Bitcoins and Gravy #59 : Yanis Varoufakis! - (Transcript)

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[0:00] John Barrett (Announcer and Host): Welcome to Bitcoins and Gravy, episode #59. At the time of this recording, Bitcoins are trading at $286.00 dollars each, and everybody's favorite coin, the LTBCoin, is trading at $0.000157 U.S. dollars each. Mmm...Mmm...Mmm... Now THAT'S gravy!

[Intro music]

John : Welcome to "Bitcoins and Gravy", and thanks for joining me today as I podcast from East Nashville, Tennessee, with my trusty Siberian Husky, Maxwell, by my side. Say hello Maxwell.

Max : Grrrrr.....

John : We're two Bitcoin enthusiasts who love talking about Bitcoins, and sharing what we learn with you, the listener. Thank you so much for being here long time listeners, and new listeners, welcome to the show. We hope you enjoy it.

[end of intro music]

[0:53] John : On today's show, in the traditional of Orson Welles, and his classic 1938 "War Of The Worlds" Halloween Broadcast, I am honored to be speaking - and NOT speaking - with Yanis Varoufakis. Yanis Varoufakis is a political economist, and a professor of economic theory, who has bravely accepted the position as finance minister for the troubled country of Greece. Yanis talks about the past, the present, and the future of economics, and the potential we all have to do better and think better, if we can work our minds out of some of the old defective models, and enter into a new paradigm, with open minds and open hearts.

[Segway music]

[1:42] John : All right. Listeners, today on the show I am honored to have as my guest Yanis Varoufakis, the current finance minister of the great country of Greece. Yanis, welcome to Bitcoins and Gravy.

Yanis Varoufakis : It's a delight being here. Thank you very much.

John : Yes sir. So let's just jump right in. As most people know, I am not an economist. I am not an expert when it comes to economics. But you ARE an economist, and you are an expert. So let me ask you, can you comment on the fallacy of reductionism in economic theories?

[2:10] Yanis : From the 1870s onwards, there were two interesting forces that coalesced. On the one hand, some economists - political economists at the time - tried to become established as academics in universities. And the way they tried to do that was by mimicking physics, to pretend that they were the physicists of society - the scientists of society. To do that they tore up the whole political-economics tradition of Adam Smith, David Ricardo, Karl Marx, and tried to reconstitute economics on the basis on some kind of analytic, synthetic method, where the individual was to the economist that which the atom was to the physicist. So it became an atomistic, individualistic thing. But the moment you try to mathematize on the basis of atomism of individualism, you end up with mathematical models of market exchanges which lose any sight they might have had of the social relations of the [?]. And the fact that once you enter into the labor contract - at the basis of the corporation, of the firm, the business - you exit the market, and you have a social relationship with your boss.

[3:18] Therefore, from the 1870s onwards, what we call neoclassical economics, marginalist economics, became utterly disconnected from real, existing capitalism. That was one force. The other force was that at that time, of course, with the second industrial revolution, capitalism - the powers that be, the ruling classes - were desperate for a legitimizing political-economy, one that presented them as cogs in a natural science experiment. So that naturalistic, mathematical, neoclassical economics suited them down to the ground, because in it there was no room for exploitation in these models. There was no room for social relations. And they allowed the economist to create mathematical models which were a perfect ideological cover that allowed them to present themselves as parts of a natural system of efficiently allocating resources.

[4:19] So once we got into that framework of thinking about the economy, capitalism became invisible. And therefore, any analysis of capitalism became irrelevant. But more generally than that -- it took me decades to come to this conclusion; it's not something that I always knew -- Any attempt to create mathematical models of capitalism - whether they are founded on premises like the ones I mentioned, or Marxist assumptions - end up spectacular failures. Because capitalism cannot - just like Darwinism - really be encased in a well-defined, determinate mathematical model. And any attempt to do it will only succeed if it distances the model from capitalism.

[5:11] John : Mmm...Hmm.

Yanis : And this is a fate that, unfortunately, has befallen even Marxist economists, who became scholastic, and consumed by their own models.

John : Interesting. You know, the mainstream media seem to pay a lot of attention to GDP, in evaluating the health of an economy. In your opinion, how relevant is GDP as a measure of unemployment, living standards, exploitation, and - generally speaking - use values?

Yanis : All GDP can tell us is whether capitalist activity is going up or down. When GDP is falling by 5, 6, or 7% percent every year, as it is in Greece at the moment, you know there is something wrong with Greek capitalism, right? [laughter] So in that sense it's useful. But on the other hand, it has no capacity to relate to us, and to capture the quality of human life, and of the human condition. So the standard example [is], a forest breaks down [and] GDP goes up. There is a tsunami in Japan [and] GDP goes up, very quickly, because of all the effort to save people, which costs diesel fuel, and all of the effort at reconstruction, putting up tents, and so on and so forth. [6:26] So let's say you are an extra-terrestrial on Mars, or some other universe, and you are only watching the GDP [time series?]. You will have a very distorted view of the human experience.

John : Okay. I like that. So are there alternative statistics that we can rely on in order to emphasize the distinction between measuring the use and exchange value of goods?

Yanis : You know, one of the great evils of our time is this penchant for quantification of unquantifiable variables. If you look, it started in Britain, in the National Health Service, and the universities, and then spread in different realms in different countries. In the attempt to quantify, for instance, the quality of academic research over the care given to patients in hospitals, there is a logic in doing it in the sense that we want hospitals and universities to be accountable to the people.

[6:26] John : Right.

Yanis : So that we know how well they're doing. But when you try to quantify the quality of the goods that they are producing, then what you are doing is -- because this quantification will always be false. We will always fail to capture quality - because how do you measure beauty? How do you measure love? How do you measure care? How do you measure the quality of a poem? Or of an essay? Or, for that matter, a philosophical text? Because that's what you are doing when you quantify the performance of philosophers in universities. The answer is that you can't.

[8:04] So any attempt to do it will leave out a lot of important stuff, which cannot be quantified. And that creates awful incentives for people who get rewarded on the basis of the quantities that are recorded on their behalf, to do all the things that increase their industries, which are sometimes - actually more often than not - detrimental to all of the good stuff that cannot be measured. So you should beware of the need to quantify. That's why we need some descriptive data; descriptive statistics that will give us a sense of how society is served by different policies. But we have to make sure that these are multiple quantities, not one statistic - the alternative to GDP ; "gross happiness index", as in [?] and so on. There should be a series of statistics, and we [should] look at all of them. So, for instance, life expectancy; how happy kids are when they come home from school; the consumption of books; how many people read books; how many people attend concerts - in order to gain a sense of cultural life. How well are our museums doing? So I would favor a menu of different quantities which give us a whiff of the qualities.

[9:27] John : Okay. Does that presuppose a political movement that considers money spent on healthcare NOT as a financial cost, but as investment in human life? A type of politics grounded, not in scientific legitimation of numbers, but rather on something else?

Yanis : You see, I am a science freak. I love science. Science is the greatest instrument we have against superstition. But the problem is that we have pseudo-science. Economics is a pseudo-science. Any attempt to measure beauty scientifically is NOT scientific. It's rubbish. So I just don't like rubbish science, and when science is used in order to pursue particular political agendas by supposedly creating scientific measures of things that cannot be measured, this is an affront to science.

[10:14] John : You know, Taleb, in his book "The Black Swan", talks about pseudo-science, and that's one of the reasons why he has such great disdain for economists. I think he tends to go overboard a little bit, but I still think his points are well taken. When he really gets into talking seriously about it, he explains very well the nature of what much of economists have written about as pseudo-science masquerading as science. So, in commenting on global left forces, Immanuel Wallerstein differentiates between "developmentalism" and the "the priority of civilizational change", between calls for economic growth as means of rectifying present-day economic imbalances - issues by left governments and trade unions, on the one side - and ecological and social concerns over the unsustainability of economic growth expressed by environmentalists and movements of indigenous peoples - on the other. How do you propose resolving this dichotomy?

[11:12] Yanis : I think that what is of the essence is to decouple and to make the very sharp distinction between growth and development. Growth, I don't care for. But development, I do. So there are lots of things I want to see go into recession - not in growth. I want to see the financial sector be in recession - that is, to shrink. I want to see CO2 production not grow. I want to see lots of poisonous activities diminished, not grow. But development is a humanist concept, because development doesn't mean, necessarily, bigger. It means BETTER. For me, development is to have an educational system which is very unproductive. To have one teacher for one pupil, if we can. I mean, the Bourgeoisie want that. They send their kids to Oxford and Cambridge because they have one-to-one tutorials. Why shouldn't the rest of us want the same thing? Perhaps one-to-one is overstated, but one-to-five is not. So an economy which can sustain one teacher for five pupils is a developing economy. It's a developmentalist economy. But it's not one that necessarily is into capitalistic growth.

[12:23] Growth is a miasma on this planet. Look at the way that suburbs have grown, contributing massively to GDP growth. It is catastrophic. You've got the expansion of the cities at the horizontal level, far and deeply into the countryside, which means that you have to create very long distribution networks, both for people and for goods and services - which is very inefficient. At the same time you create isolated communities that create a lot of middle-class desperation amongst those who live there. And the destruction of the environment appears in statistics as growing GDP, because to sustain these suburbs you need to produce all of this stuff that you extract from nature and you destroy. Now that kind of growth, of course, you have to be mad to be in support of.

[13:33] But, if we're going to create truly sustainable energy solutions, we need development, and we need a growth in that Green industry. So it's a question of what we want to grow and what we want to shrink. It's a question of not focusing on growth, but focusing on development, which makes human life happier and freer.

John : Well put. Now Yanis, there have been reports from Greece of non-market economic activities, such as autarchic communities providing communal care and urban horticultural projects aiming to remove certain elements of basic, social reproduction from market forces and price regimes. What are the prospects for organizing a larger part of the economy in this manner?

[14:21] Yanis : Creating networks of producers and consumers, which find ways to communicate and coordinate their activities that do not reply on market signals, but reply on a generalized system of gift exchange - that's how I see it - is a great hope for creating an oasis within capitalism. Having said that, I don't believe that you can have shared prosperity, at the global level, on that basis. The problem with this is that if, let's say that we succeed in minimizing the pain experienced during a recession like the one we have in Greece - a depression - by having a community which is based on solidarity and gift exchange. That's wonderful. It's a wonderful resistance mechanism during the [price of?] recession. But it's not a model that can threaten globalizing, financialized capitalism.

[15:22] Capitalists don't have a problem with that. They simply don't have to worry about that particular community rioting or dying on their doorsteps, of hunger. But it is not a real threat. It WILL become a real threat when, through the powers of the internet, these communities find ways of creating a global version in which capital goods can be produced and shared amongst different communities around the world, helping bring about synergies in capital goods production between Kenyans and Greeks and Irish and Croatians and Chinese, that will constitute, effectively, a transcendence of capitalism.

John : Mmm...Hmm.

Yanis : THAT should be our task. Not simply to retreat to small, parochial communities that resemble the Middle Ages.

[16:16] John : Hmm. Yeah, nicely said. Now Yanis, what can you say about the manufacturing of resentment that private sector workers seem to have for public sector workers?

Yanis : Well, firstly, "divide and rule" was always a very profitable strategy for capitalism. To divide private sector workers from public sector workers, and to make one set think of the other as the enemy - has been a very successful policy for making everyone worse off. Secondly, the notion that you can not have, or that you SHOULD not have, a state sector - because the state sector is antagonistic to the private sector - is evidence of the deep-seated incomprehension by private sector workers of how capitalism works.

[17:07] John : Mmm...Hmm.

Yanis : It's something that Republicans in America, [and] conservatives in Europe, like to propagate. It's a fallacy. The fallacy being that the state is antithetical and antagonistic to the private sector. It is NOT. The private sector would shrivel and die without the public sector. The state was not created by socialists. It was created by capital, because it was an essential regulating device ensuring that the private sector would have demand so that it could actually function. So capital creates the state - or USURPS the state - puts it in its use. It employs workers - public sector workers - in order to do that. It uses them in order to intervene in cases of what we call "market failure" - failures of the private sector. And then, succeeds at the same time to set off the private sector workers against the public sector workers, and therefore to retain and gain the control over both of them. The sooner private sector workers realize that reality, the better it will be for them.

[18:16] John : Yeah, divide and conquer. Man, we have a long history of that on planet earth. If you look at Rwanda, and go back to BEFORE the genocide that the U.S. could have stepped in and done something about, the division between the people was actually manufactured - tragic really. So Yanis, what are your prospects for the European Union as a common political space?

Yanis : The European Union offers us a wonderful opportunity for progressive change. It doesn't give us any guarantees, and as an institution it is very inimical. It's an enemy of progressive change. But despite itself, it's giving us a great opportunity, because it does away with borders. It allows us something that the rest of humanity doesn't have. If you go to the United States [and] Mexican border you will realize what I mean.

John : Mmm...Hmm.

[19:08] Yanis : It is great. It is wonderful that we don't have borders in Europe anymore, if we're members of the European Union. However, the economic policies of the European Union are trying to create borders and walls separating out peoples. In the Euros, in particular, we are divided by a common currency, which is a delicious paradox. And the only way of not allowing these neoliberal institutions to stop us from uniting in order to achieve a progressive alternative in Europe, is by generally utilizing the capacity to move around - the LACK of borders - in order to stop thinking of ourselves as Greeks, or Croatians, or Germans. There is no such thing as the Croatians. There is no such thing as the Germans. There is no such thing as the Greeks. There are different perspectives on shared prosperity, and [?] institutions, and the logic of European capitalism, which goes against that shared prospective for prosperity, which should utilize the borderlessness of Europe in order to bring it about.

[20:12] John : Okay . So what kind of political institutions would utilize this lack of borders? Trade unions? Political parties? Or something ELSE?

Yanis : All three. Trade unions, political parties, and "something else"... and civil society organizations. Grassroots movements that are pushing our polities, and ourselves, to think of Europe as a vital space that belongs to all of us, and in which the human condition could liberate itself from its current shackles and chains.

[20:47] [Segway music (Greek style)]

[21:53] John : And listeners, GOOD NEWS from the Texas Bitcoin Conference, coming up here in few short weeks. Texas Bitcoin Conference director Paul Snow will be my special guest next week on the show, when he will talk to us about the conference, and about some of his other cutting-edge projects.
Paul emailed me just a few days ago to let me know this good news. Listen up. He is offering a discount code, to all of you loyal listeners, that will allow you to get into the Texas Bitcoin Conference for $25 off the $150 USD price. And that's not all! An additional $25 of what you pay can go to one of their sponsored charities. This is great stuff. You have a choice, including the well-known Shawn's Outpost ( ) , Bitgive [Foundation] ( ), Capital Area Food Banks ( , ), or Without Regrets ( ).

[22:46] Now listen, the last two I mentioned - Capital Area Food Banks, and Without Regrets - are local charities right there in Austin, Texas. These are all great causes, of course, but these last two have less support in the Bitcoin community, and sure could use it. Paul tells me they are GREAT organizations, working hard to make life better for people in Austin.

[Segway music] John : And more great news, listeners. Our transcription page is now LlVE on the web site, thanks to the continuing hard work of one of our loyal listeners, who I am proud to say is now also a consultant to the show. All new show transcripts will be rolled out approximately one week following the release of each podcast.

[23:39] We are also working on eventually going back and transcribing ALL of the archived episodes, starting with Episode #51, and working our way back, until we hit the very first episode of Bitcoins and Gravy - episode 1, numero uno. Our ultimate goal is to have every single episode of Bitcoins and Gravy transcribed, and available to you, the listener, for free. These professional transcriptions are provided each week by one of our fans, who can be found at : And, of course, you can find a link to this web site in the weekly show notes. And for you guitar and piano players out there, we are now offering sheet music for the official Bitcoin song, "Ode To Satoshi", as a PDF file download ( ). That's right, listeners. Print out your own "Ode To Satoshi" sheet music to take with you to the beach this summer. I can't think of a better way for you young men out there to win the hearts of young women everywhere, than picking up your guitars and playing "Ode To Satoshi" around the campfire there on the beach, or when you're camping.

[24:47] And for you families out there, why spend your evenings watching television? Wouldn't you really rather gather around the piano, and sing old favorites like "Show Me The Way To Go Home", "Danny's Song", and "Ode To Satoshi"? Hopefully, the free PDF sheet music, available at will help all of us get back to a simpler time, when music was melodic and families were closer.

And last, but not least, I would like to take this opportunity to congratulate Ivor Thomas. Now, I'm actually not sure if it's Ivor, or [EE-vor ]Thomas, so I'll just refer to him as Mr. Thomas, of Portland, Oregon. Mr. Thomas has won the first round of the Bitcoins and Gravy barbecue contest. [applause]. Mr. Thomas, good work sir. Here for you now is Mr. Thomas's audio submission in response to my comment, on the last show, about "Joe Perry's Barbecue Sauce", and how it tasted so good that it had my taste buds talking.

[25:46] Mr. Thomas, if you're listening sir, congratulations once again. And please send me your mailing address ASAP, so I can get this 16 ounce bottle of mouth-watering barbecue sauce right out to you, man. And I have one more bottle of barbecue sauce left. You can do the same thing that Mr. Thomas did, and that is submit and audio file to me telling me why you deserve to win the barbecue sauce, or just saying something funny or creative - something that will so move my heart that I will send the last bottle of barbecue sauce to you. And now, for your listening pleasure, here is something VERY funny, created by our very own Mr. Thomas. Take it away Mr.Thomas...

[guitar instrumental music]

[26:36] Speaker 1 : Hey Earl? Get ready for some of that "Joe Perry's Rock Your World" barbecue sauce ( ). I'm tellin' ya'. I smell it coming.

Earl : But old buddy, I can't taste anything. John done coated me with them psychoactive tricomatic cannabinoid resins, or something. I'm too high to enjoy the munchies now.

Speaker 1 : Oh, Earl! That's so sad. [wheeping sounds]

[Segway music]

John : I know that it may sound absurd, but I have for you a magic word. And today the magic word is "Austin" - A - U - S - T -I -N... Austin, as in Austin, Texas. As in the sentence, "I can't wait to finally meet some of you loyal listeners at the Texas Bitcoin Conference in Austin, coming up March 27th through 29th, here in a just a few weeks."

John : Join me there for some great keynote speakers, and some excellent conversation, plus the million dollar hack-a-thon. And if none of that interests you, just meet me there, and let's hang out and have a sandwich and a beer together, huh? [laughter]

[27:49] [music and lyrics to "Ode to Satoshi" song]

John Barrett : Now climb aboard y'all! This train is bound for glory... and there's plenty of room for all...

"Well Satoshi Nakamoto, that's a name I love to say, And we don't know much about him, but he came to save the day. When he wrote about the way things are, And the way things ought to be, He gave us all a protocol this world had never seen.

Oh Bitcoin! As you're going into the old Blockchain, Oh Bitcoin! I know you're going to reign, gonna' reign, Till everybody knows, everybody knows, Till everybody knows your name.

[guitar instrumental]

[28:35] Down the road it will be told about the Death of Old Mt. Gox, About traders trading alter coins, and miners mining blocks. But them good old boys back in Illinois, And on down through Tennessee, See they don't care to be a millionaire, They're just wanting to be free.

Oh Bitcoin! As you're going into the old Blockchain, Oh Bitcoin! I know you're going to reign, gonna' reign, Till everybody knows, everybody knows, Till everybody knows your name.

[instrumental interlude]

[29:21] From the ghettos of Calcutta, to the halls of Parliament, While the bankers count our money out for every government. Oh, Bitcoin flies on through the skies of virtuality, A promise to deliver us from age-old tyranny.

Oh Bitcoin! As you're going into the old Blockchain, Oh Bitcoin! I know you're going to reign, gonna' reign, Till everybody knows, everybody knows, Till everybody knows your name. Till everybody knows, everybody knows, Till everybody knows your -- "Give me some Exposure" -- Everybody knows your name.

Singing, Oh Lord, pass me some more, Oh Lord, before I have to go. Oh Lord, pass me some more, Oh Lord ... before I have to ... Go ...

[instrumental finale] [applause]

[30:36] John : Oh-ho! Thank you East Nashville! Y'all be good to each other out there, ya' hear?

[Outro music]

John : If you've enjoyed the show today, please take a minute to leave a comment on Let's Talk Bitcoin, in the comments section, right there below the show notes :

You can also leave a message on Soundcloud:

Or do the old fashioned thing and send me an email ( ).

And, of course, Bitcoin and Litecoin tips are always appreciated by the hardworking writers and podcasters in the Bitcoin world. Many of us work as volunteers, and sure could use those tips. You can send me $5, or 5 cents, and I will be just as happy knowing that this podcast made your day a little bit better.

Signing off now from East Nashville, Tennessee. I'm your host John Barrett, with my trusty companion Maxwell by my side. Say goodbye Maxwell.

Maxwell : Grrrr.....

[31:42] John : Y'all be good to each other out there now. And remember, the only thing necessary for the triumph of evil is for good men and women to do nothing.

[show outro music]

Maxwell : Grrrr.....