Varoufakis’s Mission “To Save European Capitalism From Itself”

Yanis Varoufakis, the Greek Finance Minister, presents himself as a Marxist—albeit an “erratic” one—and is even described as such in the bourgeois media. We would argue that he is a classic reformist who believes that a solution to the present crisis can be found within the capitalist system itself, something which Marx never stood for.

Varoufakis, before becoming Finance Minister, was an economics professor, having taught in several universities around the world. He was also an advisor to Papandreou when he was premier. As the crisis of Greek capitalism has unfolded, he has emerged as an important figure in developing the policy of the new government, in particular in its negotiations with the European Commission and the IMF, and the ideas that he has developed to deal with the crisis are of great importance to the working masses of Greece.

Just over two years ago Varoufakis presented his ideas in an article, Confessions of an erratic Marxist in the midst of a repugnant European crisis.” This was the speech he had given in May 2013 at the 6th Subversive Festival in Zagreb.

End capitalism or save it?

In the opening introductory paragraphs of his “Confessions” he poses what he describes as a “terrible dilemma” for radicals: either use the capitalist crisis to put an end to the European Union or work to stabilize European capitalism? He concludes that “it is the Left’s historical duty, at this particular juncture, to stabilize capitalism; to save European capitalism from itself and from the inane handlers of the Eurozone’s inevitable crisis.”

When he wrote this he was a professor offering his views on how to solve the crisis gripping the European Union. Today he is Finance Minister and therefore should be in a position to put into practice what he developed back in 2013.

His basic position is that the Left is not ready with a worked out alternative to capitalism. The reason for this, as he says, is “the Left was, and remains, squarely defeated,” and therefore we need “to arrest European capitalism’s free-fall in order to buy the time we need to formulate its alternative.”

The logic of Varoufakis is bizarre to say the least. Capitalism is today in a severe crisis, but we cannot use this to reveal the inner contradictions of the system to the working class and thus pose an alternative . . . and that is because the Left is not ready. Therefore we need to stabilize capitalism and find some way of achieving economic growth which will allow for a civilized existence. Those ideal conditions once achieved, we can proceed to examine the alternatives and then come up with something we can offer the masses.

Assuming that it is at all possible to get capitalism back to significant growth, together with the reforms dreamed of by Varoufakis, why should workers listen to these reformists when they finally pluck up the courage to raise socialism as an alternative, if capitalism by then is doing a good job of providing them with a decent standard of living?

What Thatcher taught the young Varoufakis

Varoufakis claims that he learned a hard lesson from the experience of the Labour government in Britain in the 1970s and the subsequent rise of Thatcher. He studied in the UK in the latter period of the 1974–79 Labour government, and also experienced the rise of Thatcher. As a young man he thought that a period of Thatcher in power would “be a good thing, delivering to Britain’s working and middle classes the short, sharp, shock necessary to reinvigorate progressive politics.”

However, then he adds that, “Instead of radicalizing British society, the recession that Mrs. Thatcher’s government so carefully engineered, as part of its class war against organised labor and against the public institutions of social security and redistribution that had been established after the war, permanently destroyed the very possibility of radical, progressive politics in Britain.”

He shows absolutely no understanding of what he experienced, least of all from a Marxist point of view. The Labour Party won the elections in 1974 on the back of a miners’ strike that brought down the Tory government that had been in office since 1970, and also as a result of the recession, high inflation, and rising unemployment.

Marxists at the time explained that the Labour government was faced with two possibilities. The first was to carry out a socialist program, and by this what was meant was the nationalization of the banks and commanding heights of the economy. This would have been the only way of carrying out any meaningful reforms. The other option was to remain within the confines of the capitalist system, which would mean buckling under the pressures of the system and carrying out austerity measures, with cuts in public spending.

The Labour leaders in government, imbued with a reformist outlook, opted for the second of these, and imposed cuts and austerity. As the Marxists had warned, this option would prepare a defeat of the Labour Party and the return of the Conservatives to office. And this is precisely what happened. In 1979 Thatcher won the elections and proceeded to carry out cuts and privatizations, combined with an offensive against the organized labor movement.

What did the Labour Party do in opposition? It was polarized to the left and the right, with a strong left current emerging around the figure of Tony Benn. But even this Left did not draw all the necessary conclusions. Although it raised demands such as some nationalizations and other such reforms, it never drew the conclusion that the problem had been the Labour government’s attempt to manage capitalism. It therefore stopped halfway and did not come up with a credible alternative.

As a consequence the Left of the party began to lose force and the right wing was eventually strengthened. Where there was militant class struggle, such as the miners’ strike, the Labour leaders refused to support this. In the case of the militant stance of Liverpool Labour Council—which refused to introduce Thatcher’s draconian cuts, and mobilized the workers behind it—the party leaders openly condemned the Liverpool councillors for putting up such a courageous fight and then proceeded to expel those who had led that struggle.

This, combined with the memory of what Labour had done when it was in office, meant that it took many years for the Labour Party to recover in the elections, only eventually winning in 1997.

Varoufakis explains none of this. The overall conclusion he drew from that period is that the Left is weak and has no alternative to capitalism in this period. He says he would dearly love to fight for a full-blown socialist alternative, but we cannot. Therefore what needs to be done is to “save” capitalism, put it back on track to growth, and stabilize the situation. Once we have achieved this, we will have the time to develop our alternative. That means he believes it is possible to manage capitalism in such a way as to avoid crisis. (We will deal with this later.)

On a mission to convince the bourgeoisie

Varoufakis sees himself as being on a mission to “work towards a broad coalition, even with right-wingers, the purpose of which ought to be the resolution of the Eurozone crisis and the stabilization of the European Union.” [our emphasis] . . . He is out to convince bourgeois society of the error of its ways and to adopt the policies that he is proposing.

He lists the people he has been talking to. Among these are “anti-austerity demonstrators in Athens’ Syntagma Square,” “schoolchildren in deprived Greek and American suburbs,” and “Syriza activists in Thessaloniki.” So far, so good. But he has also been talking to “staff at the Federal Reserve Bank of New York,” “Bloomberg analysts in London and New York,” and “hedge funds in Manhattan and London’s City.”

Thus, “schoolchildren in deprived Greek and American suburbs” have, according to Varoufakis, something in common with hedge fund speculators and the US Federal Reserve! The thing in common is to save Europe from barbarism, from a “humanitarian bloodbath,” which seems to the only possible outcome for Varoufakis of a further deepening of the capitalist crisis.

This reveals that he does not see any potential for class struggle in the present European crisis, in spite of the more than 30 general strikes we have seen in Greece alone since 2008. As he says, “Europe’s crisis is, as I see it, pregnant not with a progressive alternative but with radically regressive forces.”

This is typical of reformists throughout history, whose starting point has always been a lack of confidence in the ability of the working class to fight for a revolutionary transformation of society. And as the working class cannot change society, then the next best thing is to try and reform capitalism, but this can only be done when the economy is in an upswing. In periods of crisis they therefore seek a way of returning to “stability” and “growth” as a means of creating the basis upon which to carry out reforms.

In Varoufakis’ thinking it is clear that of Marx’s famous “Socialism or Barbarism” he only sees the barbarism. Indeed, the “regressive forces” he refers to are so dangerous that they could extinguish “the hope for any progressive moves for generations to come.” That means that unless he and his co-thinkers can convince the European capitalists of the need to save European capitalism from itself, then all hope of any change will be dashed for decades.

As if to answer any criticism from the left, he says that “I wish my campaigning were of a different ilk; that I would much rather be promoting a radical agenda whose raison d’ être is about replacing European capitalism with a different, more rational, system—rather than merely campaigning to stabilize a European capitalism . . .” Here he is attempting to regain his left-wing credentials, but he makes a very bad job of it!

His experience with Papandreou

Varoufakis has been here before. After working abroad as a university professor, he returned to Greece in 2000, and, as he says, “I threw my lot in with George Papandreou, hoping to help stem the return to power of a resurgent Right hell-bent on pushing Greece back into a xenophobic stance (both domestically, with a crackdown on migrant workers, and viz. foreign policy).”

He was an advisor to the then PASOK government, and was clearly trying to convince Papandreou of his ideas. Varoufakis soon was to discover that his efforts were in vain, and because of that he resigned as Papandreou’s adviser early in 2006. As he admits, “. . . Mr. Papandreou’s party not only failed to stem xenophobia but, in the end, presided over the most virulent neoliberal macroeconomic policies that spearheaded the Eurozone so-called bailouts thus, unwittingly, causing the return of Nazis to the streets of Athens.”

The reason why the PASOK government failed to achieve any of the objectives of Varoufakis was very easy to understand. As the reformist leaders of the PASOK had no perspective of transforming society, no idea that meaningful reforms in times of capitalist crisis are impossible unless accompanied by removing the capitalist system, taking over the commanding heights of the economy, and establishing a plan of production. Unless the leaders of a Left government are prepared to go down this road then all they have left is to attempt to make the capitalist system work in the interest of all classes. But capitalism has its own logic. It is based on private ownership of the means of production and the profit motive. Any significant reforms that improve the lives of workers have a cost. The question is: who is going to pay for them? The capitalists are only interested in increasing their profits. Anything that lowers them they will fight against tooth and nail.

In spite of his previous experience with the PASOK, Varoufakis insists that it is possible to work with capitalists to make the system work in favor of both workers and bosses. One cannot accuse him of not trying! After failing with the PASOK, he is now attempting to apply his same ideas from within the Syriza-led government. One could remind him of one popular definition of madness, “doing something over and over again and expecting a different result.”

He is no longer a mere adviser, but as Finance Minister should be in a position to apply his theories. Instead we have the spectacle of Varoufakis, under pressure from European capital, retreating on many of Syriza’s programmatic demands. All his appeals to bourgeois society to see the error of its ways seem—not surprisingly—to have fallen on deaf ears.

Dressing up—partially—in the mantle of Marx

Long before becoming Finance Minister, Varoufakis co-authored a document, his Modest Proposal for Resolving the Euro Crisis. (More on this later). Admittedly, he admits that it does not “have a whiff of Marxism in it.” In spite of this he feels the need to dress himself up—at least partially—in the mantle of Marx. He says that “Karl Marx was responsible for framing my perspective of the world we live in.” Although he immediately follows this by admitting that “It is not something that I volunteer to talk about in ‘polite society’ much these days because the very mention of the M-word switches audiences off.”

Thus, when he is off on his mission trying to convince “polite society,” i.e., bourgeois high society, he hides his “Marxism.” In truth, he does not need to hide his Marxism, for in reality he does not hold a Marxist position at all. And this is revealed when he says that while he is “an unapologetic Marxist,” he thinks it is important to resist him [Marx] passionately in a variety of ways.”

As is often the case with left reformists, they wish to wear the mantle of Marx, to present themselves as radicals, only to better sell an idea which is diametrically opposed to genuine Marxism.

The problem in his whole thinking is that what he aims to do is convince bourgeois society, its economists, politicians, etc., of his ideas. He is not in a dialogue with the working class. This is revealed in how he presents his “method.”

“. . . the powers-that-be are never perturbed by theories that embark from assumptions different to their own. No established economist will even pay attention to a Marxist or neo-Ricardian model these days. The only thing that can destabilize and genuinely challenge mainstream, neoclassical economists is the demonstration of the internal inconsistency of their own models.”

So there we have it: as alternative theories will not be taken seriously by bourgeois economists, there is no point in wasting time in trying to develop them. As he continues, “It was for this reason that, from the very beginning, I chose to delve into the ‘guts’ of neoclassical theory and to spend next to no energy trying to develop alternative, Marxist, models of capitalism.”

What Varoufakis writes here helps to explain his whole approach to solving the crisis afflicting the Eurozone. His aim is to convince the bourgeois economists and the politicians who run the European Union to see reason, to see where their policies are leading, and change track. He believes that by reason and logic he can get the bourgeois to see the error of their ways. He points out to them the doom that their own system is destined for unless they listen to the reformist utopian prophet in time.

Of course, the problem he has in convincing them is that his own ideas are utterly flawed and cannot work on the basis of the free market economy, i.e., of capitalism. He is a classic reformist who believes it is possible to improve the lives of workers and capitalists at the same time, that it is possible to find a common ground where the interests of opposing classes can be reconciled in times of acute economic crisis.

The reason for all this is that although he claims that Marx at least contributed to his understanding, he actually has very little understanding of the essence of Marxism. This can be seen throughout his writings on Marx. Although he acknowledges that Marx brought out the inner contradictions of capitalism, he also distances himself from Marx and he does this by falsifying Marx’s position.

Marx’s “errors”

After explaining why he owes “whatever understanding of our social world” he may have to Marx, he then explains why he “is terribly angry with him.” And therefore explains why he is an “erratic Marxist.” Varoufakis claims that “Marx committed two spectacular mistakes, one of them an error of omission the other one of commission.”

The first thing he accuses Marx of is his supposedly authoritarian approach, quoting his response to Citizen Weston [see  Value, Price, and Profit] in the polemic about wage increases. He says that “Marx felt an irrepressible urge to quash people like Citizen Weston who dared worry that a wage rise (achieved through strike action) might prove Pyrrhic if capitalists push prices up subsequently. Instead of just arguing against people like Weston, Marx was determined to prove with mathematical precision that they were wrong, unscientific, vulgar, unworthy of serious attention.”

Here we see the superficial and dishonest approach of Varoufakis on this question. John Weston was a member of the General Council of the First International who raised two questions: Can wage increases improve the living conditions of workers, and do the struggles of the trade unions for such wage increases have a damaging effect on the rest of industry? Weston was of the opinion that wage increases were not beneficial to workers and were indeed damaging to industry as a whole.

Comrade Varoufakis, instead of going into the essence of the polemic between Weston and Marx, attacks Marx for his supposed authoritarian approach! He ignores the little detail that Weston’s theory was being used as a weapon by the bosses in their struggle against the organized working class. John Weston’s denial of the usefulness of struggling for wage increases led directly to an abandonment of any political struggle on the part of the working class against capitalism. In essence this reflected the pressures of bourgeois thinking within the working class movement itself.

What Marx does is to provide facts and figures and historical experience to show that Weston was wrong, that there had been periods of growth in wages that did not at all lead to an increase in prices, which is what Weston had been falsely claiming. The fact that Varoufakis ignores the essence and simply stresses the “approach” reveals much about his own approach!

He complains that Marx “failed to give sufficient thought, and kept a judicious silence, over the impact of his own theorizing on the world that he was theorizing about . . . He just did not consider the possibility that the creation of a workers’ state would force capitalism to become more civilized while the workers’ state would be infected with the virus of totalitarianism as the hostility of the rest of the (capitalist) world towards it grew and grew.

Furthermore, he states that this determination of Marx to have the ‘complete,’ ‘closed’ story, or model, the ‘final word,’ is something I cannot forgive Marx for. It proved, after all, responsible for a great deal of error and, more significantly, of authoritarianism. Errors and authoritarianism that are largely responsible for the Left’s current impotence as a force of good and as a check on the abuses of reason and liberty that the neoliberal crew are overseeing today. 

Although he doesn’t specifically say so, it is clear that here Varoufakis is referring to the phenomenon of Stalinism and the degeneration of the Soviet Union. Not a word about the impossibility of building socialism in one country, not a word about the concrete conditions faced by the Soviet Union in the 1920s, the backwardness of the economy and the isolation of the revolution due to the defeats of the working class in other countries. Not a word about the reformist leaders of the labor movement who led to defeat the workers of Germany, Hungary, Italy, Spain, China, Britain, and so on in the inter-war period.

What is implied here is that Marx was somehow responsible for Stalin. In this he goes one step further than the usual propaganda we get on this subject. Often we find attempts to blame Lenin for Stalin, with the idea that Lenin’s so-called “authoritarianism” explains the emergence of Stalin, thus presenting the view that there was no difference between Lenin and Stalin. Varoufakis manages to take this logic one step further and trace the roots of Stalinism all the way back to Marx!

And where does Varoufakis find evidence of Marx’s authoritarianism? He finds it in Marx’s “assumption that truth about capitalism could be discovered in the mathematics of his models (the so-called ‘schemas of reproduction’). This was the worst disservice Marx could have delivered to his own theoretical system.

This is an attempt to reduce Marx’s approach to a rigid mathematical determinism, when in actual fact Marx had a much more general view of the capitalist system and saw it in all its contradictions. He looked at different types of crises and never singled out one single factor alone as the cause of all crises. He did, however, stress that the fundamental cause of capitalist crisis, in the final analysis, could be found in the tendency towards overproduction, which is precisely what we are seeing today on a grand scale globally. But why concentrate on the essence of Marx, when it is much more useful to attribute to Marx an authoritarian approach which can then be used to distance oneself from Marx?

Having pointed out Marx’s “mistakes,” Varoufakis then turns to Keynes for help: “Keynes’ gem of a ‘discovery’ about capitalism was twofold: (A) It was an inherently indeterminate system, featuring what economists might refer to today as an infinity of multiple equilibria, some of which were consistent with permanent mass unemployment, and (B) it could fall into one of these terrible equilibria at the drop of a hat, unpredictably, without rhyme or reason, just because a significant portion of capitalists feared that it may do so.

It is incredible that Varoufakis should claim that this concept is a “gem” on the part of Keynes. It reduces our understanding of economic crisis to the subjective whims of the capitalists. According to this manner of thinking, one would have to presume that a crisis is provoked simply because the capitalists do not invest because of lack of “confidence.” We may as well abandon economic theories altogether and take up psychology instead!

He claims that Marx’s theories on capitalism only describe regular cyclical recessions but are worthless when it comes to understanding a depression such as that of the 1930s. This is utterly false, as Marx dedicates his whole work to showing how capitalism is destined for a major crisis, which is the inevitable outcome of an accumulation of smaller crises, piling contradiction upon contradiction.

He counterposes to Marx’s supposedly worthless theories on capitalism Keynes’ concept of so-called “animal spirits,” involving the confidence of individual capitalists or lack of it, serves as a better tool, a “deeply radical idea” which works better than Marx’s attempt “to establish his theorems as mathematical, indisputable proofs.

So in order to make up for Marx’s “errors,” what is required is to add a bit of Keynesianism to Marxism. As Varoufakis states, “Of all the passages in Keynes’ General Theory, this idea, of capitalism’s self-destructive capriciousness, is the one we need to retrieve and use to reradicalize Marxism.”

A “Modest Proposal”

How does Varoufakis propose we “reradicalize” Marx? Fundamentally through continuing to expand public spending and credit, Keynesian policies! In his “Modest Proposal” he develops his idea of a “European New Deal,” which according to him “would lead to progress within months.”

What are the essential aspects? At the heart of his proposal is the idea that a significant part of the national debts of the Eurozone members should be taken on by the European Central Bank. In this, the European Central Bank would have a big role to play in applying a “limited debt conversion program.” The “Modest Proposal” states the following:

The Maastricht Treaty permits each European member state to issue sovereign debt up to 60% of GDP. Since the crisis of 2008, most Eurozone member states have exceeded this limit. We propose that the ECB offer member states the opportunity of a debt conversion for their Maastricht Compliant Debt (MCD), while the national shares of the converted debt would continue to be serviced separately by each member state.

In practice that would mean a country like Italy, which has a public debt of 130% of GDP, would put 60% in the hands of the ECB and the remaining 70% would be serviced by the Italian state. But the ECB is constrained by EU law in what it can do in this regard, as it is not allowed to simply buy up national sovereign debts. To get round this, Varoufakis proposes the ECB acts as a go-between, “mediating between investors and member states.”

Thus the ECB doesn’t buy debt directly but acts as a guarantor for buyers of debt, providing a “conversion servicing loan.” And how would this work? He states, “Refinancing of the Maastricht compliant share of the debt, now held in ECB bonds, would be by member states but at interest rates set by the ECB just above its bond yields. The shares of national debt converted to ECB bonds are to be held by it in debit accounts. These cannot be used as collateral for credit or derivatives creation. Member states will undertake to redeem bonds in full on maturity, if the holders opt for this rather than to extend them at lower, more secure rates offered by the ECB.”

The whole proposal is a disguised way of saying the ECB won’t buy up sovereign debts, but in reality it would. In a note to the text we find this explanation: “For a member state whose debt to GDP ratio is 90% of GDP, the ratio of its debt that qualifies as MCD is 2/3. Thus, when a bond with face value of say €1 billion matures, two-thirds of this (€667 million) will be paid (redeemed) by the ECB with monies raised (by the ECB itself) from money markets through the issue of ECB bonds.”

What this means is that the ECB would have to issue bonds to cover the debt of the EU member states. Whichever way we look at it, what Varoufakis proposes here is that the ECB takes on much of the national debts within the EU.

In 1993 one of the authors of the “Modest Proposal” advised Jacques Delors, the then President of the European Commission, to propose that a European Investment Fund be set up, but it was derailed by the Economy and Finance Directorate of the European Commission and, as the authors of the document openly admit, by “the resistance, then as now, of Germany to EU bonds.”

Here we have the crux of the matter. The ECB is only as strong as the countries that contribute to it. And any debt that it takes on must eventually be financed by real cash. That means that in case of difficulties, it would be fundamentally German capital that would have to pay! This remains true in spite of Varoufakis and co. stating that “banks, debt, and investment flows are Europeanized without the need for national guarantees or fiscal transfers.” If debt is “Europeanized,” it means that Europe as a whole must guarantee and pay for that debt, which means those countries who can pay, and that means Germany!

That explains why German capitalists are not too keen on Varoufakis’ proposals. He tries to reassure them by stating that, “If a member state goes into a disorderly default before an ECB bond issued on its behalf matures, then that ECB bond payment will be covered by insurance purchased or provided by the ESM [European Stability Mechanism].” How much such insurance would cost, considering the number of EU member states that are at risk of defaulting in the coming years, the authors do not explain!

In the “Modest Proposal,” the authors also refer to the problem of the “peripheral economies,” who need financing “to build new sectors, to foster convergence and cohesion, and to address the growing imbalances of competitiveness within the Eurozone.”

The ECB is here portrayed as if it were some impartial body standing above all the Eurozone states. It ignores the fact that if the ECB should ever fail, it is the powerful states within the Eurozone who would have to back it up, and that means fundamentally Germany. That explains why the German government is putting up such hard opposition to any of the proposals the Tsipras government has come up with.

In spite of Varoufakis claiming that he is a Marxist, albeit an erratic one, and that he claims that Marx has given him the insight he has about capitalism, in practice he ignores completely the laws that govern the capitalist system.

Free competition in the market between private producers and the quest for maximum profits is what drives the capitalist system. In this process some capitalists inevitably come out on top, the most efficient and productive. Investment to improve productivity in order to better compete in the market is at the heart of the system.

German industry is more competitive because it has a higher technological input. That means it can outcompete other industrial powers. In so doing it accumulates more capital and is therefore able to further outstrip its competitors. It has done this at the expense of most of the European countries.

All this explains why we have a Germany and a Greece within the EU. German industry, by being so competitive, has destroyed industry in Greece and many other EU member states. This is an inevitable outcome of free market competition. It is an expression of the fact that the productive forces globally have outgrown the world market. Therefore, one group of capitalists can only increase their market by cutting it for their competitors. If Germany is more productive and competitive, it will outsell countries like Greece, Italy, Portugal, and Spain.

Should there be imbalances, Varoufakis suggest a flow of resources from the “successful” countries to the “unsuccessful.” He refers to a situation where, in a “well-balanced Eurozone . . . the trade deficit of a member state is financed by a net flow of capital to that same member state.”

Varoufakis treats the capitalist system as if it should be some kind of charitable institution, and not an anarchic system based on profit making. His economic theories, far from being an immediate solution to the crisis—while we gain time as a Left to come up with an alternative—are utterly utopian and do not correspond to the way the real capitalist system works.

The Nazi threat

Varoufakis sees the prospect of a breakup of the EU and a collapse of the euro, which is a concrete possibility. But the only outcome that he sees from this crisis is a barbaric one with the rise of Nazis and other reactionary forces. As we have said above, he does not see the potential for the working class to step in as a force.

The Golden Dawn is a fascist party, but is its electorate unwinnable? The reason why a party such as the Golden Dawn has emerged as a parliamentary force is the deep economic and social crisis afflicting Greece. Its supporters mistakenly believe that the fascists are the alternative. But one important detail emerged during the recent weeks. When Tsipras seemed to be standing up to the Troika, an opinion poll revealed that 91% of Golden Dawn voters approved of Syriza’s stance. This shows that a large part of the Golden Dawn electorate could be won away from that party, but only on condition that Syriza stands firm. If it retreats and compromises, it will push this electorate back into the arms of the Golden Dawn fascists.

Varoufakis recently stated that in fighting tax evasion, the Syriza government will not hit the usual people, i.e., the small businesses, and ordinary workers, but the oligarchs. The latest statements on this question would indicate that they will be spying on VAT evasion, i.e., precisely the small businesses. This plays straight into the hands of the Golden Dawn.

Varoufakis no doubt is a supporter of nonviolence, for peaceful change, and to work to avoid a collapse into barbarism. What this means, however, is that he is not prepared to adopt revolutionary methods, but wishes to dialogue with the ruling class, to get them to see the need for class collaboration. This, when it has been adopted throughout history, has invariably ended up by leading to a situation where the workers are disappointed and the official Left is discredited, thus creating the conditions for a strengthening of the right wing.

Varoufakis has learned nothing from history. He has drawn all the wrong conclusions and is repeating history as a farce. The Syriza leaders need to break with this thinking and adopt a bold socialist alternative.

Are we ready?

Varoufakis ignores the fact that the alternative does exist. What needs to be done in Greece is the following: cancel the debt unilaterally, nationalize the banks and major companies under workers’ control and management, and introduce a planned economy. The wealth to finance all the necessary reforms exists; it is in the hands of the capitalist oligarchs!

What Varoufakis is saying essentially is that he would like to offer a radical alternative, but the workers are not ready for such a program. The experience of the past few weeks proves the exact opposite. When the Tsipras government seemed to be putting up a defiant stance against the Troika, his popularity ratings shot through the roof. The idea that the Thessaloniki program was going to be carried out raised the hopes of the masses. For the first time in many years, thousands of people gathered outside the parliament building to support the government.

Precisely when all the conditions for radical change exist, Varoufakis says the moment is not right. The opposite is the truth. A crisis of capitalism provides an opportunity to pose an alternative. It is when capitalism no longer provides the conditions for improvements in living standards that workers are more inclined to listen to a party proposing a socialist alternative.

It is now, in a moment of deep crisis of the system, that Syriza must offer a concrete alternative to the working masses of Greece, for if it does not then the party will eventually be seen by many as yet another group of politicians who promise much and deliver very little, if nothing at all. If that mood sets in, then people who voted for Syriza will look elsewhere, including the extreme right, which Varoufakis rightly detests!

Varoufakis’s “erratic” manner of being a Marxist means picking and choosing from Marx’s writings and removing essential aspects of his thinking and applying a completely non-Marxist approach in practice; i.e., he hides partially behind Marx, in order to create an image for himself as a “radical,” while in practice succumbing completely to capitalism.

Marx explained in his 1859 Preface to A Contribution to the Critique of Political Economy: “At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or—this merely expresses the same thing in legal terms—with the property relationswithin the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution. The changes in the economic foundation lead sooner or later to the transformation of the whole immense superstructure.”

These words describe what we have today. The means of production accumulated in Europe are rebelling against the straitjacket of capitalism. For further development they need to be freed from that straitjacket. The means by which they are to be freed are class struggle and social revolution. In Greece we have already entered the “era of social revolution.” What is required is for the leaders of Syriza to take cognizance of that fact and act accordingly.

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