By Con George-Kotzabasis
Professor Varoufakis, we have crossed swords
before several times on your website but no blood was spilt. Your thesis delivered
with panache was highly interesting, provocative, fascinating, and alluring,
but from a negative point of view. Like an exotically seductive woman flaunting
dissolutely her charms but refuses to be seduced. You likewise refuse to see or
acknowledge that your proposition is made-up from a selectivity of facts and by
leaving other facts out you let down your guard as these neglected facts will release
the Aeolian winds to demolish your argument in one wind gust. The fact is that there are many countries within Europe that are not in crisis, such as Sweden,
Denmark, Holland, Luxemburg, Austria, and Finland, not to mention others. My
question therefore is why the European and global crisis did not also embroil
these countries in it as well, as it did with Greece and other southern
European countries? Why the general predatory capitalist practices of the
dominant countries of the Eurozone affected only some countries of the EU and
not others?
The reality is that government dirigisme and
its ill-fated profligacy of over spending on borrowed funds was the cause of
the crisis that engulfed those countries of the south, and especially Greece, within
the whirlpool of sovereign debt. The virus of the malaise did not have
exogenous origins, as you wrongly suggest, but originated from the
mal-practices of socialist governments and followed inevitably by conservative
ones—how else could they have a chance to be elected in government?—with their
fatal predilection for big government, and Greece was the example par excellence.
But as we all know a crisis is a developmental
process and during its course the remedies applied to it particularly when they
are wrong can exacerbate it instead of curing it. And as you correctly point
out austerity without economic growth, especially in conditions of continued
recession, is a recipe of disaster, as the statesman Antonis Samaras also
pointed out two years ago. But it is a grave mistake to confuse the cause with
the remedy and to build one’s case on the wrongness of the cures, as encapsulated
in some of the policies of the two Memoranda imposed by the European lenders
upon Greece, as the cause of the crisis in Greece.
In my judgement therefore your thesis that the
crisis in Greece has exogenous origins and not endogenous ones is totally wrong
and highly misleading. You are peddling shoddy goods wrapt-up in the dignified
robes of academe hoping to make an easy but intellectually disrespectful sale. And
the strength of your argument can be measured by the kind of opponents you have
had in your debates up till now. None of them were real opponents and all of
them were fellow travellers sailing with the compass of your ideological
position. I remember when you met a real opponent to your thesis you banned him
from your website, and I was rather surprised at the time that with your
Kazantzakian character you would have debarred someone expressing opposing
views to your own. But it is easy to be right when you hear only your own
voice.
Also, your recycling theory from countries with
surpluses to countries with deficits is in my opinion fundamentally flawed.
What prudent investor would invest on a seat in the Titanic? Most of these
countries that have incurred those bottomless deficits were and are economically
uncompetitive and this was the primal reason why they were embroiled in this
abysmal “balance of payments crisis,” as the eminent financial commentator Martin
Woolf argues.
The crisis is profoundly complex to be fixed by
tailor-made academic economic nostrums as your Modest Proposal suggests. It
will be resolved by the method of science, i.e., by trial and error, and that
is why, moreover, will not be without pain for the majority of people, after
the grave and fatal errors committed by their past governments. The
Schumpetarian principle of “creative destruction” will be the pivotal
characteristic in this process of economic restructuring, and statesmen of the
calibre of Antonis Samaras will play a decisive role toward its resolution.
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