WEBVTT 00:00:01.573 --> 00:00:03.196 Democracy. NOTE Paragraph 00:00:03.196 --> 00:00:04.671 In the West, 00:00:04.671 --> 00:00:08.431 we make a colossal mistake taking it for granted. 00:00:08.431 --> 00:00:09.853 We see democracy 00:00:09.853 --> 00:00:14.263 not as the most fragile of flowers that it really is, 00:00:14.263 --> 00:00:17.756 but we see it as part of our society's furniture. 00:00:18.251 --> 00:00:22.430 We tend to think of it as any transient given. 00:00:22.988 --> 00:00:28.282 We mistakenly believe that capitalism begets inevitably, democracy. 00:00:28.282 --> 00:00:29.513 It doesn't. NOTE Paragraph 00:00:29.513 --> 00:00:33.887 Singapore's Lee Kuan Yew and his great imitators in Beijing 00:00:33.887 --> 00:00:36.882 have demonstrated beyond reasonable doubt 00:00:36.882 --> 00:00:40.783 that it is perfectly possible to have flourishing capitalism, 00:00:40.783 --> 00:00:43.205 spectacular growth, 00:00:43.205 --> 00:00:46.407 while politics remain democracy free. 00:00:46.407 --> 00:00:50.689 Indeed, democracy is receding in our neck of the woods. 00:00:50.689 --> 00:00:52.225 Here in Europe. NOTE Paragraph 00:00:52.225 --> 00:00:55.611 Earlier this year while I was representing Greece -- 00:00:55.611 --> 00:00:58.394 the newly elected Greek government -- 00:00:58.394 --> 00:01:01.244 in the Eurogroup as its Finance Minister, 00:01:01.244 --> 00:01:06.174 I was told in certain terms that our nation's democratic process -- 00:01:06.174 --> 00:01:07.726 our elections -- 00:01:07.726 --> 00:01:09.538 could not be allowed to interfere 00:01:09.538 --> 00:01:13.196 with economic policies that were being implemented in Greece. 00:01:13.196 --> 00:01:14.318 At that moment, 00:01:14.318 --> 00:01:18.891 I felt that there could be no greater vindication of Lee Kuan Yew, 00:01:18.891 --> 00:01:20.617 of the Chinese Communist Party, 00:01:20.617 --> 00:01:24.256 indeed of some recalcitrant friends of mine who kept telling me 00:01:24.256 --> 00:01:28.925 that democracy would be banned if it ever threatened to change anything. NOTE Paragraph 00:01:29.969 --> 00:01:33.045 Tonight, here, I want to present to you 00:01:33.045 --> 00:01:36.388 an economic case for an authentic democracy. 00:01:36.782 --> 00:01:41.649 I want to ask you to join me in believing again 00:01:41.649 --> 00:01:44.800 that Lee Kuan Yew ... 00:01:44.800 --> 00:01:46.175 the Chinese Communist Party, 00:01:46.175 --> 00:01:47.592 and indeed the Eurogroup, 00:01:47.592 --> 00:01:51.122 are wrong in believing that we can dispense with democracy. 00:01:51.893 --> 00:01:55.445 That we need an authentic, boisterous democracy, 00:01:55.445 --> 00:01:58.613 and without democracy, 00:01:58.613 --> 00:02:01.488 our societies will be nastier, 00:02:01.488 --> 00:02:03.615 our future bleak, 00:02:03.615 --> 00:02:06.471 and our great, new technologies wasted. NOTE Paragraph 00:02:06.471 --> 00:02:07.541 Speaking of waste, 00:02:07.541 --> 00:02:10.449 allow me to point out an interesting paradox 00:02:10.449 --> 00:02:13.275 that is threatening our economies as we speak. 00:02:13.275 --> 00:02:15.645 I call it the twin peaks paradox. 00:02:15.645 --> 00:02:17.046 One peak you understand -- 00:02:17.046 --> 00:02:18.583 you know it, you recognize it -- 00:02:18.583 --> 00:02:20.010 is the mountain of debts 00:02:20.010 --> 00:02:24.911 that has been casting a long shadow over the United States, 00:02:24.911 --> 00:02:25.910 Europe, 00:02:25.910 --> 00:02:26.911 the whole world. 00:02:26.911 --> 00:02:29.232 We all recognize the mountain of debts. 00:02:29.232 --> 00:02:33.249 But few people discern its twin. 00:02:33.885 --> 00:02:37.150 A mountain of idle cash 00:02:37.150 --> 00:02:41.230 belonging to rich savers and to corporations, 00:02:41.230 --> 00:02:43.986 too terrified to invest it 00:02:43.986 --> 00:02:47.283 into the productive activities that can generate the incomes 00:02:47.283 --> 00:02:50.359 from which you can extinguish the mountain of debts 00:02:50.359 --> 00:02:54.247 and which can produce all those things that humanity desperately needs, 00:02:54.247 --> 00:02:56.019 like green energy. NOTE Paragraph 00:02:56.019 --> 00:02:58.170 Now let me give you two numbers. 00:02:58.170 --> 00:02:59.640 Over the last three months, 00:02:59.640 --> 00:03:02.449 in the United States, in Britain and in the Eurozone, 00:03:02.449 --> 00:03:06.961 we have invested, collectively 3.4 trillion dollars 00:03:06.961 --> 00:03:09.623 on all the wealth-producing goods. 00:03:09.623 --> 00:03:12.738 Things like industrial plants, machinery, 00:03:12.738 --> 00:03:15.028 office blocks, schools, 00:03:15.028 --> 00:03:17.888 roads, railways, machinery, and so on and so forth ... 00:03:17.888 --> 00:03:20.963 3.4 trillion sounds like a lot of money 00:03:20.963 --> 00:03:24.819 until you compare it to the 5.1 trillion 00:03:24.819 --> 00:03:27.503 that has been slushing around in the same countries, 00:03:27.503 --> 00:03:29.453 in our financial institutions, 00:03:29.453 --> 00:03:33.733 doing absolutely nothing during the same period ... 00:03:33.733 --> 00:03:38.253 except inflating stock exchanges and driving up house prices. NOTE Paragraph 00:03:38.613 --> 00:03:43.804 So a mountain of debt and a mountain of idle cash 00:03:43.804 --> 00:03:47.679 form twin peaks failing to cancel each other out 00:03:47.679 --> 00:03:50.334 through the normal operation of the markets. NOTE Paragraph 00:03:50.334 --> 00:03:53.544 The result is stagnant wages, 00:03:53.544 --> 00:03:59.230 more than a quarter of 25 to 54-year-olds in America, in Japan and in Europe 00:03:59.230 --> 00:04:00.851 out of work. 00:04:00.851 --> 00:04:03.215 And consequently, low aggregate demand, 00:04:03.215 --> 00:04:05.450 which in a never-ending cycle, 00:04:05.450 --> 00:04:09.089 reinforces the pessimism of the investors, 00:04:09.089 --> 00:04:12.944 who fearing low demand, reproduce it by not investing. NOTE Paragraph 00:04:12.944 --> 00:04:15.628 Exactly like Oedipus' father, 00:04:15.628 --> 00:04:18.273 who terrified by the prophecy of the oracle 00:04:18.273 --> 00:04:21.027 that his son would grow up to kill him, 00:04:21.027 --> 00:04:22.935 unwittingly engineered the conditions 00:04:22.935 --> 00:04:26.825 that insured that Oedipus, his son, would kill him. NOTE Paragraph 00:04:26.825 --> 00:04:29.475 This is my quarrel with capitalism. 00:04:29.475 --> 00:04:31.698 Its gross wastefulness, 00:04:31.698 --> 00:04:33.111 all this idle cash, 00:04:33.111 --> 00:04:37.327 should be energized to improve lives, 00:04:37.327 --> 00:04:38.710 to develop human talents, 00:04:38.710 --> 00:04:41.563 and indeed to finance all these technologies -- 00:04:41.563 --> 00:04:42.611 green technologies -- 00:04:42.611 --> 00:04:45.831 which are absolutely essential for saving planet Earth. NOTE Paragraph 00:04:46.612 --> 00:04:49.698 Am I right in believing that democracy might be the answer? 00:04:49.698 --> 00:04:50.698 I believe so, 00:04:50.698 --> 00:04:52.572 but before we move on, 00:04:52.572 --> 00:04:54.846 what do we mean by democracy? 00:04:54.846 --> 00:04:57.183 Aristotle defined democracy 00:04:57.183 --> 00:05:02.183 as the constitution in which the free and the poor, 00:05:02.183 --> 00:05:03.593 being in the majority, 00:05:03.593 --> 00:05:05.357 control government. 00:05:05.357 --> 00:05:08.687 Now of course Athenian democracy excluded too many. 00:05:08.687 --> 00:05:12.247 Women, migrants and of course, the slaves. 00:05:12.247 --> 00:05:13.464 But it would be a mistake 00:05:13.464 --> 00:05:17.151 to dismiss the significance of ancient Athenian democracy 00:05:17.151 --> 00:05:19.357 on the basis of whom it excluded. NOTE Paragraph 00:05:19.878 --> 00:05:21.385 What was more pertinent, 00:05:21.385 --> 00:05:25.029 and continues to be so about ancient Athenian democracy, 00:05:25.029 --> 00:05:28.607 was the inclusion of the working poor, 00:05:28.607 --> 00:05:33.235 who not only acquired the right to free speech, 00:05:33.235 --> 00:05:34.686 but more importantly -- 00:05:34.686 --> 00:05:35.712 crucially -- 00:05:35.712 --> 00:05:38.272 they acquired the rights to political judgements 00:05:38.272 --> 00:05:40.632 that were afforded equal weight 00:05:40.632 --> 00:05:44.335 in the decision-making concerning matters of state. NOTE Paragraph 00:05:44.335 --> 00:05:47.419 Now of course, Athenian democracy didn't last long. 00:05:47.419 --> 00:05:51.703 Like a candle that burns brightly, it burned out quickly. 00:05:51.703 --> 00:05:52.738 And indeed, 00:05:52.738 --> 00:05:57.368 our liberal democracies today do not have their roots in ancient Athens. 00:05:57.368 --> 00:05:59.653 They have their roots in the Magna Carta, 00:05:59.653 --> 00:06:02.969 in the 1688 Glorious Revolution, 00:06:02.969 --> 00:06:05.342 indeed in the American constitution. 00:06:05.342 --> 00:06:10.162 Whereas Athenian democracy was focusing on the masterless citizen 00:06:10.162 --> 00:06:13.621 and empowering the working poor, 00:06:13.621 --> 00:06:17.671 our liberal democracies are founded on the Magna Carta tradition, 00:06:17.671 --> 00:06:20.875 which was, after all a charter for masters. 00:06:20.875 --> 00:06:25.035 And indeed, liberal democracy only surfaced when it was possible 00:06:25.035 --> 00:06:29.118 to separate fully the political sphere from the economic sphere, 00:06:29.118 --> 00:06:34.138 so as to confine the democratic process fully in the political sphere, 00:06:34.138 --> 00:06:36.007 leaving the economic sphere -- 00:06:36.007 --> 00:06:37.988 the corporate world, if you want -- 00:06:37.988 --> 00:06:40.896 as a democracy-free zone. NOTE Paragraph 00:06:41.982 --> 00:06:45.051 Now in our democracies today, 00:06:45.051 --> 00:06:48.488 this separation of the economic from the political sphere, 00:06:48.488 --> 00:06:50.755 the moment it started happening, 00:06:50.755 --> 00:06:55.118 it gave rise to an inexorable, epic struggle between the two, 00:06:55.118 --> 00:06:58.270 with the economic sphere colonizing the political sphere, 00:06:58.270 --> 00:07:00.198 eating into its power. NOTE Paragraph 00:07:00.721 --> 00:07:04.871 Have you wondered why politicians are not what they used to be? 00:07:04.871 --> 00:07:07.724 It's not because their DNA has degenerated -- NOTE Paragraph 00:07:07.724 --> 00:07:08.958 (Laughter) NOTE Paragraph 00:07:08.958 --> 00:07:13.470 It is rather because one can be in government today and not in power. 00:07:13.470 --> 00:07:16.837 Because power has migrated from the political to the economic sphere, 00:07:16.837 --> 00:07:18.563 which is separate. NOTE Paragraph 00:07:19.545 --> 00:07:21.089 Indeed -- 00:07:21.089 --> 00:07:23.399 I spoke about my quarrel with capitalism -- 00:07:23.403 --> 00:07:25.098 If you think about it, 00:07:25.098 --> 00:07:29.428 it is a little bit like a population of predators, 00:07:29.428 --> 00:07:34.898 that are so successful in decimating the prey that they must feed on, 00:07:34.898 --> 00:07:37.053 that in the end they starve. NOTE Paragraph 00:07:37.053 --> 00:07:38.053 Similarly, 00:07:38.053 --> 00:07:41.840 the economic sphere has been colonizing and cannibalizing the political sphere 00:07:41.840 --> 00:07:45.265 to such an extent that it is undermining itself, 00:07:45.265 --> 00:07:47.051 causing economic crisis. 00:07:47.051 --> 00:07:49.239 Corporate power is increasing, 00:07:49.239 --> 00:07:51.426 political goods are devaluing, 00:07:51.426 --> 00:07:53.229 inequality is rising, 00:07:53.229 --> 00:07:54.932 aggregate amount is falling, 00:07:54.932 --> 00:08:01.081 and CEO's of corporations are too scared to invest the cash of their corporations. NOTE Paragraph 00:08:01.755 --> 00:08:08.419 So the more capitalism succeeds in taking the demos out of democracy, 00:08:08.419 --> 00:08:10.122 the taller the twin peaks 00:08:10.122 --> 00:08:13.292 and the greater the waste of human resources, 00:08:13.292 --> 00:08:15.429 and humanity's wealth. NOTE Paragraph 00:08:16.012 --> 00:08:18.769 Clearly, if this is right, 00:08:18.769 --> 00:08:21.950 we must reunite the political and economic spheres 00:08:21.950 --> 00:08:25.389 and better do it with a demos being in control, 00:08:25.389 --> 00:08:28.213 like in ancient Athens except without the slaves 00:08:28.213 --> 00:08:31.360 or the exclusion of women and migrants. NOTE Paragraph 00:08:32.422 --> 00:08:34.213 Now this is not an original idea. 00:08:34.213 --> 00:08:36.994 The Marxist left had that idea 100 years ago 00:08:36.994 --> 00:08:39.148 and it didn't go very well, did it? NOTE Paragraph 00:08:39.148 --> 00:08:42.518 The lesson that we learned from the Soviet debacle 00:08:42.518 --> 00:08:48.784 is that only by a miracle will the working poor be re-empowered, 00:08:48.784 --> 00:08:50.946 as they were in ancient Athens, 00:08:50.946 --> 00:08:54.742 without creating new forms of brutality and waste. NOTE Paragraph 00:08:55.128 --> 00:08:57.152 But there is a solution. 00:08:57.152 --> 00:08:59.288 Eliminate the working poor. 00:08:59.702 --> 00:09:01.258 Capitalism's doing it 00:09:01.258 --> 00:09:06.220 by replacing low-wage workers with automata, androids, robots. 00:09:07.062 --> 00:09:08.059 The problem is 00:09:08.059 --> 00:09:11.546 that as long as the economic and the political spheres are separate, 00:09:11.546 --> 00:09:16.876 automation makes the twin peaks taller, 00:09:16.876 --> 00:09:18.548 the waste loftier, 00:09:18.548 --> 00:09:20.775 and the social conflicts deeper, 00:09:20.775 --> 00:09:22.555 including -- 00:09:22.555 --> 00:09:24.169 soon, I believe -- 00:09:24.169 --> 00:09:26.258 in places like China. NOTE Paragraph 00:09:26.980 --> 00:09:29.441 So we need to reconfigure, 00:09:29.441 --> 00:09:33.052 we need to reunite the economic and the political spheres, 00:09:33.052 --> 00:09:38.253 but we'd better do it by democratizing the reunified sphere, 00:09:38.253 --> 00:09:44.237 lest you end up with a surveillance-mad, hyper-autocracy 00:09:44.237 --> 00:09:48.300 that makes The Matrix, the movie, look like a documentary. NOTE Paragraph 00:09:48.649 --> 00:09:49.836 (Laughter) NOTE Paragraph 00:09:49.836 --> 00:09:53.097 So the question is not whether capitalism will survive 00:09:53.097 --> 00:09:55.639 the technological innovations of this moment. 00:09:56.083 --> 00:09:57.889 The more interesting question 00:09:57.889 --> 00:10:03.679 is whether capitalism will be succeeded by something resembling a Matrix dystopia 00:10:03.679 --> 00:10:08.073 or something much closer to a Star Trek-like society, 00:10:08.073 --> 00:10:10.515 where machines serve the humans 00:10:10.515 --> 00:10:14.837 and the humans expend their energies exploring the universe 00:10:14.837 --> 00:10:19.192 and indulging in long debates about the meaning of life 00:10:19.192 --> 00:10:22.968 in some ancient, Athenian-like, high tech Agora. NOTE Paragraph 00:10:24.629 --> 00:10:28.042 I think we can afford to be optimistic. NOTE Paragraph 00:10:29.690 --> 00:10:31.247 But what would it take -- 00:10:31.247 --> 00:10:33.043 what would it look like -- 00:10:33.043 --> 00:10:37.910 to have this Star Trek-like utopia, instead of the Matrix-like dystopia? NOTE Paragraph 00:10:38.537 --> 00:10:39.795 In practical terms, 00:10:39.795 --> 00:10:41.583 allow me to share just briefly, 00:10:41.583 --> 00:10:43.222 a couple of examples. NOTE Paragraph 00:10:43.222 --> 00:10:45.215 At the level of the enterprise, 00:10:45.215 --> 00:10:47.443 imagine a capital market, 00:10:47.443 --> 00:10:51.139 where you earn capital as you work, 00:10:51.139 --> 00:10:56.480 and where your capital follows you from one job to another, 00:10:56.480 --> 00:10:58.196 from one company to another, 00:10:58.196 --> 00:10:59.299 and the company -- 00:10:59.299 --> 00:11:02.684 whichever one you happen to work at at that time -- 00:11:02.684 --> 00:11:06.979 is solely owned by those who happen to work in it at that moment. 00:11:07.761 --> 00:11:12.359 Then all income stems from capital, from profits, 00:11:12.359 --> 00:11:16.260 and the very concept of wage labor becomes obsolete. 00:11:16.910 --> 00:11:23.413 No more separation between those who own but do not work in the company, 00:11:23.413 --> 00:11:26.710 and those who work but do not own the company. 00:11:26.710 --> 00:11:29.868 No more tug-of-war between capital and labor. 00:11:30.748 --> 00:11:34.797 No great gap between investment and saving. 00:11:34.797 --> 00:11:38.399 Indeed, no towering twin peaks. NOTE Paragraph 00:11:39.011 --> 00:11:41.281 At the level of a global political economy, 00:11:41.281 --> 00:11:43.116 imagine for a moment 00:11:43.116 --> 00:11:48.172 that our national currencies have a free-floating exchange rate, 00:11:48.172 --> 00:11:51.987 with a universal, global, digital currency. 00:11:51.987 --> 00:11:55.919 One that is issued by the International Monetary Fund, 00:11:55.919 --> 00:11:57.242 the G-20, 00:11:57.242 --> 00:11:59.843 on behalf of all humanity. 00:11:59.843 --> 00:12:01.093 And imagine further, 00:12:01.093 --> 00:12:05.489 that all international trade is denominated in this currency -- 00:12:05.489 --> 00:12:07.164 let's call it "the cosmos" -- 00:12:07.164 --> 00:12:08.859 in units of cosmos, 00:12:10.043 --> 00:12:14.317 with every government agreeing to be paying into a common fund 00:12:14.317 --> 00:12:19.887 a sum of cosmos units proportional to the country's trade deficit, 00:12:19.887 --> 00:12:23.857 or indeed to a country's trade surplus. 00:12:24.186 --> 00:12:29.094 And imagine that that fund is utilized to invest in green technologies, 00:12:29.094 --> 00:12:34.295 especially in parts of the world where investment funding is scarce. NOTE Paragraph 00:12:35.143 --> 00:12:36.652 This is not a new idea. 00:12:36.652 --> 00:12:40.013 It's what, effectively, John Maynard Keyes proposed 00:12:40.013 --> 00:12:43.708 in 1944 at the Bretton Woods Conference. 00:12:44.360 --> 00:12:45.511 The problem is 00:12:45.511 --> 00:12:48.935 that back then, they didn't have the technology to implement it. 00:12:48.935 --> 00:12:49.946 Now we do. 00:12:49.946 --> 00:12:56.232 Especially in the context of a reunified political economic sphere. NOTE Paragraph 00:12:56.990 --> 00:12:59.335 The world that I am describing to you 00:12:59.335 --> 00:13:01.837 is simultaneously libertarian, 00:13:01.837 --> 00:13:06.272 in that it prioritizes empowered individuals, 00:13:06.272 --> 00:13:07.493 Marxist, 00:13:07.493 --> 00:13:10.645 since it will have [confined?] through the [dusting?] of history 00:13:10.645 --> 00:13:13.504 the division between capital and labor, 00:13:13.504 --> 00:13:15.762 and Keynesian ... 00:13:15.762 --> 00:13:17.759 global Keynesian. 00:13:18.653 --> 00:13:20.232 But above all else, 00:13:20.232 --> 00:13:22.015 it is a world in which 00:13:22.015 --> 00:13:25.661 we will be able to imagine an authentic democracy. NOTE Paragraph 00:13:26.130 --> 00:13:28.613 Will such a world dawn? 00:13:28.613 --> 00:13:32.723 Or shall we descend into a Matrix-like dystopia? 00:13:33.212 --> 00:13:37.368 The answer lies in the political choice that we shall be making collectively. 00:13:38.041 --> 00:13:39.508 It is our choice, 00:13:39.508 --> 00:13:41.946 and we'd better make it democratically. NOTE Paragraph 00:13:42.522 --> 00:13:43.522 Thank you. NOTE Paragraph 00:13:43.753 --> 00:13:45.262 (Applause) NOTE Paragraph 00:13:49.772 --> 00:13:51.118 Bruno Giussani: Yanis ... 00:13:52.372 --> 00:13:56.203 It was you who described yourself in your bios as a libertarian Marxist ... 00:13:58.711 --> 00:14:01.904 what is the relevance of Marx's analysis today? NOTE Paragraph 00:14:02.375 --> 00:14:06.062 YV: Well if there was any relevance in what I just said then Marx is relevant. 00:14:06.062 --> 00:14:10.297 Because the whole point of reunifying the political and economic is -- 00:14:10.297 --> 00:14:11.531 if we don't do it, 00:14:11.531 --> 00:14:13.808 then technological innovation is going to create 00:14:13.808 --> 00:14:16.191 such a massive fall in aggregate. NOTE Paragraph 00:14:16.191 --> 00:14:20.417 What Larry Summers refers to as secular stagnation. 00:14:21.155 --> 00:14:23.779 With this crisis migrating from one part of the world, 00:14:23.779 --> 00:14:25.582 as it is now, 00:14:25.582 --> 00:14:28.333 that it will destabilize not only our democracies, 00:14:28.333 --> 00:14:32.002 but even the [emerging?] world that is not that keen on liberal democracy. 00:14:32.497 --> 00:14:36.349 So if this analysis holds water, then Marx is absolutely relevant. 00:14:36.349 --> 00:14:38.032 But so is [Hagen?] -- 00:14:38.032 --> 00:14:39.848 that's why I'm a libertarian Marxist, 00:14:39.848 --> 00:14:41.088 and so is Keynes, 00:14:41.088 --> 00:14:43.418 so that's why I'm totally confused. NOTE Paragraph 00:14:43.418 --> 00:14:44.485 (Laughter) NOTE Paragraph 00:14:44.485 --> 00:14:46.795 BG: Indeed, and possibly we are too, now. NOTE Paragraph 00:14:46.795 --> 00:14:47.804 (Laughter) NOTE Paragraph 00:14:47.804 --> 00:14:48.804 (Applause) NOTE Paragraph 00:14:49.607 --> 00:14:52.358 YV: If you are not confused, you are not thinking, okay? NOTE Paragraph 00:14:52.358 --> 00:14:55.411 BG: That's a very, very Greek philosopher kind of thing to say -- NOTE Paragraph 00:14:55.411 --> 00:14:57.180 YV: That's more Einstein, actually -- NOTE Paragraph 00:14:57.180 --> 00:14:59.754 BG: During your talk you mentioned Singapore and China, 00:14:59.754 --> 00:15:01.771 and yesterday night at the speaker dinner, 00:15:01.771 --> 00:15:06.255 you expressed a pretty strong opinion about how the West looks at China. 00:15:07.231 --> 00:15:08.763 Would you like to share that? NOTE Paragraph 00:15:08.763 --> 00:15:11.294 YV: Well there's a great degree of hypocrisy. 00:15:11.967 --> 00:15:15.937 In our liberal democracies we have a semblance of democracy. 00:15:15.937 --> 00:15:17.392 It's because we have confined, 00:15:17.392 --> 00:15:18.690 as I was saying in my talk, 00:15:18.690 --> 00:15:20.343 democracy to the political sphere, 00:15:20.343 --> 00:15:23.985 while leaving the one sphere where all the action is -- 00:15:23.985 --> 00:15:25.362 the economic sphere -- 00:15:25.362 --> 00:15:27.606 a completely democracy-free zone. NOTE Paragraph 00:15:27.606 --> 00:15:28.933 In a sense, 00:15:28.933 --> 00:15:32.173 if I am allowed to be provocative ... 00:15:32.173 --> 00:15:36.487 China today is closer to Britain in the 19th century, 00:15:36.487 --> 00:15:37.898 because remember, 00:15:37.898 --> 00:15:40.206 we tend to associate liberalism with democracy -- 00:15:40.206 --> 00:15:41.696 that's a mistake, historically. 00:15:41.696 --> 00:15:42.893 Liberalism -- liberal -- 00:15:42.893 --> 00:15:44.308 it's like John Stuart Mill. 00:15:44.308 --> 00:15:48.877 John Stuart Mill was particularly skeptical about the democratic process. 00:15:48.877 --> 00:15:54.525 So what you are seeing now in China is a very similar process 00:15:54.525 --> 00:15:57.683 to the one that we had in Britain during the Industrial Revolution, 00:15:57.683 --> 00:16:00.425 especially the transition from the first to the second. 00:16:00.727 --> 00:16:03.882 And to be castigating China 00:16:03.882 --> 00:16:07.007 for doing that which the West did in the 19th century, 00:16:07.007 --> 00:16:09.074 smacks of hypocrisy. NOTE Paragraph 00:16:09.753 --> 00:16:11.449 BG: I am sure that many people here 00:16:11.449 --> 00:16:13.871 are wondering about your experience 00:16:13.871 --> 00:16:16.411 as the Finance Minister of Greece earlier this year -- NOTE Paragraph 00:16:16.411 --> 00:16:17.809 YV: I knew this was coming -- NOTE Paragraph 00:16:17.809 --> 00:16:18.811 BG: Yes -- NOTE Paragraph 00:16:18.811 --> 00:16:19.811 (Laughter) NOTE Paragraph 00:16:19.811 --> 00:16:21.027 BG: Six months after, 00:16:21.027 --> 00:16:23.436 how do you look back at the first half of the year? NOTE Paragraph 00:16:24.328 --> 00:16:26.765 YV: Extremely exciting from a personal point of view 00:16:26.765 --> 00:16:28.190 and very disappointing, 00:16:28.190 --> 00:16:31.970 because we had an opportunity to reboot the Eurozone. 00:16:31.970 --> 00:16:34.106 Not just Greece, the Eurozone. 00:16:34.106 --> 00:16:37.006 To move away from the complacency 00:16:37.006 --> 00:16:39.445 and the constant denial that there was a massive -- 00:16:39.445 --> 00:16:40.664 and there is a massive -- 00:16:40.664 --> 00:16:44.679 architectural fault line going through the Eurozone, 00:16:44.679 --> 00:16:46.520 which is threatening, massively, 00:16:46.520 --> 00:16:48.958 the whole of the European Union process. NOTE Paragraph 00:16:49.259 --> 00:16:52.314 We had the opportunity on the basis of the Greek program -- 00:16:52.314 --> 00:16:53.715 which by the way, 00:16:53.715 --> 00:16:58.055 was the first program to manifest that denial -- 00:16:58.055 --> 00:16:59.296 to put it right. 00:16:59.296 --> 00:17:00.436 And unfortunately, 00:17:00.436 --> 00:17:02.493 the powers that be in the Eurozone, 00:17:02.493 --> 00:17:04.223 in the Eurogroup, 00:17:04.223 --> 00:17:06.413 chose to maintain denial. NOTE Paragraph 00:17:06.413 --> 00:17:07.670 But you know what happens. 00:17:07.670 --> 00:17:09.683 This is the experience of the Soviet Union. 00:17:09.683 --> 00:17:12.025 When you try to keep alive 00:17:12.025 --> 00:17:16.857 an economic system that architecturally cannot survive, 00:17:16.857 --> 00:17:19.504 through political will and through authoritarianism, 00:17:19.504 --> 00:17:21.090 you may succeed in prolonging it, 00:17:21.090 --> 00:17:22.484 but when change happens 00:17:22.484 --> 00:17:25.126 it happens very abruptly and catastrophically. NOTE Paragraph 00:17:25.126 --> 00:17:27.144 BG: What kind of change are you foreseeing? 00:17:27.144 --> 00:17:28.347 YV: Well there's no doubt 00:17:28.347 --> 00:17:31.042 that if we don't change the architecture of the Eurozone, 00:17:31.042 --> 00:17:33.100 the Eurozone has no future. NOTE Paragraph 00:17:33.100 --> 00:17:35.951 BG: Did you make any mistakes when you were Finance Minister? 00:17:35.951 --> 00:17:36.945 YV: Every day. NOTE Paragraph 00:17:36.945 --> 00:17:37.945 (Laughter) NOTE Paragraph 00:17:37.945 --> 00:17:40.046 Anybody who looks back -- NOTE Paragraph 00:17:40.050 --> 00:17:41.466 (Applause) NOTE Paragraph 00:17:44.438 --> 00:17:45.762 No but seriously. 00:17:45.762 --> 00:17:47.857 If there's any Minister of Finance, 00:17:47.857 --> 00:17:49.586 or of anything else for that matter, 00:17:49.586 --> 00:17:51.520 who tells you after six months in a job, 00:17:51.520 --> 00:17:55.169 especially in such a stressful situation, 00:17:55.169 --> 00:17:56.626 that they made no mistake, 00:17:56.626 --> 00:17:57.938 [they're dangerous people], 00:17:57.938 --> 00:17:59.220 of course I made mistakes. NOTE Paragraph 00:17:59.220 --> 00:18:00.183 The greatest mistake 00:18:00.183 --> 00:18:04.355 was to sign the application for the extension of a loan agreement 00:18:04.355 --> 00:18:05.850 in the end of February. 00:18:05.850 --> 00:18:06.921 I was imagining 00:18:06.921 --> 00:18:10.169 that there was a genuine interest on the side of the creditors 00:18:10.169 --> 00:18:11.446 to find common ground. 00:18:11.446 --> 00:18:12.411 And there wasn't. 00:18:12.411 --> 00:18:14.987 They were simply interested in crushing our government, 00:18:14.987 --> 00:18:16.417 just because they did not want 00:18:16.417 --> 00:18:19.965 to have to deal with the architectural fault lines 00:18:19.965 --> 00:18:21.911 that were running through the Eurozone. 00:18:21.911 --> 00:18:23.704 And because they didn't want to admit 00:18:23.704 --> 00:18:27.304 that for five years they were implementing a catastrophic problem in Greece. 00:18:27.304 --> 00:18:30.342 We lost one-third of our Nominal GDP. 00:18:30.342 --> 00:18:32.320 This is worse than the Great Depression. 00:18:32.320 --> 00:18:33.582 And no one has come clean 00:18:33.582 --> 00:18:36.508 from the tribe of lenders that has been imposing this policy 00:18:36.508 --> 00:18:39.549 to say, "this was a colossal mistake." NOTE Paragraph 00:18:39.549 --> 00:18:40.569 BG: Despite all this, 00:18:40.569 --> 00:18:42.878 and despite the aggressiveness of the discussion, 00:18:42.878 --> 00:18:45.437 you seem to remaining quite pro-European. NOTE Paragraph 00:18:45.437 --> 00:18:46.579 YV: Absolutely. 00:18:46.579 --> 00:18:51.096 Look, my criticism of the European Union and the Eurozone 00:18:51.096 --> 00:18:55.206 comes from a person who lives and breathes Europe. 00:18:56.010 --> 00:18:59.516 My greatest fear is that the Eurozone will not survive. 00:18:59.516 --> 00:19:01.050 Because if it doesn't, 00:19:01.050 --> 00:19:03.855 the centrifugal forces that would be unleashed 00:19:03.855 --> 00:19:05.740 would be [demonic], 00:19:05.740 --> 00:19:07.804 and they would destroy the European Union. 00:19:07.804 --> 00:19:10.134 And that would be catastrophic not just for Europe 00:19:10.134 --> 00:19:11.751 but for the whole global economy. NOTE Paragraph 00:19:11.751 --> 00:19:15.468 We are probably the largest economy in the world. 00:19:15.739 --> 00:19:17.568 And if we allow ourselves 00:19:17.568 --> 00:19:20.291 to fall into a [route?] of the post-modern 1930's, 00:19:20.291 --> 00:19:23.077 which seems to me to be what we are doing, 00:19:23.077 --> 00:19:24.913 then that will be detrimental 00:19:24.913 --> 00:19:28.221 to the future of Europeans and non-Europeans alike. NOTE Paragraph 00:19:28.221 --> 00:19:30.601 BG: We definitely hope you are wrong on that point. 00:19:30.601 --> 00:19:32.271 Yanis, thank you for coming to TED. NOTE Paragraph 00:19:32.271 --> 00:19:33.271 YV: Thank you NOTE Paragraph 00:19:33.271 --> 00:19:35.921 (Applause)