Paternal lessons in economics: Lefty edition

 I will admit that the first thing that caught my eye about Talking to My Daughter About the Economy was the title. It reminded me of being in the car on the way to school, back when I went to school up in Mountain Lakes, and listening to my dad explain concepts like business cycles, the structure of student loan repayment plans, why credit cards aren't money, and, of course, surety bonds. There were simplified lessons on Keynesian macroeconomic theories, heavily seasoned with Grateful Dead lyrics, because that's how my dad talks. So the Meandering Fatherly Lecture is a medium of learning about economics that I am very comfortable with--much more comfortable than trying to chew through actual academic economics texts--and so I was quite curious about what other teenage girls' Lessons On Economics From Dad sounded like, especially when the dad is a Marxist. (My dad is a fairly mainstream New Dealer/social democrat sort. I also got some bonus Dad Lectures from various Chamber of Commerce Republican dads on occasion, since the North Jersey suburb I grew up in was heavily populated by banking professionals. But if there were any Marxist dads around, they didn't feel nearly as free to lecture on economics around other people's kids as the Republicans did.) 

 

Yanis Varoufakis, short-lived finance minister for the Syriza government in Greece, is one of a fairly limited number of dads out there whose dadly ramblings to their children about The Economy are actually worth reproducing for the general public. This is not only because a limited number of dads have ever served as national finance ministers in times of great crisis; most of those guys probably aren't worth listening to about economics either, if the state of the world financial system is anything to go by. But the list of dads who are left-wing finance ministers with Ph.D.s in economics and specializations in game theory--in my limited experience, a field with an unfortunate penchant for attracting hordes of libertarian fanboys, although perhaps it's different at the actually-studying-at-Ph.D.-level end--who can also still write in a concise and accessible style is very, very short. 

 

Which brings us to Talking to My Daughter About the Economy: Or, How Capitalism Works--And How It Fails, just published in English this summer after having been published in its original Greek five years ago, and nearly every other major language in the interim. Why English held out so long--why it was so important for English speakers not to learn about the economy from a left-wing perspective that a reasonably bright preteen could understand--is surely a great mystery. 

 

Despite the subtitle, Varoufakis doesn't tend to use terms like "capitalism" or "socialism" in this book. He doesn't use a lot of the traditional left-wing vocabulary, and he only uses mainstream economic vocabulary in order to explain what it means, and then goes back to talking about it in whatever way makes the most sense to him. The book also covers a bit more than just capitalism; the earliest chapters talk about the origins of the economy--any economy--and the inventions of debt, currency (yes, in that order), writing, the state, and markets. Then he explains how Europe went from a feudal economy with markets to an actual market economy, and the contradictions and absurdities that arise from having an entire society organized around markets. From here we get into a lot of the current hot topics, such as why capitalism makes automation bad when it ought to be good, the role of trust (and distrust) in markets, public debt, why market crashes are inevitable, how the labor markets and the money markets differ from the goods and services markets, how central banks work, why banking amplifies market destabilization, and the role of state violence in creating the conditions for the creation and accumulation of private wealth. All of these concepts are laid out in clear, accessible language, and explained with the help of numerous pop culture references, leading to subheads like "The Matrix and Karl Marx," which sounds like it ought to be dumb but is actually a perfectly reasonable point about how the mechanization of labor tends to generate a crisis before the machines fully "take over." Varoufakis seems to like Greek myth, Gothic classics, and modern sci-fi, so the references he uses manage to be even more familiar to me than my own dad's Grateful Dead lyrics. The one time he does use the word "socialism" it is to sneak in a quote by my longtime fave Oscar Wilde. This stuff is extremely my jam.

 

Even though I actually understood everything on the first go-round (which cannot be said for everything I read about banking), I do think this would be worth reviewing periodically, just to make sure that I, too, can explain public debt in a way that anybody can understand. This is essentially Varoufakis' goal, which he states right from the beginning: Not to popularize economics the way we usually understand it, where we learn to follow along with what the experts are doing, but to make economics reachable for regular people, because it is entirely too important to leave to the economists, most of whom think they're a lot more scientific than they really are just because they came up with some mathy-looking charts and models and stuff. 

 

There is also a really excellent section on the perils of trying to make banking and money and general financial stuff suck less by trying to make it not political, which he argues is impossible, and trying to do so only makes it more undemocratic and unaccountable. The most excellent part of this excellent section is its takedown of bitcoin, a thing I have to constantly deal with people being very bullish about at my day job. My employer is paid in bitcoin on some of our accounts, which means I get cranky every time the value of bitcoin goes up 500% overnight and there's still not enough money to give me a raise, but I digress. 

 

As is becoming sort of traditional for left-leaning books that try to cover a wide range of subjects, one of the very last sections of the book situates all the rest of it in its largest possible context, which is that we're killing off the entire planet. Chapter 8, titled "Stupid viruses?" talks a little about the unsustainable expansionist logic of capitalism but mostly talks about the two major approaches to fighting climate change--privatization and decommodification--and explains why market-based "solutions" to fighting climate change, like creating pollution "markets," however tightly regulated, are basically futile, and that it's very convenient that the proponents of these solutions would just have to own the whole world in order to "save" it under these plans. 

 

Varoufakis' prescription for the staggering inequality and technocratic stupidity currently threatening to melt the world is, simply, "democratize everything," including democratization of the monetary and banking systems, democratizing the European Union, and generally refusing to leave economics to the experts. Of course, this is a lot easier said than done, otherwise we probably would have done it already, but it's still important to say since a lot of folks really do seem to be quite dedicated to going in the other direction. And, as Varoufakis reminds us, Star Trek teaches us that resistance is never futile.