Yanis Varoufakis

> Also, what exact lack of understanding in terms of "structure" of the current system did you find appalling in those blockchain hackers? Can you be more specific?

- How currencies are created by a population or state?

- How currencies are adopted/enforced to/by a population or state?

- What is the role of a central bank in a modern economy?

- How if the "Chair of the FED" appointed?

- What is the inflation rate?

- Why does a central bank get to decide the inflation rate?

- Why exchange currencies (e.g. USD, EUR, etc) are inflationary?

- What is democracy? (by extension is it in the best interest of a democracy having a CB-backed currency or a virtual currency?)

- Can a player with vast amounts of shares/bitcoins/USDs fix the price of the stock/share/btc?

- Can money be a-political?

> I think we need more scientists, engineers, software professionals, etc. in our political system, not less.

Two examples of technocratic governance are (A) Greece and (B) Economics/Finance:

(A) In 2015 Greece has been turned officially into a colony[1]. In essence it's been a colony since 2010. All major political decisions are taken from a technocratic board. Basically the Greek govenrment acts as the executive branch. The legislative power been delegrated to a supranational authority, which 60% of Greeks rejected btw. The technocratic board, known as 'Troika', has done mistakes[2]. While the IMF will issue a sorry we made a few mistakes statement and go home, people in Greece…

The roll out of the current system was fairly slow and based on response to changes in TF2. Initially weapons were tied to in game achievements, and later a random drop system as well. Cosmetic hats were added to the drop pool in 09, and in 2010 a weapon, item and crate (loot box) shop, and later an update made of community creations. 2012 added a co-op mode MvM that required a 1$ ticket to play a round of the game that that count how many times you've played and can drop items, and the steam community market where items can be traded. It's worth noting that Yanis Varoufakis[1], the economist was a consultant for valve at this point. In 2015 skins for weapons were added, something that beforehand was free.

Valve's argument, which is significantly different than something like overwatch seems to be that content like hats and weapon models and skins has value, and when it's given away there's less incentive for creators to make things, which results in less things being available for players to enjoy and people who make things getting less money. A similar thought led to the introduction of the paid mods store for example. While that was extremely unpopular, there are a couple game mods for sale on the steam store2[2], and there are Patreon game modders[3].

Of course Valve's dog in this race is that they can and have made boatloads of cash in doing so[4], where in their ideal situation users make content and other users pay for it, and they just collect a fee on top for…

I find Yanis Varoufakis' account of the history leading up to the collapse of Bretton Woods very telling:

As the combined costs of the Vietnam War and the Great Society began to mount, the government was forced to generate mountains of US government debt. By the end of the 1960s, many governments began to worry that their own position, which was interlocked with the dollar in the context of the Bretton Woods system, was being undermined. By early 1971, liabilities in dollars exceeded $70 billion when the US government possessed only $12 billion of gold with which to back them up.

The increasing quantity of dollars was flooding world markets, giving rise to inflationary pressures in places like France and Britain. European governments were forced to increase the quantity of their own currencies in order to keep their exchange rate with the dollar constant, as stipulated by the Bretton Woods system. This is the basis for the European charge against the United States that, by pursuing the Vietnam War, it was exporting inflation to the rest of the world.

Beyond mere inflationary concerns, the Europeans and the Japanese feared that the build-up of dollars, against the backdrop of a constant US gold stock, might spark off a run on the dollar which might then force the United States to drop its standing commitment to swapping an ounce of gold for $35, in which case their stored dollars would devalue, eating into their national ‘savings’.

The flaw in the Global Plan was…

Well that is the problem: There is no good way for people to organise effectively on an European level, or at least it is much harder. By comparison is very easy for a determined few to organise at this level, which is why you have tons and tons of lobbyists in Brussels. You can partially observe this when "Wutbürger" protest against local changes like building a new railway station (months of protest, sitins, general disorder), but you barely get two days worth of protests against the ECB on the occasion of the opening of their new head quarters in Frankfurt.

Note it was not the ECJ which struck down the law first, they did it after the BGB did strike it down, partially because they did not want to get into a fight about who has primacy in decision making I believe (the BGB still claims to have the last word, changing this would be unconstitutional in Germany).

I don't think politicians "hiding behind the EU" is what is actually happening, what actually happens is collusion to shift away power from the people by obfuscation and misdirection. People like Schäuble have active contempt for democracy (According to Varoufakis he told him "Elections can't change economic policy"). See for example this discussion of ECB policies (https://www.yanisvaroufakis.eu/2017/03/14/19258/).

I truly believe the EU has to go, in order for Europe to not further slide into a corporatist neo-liberal nightmare. It is very unfortunate that this push is lead by right-wing nationalists.

I'm surprised by the amount of comments denying even the sense of such critique as DHH presented in the article.

The problem comes from a very narrow understanding of how 'capitalism/free market economy/society' should work. In the original theoretical framework that laid the ground for the modern economical system, David Hume (and Adam Smith) talked about 'spontaneous order' that comprised multiple social signals, not just prices!
Society and economy are complex adaptive system with multiple inputs and any public indignation like this one are perfect examples of signals that should act like 'invisible hand'.

The more such signals we'll allow, the better the optimisation will be, not just in terms of economical efficiency, but also environmental friendliness, quality of life impact etc.

Unfortunately neoclassical economy (including some Nobel price winners) seem to be blissfully unaware of where they are coming from and they tend to ditch social 'messiness' so characteristic for any complex system in favour of simplified mathematical models.

For anyone interested, I really recommend the below:

1) This talk about the missing forgotten part of Adam Smith thought ("The Theory of Moral Sentiment"), that significantly changes the understanding of his perspective: http://www.econtalk.org/archives/2015/04/vernon_smith_an.html

2) This article by Yannis Varoufakis on the idea of Spotaneous Order and how it got oversimplified over the last 3 centuries:…

Wow! I certainly wasn't expecting that.

Mr. Varoufakis has been my favorite economist for many years now, and I think he has brilliant insights as to reasons for the Eurocrisis. Whether he can translate his genius into government policy is another matter, but I wish him the best luck.

I've heard him tell the story about how he became Valve's economist. Mr. Varoufakis is a regular guest on the popular left-wing podcast, Doug Henwood's Behind the News. I imagine that Gabe Newell first heard of Yanis through this podcast, but I can't confirm that. Anyway, Gabe sent Yanis a cold email explaining to him what Valve is, and asking him to join the team. Mr. Varoufakis was a long-time economics professor at the University of Athens, but he was in the process of moving to the University of Texas-Austin. Once he learned more about Valve and its virtual economy (and I imagine the fat salary), he accepted the position.

It should be noted that Mr Varfakis is a communist. Part of Gabe's pitch to Yanis was that he runs Valve on what he calls anarcho-syndicalist principles. Although I don't know anything about Gabe's politics, I suspect that his sympathies are not too far from Mr. Varafakis'.

If you want to hear some of his recent thoughts on the Eurocrisis, check out this interview from a couple months ago. IMO, no one does a better job of plainly explaining the malaise in Europe better than this…