Yanis Varoufakis: We Are Nowhere Near the Green Transition

Log in

Remember me

Forgot your password?
Free trial

Yanis Varoufakis: We Are Nowhere Near the Green Transition

Date: October 22^nd 2020

Author: Alenka Lena Klopčič

Category: En.vision

Topic: Energy policy , Economy

“Imagine it is 2025. Years earlier, in the wake of the financial crisis of 2008, a global hi-tech uprising has birthed the post-capitalist world in which work, and money, land, digital networks and politics have been truly democratised.” In a thought-experiment of startling originality, the world-famous economist Yanis Varoufakis offers a glimpse of this alternative reality in his latest book ‘Another Now’. Energetika.NET conducted a video interview with this world-renowned economist and bestselling author, who in 2015 also spent a few (economically and politically very hot) months as Greece's Minister of Finance. Meet Yanis Varoufakis through some of his bestselling books and talking about the ‘here and now’.

COVID-19 pandemic intensifying the crisis…

In the book ‘Talking to My Daughter About the Economy’ Varoufakis writes about how debt has become the raw material required for the creation of profit, and how this process has transformed profit, profitability and money into means pursued for their own sake. He also writes about privatisation of the atmosphere, rivers, and forests, and about markets for ‘bad things’, for instance a market that determines the exchange value of polluting emissions, a widely undesired ‘commodity’. Can this change now in this new COVID-19 reality for the benefit of society at large?

“No, it won’t change, since the COVID-19 pandemic is simply intensifying the crisis caused by too much private debt.” But this intensification means that the central banks are producing even more cash, liquidity and private debt, which makes the corporations a ‘living dead’. The world of money is doing pretty well, while profits, wages, and investments are nowhere near the green transition. In short, things are not good, answered Varoufakis, adding that, therefore, the solution must be political.

In response to the question, what can we – ordinary citizens – do, Varoufakis replied that first of all we shouldn’t panic, however, people have to become a ‘demos’, which is an essential part of democracy.

… and the recovery package is not something to look forward to

Varoufakis’s experience with the EU’s deep establishment is fully summarised in the ‘Adults In The Room’, but how does he envision Europe’s future now, especially considering the EUR 1.850 trillion package for Europe's recovery from the COVID-19 pandemic, which includes EUR 1.1 trillion for the long-term EU budget for 2021-2027 and an additional EUR 750 billion for the new recovery instrument, Next Generation EU?

“The more Europeans believe these numbers, the worst the prospects are of the European Union. He explained that the numbers above are only ‘propaganda’, since the recovery package is at most EUR 310 billion, while the rest are loans, which cannot be a part of a sustainable solution. Additionally, according to Varoufakis, the loans don’t go to ‘little people’, but rather to corporations which use them to buy their own shares. So, Europe will not benefit from this, he believes, adding that establishments should take responsibility before the ‘demos’. However, pressing the establishments means overthrowing them, he is clear. “People have to take their faith and democracy into their own hands, otherwise Europe will continue to fail.”

When too much digitalisation can lead to more crises

“Market societies flourish when commodification, financialization and technological innovation are on the rise. The more streamlined and mechanized production gets, the lower the human contribution to its existence becomes and the cheaper it gets,” wrote Varoufakis in ‘The Global Minotaur’. Does this mean we should be worried about the EU’s recovery agenda, which focuses strongly on digitalisation?

In response to this question Varoufakis relates to the time when he witnessed the construction of the Apple factory in the U.S., where the building was being constructed by robots and inside the building robots were building robots. We have this absurd situation whereby machines are creating machines, but there are also factories where there are mechanised humans, so we end up with mechanical and human slaves in an economy that is not capable of consuming the goods that it is producing. This is a stupidity and, moreover, a system that produces crises. Therefore, we have to re-think the socio-economic model that we have today, he stressed, mentioning his most recent book titled ‘Another Now’, in which he writes about what a fair and equal society would look like.

On the future role of banks and states

It is not a surprise that, therefore, Varoufakis is convinced that the world will be – and already is – economically driven by digital money. However, the interesting question is, according to Varoufakis, what will be the future role of commercial banks. He believes that it would be best if they, as a middle man, no longer existed and we, as individuals, would have bank accounts directly with the central banks.

Coming from the financial sector to a state role, Varoufakis clearly disagrees with the American economist David D. Friedman’s argument that the state is unnecessary and that all its functions should be left to the market. More on this in a video interview.

You can view the interview with Yanis Varoufakis in its entirety HERE.

This article is available also in Slovene.