1
00:00:01,200 --> 00:00:02,400
Democracy.

2
00:00:02,960 --> 00:00:04,296
In the West,

3
00:00:04,320 --> 00:00:08,256
we make a colossal mistake
taking it for granted.

4
00:00:08,280 --> 00:00:09,576
We see democracy

5
00:00:09,600 --> 00:00:14,096
not as the most fragile
of flowers that it really is,

6
00:00:14,120 --> 00:00:16,960
but we see it as part
of our society's furniture.

7
00:00:17,960 --> 00:00:21,960
We tend to think of it
as an intransigent given.

8
00:00:22,680 --> 00:00:27,896
We mistakenly believe that capitalism
begets inevitably democracy.

9
00:00:27,920 --> 00:00:29,256
It doesn't.

10
00:00:29,280 --> 00:00:33,656
Singapore's Lee Kuan Yew
and his great imitators in Beijing

11
00:00:33,680 --> 00:00:36,616
have demonstrated beyond reasonable doubt

12
00:00:36,640 --> 00:00:40,536
that it is perfectly possible
to have a flourishing capitalism,

13
00:00:40,560 --> 00:00:42,160
spectacular growth,

14
00:00:42,960 --> 00:00:46,016
while politics remains democracy-free.

15
00:00:46,040 --> 00:00:50,456
Indeed, democracy is receding
in our neck of the woods,

16
00:00:50,480 --> 00:00:52,056
here in Europe.

17
00:00:52,080 --> 00:00:55,456
Earlier this year,
while I was representing Greece --

18
00:00:55,480 --> 00:00:58,216
the newly elected Greek government --

19
00:00:58,240 --> 00:01:00,936
in the Eurogroup as its Finance Minister,

20
00:01:00,960 --> 00:01:05,896
I was told in no uncertain terms
that our nation's democratic process --

21
00:01:05,920 --> 00:01:07,336
our elections --

22
00:01:07,360 --> 00:01:09,136
could not be allowed to interfere

23
00:01:09,160 --> 00:01:12,400
with economic policies
that were being implemented in Greece.

24
00:01:13,120 --> 00:01:14,336
At that moment,

25
00:01:14,360 --> 00:01:18,656
I felt that there could be no greater
vindication of Lee Kuan Yew,

26
00:01:18,680 --> 00:01:20,216
or the Chinese Communist Party,

27
00:01:20,240 --> 00:01:23,976
indeed of some recalcitrant
friends of mine who kept telling me

28
00:01:24,000 --> 00:01:28,320
that democracy would be banned
if it ever threatened to change anything.

29
00:01:29,640 --> 00:01:32,896
Tonight, here, I want to present to you

30
00:01:32,920 --> 00:01:36,080
an economic case
for an authentic democracy.

31
00:01:36,600 --> 00:01:41,456
I want to ask you
to join me in believing again

32
00:01:41,480 --> 00:01:43,480
that Lee Kuan Yew,

33
00:01:44,480 --> 00:01:45,856
the Chinese Communist Party

34
00:01:45,880 --> 00:01:47,256
and indeed the Eurogroup

35
00:01:47,280 --> 00:01:50,920
are wrong in believing
that we can dispense with democracy --

36
00:01:51,600 --> 00:01:55,336
that we need an authentic,
boisterous democracy.

37
00:01:55,360 --> 00:01:58,336
And without democracy,

38
00:01:58,360 --> 00:02:01,216
our societies will be nastier,

39
00:02:01,240 --> 00:02:03,376
our future bleak

40
00:02:03,400 --> 00:02:06,216
and our great, new technologies wasted.

41
00:02:06,240 --> 00:02:07,496
Speaking of waste,

42
00:02:07,520 --> 00:02:10,295
allow me to point out
an interesting paradox

43
00:02:10,320 --> 00:02:13,096
that is threatening
our economies as we speak.

44
00:02:13,120 --> 00:02:15,416
I call it the twin peaks paradox.

45
00:02:15,440 --> 00:02:16,736
One peak you understand --

46
00:02:16,760 --> 00:02:18,376
you know it, you recognize it --

47
00:02:18,400 --> 00:02:23,456
is the mountain of debts
that has been casting a long shadow

48
00:02:23,480 --> 00:02:26,296
over the United States,
Europe, the whole world.

49
00:02:26,320 --> 00:02:28,200
We all recognize the mountain of debts.

50
00:02:28,880 --> 00:02:33,000
But few people discern its twin.

51
00:02:33,640 --> 00:02:35,840
A mountain of idle cash

52
00:02:36,840 --> 00:02:40,200
belonging to rich savers
and to corporations,

53
00:02:41,120 --> 00:02:43,696
too terrified to invest it

54
00:02:43,720 --> 00:02:47,016
into the productive activities
that can generate the incomes

55
00:02:47,040 --> 00:02:50,096
from which you can extinguish
the mountain of debts

56
00:02:50,120 --> 00:02:54,096
and which can produce all those things
that humanity desperately needs,

57
00:02:54,120 --> 00:02:55,776
like green energy.

58
00:02:55,800 --> 00:02:58,136
Now let me give you two numbers.

59
00:02:58,160 --> 00:02:59,496
Over the last three months,

60
00:02:59,520 --> 00:03:02,296
in the United States,
in Britain and in the Eurozone,

61
00:03:02,320 --> 00:03:06,736
we have invested, collectively,
3.4 trillion dollars

62
00:03:06,760 --> 00:03:09,416
on all the wealth-producing goods --

63
00:03:09,440 --> 00:03:12,456
things like industrial plants, machinery,

64
00:03:12,480 --> 00:03:14,696
office blocks, schools,

65
00:03:14,720 --> 00:03:17,856
roads, railways, machinery,
and so on and so forth.

66
00:03:17,880 --> 00:03:20,616
$3.4 trillion sounds like a lot of money

67
00:03:20,640 --> 00:03:24,496
until you compare it to the $5.1 trillion

68
00:03:24,520 --> 00:03:27,216
that has been slushing around
in the same countries,

69
00:03:27,240 --> 00:03:29,056
in our financial institutions,

70
00:03:29,080 --> 00:03:32,280
doing absolutely nothing
during the same period

71
00:03:33,440 --> 00:03:38,296
except inflating stock exchanges
and bidding up house prices.

72
00:03:38,320 --> 00:03:43,576
So a mountain of debt
and a mountain of idle cash

73
00:03:43,600 --> 00:03:47,296
form twin peaks, 
failing to cancel each other out

74
00:03:47,320 --> 00:03:50,136
through the normal
operation of the markets.

75
00:03:50,160 --> 00:03:52,480
The result is stagnant wages,

76
00:03:53,360 --> 00:03:59,016
more than a quarter of 25- to 54-year-olds
in America, in Japan and in Europe

77
00:03:59,040 --> 00:04:00,536
out of work.

78
00:04:00,560 --> 00:04:02,896
And consequently, low aggregate demand,

79
00:04:02,920 --> 00:04:05,136
which in a never-ending cycle,

80
00:04:05,160 --> 00:04:07,880
reinforces the pessimism of the investors,

81
00:04:08,880 --> 00:04:12,696
who, fearing low demand,
reproduce it by not investing --

82
00:04:12,720 --> 00:04:15,416
exactly like Oedipus' father,

83
00:04:15,440 --> 00:04:17,935
who, terrified
by the prophecy of the oracle

84
00:04:17,959 --> 00:04:20,696
that his son would grow up to kill him,

85
00:04:20,720 --> 00:04:22,656
unwittingly engineered the conditions

86
00:04:22,680 --> 00:04:25,680
that ensured that Oedipus,
his son, would kill him.

87
00:04:26,560 --> 00:04:28,560
This is my quarrel with capitalism.

88
00:04:29,200 --> 00:04:31,216
Its gross wastefulness,

89
00:04:31,240 --> 00:04:32,856
all this idle cash,

90
00:04:32,880 --> 00:04:36,976
should be energized to improve lives,

91
00:04:37,000 --> 00:04:38,336
to develop human talents,

92
00:04:38,360 --> 00:04:41,216
and indeed to finance
all these technologies,

93
00:04:41,240 --> 00:04:42,496
green technologies,

94
00:04:42,520 --> 00:04:45,280
which are absolutely essential
for saving planet Earth.

95
00:04:46,280 --> 00:04:49,536
Am I right in believing
that democracy might be the answer?

96
00:04:49,560 --> 00:04:50,776
I believe so,

97
00:04:50,800 --> 00:04:52,016
but before we move on,

98
00:04:52,040 --> 00:04:53,440
what do we mean by democracy?

99
00:04:54,520 --> 00:04:56,936
Aristotle defined democracy

100
00:04:56,960 --> 00:05:01,896
as the constitution
in which the free and the poor,

101
00:05:01,920 --> 00:05:04,080
being in the majority, control government.

102
00:05:05,000 --> 00:05:08,296
Now, of course Athenian democracy
excluded too many.

103
00:05:08,320 --> 00:05:11,360
Women, migrants and,
of course, the slaves.

104
00:05:12,040 --> 00:05:13,296
But it would be a mistake

105
00:05:13,320 --> 00:05:16,896
to dismiss the significance
of ancient Athenian democracy

106
00:05:16,920 --> 00:05:18,920
on the basis of whom it excluded.

107
00:05:19,680 --> 00:05:20,936
What was more pertinent,

108
00:05:20,960 --> 00:05:24,816
and continues to be so
about ancient Athenian democracy,

109
00:05:24,840 --> 00:05:28,336
was the inclusion of the working poor,

110
00:05:28,360 --> 00:05:33,056
who not only acquired
the right to free speech,

111
00:05:33,080 --> 00:05:35,336
but more importantly, crucially,

112
00:05:35,360 --> 00:05:37,976
they acquired the rights
to political judgments

113
00:05:38,000 --> 00:05:40,376
that were afforded equal weight

114
00:05:40,400 --> 00:05:44,056
in the decision-making
concerning matters of state.

115
00:05:44,080 --> 00:05:47,136
Now, of course, Athenian
democracy didn't last long.

116
00:05:47,160 --> 00:05:51,576
Like a candle that burns brightly,
it burned out quickly.

117
00:05:51,600 --> 00:05:52,816
And indeed,

118
00:05:52,840 --> 00:05:57,096
our liberal democracies today
do not have their roots in ancient Athens.

119
00:05:57,120 --> 00:05:59,456
They have their roots in the Magna Carta,

120
00:05:59,480 --> 00:06:02,736
in the 1688 Glorious Revolution,

121
00:06:02,760 --> 00:06:04,976
indeed in the American constitution.

122
00:06:05,000 --> 00:06:10,016
Whereas Athenian democracy
was focusing on the masterless citizen

123
00:06:10,040 --> 00:06:12,320
and empowering the working poor,

124
00:06:13,240 --> 00:06:17,416
our liberal democracies are founded
on the Magna Carta tradition,

125
00:06:17,440 --> 00:06:20,536
which was, after all,
a charter for masters.

126
00:06:20,560 --> 00:06:24,856
And indeed, liberal democracy
only surfaced when it was possible

127
00:06:24,880 --> 00:06:28,736
to separate fully the political sphere
from the economic sphere,

128
00:06:28,760 --> 00:06:33,816
so as to confine the democratic process
fully in the political sphere,

129
00:06:33,840 --> 00:06:35,696
leaving the economic sphere --

130
00:06:35,720 --> 00:06:37,656
the corporate world, if you want --

131
00:06:37,680 --> 00:06:40,360
as a democracy-free zone.

132
00:06:41,720 --> 00:06:44,696
Now, in our democracies today,

133
00:06:44,720 --> 00:06:48,216
this separation of the economic
from the political sphere,

134
00:06:48,240 --> 00:06:50,496
the moment it started happening,

135
00:06:50,520 --> 00:06:54,816
it gave rise to an inexorable,
epic struggle between the two,

136
00:06:54,840 --> 00:06:58,056
with the economic sphere
colonizing the political sphere,

137
00:06:58,080 --> 00:06:59,600
eating into its power.

138
00:07:00,480 --> 00:07:03,880
Have you wondered why politicians
are not what they used to be?

139
00:07:04,560 --> 00:07:06,976
It's not because their DNA
has degenerated.

140
00:07:07,000 --> 00:07:08,616
(Laughter)

141
00:07:08,640 --> 00:07:13,256
It is rather because one can be
in government today and not in power,

142
00:07:13,280 --> 00:07:16,576
because power has migrated
from the political to the economic sphere,

143
00:07:16,600 --> 00:07:17,840
which is separate.

144
00:07:19,160 --> 00:07:20,736
Indeed,

145
00:07:20,760 --> 00:07:23,056
I spoke about my quarrel
with capitalism.

146
00:07:23,080 --> 00:07:24,816
If you think about it,

147
00:07:24,840 --> 00:07:28,160
it is a little bit like
a population of predators,

148
00:07:29,080 --> 00:07:33,800
that are so successful in decimating
the prey that they must feed on,

149
00:07:34,560 --> 00:07:36,696
that in the end they starve.

150
00:07:36,720 --> 00:07:37,936
Similarly,

151
00:07:37,960 --> 00:07:41,656
the economic sphere has been colonizing
and cannibalizing the political sphere

152
00:07:41,680 --> 00:07:45,056
to such an extent
that it is undermining itself,

153
00:07:45,080 --> 00:07:46,816
causing economic crisis.

154
00:07:46,840 --> 00:07:48,936
Corporate power is increasing,

155
00:07:48,960 --> 00:07:51,176
political goods are devaluing,

156
00:07:51,200 --> 00:07:53,016
inequality is rising,

157
00:07:53,040 --> 00:07:54,616
aggregate demand is falling

158
00:07:54,640 --> 00:08:00,760
and CEOs of corporations are too scared
to invest the cash of their corporations.

159
00:08:01,520 --> 00:08:08,176
So the more capitalism succeeds
in taking the demos out of democracy,

160
00:08:08,200 --> 00:08:09,536
the taller the twin peaks

161
00:08:09,560 --> 00:08:13,096
and the greater the waste
of human resources

162
00:08:13,120 --> 00:08:14,560
and humanity's wealth.

163
00:08:15,640 --> 00:08:18,496
Clearly, if this is right,

164
00:08:18,520 --> 00:08:21,576
we must reunite the political
and economic spheres

165
00:08:21,600 --> 00:08:25,096
and better do it
with a demos being in control,

166
00:08:25,120 --> 00:08:28,056
like in ancient Athens
except without the slaves

167
00:08:28,080 --> 00:08:31,040
or the exclusion of women and migrants.

168
00:08:32,120 --> 00:08:33,856
Now, this is not an original idea.

169
00:08:33,880 --> 00:08:36,655
The Marxist left
had that idea 100 years ago

170
00:08:36,679 --> 00:08:38,360
and it didn't go very well, did it?

171
00:08:38,840 --> 00:08:42,256
The lesson that we learned
from the Soviet debacle

172
00:08:42,280 --> 00:08:48,616
is that only by a miracle
will the working poor be reempowered,

173
00:08:48,640 --> 00:08:50,616
as they were in ancient Athens,

174
00:08:50,640 --> 00:08:54,400
without creating new forms
of brutality and waste.

175
00:08:54,960 --> 00:08:56,200
But there is a solution:

176
00:08:56,880 --> 00:08:58,720
eliminate the working poor.

177
00:08:59,360 --> 00:09:00,616
Capitalism's doing it

178
00:09:00,640 --> 00:09:05,520
by replacing low-wage workers
with automata, androids, robots.

179
00:09:07,080 --> 00:09:08,296
The problem is

180
00:09:08,320 --> 00:09:11,536
that as long as the economic
and the political spheres are separate,

181
00:09:11,560 --> 00:09:15,880
automation makes the twin peaks taller,

182
00:09:16,640 --> 00:09:18,376
the waste loftier

183
00:09:18,400 --> 00:09:20,456
and the social conflicts deeper,

184
00:09:20,480 --> 00:09:21,680
including --

185
00:09:22,320 --> 00:09:23,856
soon, I believe --

186
00:09:23,880 --> 00:09:25,480
in places like China.

187
00:09:26,720 --> 00:09:29,136
So we need to reconfigure,

188
00:09:29,160 --> 00:09:32,816
we need to reunite the economic
and the political spheres,

189
00:09:32,840 --> 00:09:38,216
but we'd better do it
by democratizing the reunified sphere,

190
00:09:38,240 --> 00:09:43,936
lest we end up with
a surveillance-mad hyperautocracy

191
00:09:43,960 --> 00:09:47,976
that makes The Matrix, the movie,
look like a documentary.

192
00:09:48,000 --> 00:09:49,576
(Laughter)

193
00:09:49,600 --> 00:09:53,016
So the question is not
whether capitalism will survive

194
00:09:53,040 --> 00:09:55,360
the technological innovations
it is spawning.

195
00:09:55,960 --> 00:09:57,576
The more interesting question

196
00:09:57,600 --> 00:10:03,336
is whether capitalism will be succeeded
by something resembling a Matrix dystopia

197
00:10:03,360 --> 00:10:07,776
or something much closer
to a Star Trek-like society,

198
00:10:07,800 --> 00:10:10,176
where machines serve the humans

199
00:10:10,200 --> 00:10:14,616
and the humans expend their energies
exploring the universe

200
00:10:14,640 --> 00:10:18,936
and indulging in long debates
about the meaning of life

201
00:10:18,960 --> 00:10:22,960
in some ancient, Athenian-like,
high tech agora.

202
00:10:24,360 --> 00:10:27,800
I think we can afford to be optimistic.

203
00:10:29,400 --> 00:10:30,696
But what would it take,

204
00:10:30,720 --> 00:10:32,696
what would it look like

205
00:10:32,720 --> 00:10:37,600
to have this Star Trek-like utopia,
instead of the Matrix-like dystopia?

206
00:10:38,240 --> 00:10:39,496
In practical terms,

207
00:10:39,520 --> 00:10:41,256
allow me to share just briefly,

208
00:10:41,280 --> 00:10:42,480
a couple of examples.

209
00:10:43,080 --> 00:10:44,856
At the level of the enterprise,

210
00:10:44,880 --> 00:10:47,216
imagine a capital market,

211
00:10:47,240 --> 00:10:49,920
where you earn capital as you work,

212
00:10:50,880 --> 00:10:56,216
and where your capital follows you
from one job to another,

213
00:10:56,240 --> 00:10:57,736
from one company to another,

214
00:10:57,760 --> 00:10:59,016
and the company --

215
00:10:59,040 --> 00:11:02,496
whichever one you happen
to work at at that time --

216
00:11:02,520 --> 00:11:06,840
is solely owned by those who happen
to work in it at that moment.

217
00:11:07,400 --> 00:11:12,096
Then all income stems
from capital, from profits,

218
00:11:12,120 --> 00:11:16,496
and the very concept
of wage labor becomes obsolete.

219
00:11:16,520 --> 00:11:23,136
No more separation between those
who own but do not work in the company

220
00:11:23,160 --> 00:11:26,416
and those who work
but do not own the company;

221
00:11:26,440 --> 00:11:29,640
no more tug-of-war
between capital and labor;

222
00:11:30,440 --> 00:11:34,576
no great gap between
investment and saving;

223
00:11:34,600 --> 00:11:37,840
indeed, no towering twin peaks.

224
00:11:38,600 --> 00:11:40,976
At the level of the global
political economy,

225
00:11:41,000 --> 00:11:42,936
imagine for a moment

226
00:11:42,960 --> 00:11:47,936
that our national currencies
have a free-floating exchange rate,

227
00:11:47,960 --> 00:11:51,736
with a universal,
global, digital currency,

228
00:11:51,760 --> 00:11:55,776
one that is issued
by the International Monetary Fund,

229
00:11:55,800 --> 00:11:57,016
the G-20,

230
00:11:57,040 --> 00:11:59,576
on behalf of all humanity.

231
00:11:59,600 --> 00:12:00,816
And imagine further

232
00:12:00,840 --> 00:12:05,176
that all international trade
is denominated in this currency --

233
00:12:05,200 --> 00:12:07,016
let's call it "the cosmos,"

234
00:12:07,040 --> 00:12:08,440
in units of cosmos --

235
00:12:09,720 --> 00:12:14,096
with every government agreeing
to be paying into a common fund

236
00:12:14,120 --> 00:12:19,656
a sum of cosmos units proportional
to the country's trade deficit,

237
00:12:19,680 --> 00:12:23,080
or indeed to a country's trade surplus.

238
00:12:23,720 --> 00:12:28,936
And imagine that that fund is utilized
to invest in green technologies,

239
00:12:28,960 --> 00:12:34,280
especially in parts of the world
where investment funding is scarce.

240
00:12:34,840 --> 00:12:36,416
This is not a new idea.

241
00:12:36,440 --> 00:12:39,776
It's what, effectively,
John Maynard Keynes proposed

242
00:12:39,800 --> 00:12:43,120
in 1944 at the Bretton Woods Conference.

243
00:12:44,080 --> 00:12:45,296
The problem is

244
00:12:45,320 --> 00:12:48,616
that back then, they didn't have
the technology to implement it.

245
00:12:48,640 --> 00:12:49,856
Now we do,

246
00:12:49,880 --> 00:12:55,800
especially in the context
of a reunified political-economic sphere.

247
00:12:56,640 --> 00:12:59,056
The world that I am describing to you

248
00:12:59,080 --> 00:13:01,536
is simultaneously libertarian,

249
00:13:01,560 --> 00:13:06,136
in that it prioritizes
empowered individuals,

250
00:13:06,160 --> 00:13:07,376
Marxist,

251
00:13:07,400 --> 00:13:10,616
since it will have confined
to the dustbin of history

252
00:13:10,640 --> 00:13:13,096
the division between capital and labor,

253
00:13:13,120 --> 00:13:14,680
and Keynesian,

254
00:13:15,320 --> 00:13:16,800
global Keynesian.

255
00:13:18,320 --> 00:13:19,896
But above all else,

256
00:13:19,920 --> 00:13:24,840
it is a world in which we will be able
to imagine an authentic democracy.

257
00:13:25,760 --> 00:13:27,520
Will such a world dawn?

258
00:13:28,400 --> 00:13:32,896
Or shall we descend
into a Matrix-like dystopia?

259
00:13:32,920 --> 00:13:37,040
The answer lies in the political choice
that we shall be making collectively.

260
00:13:37,720 --> 00:13:39,336
It is our choice,

261
00:13:39,360 --> 00:13:41,680
and we'd better make it democratically.

262
00:13:42,280 --> 00:13:43,536
Thank you.

263
00:13:43,560 --> 00:13:46,920
(Applause)

264
00:13:49,480 --> 00:13:50,680
Bruno Giussani: Yanis ...

265
00:13:51,880 --> 00:13:56,320
It was you who described yourself
in your bios as a libertarian Marxist.

266
00:13:58,400 --> 00:14:00,920
What is the relevance
of Marx's analysis today?

267
00:14:02,000 --> 00:14:05,336
Yanis Varoufakis: Well, if there was
any relevance in what I just said,

268
00:14:05,360 --> 00:14:06,576
then Marx is relevant.

269
00:14:06,600 --> 00:14:10,096
Because the whole point of reunifying
the political and economic is --

270
00:14:10,120 --> 00:14:11,336
if we don't do it,

271
00:14:11,360 --> 00:14:13,616
then technological innovation
is going to create

272
00:14:13,640 --> 00:14:15,936
such a massive fall in aggregate demand,

273
00:14:15,960 --> 00:14:20,736
what Larry Summers
refers to as secular stagnation.

274
00:14:20,760 --> 00:14:23,616
With this crisis migrating
from one part of the world,

275
00:14:23,640 --> 00:14:25,176
as it is now,

276
00:14:25,200 --> 00:14:27,896
it will destabilize
not only our democracies,

277
00:14:27,920 --> 00:14:32,136
but even the emerging world that is not
that keen on liberal democracy.

278
00:14:32,160 --> 00:14:35,976
So if this analysis holds water,
then Marx is absolutely relevant.

279
00:14:36,000 --> 00:14:37,736
But so is Hayek,

280
00:14:37,760 --> 00:14:39,576
that's why I'm a libertarian Marxist,

281
00:14:39,600 --> 00:14:40,816
and so is Keynes,

282
00:14:40,840 --> 00:14:42,736
so that's why I'm totally confused.

283
00:14:42,760 --> 00:14:43,976
(Laughter)

284
00:14:44,000 --> 00:14:46,056
BG: Indeed, and possibly we are too, now.

285
00:14:46,080 --> 00:14:47,376
(Laughter)

286
00:14:47,400 --> 00:14:49,376
(Applause)

287
00:14:49,400 --> 00:14:52,176
YV: If you are not confused,
you are not thinking, OK?

288
00:14:52,200 --> 00:14:55,296
BG: That's a very, very Greek
philosopher kind of thing to say --

289
00:14:55,320 --> 00:14:56,976
YV: That was Einstein, actually --

290
00:14:57,000 --> 00:14:59,616
BG: During your talk
you mentioned Singapore and China,

291
00:14:59,640 --> 00:15:01,696
and last night at the speaker dinner,

292
00:15:01,720 --> 00:15:06,896
you expressed a pretty strong opinion
about how the West looks at China.

293
00:15:06,920 --> 00:15:08,496
Would you like to share that?

294
00:15:08,520 --> 00:15:10,680
YV: Well, there's a great
degree of hypocrisy.

295
00:15:11,400 --> 00:15:15,696
In our liberal democracies,
we have a semblance of democracy.

296
00:15:15,720 --> 00:15:18,456
It's because we have confined,
as I was saying in my talk,

297
00:15:18,480 --> 00:15:20,136
democracy to the political sphere,

298
00:15:20,160 --> 00:15:23,616
while leaving the one sphere
where all the action is --

299
00:15:23,640 --> 00:15:24,856
the economic sphere --

300
00:15:24,880 --> 00:15:26,720
a completely democracy-free zone.

301
00:15:27,280 --> 00:15:28,536
In a sense,

302
00:15:28,560 --> 00:15:30,760
if I am allowed to be provocative,

303
00:15:31,880 --> 00:15:36,296
China today is closer to Britain
in the 19th century.

304
00:15:36,320 --> 00:15:37,576
Because remember,

305
00:15:37,600 --> 00:15:39,936
we tend to associate
liberalism with democracy --

306
00:15:39,960 --> 00:15:41,456
that's a mistake, historically.

307
00:15:41,480 --> 00:15:44,016
Liberalism, liberal,
it's like John Stuart Mill.

308
00:15:44,040 --> 00:15:48,736
John Stuart Mill was particularly
skeptical about the democratic process.

309
00:15:48,760 --> 00:15:54,136
So what you are seeing now in China
is a very similar process

310
00:15:54,160 --> 00:15:57,336
to the one that we had in Britain
during the Industrial Revolution,

311
00:15:57,360 --> 00:16:00,336
especially the transition
from the first to the second.

312
00:16:00,360 --> 00:16:03,656
And to be castigating China

313
00:16:03,680 --> 00:16:06,816
for doing that which the West did
in the 19th century,

314
00:16:06,840 --> 00:16:08,160
smacks of hypocrisy.

315
00:16:09,520 --> 00:16:13,176
BG: I am sure that many people here
are wondering about your experience

316
00:16:13,200 --> 00:16:15,936
as the Finance Minister of Greece
earlier this year.

317
00:16:15,960 --> 00:16:17,341
YV: I knew this was coming.

318
00:16:17,365 --> 00:16:18,616
BG: Yes.

319
00:16:18,640 --> 00:16:19,976
BG: Six months after,

320
00:16:20,000 --> 00:16:22,400
how do you look back
at the first half of the year?

321
00:16:23,920 --> 00:16:26,536
YV: Extremely exciting,
from a personal point of view,

322
00:16:26,560 --> 00:16:27,816
and very disappointing,

323
00:16:27,840 --> 00:16:31,736
because we had an opportunity
to reboot the Eurozone.

324
00:16:31,760 --> 00:16:33,856
Not just Greece, the Eurozone.

325
00:16:33,880 --> 00:16:36,816
To move away from the complacency

326
00:16:36,840 --> 00:16:39,296
and the constant denial
that there was a massive --

327
00:16:39,320 --> 00:16:42,176
and there is a massive
architectural fault line

328
00:16:42,200 --> 00:16:44,376
going through the Eurozone,

329
00:16:44,400 --> 00:16:48,816
which is threatening, massively,
the whole of the European Union process.

330
00:16:48,840 --> 00:16:52,016
We had an opportunity
on the basis of the Greek program --

331
00:16:52,040 --> 00:16:53,376
which by the way,

332
00:16:53,400 --> 00:16:57,776
was the first program
to manifest that denial --

333
00:16:57,800 --> 00:16:59,016
to put it right.

334
00:16:59,040 --> 00:17:00,256
And, unfortunately,

335
00:17:00,280 --> 00:17:02,096
the powers in the Eurozone,

336
00:17:02,120 --> 00:17:03,320
in the Eurogroup,

337
00:17:04,079 --> 00:17:06,056
chose to maintain denial.

338
00:17:06,079 --> 00:17:07,336
But you know what happens.

339
00:17:07,359 --> 00:17:09,415
This is the experience
of the Soviet Union.

340
00:17:09,440 --> 00:17:11,935
When you try to keep alive

341
00:17:11,960 --> 00:17:15,839
an economic system
that architecturally cannot survive,

342
00:17:16,520 --> 00:17:19,175
through political will
and through authoritarianism,

343
00:17:19,200 --> 00:17:20,856
you may succeed in prolonging it,

344
00:17:20,880 --> 00:17:22,455
but when change happens

345
00:17:22,480 --> 00:17:24,976
it happens very abruptly
and catastrophically.

346
00:17:25,000 --> 00:17:27,007
BG: What kind of change
are you foreseeing?

347
00:17:27,031 --> 00:17:28,285
YV: Well, there's no doubt

348
00:17:28,309 --> 00:17:30,976
that if we don't change
the architecture of the Eurozone,

349
00:17:31,001 --> 00:17:32,895
the Eurozone has no future.

350
00:17:32,920 --> 00:17:35,816
BG: Did you make any mistakes
when you were Finance Minister?

351
00:17:35,840 --> 00:17:37,056
YV: Every day.

352
00:17:37,080 --> 00:17:39,616
BG: For example?
YV: Anybody who looks back --

353
00:17:39,640 --> 00:17:41,720
(Applause)

354
00:17:44,120 --> 00:17:45,496
No, but seriously.

355
00:17:45,520 --> 00:17:49,096
If there's any Minister of Finance,
or of anything else for that matter,

356
00:17:49,120 --> 00:17:51,336
who tells you after six months in a job,

357
00:17:51,360 --> 00:17:55,056
especially in such a stressful situation,

358
00:17:55,080 --> 00:17:57,776
that they have made no mistake,
they're dangerous people.

359
00:17:57,800 --> 00:17:59,096
Of course I made mistakes.

360
00:17:59,120 --> 00:18:01,936
The greatest mistake
was to sign the application

361
00:18:01,960 --> 00:18:04,056
for the extension of a loan agreement

362
00:18:04,080 --> 00:18:05,696
in the end of February.

363
00:18:05,720 --> 00:18:06,936
I was imagining

364
00:18:06,960 --> 00:18:09,936
that there was a genuine interest
on the side of the creditors

365
00:18:09,960 --> 00:18:11,216
to find common ground.

366
00:18:11,240 --> 00:18:12,456
And there wasn't.

367
00:18:12,480 --> 00:18:15,096
They were simply interested
in crushing our government,

368
00:18:15,120 --> 00:18:16,576
just because they did not want

369
00:18:16,600 --> 00:18:19,736
to have to deal with
the architectural fault lines

370
00:18:19,760 --> 00:18:21,776
that were running through the Eurozone.

371
00:18:21,800 --> 00:18:23,616
And because they didn't want to admit

372
00:18:23,640 --> 00:18:27,256
that for five years they were implementing
a catastrophic program in Greece.

373
00:18:27,280 --> 00:18:30,176
We lost one-third of our nominal GDP.

374
00:18:30,200 --> 00:18:32,136
This is worse than the Great Depression.

375
00:18:32,160 --> 00:18:33,416
And no one has come clean

376
00:18:33,440 --> 00:18:36,376
from the troika of lenders
that have been imposing this policy

377
00:18:36,400 --> 00:18:39,376
to say, "This was a colossal mistake."

378
00:18:39,400 --> 00:18:40,616
BG: Despite all this,

379
00:18:40,640 --> 00:18:42,976
and despite the aggressiveness
of the discussion,

380
00:18:43,000 --> 00:18:45,416
you seem to be remaining
quite pro-European.

381
00:18:45,440 --> 00:18:46,656
YV: Absolutely.

382
00:18:46,680 --> 00:18:50,816
Look, my criticism
of the European Union and the Eurozone

383
00:18:50,840 --> 00:18:54,880
comes from a person
who lives and breathes Europe.

384
00:18:55,680 --> 00:18:59,256
My greatest fear is that
the Eurozone will not survive.

385
00:18:59,280 --> 00:19:00,736
Because if it doesn't,

386
00:19:00,760 --> 00:19:03,616
the centrifugal forces
that will be unleashed

387
00:19:03,640 --> 00:19:05,336
will be demonic,

388
00:19:05,360 --> 00:19:07,336
and they will destroy the European Union.

389
00:19:07,360 --> 00:19:09,776
And that will be catastrophic
not just for Europe

390
00:19:09,800 --> 00:19:11,416
but for the whole global economy.

391
00:19:11,440 --> 00:19:15,536
We are probably the largest
economy in the world.

392
00:19:15,560 --> 00:19:17,296
And if we allow ourselves

393
00:19:17,320 --> 00:19:20,136
to fall into a route
of the postmodern 1930's,

394
00:19:20,160 --> 00:19:22,816
which seems to me to be what we are doing,

395
00:19:22,840 --> 00:19:24,656
then that will be detrimental

396
00:19:24,680 --> 00:19:28,096
to the future of Europeans
and non-Europeans alike.

397
00:19:28,120 --> 00:19:30,536
BG: We definitely hope
you are wrong on that point.

398
00:19:30,560 --> 00:19:32,256
Yanis, thank you for coming to TED.

399
00:19:32,280 --> 00:19:33,496
YV: Thank you.

400
00:19:33,520 --> 00:19:38,343
(Applause)