Former Greece Finance Minister Yanis Varoufakis Argues for a Reunification of Politics and Economics

Millions of people around the Western world are fed up with their governments. The legacy of the 2008 financial crisis led to the diffusion across the West of an angry-mob mentality, one that places blame in the hands of politicians rather than on the banks who caused the crisis.

Similar to the post-Great Depression political situation of many Western democracies, the demos of said democracies has begun to lose faith in the system that is supposed to put power in the hands of the unprivileged. They have grown tired of the slow, agonizing processes democracy requires to accrue change. They are tired of seeing politician after politician be elected and fail in the same way as their predecessors to make the life of the average citizen easier.

Yanis Varoufakis, Greece’s former Minister of Finance, understands the plight of the average person, and as many other politicians have, he asserts his time in government was spent working to help his fellow Greeks. He fails, he says, not because he is an ineffective politician, but because politicians are no longer in power.

In his Ted Talk entitled “Capitalism will eat Democracy – Unless We Speak Up,” Varoufakis argues that the inability of politicians to create change is the result of a decades long process in which economics has become completely isolated from politics. True power, he says, now rests in the hands of those who control the economy, not in those who run the government.

The economic sphere, according to Varoufakis, is a “democracy-free zone” where the privileged reign supreme and the underprivileged, the demos of democracy, have little to no say in the processes that rule over them. The result, he says, is that while democracy exists on paper and in principle, it does not exist in practice.  Voters can vote, politicians can argue, constituents can do and say whatever they want, and it will all be meaningless.

Varoufakis says the separation of the economic from the political sphere is a process that was begun decades ago, and “like a population of predators that are so successful in decimating the prey they must feed on that in the end they starve, similarly the economic sphere has been colonizing and cannibalizing the political sphere to such an extent that it is undermining itself causing economic crisis.”

He attests that the economic sphere has become so powerful that now when it needs the help of the political sphere to regain its balance, it is appealing to a partner that is powerless to help.

Varoufakis says the solution to the West’s present dilemma lies in reuniting the economic and political spheres into one coherent democracy where the demos regains control. He says in practice this means companies should be owned only by those who currently work for that company, not by those who merely invested in the company. This also means an end to the tug-of-war between capital and labor as well as an end to the great gap between investment and saving.

A reunification of the economic and political spheres can be accomplished. According to Yanis Varoufakis, it must be accomplished in order for power to be returned to the people.