Thursday, April 30, 2015

Johannes Witteveen: "Music goes much deeper"

Johannes Witteveen, former managing director of the IMF
Johannes Witteveen and I had a long and interesting conversation about "the" global economy, the "crisis", and the need for a change in thinking and policies... And, then, towards the end of our meeting at his house in Wassenaar, we suddenly were speaking about the making of music. Here is a transcript of that part of our conversation:

- When I was ten years old I stretched rubber bands on an old shoebox. (Witteveen laughs) I liked the vibration. 

Yes, yes, that's nice. 

- And when I was a bit older, I made a guitar of cardboard on which I could play a Christmas song ("Silent night, holy night..."). And when I was 13,  I bought a guitar and since that time I play guitar. 


- The best part of playing guitar is to let emerge something from one tone. Often I feel myself more as a kind of medium than a creator... 

Yeah ... By improvising something happens to you. That is very nice, and plays a large role in Sufism. Meditative music. The tambura is used for that, that's an Indian instrument my wife has played many times, to come to meditation. Through the sound of one tone, over and over again, and then she softly sang a bit. 

- As a boy I climbed in tall trees, and then I felt the wind blowing around my ears ... 

(Laughing) Yeah. That is different from thinking. It goes much deeper.

An interesting conversation about music with Johannes Witteveen

Since my thirteenth I play guitar, first classical guitar and later I tried to play flamenco guitar but that is hard for someone who does not live in Spain (Andalucía). Playing an instrument gives you harmony and a whole lot of other things. It also gives pleasure, and harmony, to others who listen to the music.

In the video above I improvise on my José Ramirez guitar (from Madrid) and, by coincidence and good luck, the piece I improvised fitted perfectly with the video I had just finished editing (as far as the images were concerned). Later, I realized this happy coincidence was partly due to the length to which I had cut the filmed shots -- three minutes, which is a usual time length for a music piece, especially a song. This little film is like a song, not about Greece or "the" economy but about... (you fill in).

About the making of music I had an interesting conversation with Johannes Witteveen, but that's for a next post.

Wednesday, April 29, 2015

Greece, Dijsselbloem and Focco Vijselaar (and Plutarchos Sakellaris)

The first time I had a conversation at the Dutch Ministry of Finance with its Director of Foreign Financial Relations, being Pieter Stek at the time (when was it, in 1978?), I carefully listened to what he said and how he said it. Basically, he said that the ministry did not want to have any political interference from outside. He argued strongly that it would be bad to give in to political pressure from outside as he and his colleagues had to protect rational and sound policymaking.

Later, I met other high officials of the Dutch Ministry of Finance including its ministers and those who followed Pieter Stek as Director of Foreign Financial Relations. Some of them, including then Minister of Finance Wim Kok, participated in FONDAD Conferences, and some of these conferences were cosponsored by the Ministry of Finance and by the Dutch central bank.

I have nice memories of the support I received from a man who started his career at the Dutch Ministry of Finance, to become later during many years the head of the OECD, Emile van Lennep. and ended his career still working hard till his death as a Minister of State. I also enjoyed the support from another Dutch minister of finance, the only one who ever made it to the top of the IMF, Johannes Witteveen. Both Witteveen and Van Lennep became members of the Dutch Advisory Group of FONDAD.

Focco Vijselaar
Turning to Greece and the current Director of Foreign Financial Relations, Focco Vijselaar, it is interesting to know what his view on the "Greek problem" is.

Times have changed since I had that conversation in the 1970s with Pieter Stek and so you can read now publicly what Focco Vijselaar thinks about Greece, at least what he thought about it some time ago when he was interviewed about the Greek problem. Unfortunately, that interview is in Dutch. However, I could ask him if he has written anything (in English) about Greece that he may want to share with us.

Since I stressed in a previous post that it would be important for the Greek government to have a constructive dialogue with Jeroen Dijsselbleom and his team, I glimpsed on the internet if there were any Greeks having good relations with Dijselbloem and/or Focco Vijselaar.

Obviously, there are several Greek economists who not only have had a constructive dialogue but also have shared views and even coauthored studies with high Dutch financial officials. One of them is Plutarchos Sakellaris, who coauthored with Focco Vijselaar "Capital Quality Improvement and the Sources of Economic Growth in the Euro Area".

Given Greece's lack of growth, that seems an important topic.. And Sakellaris' current position at the European Investment Bank might be useful as well... Another question is whether the Greek government is making use of or wants to make use of Sakellaris in negotiating with Dijsselbloem and his team.

Tuesday, April 28, 2015

Robert Triffin: "Most central bankers and economists are demagogues"

Jan Joost Teunissen interviewing Robert Triffin, 1985.
Looking in old archives for transcriptions of the various interviews I had with Robert Triffin, I found a transcript of a 1985 interview I had with him at the University of Louvain-la-Neuve in which Triffin says remarkable things about European central bankers and other economist friends of him. He stresses, like Yanis Varoufakis, the need for rational analysis: "Demagogy is easier than good advice. Simple slogans have far more impact on public opinion and politicians than any rational analysis. Actually, policy decisions are dominated by slogans."

Interview with Robert Triffin by Jan Joost Teunissen, 1985, transcript

-Why are you afraid of scepticism?

Because it leads to doing nothing. If you are sceptical of any proposal, it means that you are not trying to implement those proposals no matter how good they are. My friends very often say, ‘Your proposal is splendid but what chance is there of getting it accepted?’

I prefer to be wrong in my predictions nine out of ten, than to be right nine times that we go to the slaughterhouse. If I have one out of ten or even hundred of taking us away from the slaughterhouse, I think that’s worth it. I rather be a good advisor than a good prophet.

-Why is utopia lacking with most of the economists?

Because for somebody who wants to influence policy it is very important to keep the ear of the Minister or the people in power, and there is a great deal of – especially in the US but also to some degree in Europe – overlapping between an academic career and a governmental career. You are in academics but you are borrowed as part time advisor or full time consultant by the Minister, and if you want to preserve that position you have to preserve the ability to influence the Minister. (…)

- Don’t you think that the financial authorities themselves see that scepticism or cynicism as a positive quality?

Yes, it is always easier to do the easier things. Demagogy is easier than good advice. Simple slogans have far more impact on public opinion and politicians than any rational analysis. Actually, policy decisions are dominated by slogans. (…) Many of my best friends share those slogans.

-People like Wim Duisenberg [then Governor of the Dutch Central Bank] not only lack utopia, but also a basic, simple thing: contact with people in the countryside of developing countries or even here [in Europe].

I lived for months, nearly a year, in countries like Honduras, Paraguay, so that I have some knowledge at least of the rural people, below the elite classes. I feel very much like Tinbergen, that’s why I have such admiration for him. He seems to me a real humanitarian and humanist… On the whole he was not so much appreciated by central bankers. (…)

I believe that it is not just a question of being humanitarian, even from the point of view of efficiency you cannot succeed with policies which are so totally distasteful and which create a sort of dissatisfaction by the lower classes toward their governments and even toward the legal opposition.

Will Greece have more success with its new debt negotiator Euclid Tsakalotos?

Greece's new debt negotiator Euclid Tsakalotos

Not only did I interview Alfredo Cesar in 1980 about his experience as the chief negotiator of Nicaragua with its foreign creditors, but I also offered some assistance to Nicaragua later on when it was confronted with an economic boycott similar to the one the Allende government had faced in 1970-73.

Early 1980s a Nicaraguan team arrived in Amsterdam to discuss this boycott. We met during a full day at the office of the Transnational Institute where I worked in those days and that's more or less where the effort ended. The Nicaraguans did not give the needed follow-up to the meeting. 
At the time, I felt the Nicaraguans were inexperienced (that was my impression), had other priorities, or had little expectations about possible results. I also thought, at the time (early 1980s), that they preferred to stick to their confrontational style – similar to Varoufakis?

Or has Varoufakis been less confrontational over the past months than most of the media suggest? And is the Greek attitude now going to change with the new chief negotiator Efklides Tsakalotos or Euclid Tsakalotos as his name is spelled in the English speaking press?

I don’t know, I have not sought inside information about the negotiations between Varoufakis and his team and Dijsselbloem and his team. I could ask key officials in Dijsselbloem’s team though what their experience has been as I happen to know them…

But there is another issue or question. I have a sister (married to a Greek) who lives already many years in Greece and is well-informed (from the perspective of  'the man in the street', the relatively poor people), and she said to me that many Greeks think their country would be better off when it stopped paying its foreign creditors. That is not the position of the Greek government – although inside it and inside Syriza there may be people who think the same. Or would it be possible for Greece, with successful negotiations, to not repay the debt by transforming it into 'consols' as Robert Triffin suggested in a long interview I had with him in 1984 and published later -- see pages 393-95 of my article Jan Joost Teunissen, "The International Monetary Crunch: Crisis or Scandal?" -- or link debt repayment to the capacity to pay when it starts growing again? This linking to Greece's debt repayment capacity is what Varoufakis and a whole lot of academics have suggested -- see eg "300 Intellectuals and Academics in Support of Greece".

I give a quote from this letter by 300 intellectuals which goes further and advocates a write-off of debt: "The government of Greece is correct to ask for a write-off of debts owed to European partners. These debts are unsustainable and so will not be paid in any event. There is therefore no economic loss involved, for any other nation or its taxpayers, in writing them off."
The government of Greece is correct to ask for a write-off of debts owed to European partners. These debts are unsustainable and so will not be paid in any event. - See more at:
The government of Greece is correct to ask for a write-off of debts owed to European partners. These debts are unsustainable and so will not be paid in any event. - See more at:

And what about Euclid Tsakalotos? Is he going to be a shrewd or smart negotiator? Will he seek the cooperation of officials inside the ministries of Finance of the Eurogroup, with a little diplomatic help from me and others -- if needed? Obviously, he should be careful in not giving in too much to Eurogroup and IMF pressure. This is a difficult task.

Stephany Griffith-Jones
By the way, Greece's new chief negotiator Euclid Tsakalotos happens to be a former student of a close friend of mine, Stephany Griffith-Jones, a professor from the UK who is Financial Markets Director at the Initiative for Policy Dialogue at Columbia University in New York. She works with European parliamentarians and Joseph Stiglitz, who is the initiator of this international policy dialogue platform. She recently told me she still has contact with Tsakalotos. And, by the way, Stephany's proposal, backed by others, is to tie Greece's debt repayment (interest plus amortization) to the (real) growth of its economy, and to transform its existing debt into GDP-linked bonds. This would not be a debt write-off in theory but in practice.

As Louis-Philippe Rochon said in "What's the solution to a Greek austerit tragedy?", this would act in a sense "like a haircut," without really being one. "[It] would tie the repayment to the growth of Greece's real economy, thereby making such payments more manageable. (...) To be clear, this is not a haircut, but haircut-like: Greece would eventually honour all its debt, but would do so on much easier terms."

Dijsselbloem and his team have a powerful international network and enjoy the privilige of being in power including the controling or influencing of major mass media (I am also influenced / brainwashed by mainstrean mass media). But people like Varoufakis and Tsakalotos should be able to mobilize their international network as well. Don't you think so?

Monday, April 27, 2015

'Clumsy' Varoufakis replaced as key negotiator - Is he about to resign?

I don't think Yanis Varoufakis is a shrewd negotiator. But is he clumsy?

Yes, he might be - which is not bad in itself, even the contrary!

Before he entered politics he said he might have to withdraw soon. Well, that's not exactly what he said. He said, I will have my resignation letter in my back pocket...

When would he resign? When he would become too much of a politician, he said, lying to himself, and lying to his voters.

I looked it up and here is what he said a couple of months ago on his blog, in a post "Why I am running for a parliamentary seat on Syriza's ticket": "My greatest fear, now that I have tossed my hat in the ring, is that I may turn into a politician. As an antidote to that virus I intend to write my resignation letter and keep it in my inside pocket, ready to submit it the moment I sense signs of losing the commitment to speak truth to power." 

Funny, I thought he had said he would have his resignation letter in his back pocket... but that's where some men have their wallet (not me).

Is a politician by definition a person who lies? Is he or she a professional in lying?

Maybe. Only small lies, or also big lies? And, "by definition"?

It all depends on the perspective from which you look at it, on your point of view.

I am sure that Yanis Varoufakis has been put in a less prominent position in negotating with Greece's creditors because he has not done an outstanding negotiating job. And that is what Greece needs: a first rate, outstanding debt negotiator.

This reminds me of what the new Sandinista government in Nicaragua did after the overthrow of the Somoza dictatorship. They hired a US team of banking experts who could advise them on how to best approach their creditors.

I happened to interview in those days (1980?) the head of the Nicaraguan debt negotiating team, Alfredo Cesar, then Governor of the central bank of Nicaragua. I'll see if I can still find that interview, published in the Dutch newspaper "NRC Handelsblad" in 1980 (?). That's a long time ago!

PS: I found Varoufakis' exact wordings in the first post I wrote about him, New Greek finance minister Yanis Varoufakis is a new hope for Europe.

PS-2: My suggestion in the title of this post that Varoufakis might be about to resign is based on the possibility that debt negotiations may result in an agreement that is too far away from what he had in mind. It's still too early to know that, negotiations are still in 'full swing' (I say this on May 1st which is supposed to be a day we should not work and remember the 'conquistas' and 'luchas' of the workers' movement, a struggle that still goes on...) 

Saturday, April 25, 2015

The economy is too serious a thing to be left to the economists (2)

Looking for texts about "the" economy I have written in the past, the first one I found in which I dwell at some length on the concept of "the economy" and the error of economists to reduce society to their ideas and dogmas, is the introductory chapter of a FONDAD book, "Diversity in Development: Reconsidering the Washington Consensus", published in 2004.

In this introductory chapter, titled The Need for Visions on the Economy: By Way of Introduction, I say under the heading Economics Is a Social, Not a Natural Science the following:

"Possibly as a result of economic jargon, mathematical formulae and impressive economic authorities, it is often forgotten that economics is, like psychology, sociology or anthropology, a social science and thus deals with a reality that is shaped by the “subjective” human mind – as opposed to the “objective” physical matter of the natural sciences. As a consequence of this subjective character, everything in economic life is affected by how people think and act and thus by psychological, biological, political, cultural, economic and social factors. Herding behaviour among investors resulting in speculative attacks against a country’s currency is an outstanding and obvious example, but more generally, it can be observed that all economic activities are moved by habits, desires, expectations and ideologies as much as any other“normal” human activity." 

Then I point at "the fundamentally disputable character of economic analyses and policy recommendations":

"It is natural that in formulating their theories and policy suggestions, economists make assumptions about economic “rationalities” of human activities and institutions, and about political “realities”. However, in making such assumptions, it becomes necessary to discuss and make explicit what is taken for granted and recognise the fundamentally disputable character of economic analyses and policy recommendations. Often this recognition is missing in debates among economists, and, what is worse, among politicians who apply the economist’s advice as if it were solidly based on indisputable wisdom of economic science."

So economic ideas and policies should be discussed democratically, and not only by economists:

"Normally, the economist’s prescriptions are discussed by fellow economists. This is a useful discussion. But an even more useful discussion would be to popularise economic ideas and involve all agents and subjects of economic policies: politicians, union and business representatives, and other organised citizens. To use a fashionable term, “civil society” should be involved in economic debates, from the beginning until the end since they are both the subjects and objects of economic policies."

But this is not what happens, "economic policies are seldom discussed by civil society":

"Ideally, democracy serves as a mechanism for discussing proposed economic policies. In practice, however, economic policies are seldom discussed by civil society. And, what is worse, the alternative economic policies suggested by the “non-business” or “non-technocratic” segments of civil society are generally dismissed by the policymakers as “non-feasible” or “wrong”. Usually, this is done by arguing that laymen lack the economic insights of the professionals or simply do not understand basic economic principles."

And a little further in this introductory chapter I say, under the heading The Need for Divergence of Visions and a Truly Democratic Debate About Economic Policies :

"Economists have the challenging task of making existing Visions explicit and of developing new Visions. Only then can there be a truly democratic debate about economic policy alternatives. Therefore, I would welcome that economists at the IMF, World Bank, WTO, UN organisations, central banks, ministries of finance, research institutes, media and other organisations engage themselves more actively, or more visibly, in developing ideas not only about the world they [I meant, the rich] would like to live in, but also about the world that others [I meant, the poor] would like to live in."

Then I raise the question: What is the task of “the laymen”?

"In my view, they should involve themselves more actively in economics. Not only should they discuss what the economists are analysing and prescribing, but they should also envision the economic world in which they would like to live. Paraphrasing the famous French minister of war, Georges Clemenceau: ‘Just as war is far too serious a thing to be left to the generals, the economy is far too serious a thing to be left to the economists.’

Finally, I talk about the role and responsibility of other social scientists in debates about economic policies:

"Among the laymen, psychologists, historians, political scientists, sociologists etc. – the economists’ colleagues in social science – have a special responsibility. Since they, the psychologists et al., are just like economists, trained to think about human behaviour, in both its individual as well as collective forms, their insights are indispensable. Mutual interest in each other’s viewpoints and analyses and more interaction between social scientists would considerably increase the quality of analysis of society and, thus, the quality of economic advice."

The debt of Germany

As I said in my previous post, a couple of years ago I wrote on my other blog, in Spanish, stories about "the" economy from the perspective of a small boy raising questions to his Italian grandmother. The ensuing dialogues discussed complicated issues in a lively, simple manner. I would like to copy here the last dialogue between Gio and his grandmother before I return to more 'normal' posts I use to write on this blog. Here it is:

Gio y su abuela (13)

-Grandma ...
-Yes, Gio.
-Grandpa says that the presidents of the central banks of Europe think the same as the president of the central bank of Germany, although sometimes they pretend to think differently. Grandpa says this is because all central banks defend the interests of commercial banks and the people who have much money. But this postcard you have in you hands, where does it come from?

-From Italy.
-From what city?
-Genoa. That's a city with a port and there's where my brother has been and sent me this card.
-When did he send it to you?
-A little before the Great War.
-The war that Germany has lost and gained at the same time because it became the strongest country in Europe?
-No Gio, the First World War, not the Second.
-And from that first world war Germany did not come out as the country that was the strongest?
-No Gio, from that first world war Germany emerged as the country that had to pay a lot of money to other countries in Europe.

Gio talks to his Italian grandmother about economics

A couple of years ago I wrote a series of posts on my Spanish blog under the title "Gio and his grandmother". They were imagined dialogues between a small kid, Gio, and his Italian grandmother about "the" economy.

When I sent the previous post, "Varoufakis talks to his daughter about economics", to my "Greek" sister in Thassos she wrote me back saying she was thinking about my series of posts about "Gio and his grandmother".

Let me translate and copy paste the first story of "Gio and his grandmother":

Chuletas a lo pobre - Gio y su abuela (1)

-Grandma, what are you doing today? Out again?
-No, Gio, today I stay at home.
-I too want to stay at home and play with my little sister. She still does not know how to speak and I'll teach her to speak Italian like you.
-And I am going to prepare a nice meal for you!

-You know, Grandma, Grandpa said we will have 4 million more unemployed people in Europe. How is it possible that they say this and do nothing?
-They do not want the poor to be rich and do not want the rich to lose their money.
-We are rich and I do not want others to be poor. We should give money to the poor, Grandma.
-You're right, Gio, but the other rich people do not want that and if we are the only ones who give money to the poor, they will receive nothing more than a penny and with that they can not do anything, not even buy an ice cream.

-Grandma, Grandpa says we have to compete with the Chinese and therefore they have closed factories. Grandpa says companies in Europe must compete with each other and that it is not allowed that the government supports companies.
-It's true, Gio.
-And Grandpa said the miners in Spain have walked all night with their lamps in protest.
-It's true, Gio.
-The Government will help the miners?
-I don't think so, Gio. We have already seen in other countries in Europe that governments do not want to help the miners.

-What are you going to cook, Grandma?
-Chuletas a lo pobre. Do you like them?
-Yes, Grandma, I really like them. But why do they call them poor?

PS: Chuleta is chop, a thick slice of meat, especially pork or lamb, adjacent to, and typically including, a rib.

Varoufakis and I are wrong, and James Petras makes a mistake

Painting by Aafke Steenhuis
Varoufakis and I are wrong in talking about "the" economy as if there exists something like "the" economy, at the national, international or local level. What does exist is a society, or a community, in which the economic aspect is just one aspect next to the cultural, social, psychological, social philosophical, political, military, ecological aspects, at the various levels. These levels include the regional level such as the European Union or Communty which, unfortunately, is now less a community than before neoliberal dogmas and the euro were adopted. The political-economic dogmas of neoliberalism have pervaded European and national institutions, in particular the ministries of finance and the central banks, but also other institutions such as universities, media and the IMF.

That's why Greece has such difficulty in coming to an agreements with its creditors.

The reason Varoufakis and I have been speaking about "the" economy is that it is common practice to do so. How many books did I publish that carry the term "the" economy in their title? Many, as you can see in this list of Fondad publications:

Now the other part of the title of this post: "James Petras makes a mistake".

In another blog of mine, in Spanish, I wrote that I had read a depressing interview with James Petras about Syriza. In Petras' view Syriza is a bunch of corrupt politicians, just like its predecessor Pasok. In my Spanish post I wrote:

"What broke me last evening, to put it in dramatic terms, is an interview I read with James Petras, a reknown North-American sociologist of Greek origin whom I got to know when he stayed a couple of days at our houseboat. What Petras says in this interview is depressing. "If you follow his view, there is nothing left, no alternative, no hope,'' I told my wife when we went to bed.

Briefly, what Petras says is that Syriza is the same corrupt party shit
as Pasok.  

The left (as Petras' view shows) has always had difficulty in uniting. The Unidad Popular in Chile and SYRIZA in Greece are the exceptions, who both have made it into getting the "power" to form a government. But to govern a country really is something else. In general, only the right has the power to govern really (to do what it has promised and not has promised). Do I have to explain myself better? If necessary, I will do so in a future post." 

Later, I added a postscriptum to my Spanish blog post: 

"I think I have to explain a little better why I was so much disappointed with the action of James Petras to speak in such negative terms about Syriza and Varoufakis. That's what I referred to when I said that the left has difficulty in uniting, in joining forces. I referred to James Petras, a leftist thinker who seeks to discredit Syriza, presenting himself on the other had as a "real" leftist. I do not like Petras' action, and given his popularity, I like it even less. Is it clear what I think?" 

To finish this post, and coming back to the error of talking about "the" economy, did I make that point sufficiently clear? If not, I will read first what I've written about it several years ago -- see eg my 2009 speech, "Why should we have listened better to Robert Triffin?", and my 2011 speech, "Better Global Financial Governance – The Need for Reforming the System and Abandoning Free Market Ideology"  -- and then elaborate a bit more.

Thursday, April 23, 2015

The economy is too serious a thing to be left to the economists -- but "the" economy does not exist...

I copy an old post which is still valid today and tomorrow:

Friday, April 25, 2008

The economy is too serious a thing to be left to the economists

A better management of the current financial crisis requires a profound analysis of its causes, a wise consideration of possible responses and a visionary view on how the global financial system could be improved to prevent, as much as possible, future problems.

This is not an easy task and is not what happens today.

Today we are seeing central bank presidents, whom we have given the responsibility to maintain a healthy national and international monetary system, and ministers of finance, whom we have given the responsibility to propose the best possible financial policies nationally and internationally, making statements that are proof of powerlessness or lack of vision, or both.

How to change this dangerous incompetence?

We, the peoples of the world who, when we are living in democracies, have vested responsibility and authority with ministers of finance and central bank presidents (to name just the highest in "authority"), are the only ones who can give the answer.

Economists should help us, with their technical knowledge and insights, to develop a vision of a global financial and economic system that would enable a fair chance and fair living for all, now and in the future.

Robert Triffin, a famous analyst of the global financial system, once said to me: “Just as Clemenceau once said that war is much too serious a thing to be left to the generals, I think the economy is far too serious a thing to be left to the economists.” (see the second para in my article "The International Monetary Crunch: Crisis or Scandal?")

The only thing I would like to add is that "the" economy does not exist. In that sense, it is wrong that Yanis Varoufakis and I have spoken about "the" economy as if it is a thing in itself. I will elaborate on this point in a next post.

Varoufakis talks to his daughter about economics

Today, Yanis Varoufakis published a post on his blog of which I will copy a substantial part as I find it attractive and interesting. I hope you will find that too. It ends with a sentence that is familiar to me -- see eg my post of 25 April 2008, "The economy is too serious a thing to be left to the economists", or my introduction to the book ""Diversity in Development: Reconsidering the Washington Consensus", published in 2004, in which I say: "Paraphrasing the famous French minister of war, Georges Clemenceau: ‘Just as war is far too serious a thing to be left to the generals, the economy is far too serious a thing to be left to the economists." 

Talking to my daughter about the economy – Preface to the German edition

by yanisv
Last summer (an aeon it seems before my recent sojourn into politics&government) I spent ten days writing a short book in Greek on economics. The idea was to write it as if it were addressed to my young daughter, so as to keep complex ideas simple and to test my capacity to home in on what matters while discarding unnecessary complication. Now, a German edition of that book is about to be published and I was asked to author a preface for my German readers. Here is the result:


One of the enduring memories from my early childhood is the crackling sound of Deutsche Welle radio transmissions. Those were the bleak years of our dictatorship (1967-1974) when Deutsche Welle was the Greeks’ most precious ally against the crushing power of state propaganda. Mum and dad would huddle together next to the wireless, sometimes covered by a blanket to make sure that nosy neighbours would not get a chance to call the secret police. Night after night these ‘forbidden’ radio programs brought into our home a breath of fresh air from a country, Germany, that was standing firm on the side of Greek democrats. While I was too young to understand what the radio was telling my mesmerised parents, my child’s imagination identified Germany as a source of hope.
As I am writing this preface to the German edition of a book aimed at another child, my daughter, I feel the urgent need to recount that memory. To turn it into a small homage to the idea of Europe as a realm of shared democratic ideals. A small gesture of defiance against the recent tendency for European peoples, who were hitherto coming closer and closer together, to be set apart by a… common currency. 
Our European Union began life under the presumption that to achieve political and social union we must first bind together our economic interests; that economics would lead the way to a united European polity. It was a good idea except that, as the years and the decades went by, a problem emerged: our collective understanding of ‘economics’ became increasingly crude. We slipped into a simplistic mindset according to which the sphere of the economy began decoupling, separating itself from that of politics, of philosophy, of culture. As it did so, the economic sphere acquired massive discursive and social power for itself, thus causing democracy, politics and culture to fade out, to become shadows of their former selves. 
We economists were, I confess, responsible for this steady erosion of our collective understanding of the economic sphere. Before we knew it, markets were no longer means to be placed in the service of social ends but emerged surreptitiously as ends in themselves. Under the influence of, on the one hand, financialisation and, on the other, economic theory, we began to resemble Oscar Wilde’s definition of the cynic: one who knows everything about prices and nothing about values. Naturally, our European Union’s institutions also tended towards the conviction that the large decisions should be taken by technocratic committees that constitute ‘politics-free zones’. In an ironic twist the language of economists helped usher in a mindset that jettisoned from the corridors of power and the halls of decision making not only politics and culture but also …economics.
But enough of this now! This book is not intended as a diatribe on Europe, on Germany, on Greece or indeed on anything that would bore… my daughter. It was written in order to test the author’s ability to convince a recalcitrant teenager that economics is too important to be left to the economists. (...)