Preposterous pipedreams

Varoufakis’s new novel, Another Now, is full of incoherent blather between dolts

This article is taken from the November issue of The Critic. To get the full magazine why not subscribe? Right now we’re offering three issue for just £5.

Someone must have told Yanis Varoufakis that stories are more engaging than arguments. Another Now explains his proposals for a new anti- capitalist economic order, not in the dry style of a political economy monograph but through science fiction.

Alas, it is difficult to dramatise the case for compelling workers to run companies; for abolishing stock markets, commercial banks, credit rating agencies and the private ownership of land; for introducing a universal basic income; for eliminating all taxes except corporation and land taxes; and for punishing pairs of countries that do not import an equal value of goods from each other.

Another Now: Dispatches from an Alternative Present, by Yanis Varoufakis
Bodley Head, £14.99

So Varoufakis has his three characters, living in the year 2036, sit around discussing the merits of his proposals, which one of them — Costa from Crete — has discovered when chatting to himself in a parallel universe where they were implemented following the 2008 financial crisis.

It has all the narrative enchantment of an evening trapped in the junior common room with a trio of sociology students decrying capitalism and planning the new democratic socialist utopia to replace it. And the intellectual rigour too.

Consider this gem. In the section on land we learn that “as a true liberal, Eva disdained monopoly. And to her mind there could be no greater monopoly than ownership of a piece of land.” Neither of the other characters corrects her. On the contrary, Varoufakis moves directly to his proposal for eliminating this monopoly: namely, nationalising all land.

Varoufakis favours a monopoly, and argues for it by complaining that the currently fragmented market is a monopoly

A monopoly exists when a certain kind of good is available from only one supplier. I own my particular car. But that doesn’t mean that someone who wants to buy a used car faces a monopoly, because lots of other people own other cars, and many are willing to sell. Similarly, the fact that each piece of privately-owned land has just one owner doesn’t mean that purchasers of land face a monopoly. There are millions of landowners in the UK, and many are willing to sell.

Land is not now monopolised. But it would be if Varoufakis’s proposal were implemented, because all real estate would need to be rented from its sole owner, the state. In short, Varoufakis favours a monopoly, and argues for it by complaining that the currently fragmented market is a monopoly.

Or consider this one. Late in the book, Costa explains to Eva’s son how it came to be that “Amazon delivers everyone’s groceries and might means right,” how Jeff Bezos, Amazon’s founder, got his “power” over us. Yet, only four pages earlier, he claims that Amazon needs to keep its prices low and does so by underpaying its workers.

This is confusing. If Amazon has power over us, why does it need to keep its prices low? Surely this imperative suggests the opposite: that we could switch to another supplier if offered a better deal. Varoufakis may be able to explain why those with power over us nevertheless feel they must give us a good deal. But, if he can, he doesn’t bother.

Varoufakis sometimes uses Eva not simply to yield to his absurdities but to introduce them

Eva, who is an economics lecturer and former Lehmann Brothers employee, is supposed to provide the free marketeer’s resistance to Varoufakis’s proposals. But she seems a bit thick and is a total pushover. For example, Varoufakis proposes reforms to company law that would effectively abolish equity markets. Eva wonders how companies will get the capital they need to buy equipment and pay staff before they become profitable. No worries, Varoufakis (Costa) reassures her: they will be lent money by people who believe in the enterprise.

That’s good enough for Eva. She fails to make the obvious reply that people who invest in start-ups prefer acquiring an equity stake (a share of ownership) to making a loan because start-ups are risky. The high chance that investors will lose their money means they want a big return if things go well. Of course, they could lend the money at a very high rate of interest. But that’s a burden the founders of the company don’t want when getting started. They’d rather give up some of the future profits to an equity investor. Hence the dominance of equity investment rather than lending to start-ups.

Nor does Eva complain about the destructive incentives created by giving all employees equal voting rights in running their company while denying anyone ownership of it. Consider a farm. An owner — that is, someone who can sell it — will seek to preserve its long-term productivity because that is what its value depends on. He will therefore avoid over-exploiting the land for the sake of short-term profits. An employee with no stake in the land except what it can deliver him over the next few years has no such concern for its long-term productivity.

Varoufakis sometimes uses Eva not simply to yield to his absurdities but to introduce them. “Share trading,” she declares, “allowed life to borrow from the future to make life better for itself than in the past.” Really? An economics lecturer who thinks share trading involves resources being transported in time from the future to the present?

Varoufakis takes issue with Eva not by pointing out the impossibility of her idea but by asserting (this time through the feminist-leftist character, Iris) that betting on the future is a “fool’s wager”. Buying shares does indeed involve betting on the future, as opposed to borrowing from it, but it is a bizarre complaint from someone in favour of lending to businesses. Lending also involves betting on the future. If the company fails, you won’t be repaid.

Another Now is full of this kind of incoherent blather between the dolts Varoufakis has conjured up. And not only on economic matters. At one point, Varoufakis claims (through Costa) that Covid-19 was “produced by environmental pillaging”. What does this mean? How does he know? No explanation or evidence is supplied.

Of course, it doesn’t really matter. It’s all just banter for the junior common room.

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