Ending 2011 with a fable for our times

As 2011 is drawing to a close, with the ECB only having managed to paper over the deepening cracks of the eurozone, it is time to allow ourselves to abandon the barricades for ten days or so. If the soldiers in the Great War’s killing fields could maintain a humane ceasefire, tend to the wounded, and bury their dead,  we too can afford to put a cap for a while on our hectic rythm. Anyhow, the Crisis will be back with hideous vengeance soon after the New Year.  So, time to switch off our gadgets, look after those whom we have neglected, and reflect on a truly awful year. For my part, I am flying soon to Sydney to be with my daughter. I wish you all a happy holiday and a New Year worthy of the many good people who suffered needlessly during 2011. 

Lastly, since 2011 was the year of ‘my’ Minotaur, I leave you with this fable (which sums up in few words my book’s gist):

Once upon a time, in the famous maze-like Labyrinth of the Cretan King’s Palace, there lived a creature as fierce as it was tragic; its intense loneliness comparable only with the fear it inspired far and wide.

You see, the Minotaur, for this was its name, had a voracious appetite which had to be satiated to guarantee the King’s reign – the ironclad Minoan reign which secured Peace, enabled trade to criss-cross the high seas in bountiful ships, and spread prosperity’s benevolent reach to all corners of the known world.

Alas, the beast’s appetite could only be satiated by human flesh. Every now and then, a ship loaded with youngsters sailed from far away Athens bound for Crete – to deliver its human tribute to be devoured by the Minotaur. A gruesome ritual that was essential for preserving the era’s Peace and for reproducing its Prosperity.

Millennia later, another, this time a Global, Minotaur rose up. Surreptitiously. From the ashes of the first postwar phase – the one created by America’s New Dealers from the ashes of the war.

Its lair, a form of Labyrinth, was located deep in the guts of America’s economy. It took the form of the US trade deficit which consumed the world’s exports. The more the deficit grew the greater its appetite for Europe’s and Asia’s capital with which this American Minotaur satiated its hunger. What made it truly Global was its function: It helped recycle financial capital (profits, savings, surplus money). It kept the gleaming German factories busy. It gobbled  up everything produced in Japan and, later, in China. And, to complete the circle, the foreign (and often the American) owners of these distant factories sent their profits, their cash, to Wall Street – a form of modern tribute to the Global Minotaur.

What do bankers do when such a tsunami of capital comes their way daily? When between 3 and 5 billion dollars, net, passes through their fingers every morning of each week? They find ways to make it grow! To breed on their behalf. Thus, the 80s, the 90s and the naughties saw an explosion of private money minting by Wall Street on the back of the daily capital tsunami that flowed to America to feed the Minotaur.

Just like its mythological predecessor, our Global Minotaur kept the world economy going for decades. Until, that is, the pyramids of private money built upon the Minotaur’s feeding tribute collapsed under their own impossible weight. Planet Earth was simply not large enough to hold so much private, toxic money; money-like paper that burnt down once the collapse began. In this conflagration, the Global Minotaur was wounded critically.

While in rude health, the Minotaur produced tremendous wealth and despicable inequality, new vistas of pleasure and new forms of deprivation, ample security for a few and crippling insecurity for most, great inventions/gadgets and spectacular failures of common decency. Whatever we think of the Global Minotaur’s reign, it kept the world going and its elites thinking that their regime was stable, successful, moderate even. With the Minotaur out of sight, keeping the show going from its secret Labyrinth, its gross excesses remained out of sight, helping the great and the good believe their own rhetoric about some Great Moderation that was supposedly the order of the day.

But, when the Minotaur keeled over, mortally wounded by the excess of its handmaidens in Wall Street, it left the global economy in disarray. In America and in Europe, in India and in China, the Minotaur’s demise has put the world into a permanent crisis.

The Cretan Minotaur was slain by a brave Athenian Prince. Theseus. Its death ushered in the new era of tragedy, history, philosophy. Our very own Global Minotaur died less heroically. A victim of Wall Street bankers. What will its demise bring? Should we dare hope of a new era in which wealth no longer needs poverty to flourish? In which development means fewer ashes and abstract power wanes while everyone gets stronger?

Whatever the result of history’s mysterious ways, the Global Minotaur will be remembered as a remarkable beast whose 30 year reign created, and then destroyed, the illusion that capitalism can be stable, greed a virtue and finance productive.


  • Safe Travels and KALA XRISTOUGENNA Yanis,
    I missed you by a day, as I was travelling back from the Thessaloniki Film Festival and my cousins Mary and Phil were having you over for dinner the day before. I would love to email you soon, as I am a screenwriter and author living and working in Toronto.
    with deep respect,

    Dannis Koromilas

  • Καλα Χριστουγενα και eυχαρισοτο για ολα;

  • Have a safe trip Yanis and have a wonderful new year. Thank you for your posts, lectures, interviews which help to rationalize a mostly irrational era.

  • Very eloquent and metaphorical, Yanis! It’s time to rise above the myth, and realize the fakeness and non-palatability of each nation’s tribute to Wall-street’s capacity to devour and recycle…The times clearly show that contemporary economics are once more inadequate to address -let alone solve – this mess! We will have to understand that there is nothing like a free ride – in economic terms – and that living on borrowed money is far riskier than drug addiction or gambling pathos. As the banking cards collapse one-by-one, we realize that it is the intangibles like, values, ethos, synergy, peace, etc. that are to be treasured as the single currency that no one can mint in the backyard, but rather have to build with our own hands, piece-by-piece and through trial and error.

  • Dear Yiani, as a teacher you must be proud that you have reached and educated one more student…me! Let me wish you all the best for you and yours leaving it up to you to define your own “best”. Finally a “thank you” for all the gifts you have been providing your readers during the past year.

  • Yani:

    Best wishes for 2012 and beyond.

    Since antiquity, the Greek ideal has been the curbing of excess on both sides of the spectrum towards seeking the balanced center (what we call metrio-pathia).

    In invoking dire predictions and venting out dissatisfaction about the state of things , you are unwittingly violate such balanced conduct.

  • I wish you a lovely holiday with your family, and a creative New Year on this blog and in your function as a teacher.

    As for history and the future, time will tell. My prophecy is that the progress of nanotechnology and robotics will force such a complete change in society that even the concept of wealth will be changed. Unless there is a third world war and we start again at square one.

    • Without morality in our institutions, I’m afraid that nanotec and robots will not solve anything. Looking back, across about the last eleven thousand years of the human project, we have seen remarkable advances in tech/science that have done little or nothing to deter governments from becoming ongoing criminal enterprises. The eternal effort required to control greed in human populations waxes and wanes, unfortunately; and, the ‘greed is good’ paradigm always resurfaces when sociopaths get control of govt – as in, “All hail the Minotaur”, the response of all the western govts in dealing with this global financial crisis.

  • Yanis,

    may I wish you and yours a Very Merry Christmas in the summer sunshine of Australia and a happy and successful New Year back here in Europe afterwards.

    One small point, the United States is a feudal mercantile economy; NOT a classic Capitalist one. Perhaps this coming year we will be able to start to prove that point. First lesson; Never give up trying.


  • Great book Mr Varoufakis…

    Great analysis on facts of economic history that most of us, the non-economists ignore (I dare to say even the economists ignore). That why the thing is messed up.

    by the way it was very difficult to find it in Greece. At three of the four central bookshops in Athens they said that they didn’t have it, couldn’t order it because they were not making orders anymore…

    The Labirynth, in the absence of the Minotaur, is being worked with the Merkozy vacuum cleaner…

    • Yet another piece of evidence of our social economy’s collapse: bankrupt bookshops, that have no capacity to order… books. (The Minotaur, fyi, will be out in Greek some time in January, I hope. Till then, Amazon…)

    • The book is absolutely brilliant – intelligent, comprehensive and extremely well written. I purchased through Amazon UK, however, I saw it in PUBLIC in Glyfada just yesterday.

      Wishing happy holidays and a good year for all…..


    • In the mean time, here’s a video of Yani discussing The Global Minotaur. The event was organized by Columbia University last month. The video is about 90 mins long, with the last 30 mins set aside for questions. It’s an excellent summary of the book:

      Bretton Woods (The Global Plan) … Keynes vs White … Global Surplus Recycling Mechanism … Germany, Japan … U.S. Deficits … Bretton Woods Redux (The Global Minotaur is born) … capital tributes to the Beast … financialization ….

      Btw, an excellent companion to The Global Minotaur is Steve Keen’s Debunking Economics.

    • I am sorry to intervene, and I don’t know which are the central bookstores in Athens our friend is talking about, but you can always find it in the only high quality bookstore of Athens – Politeia (Asklipiou 3). As a matter of fact there are numerous copies, not just of the Minotaur but I also saw one copy of the ‘Modern Political Economics’..And many others…

  • The fat lady has put on the glasses and pushed the button… and the short guy is holding the cable.

    On WW2 they liquidated even the coins in Greece for raw materials, and the iflation rocketed…
    Now iI think is the same without inflation…
    There wil be no coin.

  • Great story, Mr. Varoufakis. Thank you! I will buy your book, whenever it becomes available in greek.

  • Merry Christmas and a wonderfull new years to Yannis and everyone.

    thank you professor…

  • Happy christmas celebration and new year, also from me Yannis.
    I bought your “dry bread” book – as Germans say – “political economics”. I sure have a long way to go, but it is enjoyable. Most of all I enjoy the philosophical and science theory related remarks in it.

  • ” Stephen A. King, the chief global economist of HSBC, believes that the only solution for Europe is for creditors and debtors to focus on their mutual interest in healthy economic growth. A pro-growth consensus would break down the inhibitions against aggressive fiscal and monetary stimulus.

    Yet nothing of the sort will happen, King says, until it’s blatantly obvious that only dramatic action will prevent a breakup of the common currency. “The world has to go crazy before you can do crazy things,” he concludes. “That’s what the Fed waited for, and that’s what the ECB will have to wait for.” Stand back from the operating table—here comes the defibrillator.”


  • Merry Cristmas to all!

    A little history trivia for the nice Ms. Merkel …

    If Henry Morganthau Jr., U.S. Treasury Secretary in the FDR administration, had had his way — the Morgenthau Plan — the only production Germany would be known for today would be … potato production.

  • During my attendance to this blog , as a result of my participation arguing about ethics , politics and political economics , i concluded to the following :

    What seems logical is not necessary logical .
    What is logical is not necessary ethical .
    What is ethical is not necessary feasible .

    (I heard Mrs Kanelli say it in one of her radio shows but it depicts very well the fight that goes on in this blog and further )

    I proudly admit that i have slightly different views compared with what i believed before attending this blog .

    Merry Christmas and best wishes to everyone .

  • Καλά Χριστούγεννα και καλή χρονιά 2012!

    Iulia Dragan

  • Is Amartya Sen’s absolute prosperity and relative inequality of the capitalist system vulgarly to be replaced by Yanis Varoufakis’s “despicable inequality?”

    Professor Varoufakis distorts and defames the whole history of the dynamism of entrepreneurial capitalist wealth that shot up the standard of living of the masses to “Himalayan” heights. To claim that capitalist “wealth …needs poverty to flourish,” is just an ornamental academic trapping empty of history and fugitive from serious thought. Capitalism, like everything else in life, was never meant to be “stable” but a process of Schumpeterian “creative destruction.” But this can only be understood and accepted by realists and not by heroic ideologues, like Professor Varoufakis.

    Good Christmas to all.

    • It is always good to encounter intransigent Panglossian views in the post-2008 world. There is something touching about undying faith, even when of the toxic variety.

    • K: I don’t think it’s capitalism that has shot up the standard of living of the masses. If it was up to capitalism, we’d all be working in the mills and the mines from the ages of eight and for 16 hours a day, seven days a week. What it is that has improved the masses’ standard of living has been the masses’ struggles AGAINST capitalism. Capitalism is only one part of the story of the modern world, the other part is the resistance to its logic and lies. Not that I’m a rabid Marxist or anything, just trying to divest you of your naive belief in some of the myths perpetrated by capitalism.

      Happy Xmas to all; and don’t spend or consume too much. It’s not necessary. It’s silly, in fact.

    • I don’t want to argue about capitalism but … if you are linking all the advances of the last centuries with capitalism, you are certainly mistaken .

      Technological breakthroughs for instance have to do with scientific thinking which is definitely not capitalistic .

      What forces human mind towards progress is need , not profit . In contrast capitalism is not guided by need but by profit .

      Take for instance CERN experiments . Do you think they make profit?
      In fact capitalistic thinking is destroying basic sciences .

      Take atomic bomb and atomic research as an extreme example . Again it was need that urged research , not profit .

      And if you think that need is synonymous with profit . Think again .

      Finally , If our planet didn’t have oil reserves , such technological advances WILL NOT have been possible whether we were in a capitalistic environment or not .

      Life has been easier in developed countries during the last century due to cheap oil energy , NOT capitalism .

  • Professor Varoufakis

    Are capitalist entrepreneurial creativity, wealth, and prosperity based on “intransigent” “Panglossian” naivety? And is the history of capitalism to be truncated and concentrated naively and un- imaginatively between 2008 and 2011 for you to make your uninspiring and toxic argument?

    • No, capitalism’s wonders have nothing to do with Panglossian naïveté. But your determination to portray it as the best of all possible systems exudes it. As for my assessment of capitalism, and your claim that I truncate the latter’s history to a period around 2008, feel free to judge it. But only after you acquaint yourself with it. (For had you read it, eg either of my last two books, you would have realized that I truncate nothing. And that I go to great lengths to analyse capitalism’s contradictions, something that entails a celebration of its achievements as well as an exposition of its failures.) Till you are prepared to become acquainted with what I am really saying, before you attack it, I shall treat you as no more than a minor Panglossian.

    • Kotzabasi:

      Let’s not get into a “paralysis of analysis” syndrome. It pains me to see smart people fight on semantics.

      Europe’s problem is a political one. As long as the Merkozy punctuated morony exists, there is no hope for tomorrow.

      Here is a simple action plan for you:

      1. Merkel has to go.
      2. Sarkozy has to go
      3. A new political class must take its place able to implement the Modest Proposal or a variation thereof.

      End of story.

      P.S. While all of the above is unfolding, there is a paramount citizen duty by all Europeans to resist, thwart and defeat any plan that is promoted by Berlin in any fashion, shape or form. This total resistance must be relentless until the enemy is completely defeated.

  • Professor Varoufakis2

    Thank you for your advice how to overcome my “minor Panglossian” status. But unfortunately for me I’m bound to retain it, as your crass defamation of capitalism in your post, hardly incentivized me, to use a term of your “little man” John Howard, to read your books and be acquainted with your thoughts. And indeed, my preference is to be “treated… as a minor Panglossian” than go through the treat to major on your Pandistortions and jaundiced strictures on capitalism.

    But to come to the gist of the matter in hand, my riposte to you was not to either of your two books, which, as I imply above I have not read. My reply was specifically to your post where you wistfully and wrongfully write, “Should we dare to hope of a new era in which WEALTH NO LONGER NEEDS POVERTY TO FLOURISH,” and of the illusion that “capitalism can be stable” and where you vulgarly and gracelessly contend that capitalism creates “DESPICABLE INEQUALITY,” and in your reply to my first post where you refer to the “post-2008 world.” It might well be that these ‘populist flourishes’ had not meant to be of any intellectual seriousness and their only aim was na deleazei and enthuse the ignorant to rush and become volunteer workers to your construction of your ‘matchsticks’ good society, as a replacement to the infernal deeds of capitalist society. But could one do this at the cost of one’s intellectual integrity?

    And it is surprising that the Gargantuan, indeed, Cyclopean efforts that you have put in your Modest Proposal—although one must note that Cyclopean efforts without a Ulysses are fated to be wasted efforts—have the aim to save Europe, a system that according to you produces genetically “despicable inequality.” Fortunately, however, for those condemned to this despicable inequality, but unfortunately for you, Andreas Koutras’s fatal Jovian bolts demolished to ashes the MP, from which no contriving number of revisions to it will give rise to a Phoenix solution that will salvage the European Union from its peril.

    Lastly, to state that “to analyse capitalism’s contradictions… entails a celebration of its achievements as well as an exposition of its failures,” is to state the obvious.

    • Impressed by your dedication to keep knocking down my (according to you) already demolished, and perpetually ridiculous, arguments, as well as by the amount of time you dedicate to a blog (mine) which you consider unworthy, I shall continue to post your comments. Carry on Sir!

    • Kotzabasi:

      You are off topic.

      This is not about capitalism or its alternatives.

      This is about amateur Merkozy thinking that he/she can jam, when professionals can do it much better:

  • It took me some days before I could get the “overview”, to understand, because…. this global minotaur is such a complex beast.

    Though all were addicted to it, not frightened at all! (The Minotaur from Crete was an uggly animal/human being, scary..)

    People must have been blind , or… this Global Minotaur must have been in a perfect disguise, as the wolf was in some fairy tales….

    But finally the wolf was killed, or the bad queen disappeared (Snowwhite).

    Here, in the Reality of Today, people are NOT happy with the death of this Minotaur. They LOVE(D) him/it. Everybody is in shock because of the Truth. Why then should they love it and willing that this creature continues ruling the world?

    Then this must be a drug, like heroine, cocaine. People who are addicted to it prefer to die than to get rid of it.
    The most are dead though, in a mental way.

    Death is always present in fairy tales. Death has always been conquered in fairy tales and the end is always coloured by liberation and happiness…

    Wishing you all to be liberated from the addiction to money and to be happy with real wealth.
    Happy Newyear! This video I made two years ago, when I was hosting the channel. Somebody else hosts it now, but enjoy here my love for life, for dance and music. The music is from Bach, the scenes are from other videos, with other music. Enjoy!

    [youtube http://www.youtube.com/watch?v=tN2D_VeVeJI&w=420&h=315%5D

    • @Kotzabasis

      Your comments have no essence . There are no arguments in what you say .
      Unless you think that you are referring to people who are impressed by high pitch or childish fight , you must present some arguments to support what you say .
      I don’t agree with Mr Varoufakis in many aspects but he has some arguments and i have my own . What are yours?

      It’s not enough to state that something is wrong . Unless you are the Pope and live in another century .
      Why don’t you provide us with some historic examples or references in this blog ?

      P.S. There is no point in believing that you are right . Unless you convince others people too , it’s useless . If you think you are a smart person ,prove it.

      P.S.1 Don’t forget that in blogs there is the concept of Φιλοξενία too . In cretan tradition and i suppose in greek as well , the guest has obligations as well . Otherwise , this concept falls apart . In Crete , throw away an ungrateful or insulting guest is socially perfectly understandable .

    • Yanis has indeed writing talent! I read words I never read before, excellent sentences…. My thoughts were: if times change, and economists are not needed anymore because humanity will be really social, not working with money anymore but with their heart, then Yanis can start writing books! About anything that crosses his mind, about life, people, myths.
      Maybe he will write in one of these books: “Once upon a time there was a Global Minotaur, and there was a man, with a red shirt and wonderful black hair, a true gentle man, who was fighting against the unbelief of too many people that he could conquer it….. He won. Finally. But it took some time, so here is his story, starting in Sydney, Australia, surfing on the waves of time, a long time ago….”

  • “..the illusion that finance can be productive” How true!

    Happy Holidays and a productive 2012 to everybody !

  • Ilias Trou

    I was not arguing a case, I was merely pointing out at the distortions of Varoufakis’s post where he stated that capitalism needed poverty to flourish and that it generated “despicable inequality.” This is contrary to all the historical facts of how capitalism developed, which Varoufakis himself, I’m sure, in a more sober moment would agree with.

    Certainly, one has to respect the philoxenia of the host, but when the latter throws before the guest the carpet of populism in the grave and illustrious halls of Academe the guest perforce needs to walk with nailed boots and open holes in the carpet. Otherwise, in such a case, philoxenia becomes genuflection in which no man/woman with a modicum of AMOUR PROPRE would engage in.

    • How can you say somethig like this. Look what happened to East Germany! It was a workders paradise, now the inhabitants are living in poverty!

    • Sir Kotzabasis,

      Please, could you inform me about the historical facts, that Capitalism developed? Where do you refer to? Or at?
      Is that information complete? Did you ever >checq< the information you got about Capitalism? Have you been around in USA, everywhere where His Majesty Capitalism is hailed and praised, eyewitnessing H.M. Capitalism as USA and others prefer NOT to show? If you just collect ALL the phenomena of Capitalism, then you should know better.

      The same counts for Communism! Kim Yong-un is a ruler, and his type is a kind of a metaphor, also the N Korean people, how they act and react on what is the ruler in the "civilized" capitalist states. It is the same!! The capitalist states are BLIND for what is ruling them (behind the mask) and in N. Korea they are BLIND for their system. Communism (as the phenomena in 2012, not as the pure idea) and Capitalism (as the phenomena in 2012) are just the two opposite sides of the coin named Greed, Power, Overruling System. Leader and Followers. Slaves. Slaves!! Even the presidents and politicians.

      I experience you as a person like too many others, not capable to understand that where it is all about BEHIND the masks of the phenomena, beyond the horizon, and yes, that is alas the reason for a world wide disaster and despair (the countries which are "flowering" now (Brasil, China, etc.) because of capitalism will follow later), for a therefore too much time taking and needed change on this planet.

    • I’ve been a major participent and beneficiary of US capitalism for over 40 years, have followed the history of capitalism nearly as long, and have not found a shred of evidence capitalism alleviates poverty. Count the poor! Its easy, the numbers and maps are available. Then make an argument from facts instead of conjecture. Where are your facts, kotzabasis?

    • What we’ve got here is CASINO capitalism backstopped by the taxpayers.

      And what a system it is! No rule of law. No consequences.

      Speaking of which, I am reading that Greece is negotiating on a final resolution with its creditors. Negotiating? What is there to negotiate about? All unsecured Greek debt goes to ZERO. Says who? Says capitalism, that’s who. Oh yeah … there are consequences when you have real capitalism, unlike the “casino” variety of the banskters.

      PS: A default is NOT a failure. It is a strategy. You don’t believe me? Ask that super capitalist with the wild hairpiece Donald Trump. He’s had four — count ’em — four company bankruptcies. Yeah, “the Donald” called the bankruptcy moves a great deal. Something about paring down the debt and having the opportunity to start over again. Go figure.

    • As a British inventor, my lifetime of experience of what is today described as “Capitalism” taught me that that descriptive title is a profound confusion created to impart credibility to what is instead a deeply medieval feudal mercantile economic model that serves only those with direct access to the savings of the people.

      Rather than make simple statements that can, of course, be argued against, Over the past decades, I have consistently argued my case in very detailed presentations made to, among others, the Bank of England and the 10,000 members of http://www.itulip.com community and had, in 2009, brought all that I had written together into one free PDF book; The Road Ahead from a Grass Roots Perspective, which you may download from my web site here. http://www.chriscoles.com/page3.html

      True, free market, free enterprise capitalism, would be a wonderful solution to all of our problems. But as I point out in great detail, we do not have any working mechanism to deliver such.

      Yanis has already agreed to comment on my thinking, so I am not spamming for the sake of it. And I am very happy indeed to continue to wait until he feels sufficiently comfortable about his interpretation that he can deliver his impressions. So, take your time Yanis and may I wish everyone a very happy New Year.

  • To doubters, like Antoinette and David, about the historical facts and achievements of capitalism, in increasing the standard of living of the masses one should read, among other great economists, Joseph Schumpeter, Ludwig von Mises, and Amartya Sen. Do you think Antoinette, that these three great economists could not see “BEHIND the masks of the phenomena” of capitalism? By allowing yourself a spell of intellectual curiosity to learn from them, the “mask” that blinds you from seen the truth about capitalism will drop from your own face in no time.

    • I’ve read Shumpeter and von Mises; they both have interesting contributions to understanding capitalism, but neither address the ponzi nature of the system. Capitalism cannot be sustained without growth. Period.

      If you want to make a good critical remark about Yanis’ Modest Proposal, you should start with the intent of his proposal – stimulating economic growth in the EZ. Then proceed to his bond market based approach to stimulous and explain why growth will not come from his plan.

    • We will see who looks with the most sharp eyes, the eyes of the eagle…

      More and more I experience the talking ABOUT what IS, is a world of thoughts going parallel with the reality, but missing the reality.

      There are not studied people who look more far and more detailed than the most high professor on the most excellent university.

      I would believe you if one of those you mention was one fo the great Greeks from history, and because they are not there I prefer to follow up Professor Varoufakis. I feel the most close to his views. Not from anybody else, than…., yes, those who are gifted with the same Metaphysical Insight as the great Greeks were gifted with.

      The few I know did not even made one step into a university, but they studied the university of Life: the most difficult study you can imagine and just a few have really finished that study and are a Master.

      Not any earthly formula is complete enough to rule life, or nature, or mankind, or thoughts. There are always important parts missing.
      Thank God.

      It is nice to puzzle though, and it creates jobs. We cannot all be farmers, though it would be good to know how to cultivate potatoes, vegetables, fruits, to survive in the future because of utterly serious signs, all what is going on, and what cannot be controlled or stopped.

      There is not one formula that works. Therefore you need people who can think the same as the professors who “know” the solution. The most don’t understand a shit of it, not even the politicians. Everything is too complex. So, let us go to the next blogpost.


  • Greed

    In the Dutch TV program “Altijd wat” (“Always something”)(January 3, 2012) has been an explanation about Greed, how greed and all the advertisements work in our brains, about a new money system in a.o. England (Brixton Pound) and Crete (Kaereti), Netherlands (Noppes). Also USA, and more countries has other money systems, and all work great!!
    Also news about a German economist from Berlin who even lives WITHOUT money. He lives from the food supermarkets throw away and it is really shocking to watch and listen.
    He travels by hitchiking, works for FREE when teaching on universities about his way of living, his view on economy, ecology and the furture, the crisis, and so on.

    Anyway, what I saw in the program is really giving me courage, knowing that there are brilliant minds in warmhearted human beings, working at a new world in a very practical way, not a fairy tale, not a dream, but reality, because they show that it is achievable.

    Url to the program:
    On 23:00 starts the part of Crete…. on 27:10 about the Brixton pound, and after that again about the Kaereti (Crete), on 32:00
    The German economist:Raphael Velmer/Felmer/Pfelmer ? I could not trace his name very well) from 7:56

    Lyrics “Society” (Eddie Vedder, film: Into the wild)

    Oh it’s a mystery to me.
    We have a greed, with which we have agreed…
    and you think you have to want more than you need…
    until you have it all, you won’t be free.

    Society, you’re a crazy breed.
    I hope you’re not lonely, without me.

    When you want more than you have, you think you need…
    and when you think more then you want, your thoughts begin to bleed.
    I think I need to find a bigger place…
    cause when you have more than you think, you need more space.

    Society, you’re a crazy breed.
    I hope you’re not lonely, without me.
    Society, crazy indeed…
    I hope you’re not lonely, without me.

    There’s those thinkin’ more or less, less is more,
    but if less is more, how you keepin’ score?
    It means for every point you make, your level drops.
    Kinda like you’re startin’ from the top…
    and you can’t do that.

    Society, you’re a crazy breed.
    I hope you’re not lonely, without me.
    Society, crazy indeed…
    I hope you’re not lonely, without me
    Society, have mercy on me.
    I hope you’re not angry, if I disagree.
    Society, crazy indeed.
    I hope you’re not lonely…
    without me.

    Video YouTube
    I still struggle with embedding here a video, so all the urls

    [youtube http://www.youtube.com/watch?v=Cy6iwP9Ux3A&w=420&h=315%5D


  • “A 30-year low interest-rate loan to Greece could accompany the reversal of PSI (private sector involvement) to keep the financing cost on the Greek government as low as presently contemplated,” Orphanides, a member of the European Central Bank governing council, said in an article in the Financial Times.

    Orphanides said the end of 2011 saw questions raised about the survival of the euro that would have been considered taboo earlier.

    “What caused this dramatic erosion of confidence? Was it the result of fiscal profligacy, such as that revealed in Greece that marked the start of the slide? Was it the loss of competitiveness? Or current account imbalances?” Orphanides said.

    He said these were contributing factors but the eurozone also suffered from a broader problem: the incomplete design of the euro area – lax monitoring, inadequate enforcement of the rules and non-existence of a crisis management framework

    “It also points to the collective failure of eurozone decision makers to tackle this problem effectively. A failure that has been marked by a sequence of EU summits and aborted plans that have convinced some that a solution is beyond reach,” Orphanides said.

    He said two decisions proved costly for the eurozone: first, European leaders agreed to impose losses on creditors whenever a member state faced liquidity concerns.

    “The message to potential creditors was clear: eurozone sovereign debt should no longer be considered a safe asset with the implicit promise that it would be repaid in full. Private sector involvement (PSI) was the new doctrine.”

    And second, at the EU summits in July and October, European leaders decided to force losses on holders of Greek debt.

    The Greek PSI reinforced the idea that holders of eurozone sovereigns should be prepared to incur losses even under circumstances that would not necessarily trigger comparable losses for sovereigns outside the eurozone.

    “Unsurprisingly, as investors digested the implications of the two decisions they increasingly fled eurozone sovereign markets,” Orphanides said.

    The resulting contagion was evident in the deterioration of borrowing conditions for other eurozone member states after October 18 2010; July 21 2011 and October 26 2011.

    EU leaders have since reversed the PSI innovation but still failed to restore investor trust.

    A reason cited for this is that the December decision did not reverse the haircut on Greek debt. Rather, the eurozone leaders supported continuing the Greek PSI while stating that the Greek case was unique and would not be repeated.

  • Some folks think that it was not capitalism that created the affluence of the western world but something that it was dear to a Greek soul from the time that history started to be recorded until the present days. First is democracy. It is an axiom that the higher degree of democracy correlates with higher degree of the ability to create goods and services. The second is education. It was education and democracy that put the Greek world of antiquity on the top of civilized world. It was the smart thing of America to allow and push every kid to have free high school education and if possible university education too. The endless amount of resources however helped too. The hungry people of Europe considered as worthless and incapable to do things, they proved their betters’ from old countries wrong. The two results of capitalism, the first and Second World War, immensely helped America too. The war didn’t destroy anything in America or almost anything, it destroyed Europe. It came and helped Europe so it was considered a benefactor to victorious countries and they were victors over the defeated, so they were able to dictate the results.
    Observing the results of pushing education in many countries, like China, India, Europe, Russia and almost every country in the world, we see the ability of people to create endless amount of goods. So America as a representative of the capitalist world is falling behind because the many other countries see what helped America to the top and imitating it.
    There is a third ingredient of Greek greatness, to push the wealthiest citizens to pay for public lunches, or to sent the people who overreached to Persia, or to divide over the farms over again after a certain duration of time.
    The fourth ingredient is the love of Greeks to own certain things in common. The commons were almost destroyed in most countries in the world; in Greece it gives people to these days a certain degree of security. They are hated by every true capitalist, because they are unable to completely enslave them.
    People of Greece were proud to serve the common good as soldiers, if there was a need. They still do.
    So to recapitulate my thinking of what creates the most goods and services: education, democracy, limits of wealth and power, a certain amount of public goods, public service by all. If capitalism eliminates the “Sky is the limit” with certain limitations it can take the face of the Greek soul. Now it is a destructive force and a tool to enslave the majority by e few.

  • Time to jettison the plans to hit Greek creditors

    By Athanasios Orphanides

    Government debt markets are about trust. Before the crisis, all eurozone governments enjoyed the benefit of their collective trustworthiness, co-operation and solidarity in the form of favourable financing conditions that contributed to the wellbeing of Europe.

    Investor trust in the eurozone has been badly shaken in the past two years. The image of co-operation and solidarity has been shattered. As 2011 came to a close, questions about the survival of the euro that would have been considered taboo earlier began to surface. Following Greece, a number of member states faced difficulties refinancing their debts or lost access to markets altogether, despite the implementation of unprecedented fiscal programmes.

    What caused this dramatic erosion of confidence? Was it the result of fiscal profligacy, such as that revealed in Greece, that marked the start of the slide? Was it the loss of competitiveness? Or current account imbalances? Without doubt, all these were contributing factors. But the contagion that has spread to so many eurozone member states points to a broader problem: the incomplete design of the euro area – lax monitoring, inadequate enforcement of the rules and non-existence of a crisis management framework. It also points to the collective failure of eurozone decision-makers to tackle this problem effectively – a failure that has been marked by a sequence of EU summits and aborted plans that have convinced some that a solution is beyond reach.

    Two related decisions proved costly for the eurozone. First, following the summit in Deauville in October 2010, European leaders agreed to introduce a novel element in eurozone sovereign markets: the imposition of losses on creditors whenever a member state faced liquidity concerns. The message to potential creditors was clear: eurozone sovereign debt should no longer be considered a safe asset with the implicit promise that it would be repaid in full. Private sector involvement (PSI) was the new doctrine. Second, at the EU summits in July and October, European leaders decided to force losses on holders of Greek debt. The Greek PSI reinforced the idea that holders of eurozone sovereigns should be prepared to incur losses even under circumstances that would not necessarily trigger comparable losses for sovereigns outside the eurozone.

    The decisions that raised the cost of financing in the eurozone by introducing additional risk on private investors were not without a useful purpose. The PSI risk raised (disproportionately) the cost of financing of member states with larger projected levels of debt. Thus, it would serve as a disincentive to fiscal profligacy, thereby guarding against moral hazard and reducing the risk of future crises. Adding PSI risk could improve governance.

    Unsurprisingly, as investors digested the implications of the two decisions they increasingly fled eurozone sovereign markets. The resulting contagion was evident in the deterioration of borrowing conditions for other eurozone member states after October 18 2010, July 21 2011 and October 26 2011.

    The capacity to learn from mistakes is a hallmark of good leadership. As the existential threat to the eurozone became clearer, EU leaders changed tack. On December 9 a change in doctrine reversing the Deauville PSI innovation was announced. In future, the eurozone would adhere to International Monetary Fund principles. Leaders also agreed on a new “fiscal compact” to enhance governance.

    Unfortunately, despite reversing the Deauville PSI innovation, investor trust has not been regained. A reason cited for this is that the December decision did not reverse the haircut on Greek debt. Rather, the eurozone leaders supported continuing the Greek PSI while stating that the Greek case was unique and would not be repeated. But can the promise to abandon the PSI doctrine in the future be convincing while losses on Greek debt are imposed at present?

    Reversing the Greek PSI decision would help to restore trust. Could it still be undesirable? Consistent with IMF principles, one of the reasons for imposing the Greek PSI was to reduce the interest burden on the Greek government. But a serious limitation of their application in the eurozone is that the IMF principles examine a member state in isolation, ignoring contagion effects on other states. Reversing the Greek PSI decision would also raise the financing cost on the Greek government, but by restoring trust in the eurozone it would reduce the financing cost of other eurozone governments. Reversing the Greek PSI would benefit the eurozone as a whole. A 30-year low interest-rate loan to Greece could accompany the reversal of PSI to keep the financing cost on the Greek government as low as is presently contemplated.

    The key is to restore trust.

    The writer is governor of the Central Bank of Cyprus, a member of the ECB governing council and member of the ESRB steering committee

  • Antoinette,

    I can respond to your comment of January 4, 2012. I find Karl Polanyi s THE GREAT TRANSFORMASTION, The Political and Economic Origins of Our Time,to be an excellent acounting of capitalist development with many references, Polanyi published this book in 1944. it was published again in 1957 and in 2001. It is published by Beacon Press, 25 beacon Street, Boston, Massachusetts- 2892. http://www.beacon.org.

    And many thanks for the music!

  • You are probably familiar with the role of Greece in the mid-1820s ’emerging markets’ boom? When I stumbled upon this in Edward Chancellor’s “Devil Take the Hindmost,” I noted some similarities to today, remarkable even though constant repetition (fed by chronic amnesia) is the basic plot of all histories of finance.
    “Euphoria for foreign loans was not confined to South America. The public’s enthusiasm for the Greek struggle against Turkey was even stronger. In late 1824, a banquet was hosted by the Lord Mayor of London at the Guildhall to launch a Greek loan. A shady city character, named Herman Hendriks, was appointed agent for the rebel Greek government. The heavily oversubscribed loan—£800,000 at 6 percent—was issued amid great excitement and the proceeds were sent to a committee of English Philhellenes in Greece, of which Lord Byron was a member. (In 1825, a second Greek loan was launched for a nominal £2 million. Of this sum only £257,000 was even sent to Greece. The rest of the money was either purloined by the Greek commissioners or used to prop up the loan stock in a falling market and make good the losses of leading Philhellenes.) … As well as appealing to liberal sentiments, the foreign loans were desinged to be attractive to investors. Their interest payments were set so high that the South American Bonds had to be contracted in Paris to avoid British usury laws (an early example of ‘offshore’ finance being used to evaded government regulations).”

  • Here is an article from VOX EU by Charles Wyplosz outlining a plan for EZ rescue that advocates for the ECB to act unilaterally to refinance sovereign debt.


    It is good as far as it goes, but doesn’t adequately address the urgency of growing Europe’s stalled economies. The Modest Proposal is more comprehensive, better thought out, more likely to succeed, AND, obviously unacceptable to the failed European leaders that both Yanis and Wyplosz rightly criticize. WHICH, seems to prove the neo-liberal cabal that has hi-jacked Europe is more interested in labor market “reform” than in solving their crisis.

  • kotzabasis,

    I respond to your comment of January 5, 2012. You mention three economists who support your point of view. To be fair we should add the name of another outstanding economist, Joseph Stiglitz, Nobel Laureate, who was formerly chair of President Clinton s Council of Economic Advisors and chief economist of the World Bank.He has a new book titled REEFALL: America, Free Markets, and the Sinking of the World Economy, in which he describes how and to what purpose financial capitalists used their creativity in the decades prior to the financial meltdown which started in 2007.


  • http://www.examiner.com/international-trade-in-national/germany-prepares-for-a-greek-exit-of-the-eurozone

    The positive result will be that the Eurozone in itself will become more stable and stronger and will have one less weak link to worry about.

    Continue reading on Examiner.com Germany prepares for a Greek exit of the Eurozone – National International Trade | Examiner.com http://www.examiner.com/international-trade-in-national/germany-prepares-for-a-greek-exit-of-the-eurozone#ixzz1irS1WNhg

  • Aram Kudian

    I have not read Stiglitz’s book. But I assume from your short description that he is not contending that capitalism did not raise the standard of living of the masses during its long development nor that it needs poverty to flourish. All my comments, including the one you refer to, address specifically these two points and not to the ‘casino’ “financial capitalists” that were mainly responsible, alongside government DIRIGISME, for the meltdown. But you are grossly remiss in ‘cheering’ Stiglitz: the achievements of capitalism were not founded on the rolling dice of a casino.

  • Antionette and everyone

    The music you have brought to us was a very good idea. I cannot help it but go to it often.
    I have a thought. I have a number of records with Chile’s New Song movement, dating from before Pinochet’s regime. It would be nice i think to have some of it attached to your set, Antionette. I do not have them in a form I could send by the internet. they are all on LP’s. If anyone is interested, i could copy a group on casette tape and send by regular mail to the one who could transcribe them and send it to this post.

    Here is the set: 1 record of Violeta Parra,the mother of the movement, 1 of Quilapayun,3 of Inti-illimani Ensemble, and 4 of Victor Jara.

    Many of this music protests injustice and cruelty. When Pinochet ousted the democratically elected government of Salvador Alleande, Inti-illimani was in Europe,Victor Jara was not so lucky, he was first imprisoned with 3000 other artists, intellectuals and other undesirables. He continued to sing his songs in prison, he would not stop, so they broke his fingers so he could not play his guitar he continued to sing without his guitar. They killed him

    Some Chileans came to Toronto, Canada, and made music with Greeks living there. I am sorry i do not have this sort of material .

    If anyone is interested in transcribing please put a comment on this post.

  • kotzabasis,

    Sorry, I was not clear. With my comment of Jan.8 I was taking exception to your comment of Dec.25 also, more specifically re capitalist entrepreneurial creativity, welth and prosperity. Stiglitz does not go any further back than the depression of 1930s. He writes about the negative rolecreativity with selfish motives in an unregulated capitalist financial system.

    I agree that historically technological and industrial progress were intimately connected with the advent of capitalizm. But at what cost. It came with a lot of pain and suffering for the largest segment of the population. It did not come through a democratic process. It was forced on poeple.

    In my opinion the value of technological progress is often overrated. So is the values of matereiel wealth and prosperity. People often have upmost in their mind is the status they have in society. Wealth may be important in so far as itcan indicate status.

    In the matter of creative enterprize and ability to effectively deal withnature many more primitive societies were also first rate. Wade Davis has a number of examples in his THE WAYFINDER

    The quality of lifefor all should be the most important objective in society. Economic considerations should be important only so far as theythey help realize the former , not the way arouind as it is now. An important roadblockis our so called democracy is mostly a facade.

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