Editor’s note: discussion topics include the role of nationalization in the Another Now model (AN), unemployment in AN, whether AN can overcome the climate crisis, interest in AN, public finance in AN, the scope for and means of debt cancellation in AN.
[After the Oligarchy] Hello everybody, this is After The Oligarchy. Today I’m speaking with Yanis Varoufakis
Yanis Varoufakis is the former Greek Finance Minister, a professor of economics, co-founder of DiEM25 and the Progressive International, leader of MERA25, and a member of Greek parliament.
Today’s conversation is in association with mέta: the Centre for Post-Capitalist Civilization. And the topic is Yanis’s latest book Another Now, published in 2020, which presents a vision of a post-capitalist society. It’s an advanced discussion of the model proposed in that book. If you want an introduction, I wrote an essay and made a 40-minute video doing just that. Though I do recommend that you eventually read the book itself, it’s very good.
Yanis Varoufakis thank you for joining me.
[Yanis Varoufakis] Well thank you for doing everything you’ve done, it’s remarkable what you did, thank you.
[AO] Oh yeah my pleasure, my pleasure absolutely.
I have many questions to ask you, including from some viewers, but we can only cover so much in one interview. So we’ll see how we get on.
Q1 – The first question is about nationalization. In Another Now you briefly mentioned that utilities have been nationalized and I was just wondering what is and what is not nationalized? Because ‘utility’ usually refers to things like electricity, gas, sewage, rubbish, and so forth, but … if you want to jump in you can.
[YV] In the book, what I do is I try to tell a story of how we could change the very fabric of the social economic system that we live in by starting from the fact that these were all nationalized utilities, in Ireland, in Britain, Germany, everywhere, they were created by the state primarily because no private business was interested in creating them. Even the BBC was created by the BBC before there was private radio because the fixed costs were too large.
And then in the 1970s with the onslaught of neoliberalism, with Margaret thatcher in Britain, with Ronald Reagan in the United States a bit later in 1980, you have the privatization of all utilities. Effectively the conversion of state monopolies into private monopolies that were presented as marketized, decentralized, but were not really. I mean if you look at the electricity grid and the electricity network in our countries they are still monopolies except that there is an infrastructure of speculation on energy prices. Which is today, given the rise in energy prices and inflation in the post-pandemic world, a clear and present danger to the fabric of society.
So as far as I’m concerned the answer to this is not a re-nationalization but the answer that I propose in the book – and you know this very well because you’ve done a great job at summarizing the blueprint that I’m putting forward – so instead of nationalizing the privatized utilities, I am proposing the socialization of all companies not just the former nationalized utilities or nationally state-owned utilities. Because I’m challenging the very notion of tradable shares. Something we take for granted, that the property rights over companies are segmented in tiny little pieces of paper or digital pieces they call ‘shares’ and that these shares are traded anonymously in markets called ‘share markets’. I challenge that very notion. I think that in the end it’s even antithetical to the mentality, the philosophy, of the original proponents of market societies like Adam Smith.
[AO] I can imagine some people, say, who would read the book would be wondering what of healthcare, for example? Education? There are two angles to this: the first is in terms of collective consumption rights, and the second is that there are natural monopolies and one could say that certain firms are more suitable to being cooperativized than others. For example, should we let healthcare or energy be solely owned by just those workers who work there, or should this be something that is managed by society as a whole? That’s more where I’m coming from with this.
I get it, and you’re quite right. The network, whether this is the electricity network or the national health service or the public school system, must certainly be common property, common property of the whole of society. But the manner in which you run particular units, let’s say the hospital in a village or in a country town, or a particular clinic within a hospital in a city, or the way we manage a particular power plant within the electricity network, that is where I still believe we need to have a cooperative enterprise-like structure. Because those people who actually run it are the ones who are best placed to know how to run it. Now that doesn’t mean that they’re there for life, that they have tenure. But it does mean that they should have a degree of autonomy within a network, a grid, which goes hand-in-hand with the eradication of a commanding class, a class of managers, top-down, who are sitting in Dublin, or they’re sitting in London, they’re sitting in Berlin, and telling everybody else within that network what to do.
[AO] Okay I understand. The thing is nationalization can be many different things to many people. What you’re saying is there are certain sectors which could be thought as having nationalized ownership in one sense but they’re managed by the workers, the people who actually work there, at the same time. Would that be accurate?
[YV] Yes indeed. It is a commons and the question is who is supervising the whole thing? And this is where an idea which is prominent in Another Now comes through. And it is the idea of having councils, governing councils, which comprise members of the public selected by random lot. And they can be stratified, some of them can be randomly drawn from a group of experts and the rest could be just citizens, like jurors. It’s important not to replicate top-down bureaucracies a la Soviet Union without at the same time letting corporate capital run those shows.
[AO] Indeed.
Q2 – We’ll move on to the next question which is about unemployment. As we know – or we’ll see – a market system will not intrinsically create full employment of labour. So how can full employment be ensured in Another Now?
Ah, this is a very important question because I am a very strong believer in the importance of moving away from labourism, from celebrating labour. I believe in the right of humans to be lazy, not to be employed for gain. If you think about it we have conflated, because we’ve lived in capitalism for so long, we’ve conflated two things that are not one and the same thing: work and labour. In the society that I’m trying to describe in Another Now, labour has gone and it’s replaced by creative work that we do because it’s fun doing it.
Now, some jobs will be nasty and somebody will need to be paid to do it, but the rest of us will then have to have a kind of auction where we give lots of money to those people, who actually get also satisfaction. If somebody has to clean the sewers, but if society creates an option by which to decide how much money to give those poor people who could go down the sewers to clean them, and they pay them more than they pay brain surgeons, more than they pay software engineers, because somebody has to do it, now that somebody gets a lot of satisfaction out of, firstly, being recognized and, secondly, receiving a bonus for that.
But at the same time we should always make sure that we do not think in terms of full employment. You see, look, the left traditionally was against exploitation and against alienation, against working for 10 hours down the mine doing mind-shattering work, repetitive work, and in the factory, and so on. But then at some point, maybe because of the great psychological shock of the Great Depression in the 1930s, suddenly for the left the only thing we care about is that everybody should be working down the mine, in the factory, and as long as they’re fully employed, then everything is hunky-dory.
No it’s not. We should aim at a society where we work few hours to do things that need to be done, and then the rest of the time, you know, we write poetry, we play music, we chat with one another, we take care of one another, we educate ourselves. And therefore the combination of the basic income in Another Now with the fact that everything is voluntary in the end. Because if you have a basic income to fall back on the work you do is work you choose to do, so it’s no longer soul destroying, there are no longer bullshit jobs as David Graeber described them.
[AO] Okay let me play devil’s advocate. I can imagine that there will be many left-wing, socialist, listeners hearing that, nodding along, thinking ‘okay I fully agree, unalienated labour, creative work, no bullshit jobs’. But then they would ask, it sounds nice to say that but there will be people in this society who have the basic income (Dividend), they have the Legacy payment, but they’ve also got paid employment in a firm engaged in commodity production, or whatever, receiving a salary. And so for the people who don’t have jobs they’re going to be at a disadvantage in comparison to those people, because they’re only going to be relying on Dividend and the Legacy. So the question is that question of inequality, and also how are these people going to be able to buy the things that they need to be fully included within society? I suppose part of this is a question as well about how large the Dividend is, but it’s not all of it.
[YV] Indeed, whether it gives you enough outside options, options outside the business sector, that is that is the key question. But beyond that, the idea of a job needs to be challenged. Because we live in a world where if you do not submit yourself to being exploited by others then you can’t live. This is the world we live in, this is capitalism.
But in in the world that I’m trying to describe, and in the blueprint that I was putting forward and putting together, that is no longer the case. And remember, people who work in Another Now in corporations under what I call corpo-syndicalism, they don’t work for somebody else, right? They are co-owners of where they are working.
Now, who stops anyone from creating such an enterprise? Everybody has a Legacy, it’s capital, they can put it together and create anything, any outfit that gives social care, that, you know, creates a comedy store, that provides entertainment services, care to their community. So suddenly this idea that either you manage to convince some capitalist to exploit you so as to be able to go and spend money in the high street to buy stuff, and to have a social standing that you wouldn’t you wouldn’t otherwise have, that simply goes away. We need to reconceptualize social status.
[AO] I don’t want to stick on this for too long but, again, playing devil’s advocate I would come back to that and say: yes, but the Legacy will eventually run out and a firm which is selling products must have enough demand, and so forth, and I suppose I’m raising the issue of can a market system actually provide full employment.
[YV] Haha! You’re going back to …
[AO] To put it this way, everybody gets a Legacy of $100,000, a Dividend of, let’s say, $20-30,000, or something like that, per year, and let’s say the average – not wage – return to capital is something like $50-70 000. It would probably be quite large once the capitalist class were eliminated. But the people who don’t have that return to capital from working in a firm have then, say, $20,000 per year plus their Legacy to play with. So I’m just wondering how do they actually buy things? I mean, at a very basic level.
What you’re challenging is the idea that you can have inequality without having deprivation. Now, I’m saying that it is perfectly possible to have inequality without having deprivation. I think that an economist would interrogate me on the productivity of that society as a whole, and that of course is something I cannot answer because unless you try it out, this is an empirical question how productive it would be.
But if you take into consideration the great advances in technology and also the fact that the greatest advances in technology have been conducted outside the market mechanism. If you think about it, the most significant software design these days comes from cooperative enterprises, from Linux for instance, where people are staying at home, they have a computer, they improve software, they put it out there, and they’re not selling it. They are acting collaboratively and the result of this, you know, millions of ants adding their little bit of technological innovation to this open source system, results in a remarkable increase in productivity.
Now the what holds us behind today is that you have Microsoft, you have Amazon, they take the Linux software and they monopolize it and they create huge rents for themselves out of that. So my hope would be that in a society where the Microsofts, and the Amazons, and the Googles, are no longer unicorns, they are no longer gigantic demons like they are today, because they will simply belong to workers now and therefore they will not have the capacity to gain the huge power that central bank money gives them today, then suddenly the whole of society’s productivity is going to be so high that we’re not going to be having the same conditions of scarcity that we have and we take for granted today.
Because scarcity today is a product of capitalism. Capitalism by liberals is presented as the solution, the cure, for scarcity. I reverse that. I claim that scarcity is designed into, baked into, the system today.
[AO] If I were to crudely summarize that into one sentence, I think say the kernel of what you’re saying there in relation to unemployment is that a given income would represent a much larger share of a much larger social product. Would that be fair to say?
That’s right, and there will be plenty of opportunities for people to get become engaged in work that is fun and soul-enhancing as opposed to soul-destroying. And people will not be thinking of it in terms of ‘Do I have a job? Don’t I have a job?’. If you look today at communities, especially during the pandemic, the pandemic made people do a lot of things for one another. Did they have a job? When they were checking on their neighbours during the pandemic, was that a job? It was work. Was it a job? It wasn’t a job it was work.
[AO] You’re envisaging a large social sector, a non-state, non-market sector, as well. Would that be an important part?
[YV] Absolutely, and remember the local communities will have the opportunity to fund social enterprise sectors and zones by auctioning off the commercial zones.
[AO] Indeed.
Q3 – How can a market society overcome climate catastrophe?
[YV] If it’s not capitalist, it can. Because remember in the blueprint that I draw out in Another Now, to begin with nobody has an incentive to bend the will of governments and local authorities in order to destroy the planet for private profit. This is simply not doable. And also companies can be dissolved by the councils that grade the company’s Socialworthiness. So imagine if we could say that BHP or Rio Tinto depended for their survival as companies on voting by members of the public, who create a kind of assembly, an assembly drawn by lot. Then we would have, as a community, the opportunity to say ‘no, this we don’t do’ and to impose rules regarding emissions.
In sharp contrast, the great and the good coalesced in November in Glasgow for COP26, and what did they do? They fell prey to the supreme power of the lobbyists, whose job was to ensure that their companies continue to emit under the pretence of net zero. That would not happen in a world governed according to what’s in Another Now.
[AO] Q4 – Different question, about finance. There are interest payments in Another Now, both from the central bank and accruing to private loans. Is all interest simple interest or is there compound interest too? Because you say that the credit unions would charge a fee for loans, which would appear not to be compound interest.
[YV] It would be a combination of both. But there’s nothing wrong with compound interest as long as it is not predatory lending and if it is lending of money that actually exists. The problem we now have in the financial sector is that banks lend money that doesn’t exist, hoping that it will be created by the capitalist process so that the money will be returned. And then banks break down, you have bailouts, you have political conditions imposed on bailouts, as happened in Ireland famously after 2008.
But the main thing is that if we have savings there must be a way of investing those savings in productive work. Since I’ve ruled out shareholding, because shareholding is a very slippery slope towards monopoly capitalism which is what we have now, then what happens is you get some money, you can enter into a company with me and with others and use this money, and then you get a certain pre-agreed payment, a return to these savings. You don’t get shares because there is one share, one person, one vote. But there can be a contract whereby a certain amount of money, if the company makes it, comes your way, without that increasing the votes that you get in the running of the company, unlike in capitalism, without increasing your capacity to tell others what to do.
[AO] Q5 – Following that vein, what is the role of public lending specifically? There’s a very important role for public finance in Another Now, through the central bank, the public payment system, the Dividend, Accumulation, Legacy, there’s a very important role there. But I’m just wondering what is the role specifically of public lending? Both for personal and investment loans. Public banking rather than private lending.
[YV] Public banking but not public lending. The idea is that the payment system which today – I mean this is a scandal what’s happening today. If you think about it, to make any payment, to buy a cup of coffee with a plastic card, you have to have an account with some private banker. And this private banker, along with all the other private bankers, has a monopoly over the payment system. They can decide to charge you 2%, 3%, 10%, whatever they want, whatever they manage to agree to as a cartel. It is preposterous.
So, in Another Now the payment system is a public utility. It’s a free public good. No one has the monopoly of it. It simply operates like a commons, it’s a digital financial common. And the very simple way of running it is a ledger a public ledger which is sits on the servers of the central bank, which produces the money anyway. No government, no central banker, has power over it. They’re simply running it in the same way that plumbers are you running the plumbing system, they make sure that there are no leaks that, you know, there’s no rust, and the system continues to work. And this is a public system which replaces the banking system.
Then if we all had access to this free digital financial plumbing system, why would we want to start a bank account with a private banker who is going to charge us money? There will be no need for it. If somebody wants to create a bank and offer wonderful services, let them do it, we are a liberal lot. We will allow them to do it. But now we are actually forcing people to open accounts.
So lending on the other hand is peer-to-peer. Those who have savings that they want to lend, they can do it using this public infrastructure.
[AO] Q6 – Okay one last question. Following that, debt is, private debt in particular is, of course, the frame of politics today. I’m a big fan of Michael Hudson and he always says that debt accumulates with its own laws of growth, compound interest is purely mathematical, it’s not related to the productive forces in society, and that in antiquity debt cancellation was a regular feature of society. So it can be expected that where there is interest, particularly compound interest, there will eventually be exponentially accumulating debts. So the question arises then of how will those debts be cancelled? In Another Now how are the debts cancelled? Is this an institutionalized feature of society or is it something that’s approached ad hoc?
[YV] In my more optimistic moments I imagine that a society and an economy like Another Now would simply not have this problem. And the reason why I’m saying that is this. From the antiquity onward, from the Assyrian empire to today, the problem has not been compound interest. The problem has been asymmetrical power over means of production. So the landlord who controlled the land; under capitalism, the capitalist who controls machinery; with the digital information technologies, Google and Facebook who control the flow of information, the vector of information. When you’ve got this asymmetrical ownership of the things that create value, and then those who don’t have access to that are forced to borrow from those who do, that is when compound interest becomes a means of exploitation.
But in Another Now where machinery, land, everything, is commonly owned. And the only degrees of inequality, and therefore difference between the savers and the non-savers, are (1) age, and the older you are the more you have because you have accumulated, your bonuses ,and so on, and (2) a degree of entrepreneurship, which allows a little bit of inequality. The toxic influence of a compound interest would simply never reach anything like what we’ve had in prehistoric, pre-Another Now, forms of social and economic organization.
But a society like the one I’m describing has immense democratic powers to decide, if things get out of hand at some point, to say ‘okay, let’s wipe out debt’. The cooperative, participatory, democratic, councils, and so on, that are the essence of the political framework in Another Now, allow people to do this. Whereas in today’s society, there is no government which can, even if they want, even if they decide they have the absolute majority in parliament to have a debt write down, they don’t have the power to impose it. They will be overthrown because they are in the pockets of the money lenders, they’re in the pockets of the capitalists, of the landlords.
[AO] Well, that is a very nice note to end on, a world without toxic debt. Hardly recognizable from today. And I’d like to thank you very much for joining me. I just want to ask, there are many other interesting questions to ask so I’m just curious …
[YV] Let’s do it again in the new year, Part B.
[AO] Okay, great. I’ll let you go. I think it’s lunchtime where you are so enjoy your lunch …
[YV] No such thing, phonecalls, phonecalls …
[AO] Oh dear, a past life, okay thank you very much, have a good Christmas.
[YV] Thank you.