilians have been killed in the wars in Afghanistan, Iraq, Syria, and Pakistan. Physicians for Social Responsibility have concluded the number killed to be over 1.3 million. In order to discredit alternative visions of society, US politicians and government officials consistently refer to leaders of movements against capitalism as murderous tyrants yet, since World War II, this government itself is responsible for more killings than any other body. We live in a country whose government is in a state of perpetual war. US military expenditures exceed $900 billion annually while people around the world go hungry.

As workers become marginalized from political decisions that impact their lives and alienated in tedious employment they find unsatisfying, mental instability has come to afflict a quarter of all humans according to the World Health Organization. Suicides (800,000, or 1 every 40 seconds) and homicides tend to rise with the development of capitalism and the breakdown of traditional mores and values in societies. (I won’t go on and on. It’s too scandalous, but you get the picture.)

Socialist scholars and activists who believed in the inevitability of progress, liberation, and the movement toward socialism have been wrong. Capitalism has proven historically to be flexible, innovative, and sustainable. While we, in the United States, have been unable to transcend capitalism, climate change has now brought on the possibility, most likely the necessity, of social transformation. We have already begun to see the devastating impact of Mother Nature on countries, yet the most developed industrial nations continue ravaging natural resources amidst big talk and little action. There are multiple reasons for the inaction. An entire economic system has been built on fossil fuels as the primary energy source. Changing the infrastructure will be a gargantuan task that is formidable, but one we must undertake in order to create a more sustainable economic order. But also, the emotional toll that continuing development and climate change will entail is too great for many of us to face without support. We have already seen documentation of the reduction of biodiversity, species extinction, deforestation, threats to coral reefs and aquatic life, the melting of ice caps and glaciers, the projected displacement of millions of people, and an existential threat to humanity itself. Who wants to think about that?

In my own work, I have great opportunities to travel and engage with educators in schools in various parts of the world. This past fall, in Poland, we were working on text-based thinking strategies with Jem Bendell’s “Deep Adaptation: A Map for Navigating Climate Tragedy” which addresses exactly this issue. I was previewing the Polish translation of a section of the text with my co-worker, Vicky, who said, “Gee, thanks. Do you want me to just kill myself now?” No. But we need, in a serious and realistic manner, to investigate the claims of environmentalists and discuss collectively what needs to be done; not to be driven by fear.

What to do? What are our individual and collective options for responding to our current predicament? Erich Fromm, in The Sane Society, writes:

Despots and ruling cliques can succeed in dominating and exploiting their fellow man, but they cannot prevent reactions to this human treatment…Whole nations, or social groups within them, can be subjugated and exploited for a long time, but they react…Again their reaction may create such independence and longing for freedom that a better society is built on their creative impulses. Which reaction occurs, depends on many factors: on economic and political ones, and on the spiritual climate in which people live.

One thread running through the book is the distinction Varoufakis makes between experiential value—those uniquely human experiences that bring us joy and satisfaction and have no inherent price attached—and exchange value—the worth of goods and services exchanged in a capitalist economy. Exchange values have come to dominate most aspects of our consciousness and lives. We increasingly measure ourselves according to our income and possessions rather than our own values and actions in solidarity and support for others; in Fromm’s words: To have or to be.

While recently participating in a small reading group, I came across Henri Lefebrve’s Critique of Everyday Life. The reading and discussions forced me to ask myself: where in my life, what understandings and actions am I engaged in, which are not dominated by capitalist ideology, and how do I maximize those? Some of the things that come to mind are: sitting, being mindful, talking and listening in the company of loved ones; tending the garden; preparing food and enjoying it with family and friends; sharing intimate moments with a partner; listening to or making music; playing a game or a sport that requires teamwork; staring at the art in the Whitney (Vida Americana) and wondering about the stylistic and cultural interdependence of artists in the Americas; etc. We all have our own. How can we maximize those things and minimize our consumption of frivolous commodities?

At a collective level: joining a political action or community group, installing solar panels and/or getting off the commercial grid in some way; voting for a candidate not indentured to the ruling class; working for, as Bernie would say, a political revolution. Bernie is right in that the rich and powerful are not going to give up their privilege without a fight. Nor will electoral politics bring about fundamental social change. As the poet, Audre Lorde, declared, “For the master's tools will never dismantle the master's house. They may allow us temporarily to beat him at his own game, but they will never enable us to bring about genuine change.” 

Real social change will require a movement, not an election. The majority of voters continue to support candidates who have enacted policies that disproportionately imprison poor people; re-inflate the financial bubble and protect the power of bankers and financiers; redline neighborhoods and segregate neighborhoods and schools; deport workers fleeing gangs and oppression in the Americas; conduct war on liberation movements that fight US-sponsored military dictatorships; and, contrary to Varoufakis’s technological optimism, develops a state security panopticon that traces our every move. The government uses its institutions to eliminate, by any means necessary, leaders who become powerful in their opposition to capitalism. At the ballot box, the electorate, immunized from birth by an indoctrination system that demonizes socialism as a viable alternative, historically votes against its own interests.

We now face a president who has no commitment to anything other than using government to augment his own wealth and power. He is an inveterate liar, psychologically not well, and exhibits classic characteristics of narcissism. As Fromm writes in The Sane Society,

For the narcissistically involved person, there is only one reality, that of his own processes, feelings, and needs. The world outside is not perceived objectively, i.e., as existing in its own terms, conditions and needs. The most extreme form of narcissism is to be seen in all forms of insanity. The insane person has lost contact with the world; he has withdrawn into himself; he cannot experience reality, either physical or human reality as it is, but only as formed and determined by his own inner processes…Narcissism is the opposite pole to objectivity, reason, and love.

There was documentation of Trump’s connections with the Russian mafia and substantial evidence of criminality—money laundering through his real estate transactions—for decades.2 Yet, this is the man the current political system offers as its top leader. We need to anticipate how to effectively respond when he refuses to leave office, no matter what the outcome of the impending election.

Our issue however, is not just the individual narcissistic personality. It is that this man holds the most powerful political position in the world. His future actions are not completely unpredictable. In spite of the surprise expressed by pundits at the trajectory the president has laid out for government, it is consistent with his words and the interests of the ruling class—roughly defined as the owners of the largest companies, banks and financial institutions, media corporations, and those who serve them ideologically. Trump is a tool of an extreme wing of the ruling class that has attracted white nationalists, small business owners, and big capital in classic fascist fashion. We do not experience the gross mass violence of that era, but who is willing to stand up to the domination that exists today?

The forms of government that have been operative for the ruling class across the globe through the last century have been military dictatorships, representative parliamentary democracies, religious states, fascist regimes and, in the case of the Soviet Union and Eastern Bloc nations—a state bureaucracy that monopolized political life and the economy. The ruling class in various countries is opportunistic according to local conditions and values. What they hold in common is the protection of their ability to maximize profit at the expense of the great majority of citizens. Class society means that there is a small segment of the population that controls the surplus in a country that is produced by workers. This occurs through the ages in different forms. What will distinguish socialism, if we are successful in moving forward, will be to base the production of goods and services on human needs rather than the maximization of profit, and the establishment of decentralized, democratic forms of political decision-making that prevent the recreation of an elite ruling class.

It has now become evident that both major parties in the United States are two wings of the eagle. Both parties, first and foremost, serve the interests of the capitalist class and are disconnected from the needs of the poor, the working class, and the majority of citizens in our country. The faith that was placed on the checks and balances of the constitution and representative democracy was naïve, and the institutions are being ripped asunder. The post-WWII notion of government needing to attend to human rights and the needs of its citizens has been replaced with the role of government as the protector of the capitalist marketplace and the elite. There is no going backward. We will need to find new forms of cooperative social and political organization if we want to improve our lives. This cannot be achieved through the identity politics that have become prevalent today, nor through single-issue campaigns. Both serve to factionalize when what is needed is greater understanding and unity of purpose.

Our task, however, in returning to the opening premise of this essay, is not just to explain the economy and notice the sea change of attitudes; but to unite our understandings with actions that can create a better, more just world for ourselves and our fellow citizens.

Reminiscent of the lesson from Paolo Coehlo’s The Alchemist, Varoufakis (spoiler alert) ends the book with a quote from T.S. Eliot:

We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.

I, however, do not want us to arrive where we started, my sons. The exploring is necessary, but we are going to have to find a new way forward. Our challenge is that we do not have a map—that we will make the road by walking.

Another world is possible.


  1. UN report on The State of Food Security and Nutrition in the World.
  2. Unger, House of Trump House of Putin. Enrich, Dark Towers


William Stroud

WILLIAM STROUD is an international educator and student of political economy.


The Brooklyn Rail

APRIL 2020

All Issues