Subscribe on iTunes.

Yanis Varoufakis is the former finance minister of Greece, an economist, and the author of the book And the Weak Suffer What They Must?: Europe's Crisis and America's Economic Future. Recently, he was joined at LIVE from the NYPL by Noam Chomsky, the prolific linguist, social critic, and political activist. For this week's episode of the New York Public Library Podcast, we're proud to present Varoufakis and Chomsky discussing financial collapse, the euro, and "the sickest joke in the history of humankind."

Chomsky spoke of an unholy marriage of private interests and the US government. One example he cited was the way in which American banks have profited from government support and how taxpayers have, in the form of government subsidies, invested in the tech sector without gleaning profit:

"You recall the IMF study of the leading American banks, which determined that virtually all their profits come from their implicit government insurance policy, cheap credit, access to higher credit ratings, incentives to take risky transactions which are profitable but then if it’s problematic, you guys pay for it, or just take the basis of the contemporary economy, which actually I’ve been privileged to see developing in government-subsidized laboratories for decades. MIT, where I’ve been since the 1950s, is one of the institutions where the government, the funnel in the early days was the Pentagon, was pouring in money to create the basis for the high-tech economy of the future and the profitmaking of the institutions that are regarded as private enterprises. It was decades of work under public funding with a very anticapitalist ideology. So according to capitalist principles, if someone invests in a risky enterprise over a long period and thirty years later it makes some profit, they’re supposed to get part of the profit, but it doesn’t work like that here. It was the taxpayer who invested for decades. The profit goes to Apple and Microsoft, not to the taxpayer."

Echoing Chomsky's point, Varoufakis critiqued widespread beliefs about the relationship between the free market and government intervention:

"I mean the whole notion that there can be a market system which is at an arm’s length separated from a state, which is the enemy, is the sickest joke in the history of humankind. If you think that this narrative of private wealth creation which is appropriated by the big bad wolf, the state, on behalf of trade unions and the working class that need a social welfare net, is just a preposterous reversal of the truth that wealth is being created collectively and appropriated privately but right from the beginning. I mean, the enclosures in Britain would never have happened without the king’s army and without state brutality for pushing peasants off their ancestors’ land and creating the commodification of labor, the commodification of land which then gave rise to capitalism. Just half an hour ago, we were being shown, some of us, the magnificent collection of maps of the city of New York in this wonderful building and you could see in one of the maps of Alabama, the precise depiction of the theft of land from Native Americans, the way in which it was parceled up, commodified. Now that would never have happened without the brutal intervention of the state and created the process of privatization of land and therefore of  commodification."

Varoufakis also pointed out the way in which lessons have not been learned from previous failures. He framed the euro as similar to the gold standard and therefore doomed to repeat the same type of financial collapse:

"The euro is a carbon copy of the gold standard of the 1920s. It was created in the image of the gold standard of the 1920s. So you know what happened to the gold standard of the 1920s. It gave rise to the roaring twenties, to immense financialization, immense concentration of industrial power, funded by the consolidation of the financial sector, and then Wall Street 1929 [and] of course enormous inequality which is the result of this easy private money minting by the financial sector. And when the chickens came home to roost in 1929, the common currency of that era, the gold exchange standard, collapsed, started fragmenting, very soon."

You can subscribe to the New York Public Library Podcast to hear more conversations with wonderful artists, writers, and intellectuals. Join the conversation today!