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Valve Economist Yanis Varoufakis Appointed Finance Minister of Greece

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Re: Valve Economist Yanis Varoufakis Appointed Finance Minister of Greece

#111

Post by thomasz »

SyneRyder wrote: post #99
thomasz wrote: post #62

Earlier quoted context omitted.

Politics in Germany is an apprenticeship trade that takes countless hours from adolescence onward. You do not have the time to become a successful scientist and a successful politician in the same life.

I'm not sure if I missed the sarcasm, but Angela Merkel had a doctorate in quantum chemistry before she became the Chancellor of Germany: "She spent the final moribund decade of the G.D.R. as a quantum chemist at the East German Academy of Sciences, a gloomy research facility, across from a Stasi barracks, in southeastern Berlin. She co-authored a paper titled “Vibrational Properties of Surface Hydroxyls: Nonempirica…

She's the exception that proves the rule. Her rise was made possible by the turmoil caused by the reunification that opened up that career path for highly educated people who kept their distance to the regime. [1] is another example with ... comparable ... charisma. But again, they are rare exceptions. [2] says that there are 27 members of parliament with a doctorate in engineering, 8 with a doctorate in biology, 7 in math, 2 chemistry, one in geology, and one in computer science. And I doubt that many of them have been working in science after the doctorate.

[1] http://en.wikipedia.org/wiki/Matthias_Platzeck [2] http://scienceblogs.de/frischer-wind/2011/03/21/wissenschaft...

Re: Valve Economist Yanis Varoufakis Appointed Finance Minister of Greece

#112

Post by Pinatubo »

TheOtherHobbes wrote: post #108
simonh wrote: post #92

Earlier quoted context omitted.

The fact that companies do not operate internal markets is well known in economics. The theory is that there is a balance point between the scale at which activities are most efficient operating on a command model and the scale at which activities are most efficicently managed by market mechanisms. The position of the balance point is different from industry to industry, and also varies over time with economic condit…

If by 'efficient' you mean 'most consistently profitable', then no, neither markets nor a 'flexible corporate environment' promote actual efficiency. In that kind of environment - which is not too dissimilar to the one we're in - corporations simply hoard money to no great end, and markets crash unless they're propped up by public subsidies and hand-outs. This distorts the wider economy and makes real efficiency less…

On the contrary, 'providing the greatest possible benefit to the greatest number of people' is a central focus in economics. Start with Pareto efficiency and go from there if you want to see various ways in which economists actually define and study efficiency.

Re: Valve Economist Yanis Varoufakis Appointed Finance Minister of Greece

#113

Post by bildung »

MatthiasP wrote: post #101
antientropic wrote: post #95

Earlier quoted context omitted.

Paul Krugman helpfully explains the situation here: http://www.nytimes.com/2015/01/26/opinion/paul-krugman-endin... In short, the EU and the IMF demanded savage spending cuts from the Greek government. Turns out that cutting in a depressed economy makes the depression worse (despite the wildly optimistic predictions by EU officials, who decided to ignore textbook economics). As a result, Greece now has enormous unemp…

>In short, the EU and the IMF demanded savage spending cuts from the Greek government. Let's also mention WHY those spending cuts were demanded: Because Greece was on the verge of bankruptcy, the interest rates for their bonds were exploding and the EU and IMF had to pump more than 300 billion € into this 11 million people country.

> Let's also mention WHY those spending cuts were demanded: Because Greece was on the verge of bankruptcy[...].

That, while true, leaves out the quite important fact that Greece was only on the verge of bankruptcy because they bailed out their banks. One can nicely see that on charts displaying the debt/GDP ratio: While high for quite a few years, it was more or less constant. The bailout was the one factor that created the explosive dept growth. Now it gets interesting: Whose money was in these banks, invested in high risk/ high yield projects? Mostly investments of european upper class/upper middle class (because small Greece had an even smaller upper class). That's why so many German banks like Commerzbank, Deutsche Bank and the now defunct Hypo Real Estate hold so many Greek government bonds. By bailing out the Greek (and Spanish, Irish etc.) banks the European population indirectly subsidises the risky investments of its own upper class. That's also the reason why the austerity measures are so inconsequential: While pensions get cut and hospitals closed, profiteers like Germany have no qualms to sell German tanks and submarines worth billions of € to Greece (the German submarines alone cost 3 billion) [1].

[1]: http://www.theguardian.com/world/2012/apr/19/greece-military...

edit:typo

Re: Valve Economist Yanis Varoufakis Appointed Finance Minister of Greece

#114

Post by sebkomianos »

crdoconnor wrote: post #39
Shivetya wrote: post #35

It will be interesting to see if they can pare down some of Greece's military expenditures, they have over a hundred thousand in their military, nearly ninety thousand soldiers. Granted the politicians can always point to Turkey as a threat but I would be very curious how the new administration handles this. Side effects of closing some of the nearly 500 military and releasing troops is not having jobs for them.

I would assume so. This type of thing: http://www.zerohedge.com/news/greece-spends-bailout-cash-eur... ...is against everything Syriza stands for.

It's highly unlikely: The government is a coalition of SYRIZA and Independent Greeks, a quite right-winged party whose president was given the Ministry of Defense and first words were "I want to apologise to the people of our armed forces for the financial injustice they were done to by the previous government".

Re: Valve Economist Yanis Varoufakis Appointed Finance Minister of Greece

#115

Post by trhway »

JumpCrisscross wrote: post #11

Varoufakis wrote a blog post two years ago on the history of political economic thought on the firm. It also delves into Valve's unique management culture [1]. "There is one last bastion of economic activity that proved remarkably resistant to the triumph of the market: firms, companies and, later, corporations. Think about it: market-societies, or capitalism, are synonymous with firms, companies, corporations. And y…

>And yet, quite paradoxically, firms can be thought of as market-free zones. Within their realm, firms (like societies) allocate scarce resources (between different productive activities and processes).

as the saying goes - the larger the company, the more socialism there.

Re: Valve Economist Yanis Varoufakis Appointed Finance Minister of Greece

#116

Post by kalkin »

saiya-jin wrote: post #52
kalkin wrote: post #21

Earlier quoted context omitted.

Politicians from parties who now get 3-4% of the vote lied years ago (to the Greek public as well as EU bankers), so let's take Greek workers' pensions, crush their unions, slash their social services, and offer no jobs or future to 60% of Greek young people. The bankers may not get their money anyway, since the debt is still increasing, but at least the Greeks* will get what they deserve! *may not apply to the elite…

This is vastly mentality problem and consequences that comes with it. Simple fact is, southern european countries have laid back attitude which is nice to enjoy and so on, but doesn't perform well and has more drawbacks in long term, as we can see. The s t had to hit the fan hard, and it did for people to wake up. What do you expect - full pardon on all mistakes? It won't happen next time, we promise? You know, one o…

"one of life's lessons is - you pay for all your mistakes"

This isn't true though. The people with the most direct responsibility for crashing the world economy, like those with the most direct responsibility for bankrupting Greece, haven't paid at all.

Also, I think the "citizens of democracies are responsible for the crimes of their leaders" moral principle is one you probably don't want to consistently apply. To try a reductio ad absurdum, I assume you're not in agreement with Bin Laden's reasoning for the WTC attacks, for example.

Re: Valve Economist Yanis Varoufakis Appointed Finance Minister of Greece

#118

Post by calibraxis »

simonh wrote: post #92
JumpCrisscross wrote: post #11

Varoufakis wrote a blog post two years ago on the history of political economic thought on the firm. It also delves into Valve's unique management culture [1]. "There is one last bastion of economic activity that proved remarkably resistant to the triumph of the market: firms, companies and, later, corporations. Think about it: market-societies, or capitalism, are synonymous with firms, companies, corporations. And y…

The fact that companies do not operate internal markets is well known in economics. The theory is that there is a balance point between the scale at which activities are most efficient operating on a command model and the scale at which activities are most efficicently managed by market mechanisms. The position of the balance point is different from industry to industry, and also varies over time with economic condit…

Completely ahistorical. Capitalism clearly dominates because capitalist nation-states dominate and war, imposing that economic system.

Such economic priesthood stories conveniently omit world hegemons which send vast armies of uniformed killers across the world against anyone trying out their own systems. (Like overthrowing Iran's secular parliamentary democracy for daring to be vaguely "socialist", installing the Shah.) Or their police who literally strangle people in broad daylight, and violently attack people like the Occupy movement who imaginatively discuss alternatives to the economic order.

Re: Valve Economist Yanis Varoufakis Appointed Finance Minister of Greece

#119

Post by maceo »

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 dude:

http://yanisvaroufakis.eu/2014/11/24/taking-stock-of-the-eur...

Re: Valve Economist Yanis Varoufakis Appointed Finance Minister of Greece

#120

Post by lmm »

tjradcliffe wrote: post #102
mdemare wrote: post #93

Earlier quoted context omitted.

I agree that soldiers and sailors are not particularly productive in a country that's been at peace for quite some time. Nevertheless, if you've got potential candidates who make stuff that the rest of the world is willing to pay for, maybe you should hire them either way. They'll pay for themselves after all. And if you're going to hire them either way, why fire the sailor? (Unless of course it's the sailor you want…

It's not that soldiers and sailors are "not particularly productive", in peace or war. Its that they are what in economics is called a "deadweight loss". They contribute nothing to the productive economy of Greece and the money that pays them could be spent in many more productive ways.

Where's the loss? Soldiers and sailors are notorious for spending their money as soon as they get it, so that money goes right back into circulation. They could be wasting the labour of those able bodies, but at 25% unemployment, any company that needs labour can get it cheap.

If the greeks were putting scarce resources into the military, e.g. using metal that could build productive machines to build useless ships and aeroplanes, then that would be a deadweight loss. But in Greece right now, labour is the opposite of scarce. It does very little harm to keep them employed.

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