Review by Paul Mason
At the battle of Gettysburg, the defence of the Union army’s flank was entrusted to a man whose biggest responsibility until then had been as professor of rhetoric at an east coast university. In the 1993 movie of the battle, his commander tells him: “Now we’ll see how professors fight.” In their latest books, both Yanis Varoufakis – the former Greek finance minister – and Thomas Piketty (pictured) confront the same dilemma: how does a life of academic precision prepare you for a struggle over economic policy in which rationality and proof go out of the window? How, in the modern world, do leftwing professors fight?
Piketty’s Chronicles is a collection of his columns written for the leftist daily newspaper Libération and spans the period from just before Lehman Brothers collapsed until after the terrorist attacks in Paris in November 2015. Coming on the heels of his masterwork, Capital in the 21st Century, one might expect this to be the lesser contribution.
In fact, Piketty unleashed on real-time economics is a revelation: he is lucid and persuasive – all the more so for being proved right about most of the events he is responding to, even though the full facts only came out later.
He spots the feebleness of Obama’s fiscal stimulus, even as most financial columnists are warning of its overambition. He spots, at a point when most people were struggling to comprehend quantitative easing, its theoretical flaw. Unless central banks begin to “lend at all maturities and to every kind of economic actor … these unconventional policies will sooner or later reach their limits”, Piketty warned in 2009. Today – amid a welter of new financial stress alarms – those limits have been reached.
But to follow Piketty through the ups and downs of the post-Lehman era is to see an unwelcome issue for the left emerge. He asks: “Will Europe manage to become the continental power and the space for democratic sovereignty that we’ll need in order to take control of a globalised capitalism gone mad?” Or will it facilitate the subjugation of governments to markets and, in the resulting chaos, fail?
That sums up the left’s dilemma in 2016. It is posed in Britain through the Brexit referendum. In the rest of Europe it is posed, increasingly, by geopolitical pressure: the arrival of a million migrants; the swing to the authoritarian right in Poland; the surge of neo-Nazism in Hungary, Slovakia and France. And the ability of the bumbling despot in Ankara to dictate terms to an entire continent.
As the euro crisis hits in early 2010, Piketty outlines – in two brilliantly concise interventions – the only logical solution at the fiscal and monetary level. Europe should, he writes, pool its debts. He seems confident, at this point, that it will be done: that “European leaders seem ready to get over their legalism and show more flexibility”.
There is no sign on the horizon of a single European debt, nor of a monetary policy aimed at social justice, nor of institutions that would address even a modicum of the agenda Piketty proposes. So the book stands like an open parenthesis. And in that way it mirrors the contribution of Yanis Varoufakis.
Varoufakis hit the Greek crisis of 2015 by producing a whole extra crisis on his own. Syriza’s economic gurus were wary veterans; they’d planned for decades the micro-economic reforms they would make to the mafia-controlled economy if ever they came to power. They were cautious and defensive politicians. Varoufakis however, like his predecessor at Gettysburg, chose the distinctly non-textbook option of a bayonet charge into the teeth of an advancing enemy. On this occasion it did not work.
The initial problem on the Greek left was that many of the party’s supporters saw Varoufakis as a “neoliberal”: US trained, oriented and based, he sounded like a member of the elite – and his ill-fated Paris Match photoshoot did nothing to dispel that impression. But in the end he turned out to be more radical than any of the Greek left’s “organic intellectuals”. His new book is, like everything he does, unpredictable.
Its beginning and middle are, for quite a long time, simply an academic history of the EU’s rise, and from a distinctly Atlanticist point of view. Varoufakis retells the story of how America’s break with Bretton Woods in 1971 triggered the European defence mechanism of a single currency. It’s a piece of economic history, well told, and larded with anecdotes of his own time in office.
The book takes off with the current crisis. If you ever doubt what is at stake in Europe, read Varoufakis’s account of being lodged with a semi-literate farmer in the far-right heartland of the southern Peloponnese, some time in the 1990s. The farmer, polite to the point of caricature, places two books on the sleeping professor’s pillow: the memoirs of a rightwing stooge everybody has forgotten, and the memoirs of someone no one can forget: Mein Kampf, in the 1944 edition.
The Nazis, too, dreamed of a united Europe, Varoufakis points out. He himself wasted no time, on his arrival in office, in warning his German counterparts of the danger of fascism in Europe, and above all in Greece, if the policy of austerity was pursued. He was vilified for even mentioning it, but he was right. The same political elites from eastern Europe who connived and revelled in the defeat of Greece in July 2015 are now seeing their legislatures populated with antisemites.
Varoufakis is right, too, to name the danger: that by going on the streets and influencing mainstream policy, the European far right has already achieved a position where it is “in power but not in office”: the sickening sight, which I reported first hand, of aggressive migrant roundups in Athens under the government of the conservative New Democracy in 2013, was – Varoufakis writes – simply the respectable state doing the job of the fascist right by proxy.
He concludes his book with an outline of his current project: to democratise Europe within 10 years or let the project lapse. Like Piketty, he retains an implicit “optimism of the will”, as Gramsci once put it, compared with a pessimism of the intellect.
I doubt either Piketty or Varoufakis will see their optimism justified. Both men effectively site themselves, and the leftism they support, as the last defenders of the true ideal: a social Europe, reflecting the democratic values of its founding nations. Ranged against them are two forces: paralysed liberalism, whose economic remedies no longer work; and rightwing xenophobia, whose economic remedies are incoherent but persuasive.
The problem is the ship is sinking. When that happens you should man the pumps. But the European centrist elite does not want to: it is “against the rules” to man the pumps – that is, to embrace the radical stimulus Piketty and Varoufakis want. The logical thing to do is man the lifeboats.
Neither of these two books, though launched at the very height of the Brexit debate, and amid existential political crisis in Europe, attempts to provide answers – only principles from which answers might be derived. But the European left will soon have to make choices: between humanitarian values and the illegal pushback strategy Brussels has agreed with Ankara on refugees; between saving Europe’s economy and saving what is left of Europe’s banks; between saving the steel industry and obeying arcane rules on state aid nobody really believes in.
For economists, both Piketty and Varoufakis draw on vast and unusual stores of honesty and emotional intelligence. But if you ask the question: can Europe save itself? – and answer it with the evidence in these books – the answer veers very decisively towards the negative.
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