for, | November 24, 2021

Technology and Redistribution of Power (with Yanis Varoufakis)

The outspoken former Greek Finance Minister joins Azeem Azhar to discuss tech, economics, and the future of democracy.

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AZEEM AZHAR: Welcome to the Exponential View podcast where multidisciplinary conversations about the near future happen every week. As an entrepreneur investor and analyst, I’ve been an insider in the technology industry for more than 20 years. And during that time, I have observed that exponentially developing technologies are changing the face of our economies, business models, and culture in unexpected ways. Now, every week I return to this question in my newsletter Exponential View in this podcast and in my recent book, The Exponential Age. Those of you who listen to my podcast know that the intellectual diversity of our guests is one of our strong suits. This week’s guest has quite a special heritage. Yanis Varoufakis is an economist and a mathematician who served as Greek Finance Minister in 2015, pursuing what was often seen as a radical left agenda coming into conflict with the European Union. He’s been a strong advocate for a new way of thinking about the intersection between democracy, finance and the economy. For many years, he has championed the blockchain as a mechanism for putting the control of the monetary system back in the hands of the people. In 2020, Yanis released a work of speculative fiction, Another Now, which imagines an alternative reality where mass organization has changed the world. No more banks, no more billionaires, no more tech giants. Like all great science fiction, it’s not about the future, it’s about the present. Yanis Varoufakis, welcome to Exponential View.

YANIS VAROUFAKIS: It’s great to be here. Thank you so much for inviting me.

AZEEM AZHAR: You have written several books in the past alongside being an academic and a politician. This is your first novel. What did you feel you could say in fiction that you couldn’t say in your previous books?

YANIS VAROUFAKIS: A vision of the future, because when it comes to explaining the past or to providing readers with my analysis of where we are and how we got here, I have no difficulty writing an essay, a book, delivering a speech in the first person. I think that the transformation from slavery to feudalism happened for those reasons in that particular way then from feudalism to capitalism, then we went to the 20th century with monopoly [inaudible 00:02:23]. I can do that, but when it came to stop dodging the bullet of answering the question, if you don’t like capitalism mate, what’s the alternative? I have been avoiding this question all my life because it’s such a damned hard question to answer. We have to answer the question if we don’t like capitalism, what is the alternative? So one reason that I never actually sat down, provide such an answer was that every time I started thinking of an answer, I would immediately disagree with myself.

AZEEM AZHAR: Because there are such contradictions in the way in which the future might play out. What takes us to freedom might take us to servitude.

YANIS VAROUFAKIS: Yes, that is one incredibly important reason. The other one is that there are many alternative ways of doing things and I’m somebody who loves markets. At the same time I love them because it allows me a sense of autonomy. I don’t have to negotiate with anyone to buy these earphones, I just go and buy them. I don’t have to have a long discussion with anyone. So it’s liberating. Markets are liberating, but at the same time, the idea that of something for nothing is so deeply opposed to my own existentialist and philosophical makeup. So I have disagreements with myself about all those things. To answer your question, the answer is this, that the novel form simply presented itself to me as the obvious way of resolving this problem because in a novel you populate a fiction of the space with characters and you can put different ideas of yours and different characters and let them fight it out.

AZEEM AZHAR: As they do occasionally with themselves in the current book. At the heart of some of the things you’ve said recently, you strike at, I think, some of the fundamental assumptions of how we get here and what has made our political economies. You’ve talked about the challenges of markets, right? And we think of markets as being a really effective way of being able to set prices across an economy. On the other hand, you’ve also described the failed democracies of the west. And we think of democracy as at least being the least bad system for finding political legitimacy. One person, one vote. So how do we square those critiques with a sort of a vision of the future?

YANIS VAROUFAKIS: The idea of democracy is a very radical one. And the idea of one person, one vote is even more radical, but come to think of it, democracy has spread only as part of exactly the same process that took away all the important decisions from the political sphere where one person on vote in the end prevailed and put them in another sphere where one person on vote doesn’t prevail. So for instance, the big decisions are not being made by government these days, they’re being made within the confines of corporations. And in corporations, you get as many vote as you can afford as a shareholder. So the more money you have, the more votes you have, and if you don’t have money, you don’t have any votes whatsoever. Think of what Zuckerberg is trying to do now with Facebook. He’s envisioning a digital life in which you and I, and everybody else can meet maybe wearing those incredibly unwieldy 3d goggles and whatever.

AZEEM AZHAR: This is his metaverse idea.

YANIS VAROUFAKIS: His metaverse. So you walk into Zuckerberg’s metaphors and all manners of joy await you there and consumption and interaction with other people that you don’t even need to leave your house to do, which is at the same time, very alluring, a very dystopic. But nevertheless, this is a space that owns to one man. There’s only one vote, one person One vote, one person, and that person is Zuckerberg. So what I’m saying is the more democracy spreads to the political sphere, the less important the political sphere was for making decisions. Industrialists were making the decisions. And then it was finances.

AZEEM AZHAR: I think back to something that happened during the coronavirus pandemic, where you had governments trying to make decisions and companies standing in a different position. And I think back to the time when we were very excited about the possibility of contact tracing using smartphones, so all of us carry smartphones. And the idea was that if I had been exposed to coronavirus, we could figure out who my phone had been near and therefore know who had been near it. And there were two approaches to implementing this. One was a centralized approach where your name and your location is captured in a database that would make Eric Honecker and the Stasi proud. And it would serve the public health purpose. The other approach would be a decentralized approach where our privacy is protected and there is no centralized register for who was where and who met who. But if I had been exposed the decentralized system would’ve told the people I’d been near to that you were close to someone with a coronavirus, sort of risk. Now the human rights people, the privacy rights people, the people who kind of consider the needs of the demos largely favored the decentralized approach. It achieved the public health outcomes without the risk of creating this sort of all seeing state. But most governments wanted the centralized approach. And in the end it was two large technology companies, Apple and Google who control the operating systems, who said, no, you can build a centralized version if you want, but what we are going to enable for easy development on our phones is a purely decentralized model. So I look at that example and I say, well, I’m quite pleased with that outcome because we want our rights protected. But from the question of democratic legitimacy, I’m not sure the process was correct. And I guess the question I would put to you is that we seem across a lot of areas to be in a point where the political establishment with its democratic legitimacy doesn’t necessarily make the right decisions and we have to fall back to these large companies with their own capabilities to do that.

YANIS VAROUFAKIS: To begin with, let me say that I don’t think we live in democracies. I think that the idea that we live in liberal democracies is widely exaggerated. We live in oligarchies with periodic elections that provide them with democratic legitimacy. Democracy, I hope you allow me to say this as a person of the Greek predicament comes from this town here, Athens, where I’m speaking to you from. But that was a very, very, very fragile flower. It only lasted a few decades and then it never reappeared anywhere in the world in a purely democratic form. It wasn’t even pure back in Athens, in ancient Athens because the Metics, the foreigners, the migrants, were not part of the demos. The women were not part of the demos. They were slaves. But nevertheless, what was significant about ancient Athenian democracy was that it was a regime in which the poor run the government, because the poor were by definition of the majority. Okay. There were men and there were citizens, but nevertheless, [inaudible 00:09:41] aristocrats, people like Plato hated democracy. They loathed it. Plato was a staunch anti-Democrat, even sailed all the way to Southern Italy in order to stage a coup against the democracy there. What we refer to as democracy is a result of a different tradition, which begins with Magna Carta, where the Magna Carta was an accord, agreement between the king and the barons. A kind of equilibrium between two kinds of authoritarian power. And let’s not forget that part of the Magna Carta was the respect by the king of the baron’s right to have slaves. So the demos was always subjugated in this liberal process, which led from the Magna Carta to the American Constitution. But to come back to your question, Google and Facebook and Amazon and Apple do not want the state to become all powerful because they fear the state. So there will be times when they do the right thing by us, progressives, as in the example that you just mentioned. To be a dialectical rebel, that is a rebel that has a capacity to understand the internal contradictions of the systems of power all around us. Whether we’re able to recognize the good and the bad that comes from capitalism, from Google. I remember a few years ago, I was invited to give a talk at the Google campus in California. And they were very surprised to hear me thank them for inventing a human right. And that is Google search. And I said, the problem, however, when you invent such a facility, which then is so important to people that it becomes a human right, that you can no longer monopolize it. So we have to take it away from you folks who have to nationalize or internationalize it. I think the example you gave reflects this dialectical internal contradiction of Google, Apple, and so on, at once providing us with things that are crucial for humanity, and also some defense mechanisms from the ridiculous power of the state over us, which we experienced during the pandemic, the state having the capacity to lock is in, for instance. While at the same time, building up their own imperial power with Google, Facebook effectively demanding their right to own us without the [inaudible 00:12:26] of the state.

AZEEM AZHAR: Without the oversight of the state. I think the thing that’s fascinating, of course, is the close relationship between the technologies and their capabilities. You talk about the new human rights that Google created in giving us access to so much of the world’s knowledge. And in your book, you describe a new acronym, TATIANA, that astonishingly there is an alternative to the way that we have been thinking and a large part of the way that I think you articulate that alternative is on some of these emergent and breakthrough technologies. And one in which you are quite excited about, I think it’s fair to say, are some of the blockchain technologies. What is important for you in what blockchain offers us?

YANIS VAROUFAKIS: Decentralized trust creating systems. If you use your Visa card or your MasterCard to buy something off the internet, it’s convenient, it’s straightforward. But what happens effectively is some oligarch, some financier owning Visa or MasterCard, or Bank of America or Deutsche Bank or whatever has a ledger on which everybody’s financial details sits. And what this central planner of the private sector does is they take numbers from one cell and put them in another. And at the same time, they know exactly what you’ve consumed. They sell their information to other companies that treat you like a product. So the complete alienation of humanity as a result of the convenience of internet purchases. Now, if you have a transaction on one of the crypto platforms, whether it’s Ethereum or Bitcoin or whatever, what happens is quite astonishing.

YANIS VAROUFAKIS: You register your identity, your identity is checked by hundreds and thousands, if not millions of computers. So no one person establishes who you are. And then the transaction that you make is also verified by millions of computers, so no one knows exactly who you are and what you’ve done, but the system as a whole, the community as a whole, has contributed to the verification of this transaction, whether this transaction is voting in a referendum, contributing money to [inaudible 00:14:54] international or buying something. So blockchain for me is… I understand why especially youngsters are fascinated by it, but at the same time, I’m deeply worried by the dangerous fantasy that this can replace money in capitalism.

AZEEM AZHAR: I’m going to come into that question in a second. I want to follow up with just an observation. The way you describe blockchain there, which is how do you get a large group of people to operate in a trusted system where we cannot assume trust or good behavior by any one of them or any group of them? That seems to be the central problem of political theory. That is what Hobbes argues we solve through the Leviathan. It’s what Russo and those early group of revolutionaries argue that we generate the social contract for. It sounds like it is a mechanism for creating a society that can somehow cooperate and live within rules. That sounds like a pretty halcyon promise though.

YANIS VAROUFAKIS: Well, I think that’s a bit exaggerated because no blockchain can stop somebody from clobbering you over the head and stealing your watch. There’s no guarantee that you’re not going to be raped as a result of being part of the blockchain community. So let’s not exaggerate. The Hobbes argument concerns the monopolization of violence by a center state, because you simply cannot trust the behavior. It’s a very pessimistic view of human nature, but that’s Hobbes for you.

AZEEM AZHAR: That’s right.

YANIS VAROUFAKIS: You also have David Hume who opposed Thomas Hobbes and he believes that the communities develop social conventions of trust. And this is a more anarchistic libertarian perspective where you don’t need to have a Leviathan to do that. I think that blockchain is closer to Hume, but it concerns a very small subset of the things that we need in society in order to guarantee peace and to guarantee nonviolence. But it’s a very important part of it when it comes to transactions, when it to keeping a common ledger of who has a right to what. That I think is important. And this is where blockchain is going to come into its own, especially when it comes to a registration of assets, of this stamp belongs to me, this stamp collection doesn’t belong to you, that kind of thing.

AZEEM AZHAR: But then let’s take that into the example that you’ve often spoken about, which is the ability for blockchain based mechanisms to form the bedrock of the financial and the monetary system and the flow of funds that occur across an economy as a means of reconnecting the people with the sort of central monetary authority of a federal reserve bank. Why does that work? And what’s broken about the system that we have today?

YANIS VAROUFAKIS: Well, let me give you an example of something that was very tangible and something that was inches away from implementing back in 2015, here in Greece, in my country, I was a finance minister as you pointed out at the introduction, in a country that didn’t have its own currency. We have the European currency, which the Greek government does not control. I was planning and I had already developed a system of making payments within the country, using the currency which was established, the Euro, but without relying anymore on the Central Bank of Europe, based in Frankfurt and without having Bitcoin. The idea was to employ blockchain as part of a payment system that would live within the Greek tax office. Everybody has a tax file number. Well, I would simply attach an account to every tax file number on the tax offices website. And the government would be able to give, let’s say to poor people, 500 equivalent of dollars. That money could not be withdrawn in paper form because we don’t have a central bank and we don’t have printers, but these would be effectively future tax credits. So a poor person gets this 500. They can use a pin number to transfer it to the supermarket. Why would the supermarket accept that payment given that they cannot withdraw the paper money? Well, because they have to pay taxes, the supermarkets. So these units allows them to pay their taxes. So they would accept that money from the poor people. You don’t need the blockchain to do that. However, Greeks do not trust the government and they do not trust the government to create credit units, money units because they think well, if you politicians can create money units, God knows how much of this you will create. You will create inflation. You’ll give it to your friends, to your associates.

AZEEM AZHAR: And you are describing here some of the critiques of the quantitative easing that we’ve seen in most advanced economies for the last decades, so yeah.

YANIS VAROUFAKIS: That’s why I wanted to use a blockchain because if these transactions on the tax offices, the equivalent of your IRS were based on the blockchain, the community would be able to verify all the payments and they would know how much money there is in the system. So the total supply of money in the system would be utterly known by everyone, while everyone, and each contributor to this system, would have complete anonymity when it comes to their transactions. That would be a magnificent combination of what blockchain has to offer a community. With state money, which is the only way of properly democratizing money, because private, blockchain based currencies, like Bitcoin simply feed into a private oligarchy that use and abuse the system against the interest of the many.

AZEEM AZHAR: So, ultimately your blockchain suggestion for Greece didn’t go ahead.

YANIS VAROUFAKIS: No, because we had a coup d’etat against the people. The people were overthrown. We had on the 5th of July of 2015, we had a referendum and we got 62% of the vote. Can you believe it? 62% of the vote backing this kind of idea. And on that night, my prime minister and colleague and comrade until that moment surrendered to the international creditors. And on that night, I resigned.

AZEEM AZHAR: You couldn’t have made the story up if you were writing a piece of speculative fiction. Now, of course you did do that. And we’ve had six years now of greater development of the blockchain ecosystem and dozens of central banks now are researching or have announced small projects for digital currencies and blockchains themselves in some way make their way into your book. I notice that the way companies get owned looks not dissimilar to certain types of decentralized organizations that people are trying to build today using blockchains. Looking out from 2021, how would you articulate the potential of this technology to tackle some of the challenges that you’ve seen, either the relationship with the banking system or actually the sort of fundamental way that shareholder capitalism operates?

YANIS VAROUFAKIS: Well, I tried to answer that question by writing this novel, Another Now, because the answer to this question is a complex one and inside that novel, but let me, for the benefit of our audience, narrate the basic parts. Look, the question of ownership of corporations and the running of corporations, that’s unrelated to blockchain. You don’t need blockchains for that. To move beyond the system that we now have of extreme concentration of ownership. Think about it. 90% of companies listed in the New York Stock exchange belong to steel companies. BlackRock [inaudible 00:23:14]. They own 90% of old [inaudible 00:23:17] in the New York Stock Exchange. Period. This is not even capitalism. That’s feudalism. It’s a kind of techno feudalism as I call it. And this is what you get when you’ve got tradeable shares. When shares in the company can be purchased, they will be purchased by the big dinosaurs. And the big dinosaurs are going to effectively take over the way they have. So, in my book and in my mind, the way to democratize corporations and effectively to revise markets, even, is to move away from traded shares. For shares to become like library cards in a college. When you enroll in a college, you get a library card. That library card gives you the right to do things, like take books out or connect to the internet in your college, or vote in the elections of the students union or whatever, access to places. So imagine a new corporate law where it simply stipulates that you have one member, one share, one vote for every corporation. It sounds like an incredibly radical idea, but not more so than the idea of one person, one vote in democracies. And when it comes to money, who controls money? I took my plan, my experience, and my vision for the system that I described to you just now in 2015 for Greece and I said, okay, how could we create a crypto Dollar, a crypto Euro, a crypto Yen, which cuts out the middleman? The middleman being the commercial banks, the Wall Street bankers, because what happens today is this. The Federal Reserve trying to stimulate American economy since 2008, they’ve been doing it, not just the pandemic, since 2008, what they do is they print money. They give it to the Bank of America city, Citi, JP Morgan and so on, to the Wall Street bankers in the hope that they will then lend it to the large corporations that will use the money to invest in good quality jobs and green energy. It doesn’t happen. What happens is that these large corporations take the money, go to the New York Stock Exchange, buy back their own shares, share prices go up, their bonuses go up and there’s no green energy and there are no good quality jobs. Okay? So all this printed money by the Federal Reserve is wasted. But imagine that using a blockchain, instead, every resident of the United States, every resident of the Eurozone has an account or if you want, a personal identification number like you do in Etherium or blockchain on the blockchain of your central bank. And when the central bank wants to stimulate economy, everybody gets a few credit points, $1000, $2000, $3,000, $5000. And that’s a basic income for everyone. So you want to print money. You want the money tree. Yes, you do. Because you’ve been plucking the bloody money tree since 2008 on behalf of the corporations and finance and Wall Street. So use a blockchain. Everybody knows how much money there is there. So those who freak out about inflation will no longer freak out about inflation because-

AZEEM AZHAR: Well, everyone is getting the money.

YANIS VAROUFAKIS: Everyone’s getting the money and everybody knows how much money there is if it’s inflationary or not. So that keeps a check on the Fed, not to overdo it by pumping too much money into the economy because everybody will have the same information as a central banker. Can you imagine that? How liberating that would be? Okay. So to put it succinctly, in order to revive markets, we have to get rid of two markets. The market for labor, which is predicated on the idea that owners do not work and workers do not own. So one member, one share, one vote ends the labor market because in the end, if you have one member, one share, one vote, everybody’s a shareholder. Ll workers in a company are shareholders. So they’re not receiving wages, they’re receiving a share of the net revenue. So you end the labor market that way. And with a second idea of a blockchain dollar, a blockchain crypto Euro, you kill off the banks because at the moment, the only reason why banks exist is because we have given them complete monopoly over the payment system. So a blockchain dollar ends up monopoly over the payment system. So if there’s any reason to have banks, let them exist, but you will not be creating the monopoly of Wall Street the way we have been doing it for 150 years.

AZEEM AZHAR: There are a lot of big ideas in there. And I want to come to this idea of companies and how companies could be owned a and controlled. One of the things that I struggled with in that idea is that part of the job of a company is to deploy capital productively in the economy, to put capital to work to things that people want, or that sometimes the things that we don’t know we want, but we need. And sometimes things that we neither want nor need, but end up desiring. But mechanism of allocation comes with it, this idea that as a shareholder or as an investor, you are taking risk. When I invest in early stage technology companies and I put my capital to work, I’m taking risk and there should be some incentive alignment that gets created there. How do you align those incentives in a space where everyone equally has one share and no one can get two shares and no one can put more productive capital to work if they have it, or if they generate it then than anyone else?

YANIS VAROUFAKIS: Two ways. And it’s all in Another Now. Let me plug the book again because I struggled myself with these questions, as you can understand, and it’s in the book. You can tell that I’ve struggled because there are disagreements between my characters having the kind of conversation that you and I are having. So the answer to your question is in two ways. Firstly, the fact that everybody has one share in the company doesn’t mean that they get the same money out of the company. There’s a basic income, in my ideal corporation, in the way that I have described the corporation in Another Now, everybody gets a basic income, but everybody gets bonuses as well. And the bonuses can be very large. The only difference between the current capitalist world in which we live and the non-capitalist world in Another Now, is that the bonuses in the corporation that I have tried to describe in my book are decided, collectively, they’re decided democratically, how can that happen? Well, I have a system which I like and… Well, provocatively to the Eurovision song contest [inaudible 00:29:58] horrible [inaudible 00:29:59] institution here in Europe, which is a very interesting voting system. And so the idea is that everybody in the company gets a hundred brownie points and you cannot distribute them to [inaudible 00:30:09] but you distribute them to others whom you think have contributed to the success of the company. And then you have a bonus file, which is divided in proportion to how many votes you got from others relative to how many votes others got from others. So there is an incentive within the company to do good things for the company and to make the company more successful and more successful means higher net revenues, but not just that. Could also be you’ve contributed to the climate, to the atmosphere, to the social bonds within members of the corporation. This is up to the members of the corporation to decide. And secondly, because there is no income equality, people get different amounts of money in their bank account with the Fed, the crypto account, they have different amounts of money depending on the bonuses that they received. Those who have spare cash can lend it to other enterprises. So effectively they contribute. Instead of getting shares in other enterprises, they get bonds in other enterprises and they can get a higher interest rate for instance, in enterprises that are more risky, but this system does not allow you to buy shares in the other company because what does it mean to buy a share? You buy the right to squeeze from future workers the value that they create, even though you are not one of them. The logical conclusion of that is BlackRock [inaudible 00:31:45] and [inaudible 00:31:46] owning 90% of the corporations.

AZEEM AZHAR: But there’s another argument of course, which is that in the last 2 or 300 years, future workers have always been wealthier than previous workers and a worker in 1880 earned far less than a worker in 1930. And on the non-financial measures also did better, longer lifespan, lower maternal mortality, longer time in education and so on. So there is an argument that actually from a redistributive perspective, it makes sense to impose something of a burden on the future workers, because they may well be more well off.

YANIS VAROUFAKIS: Well, to begin with what you described, the march of triumphant capitalism was certainly true up until 2008. 2008 was to capitalism that which 1991 was to socialism. To soviet socialism. That is the end. This constant progress where every generation of workers could expect their kids to have a better life than they did ended. Actually, that ended in the ’70s in the United States. It was sustained for another few decades with the myth of house prices always going up. That crashed in 2008. And since then, one of the reasons why we have neo-fascism, Trumpism, right wing populisms, xenophobia, call it what you might, I call it fascism. Post-mortem fascism. The reason why it’s on the rise is because this expectation is no longer there. The vast majority of families expect their kids to find it harder to make ends meet than they did. In the post capitalist socialist society that I have designed in the Another Now, if we think if we lived in that kind society, that there needs to be a distribution of income of the older generation to the young generation, there’s nothing stopping us from doing it. What we have removed in that post capital social society is a systemic tendency inertia of the system towards concentrating on the one hand wealth, and secondly, destroying productive opportunities and destroying capital that could save not just social justice, but also the planet from environmental disaster.

AZEEM AZHAR: We’ve also just come through COP26 at Glasgow, which was a great coming together of activists and governments and businesses. One of the messages that I took away from it was that the pathway from companies and the potential dividend from the technologies was more optimistic than what the political process had allowed for. So I see a gap emerging between the sort top level commitments of countries, for example, to phase out coal and the reality in the market of the cost of capital for funding a coal plant. It’s 15% per annum, more expensive to fund a coal plant than a solar plant, which means much less capital will flow towards those projects. So I look at COP26 and I see on the one hand there is an engine that’s moving forward that relates to how the financial markets are implicitly pricing carbon, how companies have made progress towards their own processes of decarbonization, at least at one level and what innovation promises and the political process being mired in some thorny issues that seem always to throw these processes amuck. How did you view it?

YANIS VAROUFAKIS: Hmm. As an unmitigated catastrophe that humanity will look back to with shame. There is no doubt that the money is there and the technology is there. There is no doubt that we are at an advanced stage of creating the technologies that would allow the [inaudible 00:35:50] transition successfully to proceed. The point I’m making is this, though, if you think about capitalism as a process that started 250-300 years ago, it’s a process of commodification of goods, turning goods into commodities, privatizing the commons. This is [inaudible 00:36:13] enormous wealth and at the same time a lot of pain. When you have commons that have huge value to humanity, but zero price like carbon that is underground, the only thing that prevents or slows down it’s exploitation is the private cost of exploiting it. But if the public cost of exploiting is a hundred times, a thousand times, a million times more, it will still be exploited unless you have governments that effectively say these coal mines are going to shut down today. But when you’ve got governments, which over the last 30 years have been completely taken over by the same financiers who are bankrolling the process of exploiting the commons, who at the same time want to fix their image by calling themselves a steward so they’re going transition while continuing to bankroll the fossil fuel industry. When you’ve got governments like that of Australia, and I happen to be an Australian citizen, so I think I have a right to bad mouth the government oof Australia, who are constantly hiding behind Saudi Arabia in Glasgow in order to stop any commitment to phasing out coal, humanity is doomed.

AZEEM AZHAR: May I thought just present a different picture though? The different picture is that we are already seeing 25% of carbon emissions have some kind of imputed price on them. That’s an incredibly low number, but across the market, there is an implied cost of carbon. That implied cost is the higher interest rates that you end up having to pay for funding a coal plant rather than a solar plant. The arrival of things like carbon border adjustment mechanisms, these sort of so-called CBAMs mean that your exports will have their embedded carbon priced the moment they move into the Eurozone for sake of argument. So it feels like there are deeper mechanisms that are at work, even if the headlines are these sort of disappointing political failures. Am I just being too optimistic and clutching a rose tinted view of what was going on?

YANIS VAROUFAKIS: Yes. Badly and inexcusably, if I may.

AZEEM AZHAR: Of course.

YANIS VAROUFAKIS: Look, this is all American and European Propaganda and deep self-illusion that is at work. Joe Biden came to Glasgow and preached the green transition while his people back in Washington, DC were decoupling the infrastructure bill from the build back better bill. And the only way he could pass the first one was effectively to teach any commitment to the green transition and to fund new roads and to fund new airports, to fund all those things that will increase, not decrease, emissions, at the same time to be preaching the Indians and the Chinese, and to be talking about border adjustment and so on. This is simply part of a trade war and not part of a global green transition. Take the European Union. The European Union, which waxes lyrical about the green transition. We have a president of the European Commission who’s number one prior when she was appointed was the green deal. She made an announcement of 1 trillion euros being spent over the decade on the green deal. I did the numbers. I looked at the actual numbers and she had 29 billion in the bank, not a thousand, but Europe does not have even a plan, or even a discussion going on about a green energy union. So you have in Germany as we speak, now, this is preposterous, then richest country in the world… Germany, a country that is swimming in surpluses, financial surpluses, trade surpluses, surpluses in services, surpluses even of the federal budget, at least a structural surplus, they’re building lignite powered electricity stations. This is the worst contributor to greenhouse emissions in the world. Lignite is a very dirty fuel. Germany is building new lignite stations today and to be talking about a border adjustment tax, when inside the union, we don’t have a green transition plan for Europe. So no, it is a complete disaster. We should hang our heads in shame and find absolutely no succor from the fact that the money’s there and the technology’s there. It’s a political failure. It’s not a technological failure.

AZEEM AZHAR: What is it about technology that makes you hopeful?

YANIS VAROUFAKIS: My father was a metallurgist. A chemist and a metallurgist and he took me into a steel making factory and he showed me how this iron turns into liquid and he was telling me the stories of how history that used to be measured in millennia before the invention of steel then sped up and was measured in terms of centuries after steel was discovered 2000 BC and then how the steam engine sped up history faster as technology, upended superstitions and ancient forms of slavery in feudalism. The human intellect emerged and so on. So I’m still very much taken by the idea of technology being a fundamental driver of the human spirit, while at the same time, having the capacity to create nuclear bombs and climate catastrophe. So it is something wonderful, something spectacular, it has a poetry about it, technology. It allows us to create mechanical slaves in order to liberate humanity. But at the very same time, it allows us to be enslaved by the machinery that we create, like Dr. Frankenstein was enslaved by his own creation. So I always said in previous books, I made the point that technology is our fate in the same way that humanity and poetry and drama is, but there are two potential outcomes of this technological drive. One is Star Trek, liberal communism, and the other is The Matrix where we are become complete slaves of our artifacts.

AZEEM AZHAR: What you describe of course goes further back than Frankenstein. It reminds me of King Midas’ touch where we are unaware of the power and what the consequences of that would be. You describe these two extremes though, the idea of the Matrix, the artifacts that we create that rule over us. And on the other hand, a Star Trek, which is, I think the word of one British commentator, fully automated luxury communism. You simply ask the replicator for what you needs and it provides. One question is whether that really is what drives the human spirit. And I think a little bit about the state that we are that say an American might find themselves in the 1970s, 1980s, even now, longer lifespans access to entertainment and how that compares to perhaps the condition of the Americans in the late 19th century or the mid 19th century. The gap between then and now is significant. It almost feels like science fiction. If you presented a smartphone to someone in the mid 19th century, it would look like a Star Trek future. And yet we still have deep, deep-seated issues. So we still have aspects of struggle. So even if we achieved this sort of ultimate liberal communism, it’s not the end of history.

YANIS VAROUFAKIS: Nothing’s the end of history. You can see that in Star Trek, there are very interesting conflicts and discussions of unresolved issues. Humanity will always find a way. And in my book, in Another Now, I try to make this point because in this book, I depict the post capitalist, socialist kind of utopia, but nevertheless, there are crisis in there. I try to create a crisis, an economic crisis within the socialist society, and also huge questions about [inaudible 00:44:39], about domination, about power that would not be resolved if we end the scourge, which for me is capitalism. But, I don’t think that the smartphone today is equivalent of the replicator. And let me explain why. Because the smartphone today, while it is wonderful and I can’t live without my smartphone, I have to confess that, nevertheless, it is still produced in the context of a process of production in which people producing those machines and people using those machines are products. They are disconnected from their essence. They’re alienated to use an [inaudible 00:45:20] system. The worker who builds iPhones [inaudible 00:45:24] is completely alienated from the iPhones he’s producing. The person who uses them here in the west is also alienated. We become products of Google, of Facebook, of Amazon, of the advertising. Why? Because of the ownership of means of production, which in the end creates this wave of elimination. The replicator in Star Trek on the other hand ends the dominance of the very, very few who own, but not work on the many who work and do not own, or at least that’s the hope. In that case, we will then have other problems because we cannot survive without problems. The human spirit, it needs problems in order to reach its apotheosis.

AZEEM AZHAR: And I wonder about whether in this binary that is set up and understand it’s a device, it’s a device to get us to think, but I wonder whether the path to Star Trek ultimately leads to, to the matrix. And the reason I asked that is that I remember when the web was reinvented as web two. And we went back to the original spirit of open platforms and the person having the ability to publish and be an agent on this network. And once we were persuaded to do that, the organizations that had built the most successful mechanisms of that started to shut down that openness. And in fact, you move from that Star Trek liberal openness agency to people living within walled gardens being pushed by algorithms one way to the next. The path to the Star Trek led us to the Matrix. So what mechanism would you need to construct to prevent that happening, or is that just simply a game of insisting that there is political engagement by people even as their means and ways and ways of life become more comfortable?

YANIS VAROUFAKIS: I don’t agree that the path to Star Trek to the Matrix. It is true that the first internet was cooperative, open source, open protocol system, a socialistic system where everybody contributed, we still have elements of that. All the Googles and the Amazons are sipping on top of that POP, SMTP, HTTP, and so on infrastructure that was cooperatively created. But the reason why it was cooperatively created and the big sharks did not mess with it and allowed the cooperative development of the first internet was because they hadn’t realized it’s economic value. Once they realized it’s economic value, they took it over and they overlayed on top of the cooperative system. Even if you think of Linux. Linux is a fantastic exercise in crowdsourcing huge amounts of work to create fantastic software.

YANIS VAROUFAKIS: But, even though Linux has succeeded in pushing out Microsoft, now Microsoft has a huge amount of value because it uses Linux’s technology it in order to monopolize the market. So, to answer your question, the reason why the first internet, which looks a little bit like Star Trek led to the Matrix was because it was not Star Trek, because it was a cooperative enterprise that was on the margins of capitalism, then capitalism [inaudible 00:48:48] took it over. So in Another Now, if you do have corporate law, which has one share, one vote, one member for every corporation, then you have killed off capitalism. If blockchain replaces the monetary system passing through Wall Street, then Star Trek will not lead to the Matrix. At least that’s my line and I’m sticking to it.

AZEEM AZHAR: We’ve explored the deep-seated problems within politics, corporations, and finance, but what forces will drive the transition to a world where these institutions give up their power and influence to the people that doesn’t rely on a destructive revolution?

YANIS VAROUFAKIS: In the book, I try to give flavor of this through my techno rebels who are peaceful, but have a capacity to use the instruments of the enemy and turn them against the enemy, like financial engineering, like crowdsourcing and ideas for attacking simultaneously whatever reputational capital big companies have in order to see their market value. Interestingly, one of those techno rebels groups that I described in the book, I called them crowd shorters, seemed to have had some kind of reflection upon the real world because of the GameStop example where I started getting telephone calls from journalists in the United States saying, oh, are your crowd shorters in action here? So, read the book, I won’t say more on this, but in brief, if you think of the 19th century trades unionists, they were heroes and heroines in the sense that to mount a strike in a steel works or in a mine, in a coal mine, that involved huge personal sacrifice for very little personal gain. The only way of overthrowing a system that needs to be overthrown, and to do it peacefully, is by reversing the cost benefit, creating campaigns whereby we can bring Amazon down for instance, with very small personal contributions, but with very large effect. And I think that the internet and financial engineering give potential movements the capacity to do this peacefully and effectively.

AZEEM AZHAR: Yanis, you raise a lot of really interesting and challenging ideas in your new book, Another Now, but if listeners want to follow you or be in touch with you, what’s the best way to find you on the internet?

YANIS VAROUFAKIS: Oh, If you know my name and surname, put them together, .eu is my website. Google has given us this human right of searching.

AZEEM AZHAR: It has given us that human right. And thank you so much for your time today.

YANIS VAROUFAKIS: Well, thank you for inviting me and for the very interesting conversation.

AZEEM AZHAR: Now, if you enjoyed my conversation with Yanis, you might enjoy some of the related podcast in our archive, particularly my discussions with Sergey Nazarov, co-founder of Chainlink, or Meltem Demirors of CoinShares about how decentralized finance could change the world. To become a premium subscriber of my weekly newsletter, go to, where you’ll see a 20% off discount offer. To stay in touch, you can follow me on Twitter in the US that’s Azeem, @A-Z-E-E-M and elsewhere, it’s Azeem, that’s @A-Z-E-E-M. This podcast was produced by Mischa Frankl-Duval, Fred Casella, and Marija Gavrilov. Bojan Sabioncello is our sound editor, and the podcast is a production of E to the PI I plus 1 limited.