I wish to address the following criticism of my comment- 'Your use of jargon to inflate the importance and correctness of your response has a number of negative effects both on your thinking and on your ability to understand the real nature of the issues you are trying to debate.'



To clarify, what I am saying is Varoufakis is a Professor of Economics. He writes books on the subject. He claims to know mainstream Economics of the sort taught from High School to PhD level all over the world. Thus, it is correct for me to use Economics jargon to show that every single paragraph of what he has written contains a fallacy. He could easily avoid this just by toning down his language, for e.g., by saying 'is likely' rather than 'is inevitable'. Alternatively he could quote empirical results- indeed, he could, like Krugman, do a couple of 'back of the envelope' calculations himself, or better still link to an econometric result he has derived. If he did this, his credibility would increase.



Just imagine what would have happened if, in early 2015, Varoufakis and other academics elected on the Syriza platform, had mobilised Econ theory and econometric results to show that 'price stability' is multiply realisable and thus there was no legal barrier to pursuing an expansionary policy. Recall that Draghi, of the ECB, had won a legal case against the Germans permitting quantitative easing. So, we know, the thing could be done. If Varoufakis and his colleagues had made the case that what matters is the Full Employment Budget Surplus, then it would have been much easier for PIGS to get support. Bureaucrats in various ministries would be able to say to their Ministers- 'this plan will meet the legal challenge. You can back it safely.'



I don't say that Economic theory has some magical power- successful countries break its supposed 'laws' all the time- however, if you are a professional Economist, then you should couch your arguments in the correct 'jargon' and garner empirical support for your view. Then people can take you seriously. However, if you talk nonsense, people will think there is no Economic case for your view- that is why you are just blustering.



Suppose a Doctor says to you- 'please change your diet. Your blood test shows elevated cholesterol which has a proven relationship with heart disease'- you are inclined to do as he says. However, you will disbelieve him if he says 'Change your diet otherwise the Lizard People who secretly control the Vatican will come and poison you while you are sleeping. Everyone will think you died of a heart attack. The truth, however, is that Lizard People have murderous intentions to people who eat bacon sandwiches.'



There are no non economic reasons for proposing 'Austerity'. No politician has said 'we must consume less so as to save our souls'. Once we understand this we can easily defeat flawed arguments for Austerity by showing how a better outcome can be achieved by helping, not hurting, working people and families. As a matter of fact this was the 'liberal' part of the 'ordoliberal' pact. It called for a universal safety net- which Greece never implemented- as the other side of the coin of fiscal rectitude and price stability.





It is more exciting to read a paranoid narrative featuring secretive elites who may be Lizard People from Planet X. However, this does not help anyone- except the author who makes a lot of money.

A criticism of my comment reads- 'Y.V.s’ point of a cartel is not the literal cartel from a dictionary of economic theory and to argue against is in such a way is not just pedantic, it again shows your inability to think outside of the constraints of your precious theoretical models'. When a Professor of Econ uses the word 'cartel' we expect him to literally mean 'cartel'. We don't expect him to talk nonsense unless he is either stupid or trying to bamboozle us or both. We can easily think outside the constraints of Science and Rationality and say 'the Lizard People hyper-cartelize the financialisation of the globalised NeoLiberal nomenklatura which is why my neighbour's cat is spying on me.' But, what good does that do?



The truth is that, during the eighties, Hedge Funds gained salience. Private Equity meant that 'hyper cartels' of Corporations ceased to be cohesive. That is why the Galbraithian 'fix-price' model collapsed and one source of inflationary bias disappeared. Unemployment proved to have no effect on voters. In the Nineties, they welcomed 'workfare' type Supply side measures which is why America, UK and Germany showed elastic response of Unemployment to the financial shock. Varoufakis is the same age as me. He saw this with his own eyes just as I did- unless he is really from a different dimension. Why is he writing this foolish, late Seventies type, nonsense now? Is it laziness or shrewdness? It does not matter. What matters is that he is rewarded for doing so. This is a good example of 'market failure'.