Read: Yanis Varoufakis: How I became an erratic Marxist Before he entered politics, Yanis Varoufakis, the iconoclastic Greek finance minister at the centre of the latest eurozone standoff, wrote this searing account of European capitalism and and how the left can learn from Marx’s mistakes http://www.theguardian.com/news/2015/feb/18/yanis-varoufakis-how-i-became-an-erratic-marxist
In Spanish: Yanis Varoufakis, Cómo me convertí en un marxista errático, http://www.rebelion.org/noticia.php?id=196081
A quick foreword to start with: I am writing this with the secret albeit not very realistic hope that Marxist and grassroots pressure from below can quickly propel Greece in the right direction. Otherwise, new elections will become the sole democratically acceptable alternative.
I do not know whether Mr Varoufakis prefers to be an « erratic » or a « heretical » economist. What I do know is that he definitively is not a Marxist economist. Furthermore, aside from some stale clichés, it is clear that he is not really up to date. Of course, everyone is entitled to his/her opinion. That being said, a world based on scientifically grounded opinions is surely better than one based on regressive and self-serving narratives.
Basing itself on science and internal democracy, a political party can attempt to reach its goals without opportunistic swerving or U-turns because it will be able to smoothly adapt to circumstances and to the evolving constellation of socio-political forces. Speed is less crucial when social and political reality leads to ever increasing equality and social well being. But then such a party must always be totally clear and scientifically uncompromising as to the direction it chooses.
If he were up to date, Mr. Varoufakis would never have offered his two peculiar critiques of Marx. First his allegation that Marx’s theories are narratives and, what is more, dangerous narratives when entrusted into the hands of his disciples. Second, his allegations that Marx knew his mathematical schemas were false. This simply proves that he knows nothing about the publication of the four Books of Capital, only Book One having been published while Marx was still alive. Also, according to Mr. Varoufakis the « transformation problem » is not worthy of any serious scientific consideration.
The first allegation is obviously off the mark. Aside from the fact that Marx’s true disciples single-handedly defeated Nazifascism at Stalingrad – the US entered the war only in December 7, 1942 after Pearl Harbor – , Marx had one pretention only, namely to be scientific through and through. Hence, his assertion to have scientifically grounded the entire political economy field of study. Unlike the forger Freud, he did not have to attempt to carefully select mentally subordinated disciples to protect his own « founding » fabrications. He merely trusted the scientific method sustained by the enduring egalitarian scientific spirit. He firmly believed that the emancipation of Mankind rested on science. Hence he knew that the authentic left had no other choice but to be scientific. The renegade left could temporarily influence History but the latter remains the history of class struggles and as such it is bound to lead to an ever greater Human emancipation.
Therefore, Marx refrained talking about things he could not yet analyse, such as the detail working of the announced socialist mode of production. But he offered some essential pointers: For instance, in his Critique of the Gotha program he anticipates the concept of « social surplus value » with his social funds. These funds were crucial for the building of socialism and they also informed Che Guevara’s presupuesto. They equally informed the best brands of Welfare State regulation after the Second World War. In particular, this analysis makes it clear that « individual salary » is only one part of the « global net revenue » of the household. Differed salary – unemployment insurance, pensions etc – as well as universally accessible social services and infrastructures should be part of it too. This is because the labor force is not a liquefied entity and needs to reproduce itself within society outside the immediate production process. Thus the current talk about « cost of labour » abstracted from the « cost of production » amounts to a determined attack on the « livelihood » of the working classes, to borrow a useful term from K. Polanyi. In the same fashion, Marx initiated his Marxist analysis of credit and money.
His second allegation is truly incomprehensible although it allegedly makes Mr Varoufakis « angry with Marx » (!) He writes: « Marx’s second error, the one I ascribe to commission, was worse. It was his assumption that truth about capitalism could be discovered in the mathematics of his models. » In the same paragraph he states that the « transformation problem is irrelevant » but, of course, he does not demonstrate why.
Anyone who has read some of the books and articles, freely accessible in the now venerable Marxist Web site www.la-commune-paraclet.com , knows that the transformation problem is not a mere trifle: Indeed, it goes to the very heart of economic science. True, the problem was forged by Böhm-Bawerk in order to pretend that a fatal logical contradiction existed between Book I of Capital (exchange values) and Book II, idem (prices of production). But one must understand what was at stake and why this is a fallacious and fabricated problem. Otherwise, Böhm-Bawerk’s would be right and no one in his/her right mind would lose time with Marxist theories any longer. One the contrary, it still remains that what is Marxist is scientific and vice-versa. Note that whereas Böhm-Bawerk cooked-up the transformation problem with the hope to destroy Marxism « roots and branches » my demonstrations turned out to vindicate Marx and to show that it instead revealed the fatal ex ante/post hoc flaw in all bourgeois theories’ attempts to deal coherently with prices. No bourgeois economic theory is able to coherently devise a reconciliation of micro and macro economy. Ironically, in the end, Böhm-Bawerk must be thanked for his malicious falsification attempt.
Despite Mr. Varoufakis gratuitous and ill-informed affirmation, Marx’s models in Book II amount to nothing less than the only scientific demonstration of steady state and dynamic economic equilibrium, namely Simple Reproduction (SR) and Enlarged Reproduction (ER). The bourgeois, Marginalist equivalent is embodied by the erratic and anomist working of the « invisible hand » offered as a silly post hoc « general equilibrium », one moreover characterised by enormous systemic waste amid grossly unsatisfied social needs. In fact, Mr. Varoufakis himself acknowledged in this article that bourgeois economic theories are internally illogical. They are also socially destructive. It has been written that « austerity kills » (see the Book Reviews section, idem.)
I have demonstrated that once Marx’s models are corrected for the Marxist law of productivity, fully integrating it in the SR and ER Schemas, it is fully scientific. It offers a fully coherent economic calculus in both quantities, exchange values, hours etc, and even prices which remain demonstrably over-determined by the underlying SR-ER. This is something which Marginalists cannot even approach. Yet, it alone makes economic calculus rational and establishes Economic Planning as a science, with its experimentations and its methodological predictions, anticipations and checking. It also allows for the development of the Marxist quantitative theory of money and credit which Mr Varoufakis and Syriza so cruelly lack. I have not seen the least tentative to refute my demonstrations offering me the right to respond, as deontology demands. When Mr. Varoufakis, like other pitres, says that the transformation problem is irrelevant, it is either sheer ignorance on his part or, worse still, it amounts to a dishonest attempt to belittle my own scientific achievements. These people do the same with the ludicrous tendency of the rate of profit to fall, forgetting in the process that in the following chapter – of a book of Capital he did not edit himself – Marx also analyses the counter-tendencies … In other words, these epiphenomenal tendency and counter-tendencies do not explain anything by themselves simply because, like capitalist price oscillations caused by competition, they end up annihilating each others, sending us back to search for the scientific explanation elsewhere. Lenin had correctly sensed that productivity was the root cause of the main laws of motion of the capitalist mode of production, namely of centralization/concentration of capital and of its imperialistic extroversion all over the World in an attempt to resolve the internal contradictions of capitalism through the cannibalization of the other weaker modes of production. I challenge them all to prove me wrong, giving me the right to respond.
The real question is to know why would Mr. Varoufakis want to refer to Marx and, at the same time, groundlessly deprive him of his scientific attributes? I suggest that he is playing a simple hegemonic trick which, to paraphrase the Gospels, consists in waving the flag to betray the flag. Indeed, his political boss Tsipras made his own political career as a critique of the existing Greek communist party and of other leftist groups, namely of all those Marxist-inspired groups which do not see their historical role as that of saviours of capitalism. Groups which might therefore have proven dangerous to the dominant system if left unchecked, especially in time of acute socio-political and ethico-political crisis. On the contrary, these groups continue to conceive their role as the authentic, hence Marxist, Left in the advancement of Human Emancipation for All. This is a goal that can only be achieved by handing back the surplus-value created by the workers and employees to the workers and employees, and through the adoption of Marxist Economic Planning as elucidated in my work following Marx and the best Marxists.
In retrospect, this philo-Semite Nietzschean choice to check the communists and the authentic left only mimics that of the social-democrats during the late Twenties and early Thirties of the XX Century. It has precisely the same inegalitarian inspiration and roots. In the end, the choice always remains between equality and inequality. Modern neoliberal programs, including their socio-liberist versions, are all inspired by the liberal-fascist von Mises and his followers. Social justice according to Rawls, Giddens or Blair is not acceptable to citizens looking at themselves as full citizens. Managing poverty among the masses of the working poor and unemployed to preventively undermine popular revolts, like offering electricity to a few people while maintaining monetarist workfare, does not amount to an acceptable program from the Left. Demosthenes is no Solon.
I have proven that the bourgeois paradigm is pitifully wrong, and that it is a narrative forged to reverse Marx’s scientific theory in order to fabricate a plausible narrative with which to mobilise the masses and thus retain political and economic power. The main forgers here were J.B. Say, Cournot, Léon Walras, Böhm-Bawerk and the liberal-fascist von Mises with his Société du Mont Pélerin clique made famous for the advices given to Pinochet, Thatcher, Reagan and many others of this ilk. Their preferred instruments are the cynical manipulation of fear and the cooking-up of narrative demagoguery assisted by the Nietzschean Hammer. This includes the illegal, racist and criminal « clashes of civilizations » which now lead to the barbarous global preventive war doctrine, complete with its murderous or soft regime change.
To his credit, we note that Mr. Varoufakis is quite clear on his ludicrous narrative-political-ideological pretentions. He says very clearly that he wants to save capitalism from its own destructive tendency. But he does not specify which capitalism he intends to save. Perhaps like preceding transversal Greek governments, he is benefitting from the advices of Goldman Sachs and others such, and perhaps he expected Mario Draghi to be supportive … especially in attacking German interests. This is not even 101 in negotiation or game theories. He also most tellingly says that he would love to « dismantle the euro ». Indeed, this was a clear-cut Imperial project from the very beginning as the euro could undermine the global domination of the US dollar. Apparently his dislike for the euro was checked by the fear that its dismantlement might favour the victory of the nationalist conservative right. History, including that of social-fascism experienced in the Twentieth Century, shows that the road to fascism is instead wide opened by the renegade philo-Semite Nietzschean choice of social-democrats to bloc, at any cost, the rise of Communism in order to save capitalism. Or, at the very least, to preserve the inegalitarian society of exploitation of Man by Man compatible with archaic theocratic and-or racist self-election as cherished by the regressive so-called Tradition. Thus, for instance Benedetto Croce distinguished between classical liberalism and liberism. We wonder what difference Mr. Varoufakis really sees between Thatcher and Blair … Astonishingly, he still seriously expects Marxists, the authentic Left and the Greek people and others to take him seriously?
In any case, his debt-restructuring proposals already proved a resounding failure. It further demonstrates that Syriza’s program is as much on the left as that of Renzi-Gutgeld or that of Hollande-Valls. In other words, with all due respect, it is more « sinister » than it is on the « Left».
Paradoxically, this patent failure is a victory for Greece and for the Greek people. This is because, in order to save today’s speculative capitalism, Mr Varoufakis was sanguinely ready to enslave Greece to a perpetual debt financing scheme cooked-up by his real masters and inspirers. Greek citizens should be thankful to Germany for its principled refusal.
That being said, I have already explained elsewhere that while remaining within the eurozone, the main task is to renationalise the financing of debt on the primary market and to quickly reassert public control over productive credit. (See « To save the eurozone we must terminate the so-called universal bank » in Download Now, Books section of my site.) At a minimum, this policy choice needs to be supplemented by a new anti-dumping definition capable to protect the three forms of the « global net revenue » of the household and by work sharing for the same initial pay but increased social benefits. However, this work-sharing needs to be respectful of the micro-productivity and of the macro-competitiveness of the Social Formation although gains in these areas will have to be shared between labour and capital as was partially the case before the Monetarist counter-reform initiated in 1979-1980. The implementation of this new and rational, if moderate, « gauche plurielle » program does not need to be approved by Berlin or Brussels and does not demand any sacrifices from other Eurozone member States. Furthermore, these progressive reforms being domestically financed, the eurozone will act as a protective shield against any possible targeted speculative attacks. Hopefully, after the pathetic debacle of Syriza and its economic « minds », Podemos will understand this and thus spare the European and the World Left another tragic, if grotesque, disillusion. One might recall that Solon was not only in favour of a debt jubilee; more importantly he implemented a better land and wealth redistribution, something he achieved by reforming the Demos itself.
Syriza was born as a demagogic party. Its true role was to delegitimize and check Communist rise in Europe, especially after 1991. It banked on the fact that the KKE has always been against the current capitalist European integration process at a time when Greeks rightly feel that a Europe without Greece is something like a patent nonsense. This took a new turn after I had asked for the creation of a Federation of European Communist and associated parties to defend the concept of a Social Europe (see the pertaining essays in the International Political Economy section of my site.) It is aided by the criminal exclusion of authentic Marxists from universities – still financed by workers’ taxes even when they are privatized – and by the systematic media use of grotesque pitres portraying themselves as Leftist and Marxist intellectuals. Hence, Syriza plays the same destructive role in Greece as the renegade parties I denounced years ago in Europe, particularly in Italy, France, Spain and Portugal. Their philo-Semite Nietzschean roots explain their political stand and their obscurantist methods. Including the violation of academic deontology when discussing and occulting Marxism.
Just like the Hebrew Old Testament with regard to the Tree of knowledge, they dream of eradicating the egalitarian scientific spirit, a foolish task if there ever was one – see the demented Nietzsche ending pitifully embracing the wounded horse … In this task they always fail, but unfortunately not without having caused useless social conflicts, economic havocs, wars and cultural regressions. Christ asked them from whose seeds they really were. In my Marxist theory of psychoanalysis available in my Pour Marx, contre le nihilisme in the Book section of my site – an English version is also available – I offered the first scientific explanation of the problematique involved. As a testimony to the damages still caused by most Masonic lodges, we must emphasise here that the historians of Fascism and Nazism – including over-represented and published philo-Semite modern Soviet historians – have always neglected or obscured it. They did this despite the
fact that anti-exclusivism is one of the two main foundations of Marx’s Marxism, which was strongly influenced by Thomas Paine’s Rights of Man, the second being the Marxist labor law of value. The still Freudian, thus mentally subordinated, Wilhelm Reich himself was not up to the task.
This is a complete shame. Syriza’s program is no program at all. The comment applies to that of the other renegade European parties which applauded its demagogic and unrealistic electoral campaign as they typically sensed a possible manger and quickly jumped on the band-wagon. It is just plain « dame patronnesse » demagoguery cooked-up, as Mr. Varafoukis lucidly writes, to save capitalism. It ignores the reality of hegemonic speculation. It ignores the now patent fact that the so-called «fiscal consolidation path » within the Marginalist paradigm has failed miserably. Nonetheless, these renegades’ parties continue to pretend that it is not, and merely argue in favour of the casuistic of « structural deficit », and in favour of a slower fiscal consolidation rhythm. And of some form of debt restructuring. Why do they do so when the most cursory examination demonstrates that the fiscal consolidation path is bunk and has remained so even after the Marginalist national accounts have been falsified to include fiscal evasion, drugs, prostitution and armaments?
The answer is straight. First, the austerity logic defended as unquestioned common sense demands the total privatisation of national assets for the sole benefit of stateless transnationals, and deep cuts into residual social services. In one form or another, austerity and its deadly rhythm will prevail until everything is privatized and until the European labour cost is equivalent to that of the poorest emerging rival countries. This is the underlying iron-clad strategy. As you know, the neoliberal economic equilibrium is based on the physiological « level » for the masses of workers and employees, now seen as new « chandalas ». Today, given the impact of the free trade deals, this elastic miserable level is to be reached on a global scale. This is precisely why any reference to labour rights and to environmental criteria was precluded under the present definition of the anti-dumping enforced by the WTO. Second, neoliberals know full well that Marxism is right: The secular increase in productivity cannot be negated without negating capitalist competition as capital mobility, thus without negating the working of the sacred Golden Calf of the bourgeoisie, namely the capitalist market. Yet, increased productivity means more unemployment because less workers and employees will be needed to produce more goods and services. Unless, work sharing takes place, this secular capitalist logic will cause the self-destruction of capitalism and of civilized society with it. In the end, capitalism is a historically bounded mode of production. Turning back the clock through the engineering of a new brand of philo-Semite fascism – just as in Italy and elsewhere in the Twentieth Century, at least before the racial laws of … 1938 – will not do. And imperialist wars have become hazardous with the nuclear deterrence and with the Marxist-Maoist re-invention of guerrilla warfare.
And yet, the philo-Semite Nietzscheans still hope that if only they can eradicate Marxism, hence scientific explanations of reality, they could preventively disarm the masses and forcefully « return » society to a new salaried slavery and a new domesticity. This is the gist of their so-called citizen’s revenue, or « guaranteed minimal annual income », which a Yoland Bresson – after the Report from the Iron Mountain and after Milton Friedman – established at around 350 to 500 euro a month. They perhaps should test this lofty standard of living themselves or else they will never understand the sheer bestiality of it. Worse still, there is no possible virtuous dynamic growth unless the « structure of v » does reflect the complexity of the given economic system. Ford’s intuition meets Marx’s demonstration concerning the main contradictions of capitalism. Everyone understands that 750 a month is just an initial demagogic step. To negate historical becoming in this way, you also need to replace citizen democracy by shareholder democracy (someone beautifully wrote « one euro one vote instead of one person one vote ».) In short, contrary to what renegades do pretend, it is not a straight question of degree or of rhythm, it has now become a question of scientific paradigm as opposed to bourgeois narratives. It has « once again » become a question of choice between Human Egalitarian Emancipation for All and philo-Semite Nietzschean, and generally regressive, barbarism.
I might perhaps suggest that Mr. Varoufakis takes a look at the most important Marxist contributions published in www.la-commune-paraclet.com. In so doing, he should remember a Pythagorean-Socratic teaching: Logic is the queen of sciences, mathematics are only the shorthand formalisations of logic. Furthermore, if a theory were proven wrong by the simple use of arithmetic, or by what he calls « simplistic algebraic » methods (?), the only legitimate conclusions to draw from this would be that the refutations attained in this way are more strongly demonstrated. Using heavy mathematical apparatuses when simple mathematics would do is not only foolish, it is a definite proof that mathematics are abused to artificially protect cooked-up narratives and lend them the appearances of science. Nobel Prizes then crown the vulgar supercherie. But no one is a dupe any more, though many modern forgers of bourgeois narratives, particularly among academically chosen servi in camera, have come to forget why Nietzsche tried to warn them against believing themselves in their own rubbish. In so doing, Nietzsche had his Zarathustra exclaim ironically « Hi-Han! ». This clownesque exclamation was far from a gratuitous insult.
In particular, Mr. Varoufakis as an economist should take a look at the Synopsis of Marxist Political Economy (Books section of www.la-commune-paraclet.com ) and at « Marginalist socialism or how to chain oneself in the capitalist cavern. » (International Political Economy section, idem). Mind you, one is left to wonder where exactly he took his distinction between productivity and competitiveness. As for what shape a moderate political program from the Left could take, it would be useful to take a look at the Appeal posted at the following address: http://rivincitasociale.altervista.org/appeal/ . At least, it explains how to retake control of the debt and of productive credit on the primary market, that is to say away from the so-called « universal bank » well known to Mr. Varoufakis. If Greece were to take the lead on this moderate but crucial and scientifically grounded basis, it would not only save itself, but it would equally re-launch the perspective of the badly needed Social Europe. Once again it would play its civilisation fostering role and win a far-reaching European and World consensus. (On Social Europe see the pertaining essays in the International Political Economy of my site.)
Mr. Varoufakis could also explain what he intends to do to end the constitutionally sanctioned gigantic evasion of capital perpetrated by the main Greek ship-owners. This amounts to more than 140 billion euro in less than 10 years apparently, that is to say, on top of the now prevalent so-called « fiscal optimisation » made possible through bad European and global laws allowing for the systematic use of fiscal paradises; see: http://www.repubblica.it/economia/2015/02/24/news/battaglia_anti-tasse_dei_nuovi_onassis_se_ci_colpite_portiamo_via_le_flotte-108043567/?ref=HREA-1.
Similarly, he should explain what he intends to do to contrast the generalised fiscal evasion which plagues Greece, as much as Italy, in tandem with a grotesquely regressive fiscal regime (see: Les Greeks ne paient pas d’impôts, (Crédits : Reuters) Article partenaire “MonFinancier.com” | 26/02/2015, http://www.latribune.fr/bourse/actualite/20150226triba4f7a6eb6/les-grecs-ne-paient-pas-d-impots.html) . Note that the last thing the Eurocrats and their national colleagues want is the creation of a European anti-crime pool of judges. This too is a shame and a betrayal of European civilisation and democracy. It will quickly add a pervasive criminal dimension to the already pervasive false representation and over-representation problems which fatally contradict the mathematical certitude derived from the Law of Great Numbers.
If he were to do some serious Marxist readings, Mr. Varoufakis would perhaps understand why his proposals won’t fly. Not even if the Germans were foolish enough to accept them and commit hara-kiri.
Perhaps he is well appraised with the late questioning among mainstream economists about the usefulness or less of fractional reserves. (See http://en.wikipedia.org/wiki/The_Chicago_Plan_Revisited and the ludicrous generalised coin-version in http://hal.cirad.fr/docs/00/74/79/04/PDF/12064.pdf ) He can compare this vacuous chat with my two essays « Credit without collateral » and « The Fed and the Treasury » (see the International Political Economy section of www.la-commune-paraclet.com )
This will explain to him why bailouts inevitably and uselessly follow bailouts – in all forms, be they off-mandate initial Facilities, or the fatally ensuing EFSF, ESM, OMT, QE, ABS etc – making things worse for the private banks while strangulating the real economy with the induced « credit crunch ». By the way, the crucial distinction between « real economy » and « speculation » does not exist in the dismal science paradigm. Indeed, speculation is supposed to make markets more «efficient » … Yet, until speculation is entirely disconnected from the real economy and from the fiscal revenues of the State, things will only get worse. But Mr. Varoufakis wants perhaps to take the same liberty with the mainstream textbooks as he pretends to do with Marxism. He perhaps thinks that perceptions can lastingly substitute for reality. Standing on one leg is always hazardous but lifting both legs at once is just clownesque jest.
My hope here is to be helpful to the Greek people and to the authentic Left in general. Flute players and proverbial fiddlers should not be followed lest they take you to the river to drown. Be it as it may, the Greek people have already realized what was amiss with all these European « sinister » parties which pretend to be « angry with Marx ». That is to say, angry with science just because in a scientific world they would quickly lose their political and economic legitimacy as well as their jobs. It is that simple.
Paul De Marco, former professor of International Relations – International Political Economy.
Copyright © La Commune Inc., March 4, 2015, from Magna Grecia.