VALVe Economics: A brand new blog on Digital Economic Theory by Yanis Varoufakis

[stockholmer]

http://blogs.valvesoftware.com/economics/it-all-began-with-a-strange-email/

IT ALL BEGAN WITH A STRANGE EMAIL

It was late at night in October of last year when the strange email arrived. In fact, I only read it by accident and did not delete it by some miracle of fate. Before the Euro Crisis erupted in 2009, I was just another economics professor, minding my own little theoretical endeavours, writing obscure papers and esoteric books that only a few hundred nutcases around the world (like myself) would ever read, terribly satisfied in my very own academic cocoon. Back then, I would never even imagine not answering an incoming email.

And then, all of a sudden, as if by the wave of some vengeful wizard’s wand, the tranquility was shattered and I found myself in the midst of an acrimonious Europe-wide debate watched over by millions. (If interested, you may take a look at the blog I have dedicated to these debates here.) It is what, I suppose, happens every seventy years or so when a major economic collapse turns us economists from creatures to be avoided at all cost (especially on TV or around the dinner table) into minor celebrities whose words are eagerly followed by a despairing public. Why me? For two reasons I think. First, because I am Greek and Greece was the canary in the mine (whose death warned the rest of Europe of the impending ‘gas explosion’). Secondly because I am a rather unconventional Greek whose line of argument on the BBC, CNN etc. raised eyebrows – for reasons I shall not bother you with here. Anyhow, my life was transformed overnight.

A side effect of this ‘transformation’ was that my inbox became impenetrable to the human eye, receiving as I did thousands of unsolicited non-spam messages from people with a wide range of fixations – from sharing their world view, to seeking advice on what to do with their investment in some pig farm in the north of Greece, to offering me a share in some far-fetched business venture. When I read the opening line of the email in question, my finger almost pushed the delete button: “I’m the president of a videogame company (www.valvesoftware.com).”

I thought to myself: Oh, not another “business proposal” from a crackpot… However, something in my head stopped my finger from pressing DEL while my eyes pondered the next line: “We are running into a bunch of problems as we scale up our virtual economies, and as we link economies together. Would you be interested in consulting with us?”

I was intrigued. The finger retreated from the keyboard’s right hand side and I read on:

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Yanis Varoufakis on Europe's "Dickensian Workhouse" and the Fiscal Waterboarding of Spain

Welcome to Capital Account. When we talk about bank recapitalizations or rescue plans, what usually captures headlines are dollar or euro amounts, the names of various abbreviated, bailout vehicles -- be they the EFSF or the ESM -- top politicians, technocrats and international organizations like the IMF. This latest "Spanish bailout" is no exception. Dubbed a bailout for Spain by the media, this is really a 100 billion euro bailout for Spain's banks that adds to the tab of the already indebted Spanish government. But is this really just a blood wedding between banks and the state that will end in a blood bath of pain threatening to consume all of Europe in its wake? Are these really solutions that channel the workhouses of the Victorian era, of a Dickens novel, in their conditions?

The workhouse was where the poor had to go for help with food, and a bed, and they worked for it...but life was intended to be so harsh that only the truly, profoundly down-and-out would apply. The work was so bad that it would deter anyone who could avoid it from coming and punish those who sought help. Work included breaking stones...

This seems a fitting comparison for bailout programs that impose more loans on bankrupt countries and harsh austerity on the public that is left begging for scraps only to be met with what optimists might call "tough love."

This workhouse metaphor is one that our guest, Greek economist Yanis Varoufakis, has used to describe the EU's solution to a crisis that has dragged on for almost 5 years in some countries, and even longer in others. He joins us to give his take on this latest Spanish "bailout", as well as the upcoming elections in Greece.

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http://yanisvaroufakis.eu/

Yanis Varoufakis is an academic economist, an author, and a prominent contributor to the debates on the recent economic crises in Europe and the United States. Born in Athens, 1961, he moved to England to read Mathematics and Statistics and holds a PhD in Economics from the University of Essex. He is currently Professor of Economic Theory at the University of Athens and Visiting Professor at the Lyndon B. Johnson Graduate School of Public Affairs at the University of Texas at Austin. His previous academic appointments include the Universities of Essex, East Anglia, Cambridge, Sydney and Glasgow. His books include:

The Global Minotaur: The True Origins of the Financial Crisis and the Future of the World Economy, London and New York: Zed Books

Modern Political Economics: Making sense of the post-2008 world, London and New York: Routledge, (with J. Halevi and N. Theocarakis) 2010

Game Theory: A Critical Text, London and New York: Routledge, (with S. Hargreaves-Heap), 2004

Foundations of Economics: A beginner's companion, London and New York: Routledge, 1998

Rational Conflict, Oxford: Blackwell Publishers, 1991

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Keiser Report: Con Games Go Global With Yanis Varoufakis

In this episode, Max Keiser and co-host, Stacy Herbert, the european short change con in which debt and debt facilities are created and swapped at ever increasing speeds in order to defraud the population. In the second half of the show Max talks to economist Yanis Varoufakis about the ponzi austerity screwing Europeans right down to the ground with more debt.

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http://varoufakis.files.wordpress.com/2010/11/modest-proposal-3-0-may-20121.pdf

A Modest Proposal for Resolving the Eurozone Crisis, Version 3.0 by Yanis Varoufakis and Stuart Holland

1. Prologue

For two years now, caught up in a Crisis of its own making, Europe is
fragmenting.

A euro in a Greek bank has a lower expected value than a euro in a Spanish
bank, which, in turn, trails the value of a euro in a German bank account. There
can be no better sign of the common currency’s disintegration than this.
And it is not just a matter for the Eurozone. The fallout from a Eurozone
disintegration will be so severe, the rise of nationalisms so cataclysmic, that it is
pure wishful thinking to believe that the European Union can be preserved,
except perhaps in name, if the euro-system succumbs to the centrifugal forces it
is now experiencing.

Following a sequence of errors, delays and shenanigans, Europe’s leadership
has stunned the world by its failure to take joint action. Most commentators
lament the incapacity of Europe’s political and bureaucratic elites to act speedily
and in a coordinated fashion. While there is truth in this, the recent double-edged
ECB intervention vis-à-vis Europe’s banks3 shows that Europe can act decisively.
The problem, however, is that, so far, its political leadership has pursued policies
which it justifies on the basis of (a) a poor diagnosis of the Crisis’ nature and (b)
two false dilemmas.

In what follows, we begin by summing up the true nature of this Crisis. Then we
present our Modest Proposal for overcoming the Crisis with three simple policies
that can be implemented immediately and require none of the moves such as
national guarantees or fiscal transfers to which many Europeans (and not only
governments) are opposed, nor moves towards federation that entail Treaty
changes which electorates are most likely to reject.

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