PopMatters Picks: the best new cultural offerings

'Talking to My Daughter About the Economy', and Putting Economists In Their Place

Yanis Varoufakis treats with disdain the idea that economics is a real science – it's more like a contemporary form of religion, propped up by ruling elites to make gullible everyday people remain subservient and go along with the elites' bad and self-serving ideas, he says.

Talking to My Daughter About the Economy or, How Capitalism Works--and How It Fails
Yanis Varoufakis

Farrar, Straus and Giroux

May 2018


Yanis Varoufakis is the sort of economist one wishes there were more of in the world. If there were, the world might be in much better shape. At the least, it would be a lot more comprehensible.

Some might describe Varoufakis as an anti-economist. He studied economics because he didn't like being told he was at the mercy of larger forces that he didn't understand. He set himself to understand them: and eventually came to realize they were more myth than monster.

His latest book to appear in English translation (it was published in Greek in 2013, and has been translated into other languages since then) is titled Talking to My Daughter About the Economy: Or, How Capitalism Works – And How it Fails. It's more than simple Economics 101, however. Constructed as a series of letters to his young daughter, seeking to explain economics to her, it's broken into FAQ-style headings and sub-headings, and uses very simple questions to jump from one point to another, weaving a thread that stretches from the early emergence of markets and currency to speculation on the future of cryptocurrency and the ecological crises facing the planet. He addresses the letters to his daughter, but really they're designed for a broad audience, from older children to adults. He explains a number of economic terms and ideas in simple, straightforward language, but it's his broader and recurring themes that are of especial interest.

One of his over-arching aims is to put economics and economists in their place. Many of us, surely, have become skeptical about economists in recent years, with the spate of economic crises, rising inequality, and deteriorating standard of living across much of the industrialized world. It must be akin to what people thought in olden days when astrologers promised sunny skies and instead destructive hurricanes ravaged the land for weeks on end. But what else is there to do, besides reassure yourself that predictions are a very complicated thing to do, and go on hoping that the astrologers (or economists) eventually get it right?

That's more or less what's going on, Varoufakis argues. He treats with disdain the idea that economics is a real science – it's more like a contemporary form of religion, propped up by ruling elites to make gullible everyday people remain subservient and go along with the elites' bad and self-serving ideas, he says. When you think something you're told by the economists doesn't make sense, you're often right, is his frequent conclusion: they're pulling the wool over your eyes much the way astrologers or high priests did in previous eras. Just because economists use math, formulas, and complicated charts doesn't mean they're performing credible science any more than astrologers or phrenologists were (who also used math, formulas and charts). His clear, common-sense method of disposing with too-rarely-challenged capitalist feats of faith is refreshing and at times downright delightful.

His other recurring theme is that even where economic theories appear to make sense when you read them, they invariably fail when put into practice, because they neglect to take into account human psychology. People do not act rationally nor as economists hope they would, in the real world. They act out of fear, uncertainty, passion, greed, altruism, and a range of other conflicting and often unpredictable motivations which undermine even the best theories. This is an argument which historically has been levelled against socialism and communism – 'works in theory but not in practice' -- but it's even more true of capitalism. Right-wing economists argue, for instance, that lowering wages, or lowering interest rates, will encourage aspiring business owners to hire more workers, or borrow more money to expand operations. Wrong on both counts, says Varoufakis: they're equally if not more likely to take it as a sign that the economy's going down the tubes, panic, circle the wagons and restrain both hiring and growth, thereby intensifying the crisis. That's just one example of a broader phenomenon: economics fails to account for the commonly irrational behaviour of human beings. Economists are not scientists, he reminds us; they're really more like philosophers.

Economics is, and always will be, political, Varoufakis also reminds us. That's not a bad thing. Governments are needed to respond to the many ways human beings – especially bankers, economists, corporate CEOs -- mess up the economy, through greed, competition, and other short-sighted motivations. What's bad is pretending it is or should be otherwise. That's one of the reasons cryptocurrencies will inevitably fail, he argues. They're designed to operate as a currency free from government (read: human) control. Yet one of the main functions of currency is precisely to enable governments to influence, or at least respond to, human economic behaviour. Human behaviour will necessarily provoke economic crises, and without the political control of government-directed currency, there's no way to correct and resolve those crises.

"[I]f money were to be depoliticized," he writes, "if its supply were to be separated from the world of politics, then all of the following decisions would have to be made independently of politics: how much government spends and on what; how much tax the state collects and from whom; what bankers should be allowed to get away with; how to deal with bankers when they go bankrupt. To the extent that these decisions are the very definition of politics, they can be undemocratic when made by the oligarchy, but they can never be apolitical… money is, and must always be, political."

Throughout his book, Varoufakis deliberately avoids jargon and instead draws on a range of anecdotes, metaphors, personal stories, and Greek myths.

Humanity is rapidly approaching a crisis, he says, as our technological capacity, coupled with our adherence to capitalist economics, means that we are on track to destroy the planet—and ourselves. Indeed, strict adherence to capitalist economics would demand that we proceed with destroying the planet since destructive crises are always much more profitable (in terms of economic growth) than peaceful harmony.

What is the solution? While the small minority who benefit from the status quo argue that the solution is to commodify everything (including the environment—as witnessed for instance in emissions trading or cap and trade responses to pollution, which essentially creates a market out of pollution), he advocates for the opposite response: democratize everything. Only when we realize that economics is implicitly and profoundly political, and demand to assert mass democratic control over economic decisions, which are now reserved to the handful that benefit from making decisions that are bad for the rest of us, will we have a chance at building a path through the crisis and toward a collective future. Yes, democratizing economic decisions will likely prove messy and imperfect, he admits, but it would be a far better system than any of the alternatives, including what's going on now.

Bankers and Capitalists Are "Idiots" -- Literally

In the time since the publication of Talking to My Daughter About The Economy, Varoufakis briefly served as finance minister for Greece in 2015 under the left-leaning Syriza government. After several months of negotiating Greece's economic situation with other European governments, he resigned, essentially in protest at a bailout agreement which his government signed against his advice. His critics will probably point to all this in an effort to discredit him; in effect, however, it was the consequence of his own government not having the backbone to carry through with the policies he advised, against the combined, scheming might of Europe's bankers. (But that's another story, and one he tells brilliantly in his book Adults in the Room: My Battle With Europe's Deep Establishment).

In a roundabout way, we ought to be grateful for Varoufakis' foiled stint as finance minister -- far from discrediting his ideas, it's revealed the scale of banker-led resistance to his democratizing approach to economics. He's since started his own political party, affiliated with the larger European DIEM 25 democratic movement, but Talking to My Daughter indicates a different strategy: trying to engage a broader and perhaps younger audience with the tools and courage to confront the economic theories they are raised to believe in by schools, media and governments.

Varoufakis closes off with a potent critique of capitalists. The ancient Greeks had a word for selfish people who pretended they were alone in society and pursued only their own self-interest. That word was idiotis: "a privateer, a person who minded his own business"; "a person who refused to think in terms of the common good," Varoufakis explains.

"[O]ur market societies have turned us into idiots," he observes.

What's the solution? That's up to us to figure out, he says, having spent the book trying to help the reader cut through the fog that economists have woven around economic life. But there are two recurring points which indicate the direction he wishes us to take. One is to democratize everything, especially the economy and control of money. The other, he says, is to shift our focus away from the exchange value of things – how much money they will bring us or take away from us in the market – and turn it back toward the experiential value of things.

Experiential value is what makes us appreciate a beautiful sunset, a delightful conversation, a swim in the pond just as much or more than the produced items advertisers try to make us crave and purchase. It's what makes us jump to help a friend in need fix their car, or move their furniture, without asking for compensation – just out of the joy at helping a friend; whereas if we were offered money to do similar drudgery we might grumble, drag our feet, or refuse to do it.

Democratizing economic decisions, and reasserting the primacy of experiential value over exchange value, are among the first steps toward reversing the damage economists have done to our economy and our world, says Varoufakis. Reading his brilliant, persuasive and timely book, too, is surely also a step in the right direction.





'Everything's Gonna Be Okay' Is  Better Than Okay

The first season of Freeform's Everything's Gonna Be Okay is a funny, big-hearted love letter to family.


Jordan Rakei Breathes New Life Into Soul Music

Jordan Rakei is a restless artistic spirit who brings R&B, jazz, hip-hop, and pop craft into his sumptuous, warm music. Rakei discusses his latest album and new music he's working on that will sound completely different from everything he's done so far.


Country Music's John Anderson Counts the 'Years'

John Anderson, who continues to possess one of country music's all-time great voices, contemplates life, love, mortality, and resilience on Years.


Rory Block's 'Prove It on Me' Pays Tribute to Women's Blues

The songs on Rory Block's Prove It on Me express the strength of female artists despite their circumstances as second class citizens in both the musical world and larger American society.


The 50 Best Post-Punk Albums Ever: Part 3, Echo & the Bunnymen to Lizzy Mercier Descloux

This week we are celebrating the best post-punk albums of all-time and today we have part three with Echo & the Bunnymen, Cabaret Voltaire, Pere Ubu and more.


Wendy Carlos: Musical Pioneer, Reluctant Icon

Amanda Sewell's vastly informative new biography on musical trailblazer Wendy Carlos is both reverent and honest.


British Folk Duo Orpine Share Blissful New Song "Two Rivers" (premiere)

Orpine's "Two Rivers" is a gently undulating, understated folk song that provides a welcome reminder of the enduring majesty of nature.


Blesson Roy Gets "In Tune With the Moon" (premiere)

Terry Borden was a member of slowcore pioneers Idaho and a member of Pete Yorn's band. Now he readies the debut of Blesson Roy and shares "In Tune With the Moon".


In 'Wandering Dixie', Discovering the Jewish South Is Part of Discovering Self

Sue Eisenfeld's Wandering Dixie is not only a collection of dispatches from the lost Jewish South but also a journey of self-discovery.


Bill Withers and the Curse of the Black Genius

"Lean on Me" singer-songwriter Bill Withers was the voice of morality in an industry without honor. It's amazing he lasted this long.


Jeff Baena Explores the Intensity of Mental Illness in His Mystery, 'Horse Girl'

Co-writer and star Alison Brie's unreliable narrator in Jeff Baena's Horse Girl makes for a compelling story about spiraling into mental illness.


Pokey LaFarge Hits 'Rock Bottom' on His Way Up

Americana's Pokey LaFarge performs music in front of an audience as a way of conquering his personal demons on Rock Bottom.


Joni Mitchell's 'Shine' Is More Timely and Apt Than Ever

Joni Mitchell's 2007 eco-nightmare opus, Shine is more timely and apt than ever, and it's out on vinyl for the first time.


'Live at Carnegie Hall' Captures Bill Withers at His Grittiest and Most Introspective

Bill Withers' Live at Carnegie Hall manages to feel both exceptionally funky and like a new level of grown-up pop music for its time.


Dual Identities and the Iranian Diaspora: Sepehr Debuts 'Shaytoon'

Electronic producer Sepehr discusses his debut album releasing Friday, sparing no detail on life in the Iranian diaspora, the experiences of being raised by ABBA-loving Persian rug traders, and the illegal music stores that still litter modern Iran.


From the Enterprise to the Discovery: The Decline and Fall of Utopian Technology and the Liberal Dream

The technology and liberalism of recent series such as Star Trek: Discovery, Star Trek: Picard, and the latest Doctor Who series have more in common with Harry Potter's childish wand-waving than Gene Roddenberry's original techno-utopian dream.


The 50 Best Post-Punk Albums Ever: Part 2, The B-52's to Magazine

This week we are celebrating the best post-punk albums of all-time and today we have part two with the Cure, Mission of Burma, the B-52's and more.


Emily Keener's "Boats" Examines Our Most Treasured Relationships (premiere)

Folk artist Emily Keener's "Boats" offers a warm look back on the road traveled so far—a heartening reflection for our troubled times.


Paul Weller - "Earth Beat" (Singles Going Steady)

Paul Weller's singular modes as a soul man, guitar hero, and techno devotee converge into a blissful jam about hope for the earth on "Earth Beat".


On Point and Click Adventure Games with Creator Joel Staaf Hästö

Point and click adventure games, says Kathy Rain and Whispers of a Machine creator Joel Staaf Hästö, hit a "sweet spot" between puzzles that exercise logical thinking and stories that stimulate emotions.

Collapse Expand Reviews
Collapse Expand Features
PM Picks
Collapse Expand Pm Picks

© 1999-2020 PopMatters.com. All rights reserved.
PopMatters is wholly independent, women-owned and operated.