Yanis Varoufakis, author of The Global Minotaur –a classic in modern political economy –and a professor of economic theory at the University of Athens, discusses current global issues. He is joined by Scott Baker, president of Common Ground, NYS coordinator at the Public Banking Institute and a writer and editor, who approaches the issues from a Georgist point of view. The two voices complement each other in what turns out to be one of the most comprehensive discussions of the world economy to be found anywhere.
The discussion spans decades of American economic history from protectionist beginnings to post WW II support for the German and Japanese economies and then to the end of the American middle class’s “golden” decades. Much of the discussion revolves around the concepts of “recycling surpluses” and regulating capital flows, but the speakers are not timid about casting blame for today’s economic problems. The downfall is traced, in part, to the “hubris” of the American administration, which “abused the privilege of printing dollars.”
Wall Street and “financialization” are also cast as villains. “Tsunamis of capital,” of profits from Europe and Japan and later from Russia and China are described as essential for” maintaining the new model of American hegemony.” The policy’s victims were the American blue collar workers: Wage deflation was one of the mechanisms by which foreign capital was attracted to Wall Street and why it found higher returns in the United States than anywhere else. China’s role in the new economic picture is also discussed at length, and the speakers look at the dangers of China’s “currency manipulation” and of a possible implosion of the Chinese economy.
Looking at stabilizing economies around the globe, the speakers also weigh in on possible solutions to the problems. Varoufakis recommends a new international organization that would be “the effective bulwark that stabilizes the damage caused by the World Trade Organization.” And Baker advocates for “public creation of money” as a way to create jobs that are not being created by the private sector, “which seems to want to speculate and to do currency manipulation.” The conversation concludes with a call to remember that this is “a very “small planet, and we should think of the interests of all of us as utterly interwoven.”