The Global Minotaur: America, Europe and the Future of the Global Economy (Economic Controversies)

The Global Minotaur: America, Europe and the Future of the Global Economy (Economic Controversies)

Language: English

Pages: 304

ISBN: 178360610X

Format: PDF / Kindle (mobi) / ePub

In this provocative book, Yanis Varoufakis—the fiery former finance minister in Greek’s new Syriza-led government—explodes the myth that financialization, ineffective regulation of banks, and generalized greed and globalization were the root causes of the global economic crisis. Rather, he shows, they are symptoms of a much deeper malaise, one that can be traced all the way back to the Great Depression, then through the stagflation of the 1970s, when a “Global Minotaur” was born. Today’s deepening crisis in Europe, Varoufakis shows, is just one of the inevitable signs of the weakening Minotaur—of a global system that is now as unsustainable as it is unbalanced. Rather than simply diagnose a problem, however, Varoufakis also offers a solution, a program for introducing reason into what has become a perniciously irrational economic order.

An essential, powerfully polemical account of the hidden histories that continue to shape our world and economy today, this book from a major player on the stage of world finance, and with a new introduction by Paul Mason, will be essential reading for economists, policy makers, and regular citizens alike.













E-Records’ capitalization to earnings ratio. This small piece of arithmetic yielded a fabulous number: 50:1 times $900 million = $45 billion! Thus, the new, merged, company was valued at $30 billion more than the sum of the capitalizations of the two merged companies (a sudden leap of 300 per cent). Needless to say, the fees and commissions of the Wall Street institutions that saw the merger through were in line with the marvellously big figure they had miraculously arrived at. Even more

GDP). Whether this type of Keynesian growth is sustainable without the Global Minotaur is our era’s next big question. Countries like Brazil and Argentina, which export large quantities of primary commodities to China, weathered 2008 better than others. India, too, seems to have managed to generate sufficient domestic demand. Nevertheless, it would be remiss not to take into consideration the fact that the Third World had been in a deep crisis, caused by escalating food prices, for at least a

be able to repay this new loan as well as the existing ones. Understandably unconvinced that tossing new, expensive loans to an insolvent government that was presiding over an economy in deep recession would somehow magically render it solvent, investors continued to bet on a default by Greece (and by other vulnerable eurozone states). So, a few days later, the EU announced the creation of the European Financial Stability Facility (the EFSF, whose toxic structure was discussed in chapter 7),

Chapter 4 1. Some 2.3 million dead, 3.5 million seriously wounded and 14.5 million refugees. 2. These estimates are by New Deal economist Robert Eisner, professor at Northwestern University and a one-time president of the American Economic Association. 3. V. H. Oppenheim (1976–77) ‘Why oil prices go up: The past: we pushed them’, Foreign Policy, 25: 32–33. 4. See Sheikh Yaki Yamani’s interview at the Royal Institute of International Affairs, as published on 14 January 2001 in the Observer.

tie the money supply to the quantity of some metal (gold, silver etc.). It is as if the Great Depression of the 1930s had never sprung out of a world shackled by the chains of the…gold standard (see Chapter 3). 8. Meaning that interest rates were already close to zero and could not be lowered further (see Chapter 2). Moreover, with money interest rates close to zero, falling prices threatened to boost the real interest rate during a recessionary time (the very definition of a liquidity trap).

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