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Razer: 'rock star' economist Yanis Varoufakis and the perils of U2

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Economists. They’re the new “rock stars”, apparently. And, no, this doesn’t mean you should expect to find a sex tape featuring Joe Stiglitz any time soon. If you want to see the Nobel laureate hot and live, watch him screw the policies and governance of the IMF.
By “screw”, I mean “interrogate by recourse to reason”. And by “rock star”, the press can only really mean “commanding audience of an unexpected size”. If you’ve heard or read Thomas Piketty, arguably the west’s most famous economist, you will know that equating him with, say, Tommy Lee makes about as much sense as equating capital with wealth. He may be a million-selling author, but, unless the term is now broadly used to mean “the application of questionable formulae over 600 barely readable pages”, he is not a rock star.
Paul Krugman, economics professor and op-ed writer with the New York Times, sold out the concert hall at the Opera House this year, but he’s really not a rock star. Robert Reich, economics professor and former US Secretary of Labor, may have starred in a well-regarded documentary, but he’s really not a rock star. Although, Yanis Varoufakis, economics professor and former finance minister for Greece, may be a bit of a rock star.
This is not because he is wont to dress in leathers. This is not because he is widely presumed to be partnered with the subject of a popular ’90s song. This is not even because The Guardian featured him last weekend in interview with an actual rock star—an act of cutesy literalism diminished by the disclosure he once attended a U2 concert. Bono rocks neither on stage nor in his other job as an amateur economist and I am genuinely distressed to learn that Yanis is a fan of the vacant turds this band dumps on the culture.
Still. As far as the era’s economists go, Varoufakis, who has just concluded a short national speaking tour, is a rock star. If a perspicuous account of the Eurozone crisis can be said to “rock”, then this one does.
Varoufakis, whose Melbourne talk with Mary Kostakidis I attended last Saturday, is distinct from Stiglitz, Piketty, Krugman and those other critics of economic neoliberalism whose books now fill our shopping carts and whose speeches form part of our entertainment calendar. This difference is not down to the Varoufakis leather nor even to his recent proximity to real financial disaster. Stiglitz, former chief economist with the World Bank, has lived just as fully in the hell of neoliberal consensus, but did not begin — his great gift of a slogan to the Occupy movement notwithstanding — to mesmerise audiences in the way Varoufakis now does.
Varoufakis has something that his best peers don’t and the best rock stars do: a sense that his chosen endeavour can’t last forever. Pete Townshend destroyed guitars; Varoufakis destroys the tools of the dismal science. “We are damned if we know” he said of economic forecasts on Saturday. He says this often, and with no little authority.
This is not to say that Varoufakis offers the best or the most readable account of a post-2008 world — for my macroeconomics dollar, Brown professor Mark Blyth lifts us ordinary people to a much clearer view of the way the world’s most “developed” nations just keep on developing. And this is not to say that Varoufakis offered, in office or now, a particularly revolutionary solution to the crushing problem of debt — and, there were Trotskyists in attendance to remind him of his Keynesian “betrayal”.
The thing about Varoufakis is that he “betrays” everyone. Of course, he betrays the right and the bullshit growth formulae to which it has held fast in the face of crashing failure for decades. He betrays the shiny-eyed guys of the Fifth International who still believe in “scientific” socialism. He betrays his centrist fellows who try to turn Keynes into science. He doesn’t betray an undecided audience who is grateful and surprised to hear that no one, not even a game theorist, can precisely gear the economy.
Of course, this is an easy fancy. When Varoufakis says, as he did again on Saturday, “If you want to understand the Great Depression, read Steinbeck”, he feeds the liberal humanist appetite for paralysing sentiment. It annoys me that a man who is far more capable than most of describing just how Greece was rogered by the trident of the IMF, the Eurogroup and the European Central Bank tells us all to go and read some Steinbeck. The western world is already full of people who genuinely believe that all they need to cultivate is understanding kindness and, FFS, I didn’t pay thirty bucks to hear an economics professor who likes U2 give me advice on novels.
There is a difference between dismissing the influential ideas of economists and bypassing them altogether in favour of an afternoon with American realist authors. Sure, Steinbeck describes the prison of poverty well, but this doesn’t mean we should follow Varoufakis’ new advice to ignore the architects of that prison. He is at his best and most useful, for mine, when explaining the legacy of Malthus, of Adam Smith or Locke. It is an unusual talent that he has to explain how household austerity produces a vastly different result from national austerity (“Belt tightening works individually. Individuals are blessed by independence between income and expenditure. At the macro-level, this is not the case. For example when a large private sector company lays off workers, we cannot reduce unemployment benefits and expect anything but a deepening of the debt crisis”). I do wish he wouldn’t squander this gift on fiction.
But, Varoufakis is relatively new to the rock star stage so perhaps we can expect to see him bust out some new techniques for engagement. It’s understandable that he is, when speaking to general audiences only newly enamoured of “rock star” economics, prone to flights of humanism. It’s one way to convince of us of the likely “truth” that there is no absolute truth to economic theory and modelling. But, we can’t dismiss these powerful fictions confident that the power of Steinbeck will trump them. We need a Varoufakis to tell us exactly why the history of all hitherto existing economic theories is the history of bullshit. We don’t need a sticky end at a U2 concert.

5 responses to “Razer: 'rock star' economist Yanis Varoufakis and the perils of U2

  1. ‘Rogered by the trident of the IMF, the Eurogroup and the European Central Bank’
    Not really all as simple as that. Greece was leveraged into hell as early as the naughties, we’re really just seeing the manifestation of it now, but yeah–the currently unfolding chaos has been in the pipeline for some time. If you really want to know what rogered Greece, it was systemic taxation legislation/collection failure going back over a decade, probably beyond. In reality, Greece should never have been allowed into the Euro to begin with, and it should be excluded now–and here’s why:
    The Maastricht agreement states that countries within the EU can’t have more than 3% debt of GDP. Total government debt can’t exceed 60%.
    The reality is, Greece has never adhered to this, but has instead performed a whole bunch of slippery accounting tricks to project the illusion of compliance–some were as basic as leaving out health and military expenditures, bu some were more complicated. Greece enlisted the services of Goldman Sachs, who were payed to hide debt through speculation and especially currency swaps ( well, cross currency swaps, specifically). Goldman made over 500 million dollars from the service, reportedly. And before we all go throwing rotten tomatoes at them, let’s be realistic–Greece wanted Goldman to hide their debt in a way that would insulate them from bodies like Eurostat, and they did. Was it dirty? Yes. Was it legal? Yes. It is what it is. If GS hadn’t done it, someone else would have. That is just the way of the world.
    Greece has nobody to blame but itself. The top brass were corrupt and the people were complicit in the racket because they liked not paying tax. They acted like mafia wives, and now it’s time to pay–and they don’t want to.
    No more bailouts. Return to the drachma and start over.

    1. I guess most of the best respected commentators on the matter (Blyth, Stiglitz) are wrong and you guys are right. It’s Greece’s fault! Oh, and also it was Portugal’s fault. And Spain’s. And it’s not the fault of a mechanism that keeps recycling surplus to more established capitalist economies and it’s not the fault of the finance sector who don’t need to be regulated as much as those lazy Greeks.
      And what would the former finance minister of Greece have to say about Greece, anyhow? I guess he’s just another lazy Greek not owning up to his responsibilities.
      It is you who is looking at such a small part of the story. Not me.
      Sure, national mismanagement plays a role in the intensification of a debt crisis. But, as many commentators have offered, the eurozone itself was always doomed to offer these sort of results. One fiscal policy for several monetary policies was not a textbook economic decision. It was daffy, and many said so at the time. And there is an argument to be made that the northern European members need less developed economies in their zone for the easing of currency value this provides. If Germany still had the mark, we couldn’t afford to buy her cars so cheaply.
      If you believe that a nation grows its economy through hard work and parsimony and that economic growth does not require dependent nations, your idea that the *real* story is that Greece is to blame works.
      But. Anyhow. The point of this review is that economics professors who criticise neoliberalism are becoming very popular. I am sure there are better places to argue economics. You and I aren’t really that informed.

  2. Ms Razer,
    Those “who try to turn Keynes into a science” are not “centrist fellows”. Keynesian economics is not neoliberal economics; it is demand-side as opposed to supply-side, it is ok with government deficits, it advocates strong government expenditure to maintain growth, strong regulation of financial markets to prevent crashes etc. So, in our current political climate, Keynesian economics is really closest to Greens economics (even though Greens economics is not a real concept). The Labor Party hasn’t been Keynesian since Gough.
    Keynes is not a corporate or bank apologist; he was actually a scientist. Furthermore, he did provide an excellent refutation of the neoclassical thinking of the time that said that capitalism was stable and explained the Great Depression as the result of exogenous shocks etc. Unfortunately, the kind of thinking never went away because Milton Friedman and the Chicago School overthrew Keynes by madly proselytising the nirvana of the free-market and breeding like rabbits.
    I think you should seriously look up post-Keynesian economics (“post-Keynesian” means they actually took on board Keynes’ brilliant, highly original findings in The General Theory and have combined it with the insights of Marx, Schumpeter, Fisher and Minsky to make dynamic, non-equilibrium models of the economy). Stiglitz and Krugman are not post-Keynesian; they’re New Keynesians, and there’s a big difference (Stiglitz and Krugman don’t know anything about debt, for example). One good reason to look up post-Keynesian economics is that Varoufakis, despite his rhetoric about “erratic Marxism” and whatever, is really a post-Keynesian economist. Moreover, he is good mates with another post-Keynesian economist called Steve Keen, who won an award for the best prediction of the GFC and has written a lovely book called Debunking Economics. I would recommend you reading this book, even though it is written by another boring old man (like all economists).
    Anyway, I hope you read this,
    Big Phuc (that’s my real name — lol)

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