Varoufakis's 'Another Now'

Varoufakis has a new book called 'Another Now' which, he says , offers an alternative to the present economic system. 

He writes in the Guardian

Suppose we had seized the 2008 moment to stage a peaceful hi-tech revolution that led to a postcapitalist economic democracy. What would it be like?

Venezuela. That's what Greece would have looked like if Varoufakis had stayed on as Finance Minister. 

To be desirable, it would feature markets for goods and services since the alternative – a Soviet-type rationing system that vests arbitrary power in the ugliest of bureaucrats – is too dreary for words.

Actually, you could buy anything you liked in Moscow in the old days- but only if you paid in dollars at one of the Beriozka dollar stores. There was also a flourishing black market. Postcapitalism is a spiv's paradise. 

But to be crisis-proof, there is one market that market socialism cannot afford to feature: the labour market.

Really? Market Socialism forbids collective bargaining does it? Will Socialism really ban Trade Unions? Would 'wage differentials' cease to reflect Supply and Demand? 

Why? Because, once labour time has a rental price, the market mechanism inexorably pushes it down while commodifying every aspect of work (and, in the age of Facebook, our leisure too).

Labour power has had a rental price for many centuries now. How come my friend, Gareth,  a gardener, in Fulham today, is paid far more than a gardener in the Bishop's Palace three hundred years ago? Furthermore, how come aspects of his  work have been de-commodified? Currently, gardeners like him are welcome to attend Church- which Gareth does on occasion- but they will lose no money, nor be fired, nor suffer any sort of punishment or discrimination even if they practice Wicca. Anglican worship was once a commodity. Either you showed up and put your penny into the collection plate or you paid a fine. You might be prosecuted and would certainly be sacked by the Diocese if you failed to do your duty in this respect. 

Varoufakis is wrong about the market-mechanism driving down the price of labor power. He is wrong about leisure being increasingly, rather than decreasingly, commodified. 

Suppose a Revolution had occurred in 2008. Would the masses really have said 'we don't want to be paid for our work.'? Would Trade Unions and Professional Associations really have dissolved themselves? Varoufakis, it seems, believes so. Why? He thinks advanced economies can function without labour markets. People don't clean toilets for pay. They do it for the pleasure of the thing. 

Can an advanced economy function without labour markets? Of course it can. Consider the principle of one-employee-one-share-one-vote underpinning a system that, in Another Now, I call corpo-syndicalism. Amending corporate law so as to turn every employee into an equal (though not equally remunerated) partner is as unimaginably radical today as universal suffrage was in the 19th century.

It is not radical it is idiotic.  Existing Corporations would break up such that employees would be those who would command equal residuary control rights in any case. Everything else would be 'contracted out'. The Coasian firm would be replaced by lots of sole traders and one or two limited partnerships. This is imaginable. Indeed, in some fields it is what obtains for reasons of tax avoidance. 

Corpo-syndicalism would have some giant Manpower providers. But they would be run by the Mob. Workers would either vote the right way or their legs would be broken. Jimmy Hoffas would constantly be being bumped off. Shareholder meetings would feature 'block votes' of a Stalinist sort.  

What about the public sector? Will all employees have 'one vote' in deciding things like remuneration and choice of technique? If not, why not? But if so, why should the public sector not maximize the benefit to its employees? It can be the 'Stationary Bandit'. The Manpower providers will be its feudatories. We can imagine the 'dominant' social group controlling the Government and letting proletarian or immigrant gang-masters keep the workers in line with plentiful recourse to Mafia thugs. 

In my blueprint, central banks provide every adult with a free bank account into which a fixed stipend (called universal basic dividend) is credited monthly.

How much will it be? Presumably this is related to the increment in National Income divided by the population. But that increment may be negative. In that case, either the 'stipend' is not fixed or it isn't really a 'universal basic dividend'. It is a windfall of an unsustainable sort. Velocity of circulation goes up because Hyperinflation is around the corner. Indeed, the thing is a self-fulfilling prophesy.

As everyone uses their central bank account to make domestic payments, most of the money minted by the central bank is transferred within its ledger.

But leakages will keep rising as rational agents try to get foreign exchange or stockpile foreign goods in anticipation of a fall in the nominal exchange rate. So a Balance of Payments crisis is in the offing.  

Additionally, the central bank grants all newborns a trust fund, to be used when they grow up.

But it will be worthless. So will the public schools and Colleges. Why? Each employee has one vote. Guess what Teachers and Lecturers will vote for? That's right. Drinking Martinis while telling their students that the System is fucked. Also, my wife is a bitch. Fuck you, Twenty First Century! Fuck you very much indeed!

People receive two types of income: the dividends credited into their central bank account and earnings from working in a corpo-syndicalist company. Neither are taxed, as there are no income or sales taxes. Instead, two types of taxes fund the government: a 5% tax on the raw revenues of the corpo-syndicalist firms;

A corpo-syndicalist firm which produces something worthwhile should have no revenue. Why? It can swap its output for physical goods or services. There is no income or sales tax so there is no question of tax avoidance. No doubt, Government contractors have to pay the Revenue tax- but they pass it back to the Government through higher prices. Indeed, they should corrupt the Government to inflate their Revenue. Paying a fiver in tax and a tenner in bribes gets you a profit of eighty five quid in the Bank. Nice business, if you can get it- eh? Where have we heard of something like it before? Wasn't it Varoufakis's 'Plan B' for Grexit?

and proceeds from leasing land (which belongs in its entirety to the community) for private, time-limited, use.

So, if you own your own house you get to pay rent to the Government! Isn't that cool! This sounds like Varoufakis's own dynamite plan for Greece. But he didn't last very long as Finance Minister did he? 

Why pay rent when you can squat? Why work when you can steal? Welcome to Venezuela! But Venezuela may yet prosper if oil prices shoot up. What about countries without a resource curse? Varoufakis's genius is to turn Land, as a factor of production, into a resource curse for even countries with no valuable mineral or other deposits. As the saying goes in Bihar 'Theft is property'. 

Once share markets have disappeared, the need for gargantuan debt to fund mergers and acquisitions evaporates – along with commercial finance.

Wonderful! Nobody would be investing in boring stuff like plant and machinery and inventories. Property owners, stuck with paying taxes to the Government would need to sell services to the Government. No doubt, the wealthier and more influential will have an advantage in doing so. The poor property owner, too old or too lacking in connections, won't be able to pay the tax on his property. Guess who will gobble it up? That's right! It will be the rich guy who can afford to hire goons and bribe officials. Varoufakis has just re-invented Feudalism!  What's next? Will he advocate pogroms and witch burnings and Crusades?

Varoufakis thinks Marx said 'to each according to his need'. This is not true. As the Chinese realized in the Eighties, Marx said 'to each according to his contribution'. What does this imply for property relations? The Chinese figured out that control rights over property should vest in the agent able to make most productive use of it. But they wouldn't cede residuary control rights because Gorbachev had done that and then the Soviet Union went poof. 

Still, in the West we had something called 'Game theory' which showed that 'the bourgeois strategy' is optimal. It makes sense to leave residuary control rights in the hands of the agent with the strongest interest in defending those rights. A Coasian corollary is that externalities can be internalized and 'Tort Law' can work as advertised. Thus one can have a Liberal Democracy which delivers a rising standard of living while protecting the Environment and providing a Social Minimum. Varoufakis may say 'hang on! That's not in the Game Theory!' But it is if we assume Knightian Uncertainty and thus Hannan Consistent 'Regret Minimization' based Muth Rationality. One of Varoufakis's characters is 'Eva' a smart game theoretician doing Evolutionary Game theory. The fact is there is empirical evidence that Evolutionary Stable Strategies are linked to Hannan Consistent 'multiplicative update weighting algorithms'. 

A charitable person may say 'Varoufakis is merely writing a novel. This is an exercise in rhetoric. Give the old fool a break!' However, Rhetoric is about Schelling focal solutions to coordination problems and the discoordination games they give rise to. If you treat 'focality' in a paranoid manner- i.e. hint darkly that occult forces have 'rigged the game' in advance- then your rhetoric is paranoid bullshit. Thus, you need to have an albino Opus Dei assassin or shape shifting Lizards from Planet X or the big Reveal that Christ is actually the Head Vampire or something like that to sell your stupid lucubrations. 

This is the problem with Varoufakis's slow witted shite. It doesn't go far enough. His characters are sad and tawdry. They think they are smart and hip but they aren't really. 

When it comes to international trade and payments, Another Now features an innovative global financial system that continually transfers wealth to the global south, while also preventing imbalances from causing strife and crises. All trade and all money movements between different monetary jurisdictions (eg the UK and the eurozone or the US) are denominated in a new digital accounting unit, called the Kosmos.

 Varoufakis's Greece admitted to fudging its National Income accounts on an industrial scale. Why is this silly man placing such faith in 'accounting units'? Fraud won't disappear just by changing the name of the currency from Euro to Kosmos. On the contrary, fraud is like to become cosmic in scale. 

If the Kosmos value of a country’s imports exceeds its exports, it is charged a levy in proportion to the trade deficit. But, equally, if a country’s exports exceed its imports, it is also charged the levy. Another levy is charged to a country’s Kosmos account whenever too much money moves too quickly out of, or into, the country – a surge levy of sorts that taxes the speculative money movements that do such damage to developing countries. All these levies end up as direct green investments in the global south.

So we can predict in advance that everybody will fudge the numbers so there are merely trivial departures from balanced trade. The Global South can but look on wailing and gnashing its teeth. 

But it is the granting of a single non-tradeable share to each employee-partner that holds the key to this economy. By granting employee-partners the right to vote in the corporation’s general assemblies, an idea proposed by the early anarcho-syndicalists, the distinction between wages and profits is terminated and democracy, at last, enters the workplace.

What actually happened in Republican Spain where this experiment was tried? The 'owners' of enterprises stole everything they could lay their hands on. Not only was the distinction between wages and profits terminated, so was productivity. Democracy enters the workplace when it has been stripped bare and has been turned into a crack house.  

From a firm’s senior engineers and key strategic thinkers to its secretaries and janitors, everyone receives a basic wage plus a bonus that is decided collectively. Since the one-employee-one-vote rule favours smaller decision-making units, corpo-syndicalism causes conglomerates voluntarily to break up into smaller companies, thus reviving market competition. Even more strikingly, share markets vanish completely since shares, like IDs and library cards, are now non-tradeable.

In other words, nobody owns the Company and so nobody cares whether it survives. Why not just loot it right away? If you have genuine work-skills, someone else will hire you. Since you can't sell your share, you might as well just loot the place along with your co-workers.  

Once share markets have disappeared, the need for gargantuan debt to fund mergers and acquisitions evaporates – along with commercial finance. And given that the Central Bank provides everyone with a free bank account, private banking shrinks into utter insignificance.

But the black market booms. Everybody is trying to accumulate as much foreign currency as possible. The rich have already sent their kids to Chinese boarding schools. Like Greece, the ports and infrastructure and on the auction block because those high placed in Government too want to have a bolt hole in Chairman Xi's paradise.  

Some of the thornier issues I had to address in writing Another Now, to ensure its consistency with a fully democratised society, included: the fear that powerful people will manipulate elections even under market socialism; the stubborn refusal of patriarchy to die; gender and sexual politics; the funding of the green transition; borders and migration; a bill of digital rights and so on.

Varoufakis needn't worry. The only powerful people left will be those who are beating you in your workplace and forcing your wife into prostitution so you guys can keep a roof over your head. There will be no need to 'manipulate' elections. You may have to beat some people till they vote the right way. But shooting undesirable candidates is a less strenuous way to pass the time. 

Patriarchy can't survive slavery. Nor can Matriarchy. Rape enough boys when they are still small and they will stop wanting to get married in the belief that Mums are magical. 

The Green transition won't need no funding coz nobody will have a car or much electricity. Borders may have to be policed to prevent people running away but there won't be any immigration problem. When nobody has rights- because there is no incentive compatible vinculum juris linking rights to obligations- people will stop worrying about digital rights. Varoufakis will have abolished Capitalism the old fashioned way- viz. by reverting to barbarism. 

Writing this as a manual would have been unbearable.

Coz kids doing Game Theory 101 would have laughed at you and called you an ignorant cunt. 

It would have forced me to pretend that I have taken sides in arguments that remain unresolved in my head – often in my heart.

Neither the head nor the heart of this 'Hayekian Marxist' are in the right place. This dilettante, whose Daddy is rich and whose wife is good looking, fucked up Greece in a few short months. He was trying to prove that Greece is not a European country. It is African- like Zimbabwe. But Africans don't want to be a poster child for Varoufakis's utopia. They want to rise by their own efforts and will do so- where this is not already happening.

I, therefore, owe an immense debt of gratitude to my spirited characters Iris, Eva and Costa. Above all else, they allowed me seriously to ponder the hardest of questions: once we have conceived of a feasible socialism that blasts Thatcher’s Tina out of the water, what must we do, and how far are we willing to go, to bring it about?

We know what Varoufakis did after fucking up Greece. He became a global brand of a meretricious sort. He made money for himself in a repugnancy market. Even if barbarism returns, a few pimps and other such scoundrels will be more comfortably off than most. That is the alternative to doing Economics or contributing to Public Policy. Be a fucking pimp already. You know you want to.