Before reading watch and listen to Yanis Varoufakis in this Youtube clip. He’s not talking revolution. He’s not even talking socialism. Indeed he’s on about that most liberal of fashions, value free, “evidence based” policies. How this could lead to a crisis requires explanation.
Ok, that was the former Greek Finance Minister making a persuasive case for old fashioned, liberal Keynesianism. This was a view that was growing in popularity in the public press and on-line in the months before the Greek election. Reading and listening to Syriza before the election it seemed that they were just doing the routine, familiar, populist anti-austerity pitch for votes. After the election they changed to an emphasis on negotiation and the sort of position outlined in this video. It was a very encouraging development and it raised the hope that Syriza might strengthen or lead the emerging consensus. That consensus was certainly not socialist or even mildly egalitarian but rather the creation of a functioning liberal economy – yes, ripe for leftward reforms but the left would defer that until a reasonably stable and prosperous liberal economy had developed. Clearly it would be difficult if not impossible to get a liberal deal of this kind through the Greek parliament without the support of the older centre-right and centre-left parties. However, somewhere during the months of negotiation the Keynesian position disappeared. Towards the end the German Chancellor insisted that any deal would have to be approved by the Greek Parliament. In doing so she inadvertently hastened the end of negotiations and saved Syriza’s unity. In the week before the IMF payment was due there were two sets of proposals: the creditors’ ultimatum and Syriza’s. As the Greek Finance Minister insisted, there was nothing much between them. Then the P.M. decided on a referendum to accept or reject the ultimatum. There needs to be an enquiry into these negotiations because it is simply not plausible that the argument advanced by Yanis Varoufakis in this video caused a crisis.