The Dismal and Ideologically Biased Appraisal of an Economist about Greece’s Glimmer of Economic Recovery

By Con George-Kotzabasis-May 22, 2013

The Marxistoid professor of economics Yannis Varoufakis (In his keynote speech in the Subversive Festival of Zagreb, Croatia, on 14th May, 2013, he confessed himself to be an “Erratic Marxist”), whom Marx himself would have placed under the category “vulgar marxist” for following the footsteps of the great man erratically and loosely, in a choleric and ideologically tendentious article on his website, argues, that the “The Greek Success Story” is “The latest Orwellian Turn of the Greek Crisis.” All the favorable indices by which the “international press and the money markets seem to concur,” to quote him, that the country is on the road to recovery, are to the professor a contrived fiction and “vile propaganda” by the Samaras government to deceive and fool investors and to inveigle them to make “cheap investments” in the country with the prospect of high profits.

According to Varoufakis’ argument, among the deceived and the fools are not only investors but also renowned credit rating agencies, such as Standard and Poors, and Finch, which have upgraded the Greek state’s credit worthiness and four Greek banks, a number of serious economic commentators who foresee the reigniting of the Greek economy the following year and a growth of 0,6% in 2014 –some indeed write about a “booming” economy in the near future—and a bevy of the best and brightest of the European Commission that praises Greece for its rapid and effective reforms that enhanced its competitiveness. And to top it all, the ‘trickster’ Samaras was even able to deceive the economically astute and hardheaded Chinese and lure them to make investments in the infrastructure of the country and in real estate.

Only Professor Varoufakis is disabused of this deception and remains realistic about the dire prospects of Greece in the midst of this fictional euphoria that was able to entice cerebrally reputable institutions and people to see in this ‘mirage’ a “Greek Success Story.” It is rare to see such arrogant omniscience, of a second rate economist and Marxistoid to boot, attempting to trump all other economists and institutions that on a factual basis prognosticate an economic recovery of Greece.

Professor Varoufakis’ “Invincible Summer” in the Midst of Cold Winter of Past Year

By Con George-Kotzabasis

Professor Varoufakis, let us hope that the New Year is a year of corrections of past mistakes,  mea culpas and success. With the more than possible policy success of the Samaras Government in 2013, it seems to me that your “invincible summer,” policy wise, is a will-o-’the-wisp and will turn out to be your ineffable “winter of discontent” as a result of the political and economic triumph of Antonis Samaras in pulling Greece out of the crisis, and your dire predictions of the hopelessness of Greece, as the present government continues, according to you,  to implement, without creative revision, the dead end policies of the European Union and the IMF, which have been so destructive to Greece.

A reply to a critic who lambasted me for the above comment on Professor Varoufakis.

It’s not in my character to insult anyone and least of all our morally and mentally robust Professor Varoufakis. You are confusing “no quarter will be given” criticism with insults; the typical confusion of an effete person delving in critical matters or in intellectual discourse. As to the rest of your comment, it’s wise to take the advice of Wittgenstein and stay silent. The same applies to all other comments to my riposte to Professor Varoufakis.

 

A Response to Professor Varoufakis’s Thesis that the Greek Crisis is not Home-made

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.

Professor Varoufakis Congratulates New Finance Minister of Greece for Digging his Own Grave

By Con George-Kotzabasis June 28, 2012

“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”  Winston Churchill

Professor Varoufakis the above quote illustrates the substantial personal difference between you and Yannis Stournaras, the newly appointed Minister of Finance, on the issue whether Greece has better than a chance under this new government to pull itself, by creative technocratic and Gulliverian efforts, out of the crisis. It saddens me to see you with your Kazantzakian character to distort the truth about the Samaras government that somehow is a continuation of the “ancien regime” when in truth the majority of its members, both from the political and technocratic stables are new and were chosen on meritocratic grounds for their intellectual and technocratic ‘sprints’ and were never associated  even in the loosest terms with the major economic policies of either Pasok or New Democracy that had brought Greece to the “edge of the abyss.” To say further that Stournaras should not expect any support from this purportedly coterie of the ancien regime and he was chosen only for the purpose of carrying the major burden of a more than probable failure and to become the scapegoat for it is a most ungracious, and , indeed, malicious statement that could ever come out from the illustrious portals of Academe.

It seems to me that your absolute pessimistic views about events in Europe and Greece cancel you from the vocation of a reformist actively and optimistically engaged in the transformation of a bad situation. It is optimists that win wars and not pessimists! Also it appears to me, that your ‘undying’ wish for the disintegration of the Eurozone is directly related to your Modest Proposal so in the event of Europe’s collapse you can say that it happened because the European elites refused to adopt your all perfect remedy. Thus your disparagement of all politicians and technocrats both inside Greece and in Europe such as Papademos, Samaras, Mario Monti, Mario Draghi, and Jean-Claude Trichet, to mention few. In your planetary immodesty   to consider yourself the Sun and all the others as satellites that must reflect the wisdom of your Modest Proposal, is haughtiness of the highest degree. And it is not uncommon, that arrogance emanating from an “aggressively” Narcissistic nature defeats even the strongest of characters. Alas, do you think that at the end you will avoid the fate of Narcissus? Lastly, in your Open Letter to your “friend and colleague” Yannis Stournaras, you congratulate him for his appointment to the Ministry of Finance. My question is why congratulating someone who, according to you, by accepting the appointment he will be digging his own grave?

Professor Varoufakis Proposes a Silent Axis between France and Greece Contra Germany

By Con George-Kotzabasis May 10, 2012

It’s interesting that you don’t mention one word about your one night stand with your inamorata Tsipras, the Radical Left leader of Syriza. But it’s obvious that Hollande replaced the latter in your gyrating amours, after the politically and economically inane and embarrassing post-election statements of Tsipras. And it won’t be long before you will be disappointed with President Hollande too with his dealings with Germany and you will be looking for a still more exotic paramour.

You are mired in the past when you still consider that the European leaders continue to push the austerity programme for the southern European countries as the sole measure of getting them out of the economic crisis. In the new economic orchestration of Europe the ‘soloist’ austerity no longer jingles. All the major European leaders, Jose Barroso, Olli Rehn, Chancellor Merkel, Wolfgang Schauble, the top technocrats, Christine Lagarde, Mario Draghi, and Mario Monti, are talking now about economic recovery and growth without which austerity cannot succeed. Thus they have all taken their cue from Antonis Samaras who was the only statesman that sounded this syndrome of austerity and growth two years ago and had quarrelled with Merkel and Sarkozi, for which he had been severely criticised and disparaged by politicians and the media, such as The Economist. All of them however admitted subsequently that Samaras was right. Hence there is already a sounding axis between Greece and the whole of Europe due to the intercession of Antonis Samaras. Moreover, Samaras warned the European leaders that the policies of the first Memorandum would change the political configuration of the country, as they would both give rise to the forces of the extreme left as well as lead to the break-up of social cohesion which in turn would make the country un-governable. These warnings were tragically verified in the elections of May 6. And I pose the question, why Professor Varoufakis you lack the nobility and courage to give credit where credit is due, to Samaras?

You seem to be obsessed with your toy The Modest Proposal that would drag Europe out of its crisis, and not finding any other children to play with it, you have turned into a surly and cantankerous little boy. Since, as its sire along with Stuart Holland, you flagged it more than a year ago you have made so many ‘bastard’ revisions to it, that it has become difficult to identify the ‘true father’. But one thing is for sure, that in your vainglorious pursuit to persuade governments and bankers to adopt it, you will miserably fail. Your Modest Proposal was always a flying kite that would inevitably take its nosedive.

An Exchange between Kotzabasis and Professor Varoufakis on Merits and Demerits of Capitalism

The following exchange between me and Professor of  Economics Yanis Varoufakis at Athens University took place on his blog

http://yanisvaroufakis.eu/ about the capitalist system under the post:

Ending 2011with a fable for our times-December 24, 2011

December 24, 2011 at 03:14 #

Kotzabasis says,

Is Amartya Sen’s absolute prosperity and relative inequality of the capitalist system vulgarly to be replaced by Yanis Varoufakis’s “despicable inequality?”

Professor Varoufakis distorts and defames the whole history of the dynamism of entrepreneurial capitalist wealth that shot up the standard of living of the masses to “Himalayan” heights. To claim that capitalist “wealth …needs poverty to flourish,” is just an ornamental academic trapping empty of history and fugitive from serious thought. Capitalism, like everything else in life, was never meant to be “stable” but a process of Schumpeterian “creative destruction.” But this can only be understood and accepted by realists and not by heroic ideologues, like Professor Varoufakis.

Professor Varoufakis says,

December 24, 2011 at 15:32 #

It is always good to encounter intransigent Panglossian views in the post-2008 world. There is something touching about undying faith, even when of the toxic variety.

December 25, 2011 at 01:48 #

Kotzabasis says,

Professor Varoufakis

Are capitalist entrepreneurial creativity, wealth, and prosperity based on “intransigent” “Panglossian” naivety? And is the history of capitalism to be truncated and concentrated naively and un- imaginatively between 2008 and 2011 for you to make your uninspiring and toxic argument?

Professor Varoufakis says,

December 25, 2011 at 11:56 #

No, capitalism’s wonders have nothing to do with Panglossian naïveté. But your determination to portray it as the best of all possible systems exudes it. As for my assessment of capitalism, and your claim that I truncate the latter’s history to a period around 2008, feel free to judge it. But only after you acquaint yourself with it. (For had you read it, eg either of my last two books, you would have realized that I truncate nothing. And that I go to great lengths to analyse capitalism’s contradictions, something that entails a celebration of its achievements as well as an exposition of its failures.) Till you are prepared to become acquainted with what I am really saying, before you attack it, I shall treat you as no more than a minor Panglossian.

Kotzabasis says,

December 26, 2011 at 02:46 #

Professor Varoufakis

Thank you for your advice how to overcome my “minor Panglossian” status. But unfortunately for me I’m bound to retain it, as your crass defamation of capitalism in your POST, hardly incentivized me, to use a term of your “little man” John Howard, to read your books and be acquainted with your thoughts. And indeed, my preference is to be “treated… as a minor Panglossian” than go through the treat to major on your ‘Pandistortions’ and jaundiced strictures on capitalism.

But to come to the gist of the matter in hand, my riposte to you was not to either of your two books, which, as I imply above I have not read. My reply was specifically to your post where you wistfully and wrongfully write, “Should we dare to hope of a new era in which WEALTH NO LONGER NEEDS POVERTY TO FLOURISH,” and of the illusion that “capitalism can be stable” and where you vulgarly and gracelessly contend that capitalism creates “DESPICABLE INEQUALITY,” and in your reply to my first post where you refer to the “post-2008 world.” It might well be that these ‘populist flourishes’ had not meant to be of any intellectual seriousness and their only aim was na deleazei ( to allure) and enthuse the ignorant to rush and become volunteer workers to your construction of your ‘matchsticks’ good society, as a replacement to the infernal deeds of capitalist society. But could one do this at the cost of one’s intellectual integrity?

And it is most surprising that the Gargantuan, indeed, Cyclopean efforts that you have put in your Modest Proposal(MP)—although one must note that Cyclopean efforts without a Ulysses are fated to be wasted efforts—have the aim to save Europe, a system that according to you produces genetically “despicable inequality.” Fortunately, however, for those condemned to this despicable inequality, but unfortunately for you, Andreas Koutras’s fatal Jovian bolts demolished to ashes the MP, from which no contriving number of revisions to it will give rise to a Phoenix solution that will salvage the European Union from its peril.

Lastly, to state that “to analyse capitalism’s contradictions… entails a celebration of its achievements as well as an exposition of its failures,” is to state the obvious.

Professor Varoufakis says,

December 27, 2011 at 04:33 #

Impressed by your dedication to keep knocking down my (according to you) already demolished, and perpetually ridiculous, arguments, as well as by the amount of time you dedicate to a blog (mine) which you consider unworthy, I shall continue to post your comments. Carry on Sir!

Kotzabasis says,

Professor Varoufakis

With your Kazantzakian character I could never imagine that you would not post my comments.