The new Greek Finance Minister, Yanis Varoufakis, is a Marxist and a member of The Coalition of the Radical Left (SYRIZA is their acronym in Greek). He calls himself a libertarian Marxist FWIW. He is a dual citizen of both Greece and Australia, and he is a smart economist. He has an excellent grip on the history I explored in Fiat 33, Dirty Float and Global Stagnation, especially in regard to our (America's) exorbitant privilege as it emerged through the evolution of the international monetary system from 1944 to present, a privilege which he more or less now hopes to acquire for Greece.
In addition to his PhD in Economics, he is also an expert in Game Theory, about which he has written three books. Back in the late 80s while lecturing on economics at the University of Sydney, he was quite popular for mixing Game Theory with Economics. From the Sydney Morning Herald last Wednesday:
"As a young man lecturing in Sydney, the economist's area of expertise was game theory. Now he gets to put it into practice…
In his late 20s, Varoufakis joined the university in 1988, cutting a striking figure amid the earnest and crumpled academics of its economics faculties. Long-haired, usually in jeans and a T-shirt, Varoufakis could deliver electrifying lectures on his chosen topic, the somewhat arcane discipline of game theory.
"He made economics a lot more interesting," said Helen Goritsas, a former student, now a senior lecturer at the Academy of Information Technology.
"He was young, very vibrant and dynamic. He had lots of charisma."
His specialty of game theory is possibly best known as the domain of management consultants and military planners - as far away from left-wing political economics as one could get.
The mathematical discipline studies strategic decision making in competitive situations. Its best known "game" is the "prisoner's dilemma", which shows how two individuals can "rationally" come to a decision that is in neither of their interests.
"He was aware of the limitations of game theory, but I'm sure he will apply what he learnt about strategic thinking to whole problem of Europe's political economy," said Frank Stillwell, another former colleague at the University of Sydney.
"And he will be doing it at a time when the future of the European Union is in the balance."
Varoufakis wants Greece to be allowed not to repay a large part of that debt, or at least have it restructured on favourable terms.
But he does not want Greece to leave the eurozone or dump its currency, recognising that any new Greek currency could be battered and the country would have trouble raising capital.
Game theory is, in the end, about getting the best outcome from a difficult situation. Varoufakis used to tell his students that it showed that collaboration between rivals often produced the optimal result, Goritsas says.
With the parties remaining far apart on agreement, it will be a message he hopes the rest of Europe hears."
So if economic game theory is his thing, and now he's in a position to put it to the test, what's his first move? Well, here are a few quotes from him courtesy of HuffPo on Friday:
Varoufakis [said] "… to negotiate, to be taken seriously, you have to have a credible threat. You have to be prepared to blow the whole thing up…" […] " So, this is my recommendation: Prepare for a very tough, very painful, potentially explosive negotiation." […]
In a November 2014 interview, Varoufakis predicted that countries pushing Greeks to accept austerity -- such as Germany -- would be doomed to repeat the experience of the victors of World War I, who imposed such harsh conditions on Germany that many believe it led to the rise of Adolf Hitler.
"I think we'll have a repeat performance of that," Varoufakis said of Germany today.
Sounds like he's serious, in a libertarian Marxist kind of way! ;D
I must admit that, although he's a Debtor and I'm a Saver and we are polar opposites politically, for some reason I like this guy! I may have to get hooked on watching him speak just to try and figure out how he's going to get Greece to force Europe to push that damn Freegold button! ;D