-
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Democracy.
-
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In the West, we make a colossal mistake
taking it for granted.
-
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We see democracy not as the most
fragile of flowers that it really is,
-
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but we see it as part
of our society's furniture.
-
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We tend to think of it
as any transient given.
-
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We mistakenly believe that capitalism
begets, inevitably, democracy --
-
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it doesn't.
-
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Singapore's Lee Kuan Yew and his
great imitators in Beijing
-
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have demonstrated
beyond reasonable doubt
-
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that it is perfectly possible to have
flourishing capitalism,
-
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spectacular growth,
-
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while politics remain democracy free.
-
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Indeed, democracy is receding
in our neck of the woods,
-
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here in Europe.
-
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Earlier this year while I was
representing Greece,
-
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the newly elected Greek government
in the Eurogroup as its Fincance Minister,
-
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I was told to know on certain terms,
-
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that our nation's democratic
process, our elections,
-
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could not be allowed to interfere
-
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with economic policies that were being
implemented in Greece.
-
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At that moment,
-
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I felt that there could be no greater
vindication of Lee Kuan Yew,
-
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or the Chinese Communist Party.
-
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Indeed some of recalcitrant
friends of mine who kept telling me
-
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that democracy would be banned
if it ever threatened to change anything.
-
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Tonight, here, I want to present to you
-
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an economic case
for an authentic democracy.
-
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I want to ask you to join me
in believing, again,
-
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that Lee Kuan Yew,
The Chinese Communist Party,
-
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and indeed the Eurogroup,
-
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are wrong in believing that we
can dispense with democracy.
-
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That we need an authentic,
boisterous democracy,
-
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and without democracy,
-
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our societies will be nastier,
-
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our future bleak,
-
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and our great technologies wasted.
-
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Speaking of waste,
-
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allow me to point out
an interesting paradox
-
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that is threatening our
economies as we speak.
-
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I call it the twin peaks paradox.
-
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One peak you understand --
-
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you know it, you recognize it --
-
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is the mountain of debts
-
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that has been casting a shadow
over the United States,
-
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Europe,
-
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the whole world.
-
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We all recognize the mountain of debts.
-
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But few people discern its twin.
-
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A mountain of idle cash belonging to rich
savers and to corporations,
-
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too terrified to invest it
-
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into the productive activities
that can generate the incomes
-
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from which you can extinguish
the mountain of debts
-
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and which can produce all those things
that humanity desperately needs,
-
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like green energy.
-
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Now let me give you two numbers.
-
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Over the last three months,
-
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in the United States, in Britain
and the Euro zone,
-
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we have invested collectively,
-
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3.4 trillion dollars on all
the wealth-producing goods,
-
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things like industrial plants, machinery,
office blocks, schools, roads, railways,
-
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machinery, and so on and so forth ...
-
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3.4 trillion sounds like a lot of money
-
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until you compare it to the 5.1 trillion
-
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that has been slushing around in the same
countries, in our financial institutions,
-
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doing absolutely nothing
during the same period ...
-
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except inflating stock exchanges
and driving up house prices.
-
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So a mountain of debt
and a mountain of idle cash
-
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form twin peaks failing
to cancel each other out
-
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through the normal
operation of the markets.
-
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The result is stagnant wages,
-
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more than a quarter
of 25 to 54-year-olds --
-
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in America, in Japan and in Europe --
-
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out of work,
-
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and consequently,
-
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low aggregate demand,
-
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which in a never-ending cycle,
-
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reinforces the pessimism of the investors,
-
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who fearing low demand,
reproduce it by not investing.
-
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Exactly like Oedipus' father,
-
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who terrified by
the prophecy of the oracle
-
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that his son would grow up to kill him,
-
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unwittingly engineered the conditions
-
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that insured that Oedipus,
his son, would kill him.
-
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This is my quarrel with capitalism.
-
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It's gross wastefulness,
-
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all this idle cash,
-
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should be energized to improve lives,
-
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to develop human talents,
-
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and indeed to finance
all these technologies --
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green technologies --
-
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which are absolutely essential
for saving planet Earth.
-
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Am I right in believing
that democracy might be the answer?
-
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I believe so, but before we move on,
-
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what do we mean by democracy?
-
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Aristotle defined democracy
as the constitution
-
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in which the free and the poor,
being in the majority, control government.
-
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Now of course Athenian democracy
excluded too many --
-
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women, migrants and of course, the slaves.
-
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But it would be a mistake
to dismiss the significance
-
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of ancient athenian democracy
-
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on the basis of whom it excluded.
-
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What is more pertinent,
-
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and continues to be so about ancient
athenian democracy,
-
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was the inclusion of the working poor,
-
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who not only acquired
the right to free speech,
-
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but more importantly --
-
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crucially --
-
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they acquired the rights
to political judgements
-
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that were afforded equal weight
-
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in the decision-making
concerning matters of state.
-
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Now of course, Athenian
democracy didn't last long,
-
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like a candle that burns brightly,
it burned out quickly.
-
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And indeed, our liberal democracies today,
-
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do not have their roots in ancient Athens.
-
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They have their roots in the Magna Carta,
-
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in the 1688 Glorious Revolution,
-
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indeed in the American constitution.
-
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Whereas Athenian democracy was focusing
on the masterless citizen
-
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and empowering the working poor,
-
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our liberal democracies,
-
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founded on the Magna Carta tradition,
-
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which was, after all
a charter for masters.
-
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And indeed liberal democracy
only surfaced when it was possible
-
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to separate fully the political sphere
from the economic sphere,
-
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so as to confine the democratic process
fully in the political sphere,
-
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leaving the economic sphere --
-
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the corporate world, if you want --
-
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as a democracy-free zone.
-
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Now in our democracies today,
-
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this separation of the economic
from the political sphere,
-
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the moment it started happening,
-
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it gave rise to an inexorable,
epic struggle between the two
-
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with the economic sphere
colonizing the political sphere,
-
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eating into its power.
-
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Have you wondered why politicians
are not what they used to be?
-
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It's not because their DNA
has degenerated --
-
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(Laugher)
-
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It is rather because one can be
in government today and not in power.
-
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Because power has migrated
-
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from the political to the economic
sphere, which is separate.
-
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Indeed --
-
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I spoke about my
quarrel with capitalism --
-
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If you think about it,
-
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it is a little bit like
a population of predators,
-
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that are so successful in decimating
the prey that they must feed on,
-
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that in the end, they starve.
-
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Similarly, the economic sphere
-
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has been colonizing and cannibalizing
the political sphere to such an extent
-
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that is is undermining itself,
causing economic crises.
-
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Corporate power is increasing,
-
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political goods are devaluing,
-
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inequality is rising,
-
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aggregate amount is falling,
-
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and CEO's of corporations are too scared
to invest the cash of their corporations.
-
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So the more capitalism succeeds in taking
the demos out of democracy,
-
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the taller the twin peaks
-
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and the greater the waste
of human resources,
-
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and humanity's wealth.
-
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Clearly, if this is right,
-
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we must reunite the political
and economic sheres
-
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and better do it with demos
being in control,
-
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like ancient Athens except
without the slaves,
-
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or the exclusion of women
and migrants.
-
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Now this is not an original idea,
-
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the marxist left had
that idea 100 years ago
-
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and it didn't go very well, did it?
-
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The lesson that we learned
from the Soviet debacle
-
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is that only by a miracle will the working
poor be re-empowered,
-
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as they were in ancient Athens,
-
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without creating new forms
of brutality and waste.
-
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But there is a solution.
-
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Eliminate the working poor.
-
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Capitalism's doing it
-
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by replacing low-wage workers
with automata, androids, robots.
-
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The problem is
-
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that as long as the economic and
the political spheres are separate,
-
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automation makes the twin peaks taller,
-
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the waste loftier,
-
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and the social conflicts deeper,
-
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including --
-
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soon, I believe --
-
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in places like China.
-
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So we need to reconfigure,
-
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we need to reunite the economic
and the political spheres,
-
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but we better do it by democratizing
the reunified sphere,
-
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lest you end up with
a surveillance-mad, hyper-autocracy
-
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that makes The Matrix, the movie,
look like a documentary.
-
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(Laughter)
-
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So the question is not whether
capitalism will survive
-
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the technological innovations
of this moment.
-
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The more interesting question is whether
capitalism will be succeeded
-
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by something resembling a Matrix dystopia,
-
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or something much closer
to a Star Trek-like society,
-
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where machines serve the humans
-
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and the humans expend their energies
exploring the universe
-
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and indulging in long debates
about the meaning of life
-
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in some ancient, Athenian-like,
high tech Agora
-
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I think we can afford to be optimistic.
-
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But what would it take --
-
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what would it look like --
-
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to have this Star Trek-like utopia,
instead of the Matrix-like dystopia?
-
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In practical terms,
-
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allow me to share, just briefly,
-
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a couple of examples.
-
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At the level of the Enterprise,
-
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imagine a capital market,
-
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where you earn capital as you work,
-
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and where your capital follows you
from one job to another,
-
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from one company to another,
-
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and the company --
-
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whichever one you happen
to work at at that time --
-
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is solely owned by those who happen
to work in it at that moment.
-
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Then, all income stems
from capital, from profits,
-
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and the very concept
of wage labor becomes obsolete.
-
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No more separation between those
who own but do not work in the company,
-
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and those who work
but do not own the company.
-
Not Synced
No more tug-of-war
between capital and labor.
-
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No great gap between
investment and saving,
-
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Indeed, no towering twin peaks.
-
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At the level of a global
political economy,
-
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imagine for a moment,
-
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that our national currencies
have a free-floating exchange rate,
-
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with a universal, global,
digital currency,
-
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one that is issued by
the International Monetary Fund,
-
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the G-20,
-
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on behalf of all humanity.
-
Not Synced
And imagine further,
-
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that all international trade
is denominated in this currency --
-
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let's call it "the cosmos" --
-
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in units of cosmos.
-
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With every government agreeing
to be paying into a common fund
-
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a sum of cosmos units proportional
to the country's trade deficit,
-
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or indeed to a country's trade surplus.
-
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And imaging that that fund is utilized
to invest in green technologies,
-
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especially in parts of the world
where investment funding is scarce.
-
Not Synced
This is not a new idea.
-
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It's what, effectively,
-
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John Maynard Keynes proposed
in 1944 at the Bretton Woods Conference.
-
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The problem is that back then
-
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they didn't have the technology
to implement it.
-
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Now we do.
-
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Especially in the context of a reunified
political economic sphere.
-
Not Synced
The world that I am describing to you
-
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is simultaneously libertarian,
-
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in that it prioritizes
empowered individuals,
-
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Marxist,
-
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since it will have confined
through the [dustbin?] of history
-
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the division between capital and labor,
-
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and Keynesian --
-
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global Keynesian.
-
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But above all else,
-
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it is a world in which
-
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we will be able to imagine
an authentic democracy.
-
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Will such a world dawn?
-
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Or shall we descend
into a Matrix-like dystopia?
-
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The answer lies in the political choice
that we shall be making collectively.
-
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It is our choice,
-
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and we'd better make it democratically.
-
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Thank you.
-
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(Applause)
-
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Bruno Giussani: Yanis ...
-
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It was you who described yourself
in your bios as a libertarian marxist --
-
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what is the [relevance of Marxism] today?
-
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YV: Well if there was any relevance
in what I just said, the Marx is relevant
-
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because the whole point of reunifying
the political and economic is --
-
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if we don't do it,
-
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then technological innovation will create
such a massive fall in aggregate --
-
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what Larry Summers referers
to as secular stagnation.
-
Not Synced
With this crisis migrating
from one part of the world,
-
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as it is now,
-
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we destabilize not only our democracies,
-
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but even the [emerging?] world that is not
that keen on liberal democracy.
-
Not Synced
So if this analysis holds water,
then Marx is absolutely relevant.
-
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But so is [Hagen?] --
-
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that's why I'm a libertarian marxist,
-
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and so is Keynes,
-
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so that's why I'm totally confused.
-
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(Laughter)
-
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BG: Indeed, and possibly we are, too now.
-
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(Applause)
-
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YV: If you are not confused,
you are not thinking, okay?
-
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BG: That's a very, very Greek
philosopher kind of thing to say --
-
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YV: That's more Einstein, actually --
-
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BG: During your talk you mentioned
Singapore and China,
-
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and yesterday night at the speaker dinner,
-
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you expressed a pretty strong opinion
about how the West looks at China.
-
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Would you like to share that?
-
Not Synced
YV: Well there's a great
degree of hypocrisy.
-
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In our liberal democracies we have
a semblance of democracy.
-
Not Synced
It's because we have confined --
-
Not Synced
as I was saying in my talk --
-
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democracy to the political sphere,
-
Not Synced
while leaving the one sphere
where all the action is --
-
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the economic sphere --
-
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a completely democracy-free zone.
-
Not Synced
In a sense,
-
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if I am allowed to be provocative,
-
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China today is closer to Britain
in the 19th century,
-
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because remember,
-
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we tend to associate
liberalism with democracy --
-
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that's a mistake, historically.
-
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Liberalism --
-
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Liberal --
-
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it's like John Stuart Mill.
-
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John Stuart Mill was particularly
skeptical about the democratic process.
-
Not Synced
So what you are seeing now in China
is a very similar process
-
Not Synced
to what we had in Britain
during the Industrial Revolution,
-
Not Synced
especially the transition
from the first to the second.
-
Not Synced
And to be castigating China
-
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for doing that which the West did
in the 19th century,
-
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smacks of hypocrisy.
-
Not Synced
BG: I am sure that many people here
-
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are wondering about your experience
-
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as the Finance Minister of Greece
earlier this year --
-
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YV: I knew this was coming --
-
Not Synced
BG: Yes --
-
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(Laughter)
-
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BG: Six months after,
-
Not Synced
how do you look back
at the first half of the year?
-
Not Synced
YV: Extremely exciting
from a personal point of view
-
Not Synced
and very disappointing,
-
Not Synced
because we had an opportunity
to reboot the Eurozone.
-
Not Synced
Not just Greece, the Eurozone.
-
Not Synced
To move away from the complacency
-
Not Synced
and the constant denial
that there was a massive --
-
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and there is a massive --
-
Not Synced
architectural fault line
going through the Eurozone,
-
Not Synced
which is threatening, massively,
-
Not Synced
the whole of the European Union process.
-
Not Synced
We had the opportunity
on the basis of the Greek program --
-
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which by the way,
-
Not Synced
was the first program
to manifest that denial --
-
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to put it right.
-
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And unfortunately,
-
Not Synced
the powers that be in Eurozone --
-
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in the Eurogroup --
-
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chose to maintain denial.
-
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But you know what happens.
-
Not Synced
This is the experience
of the Soviet Union.
-
Not Synced
When you try to keep alive
-
Not Synced
an economic system
that architecturally cannot survive,
-
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through political will
and through authoritarianism,
-
Not Synced
you may succeed in prolonging it.
-
Not Synced
But when change happens
-
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it happens very abruptly
and catastrophically.
-
Not Synced
BG: What kind of change
are you foreseeing?
-
Not Synced
YV: Well there's no doubt
-
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that if we don't change
the architecture of the Eurozone,
-
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the Eurozone has no future.
-
Not Synced
BG: [Did you do any mistakes]
when you were Finance Minister?
-
Not Synced
YV: Every day.
-
Not Synced
(Laughter)
-
Not Synced
Anybody who looks back --
-
Not Synced
(Applause)
-
Not Synced
No but seriously.
-
Not Synced
If there's any Minister of Finance --
-
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or of anything else for that matter --
-
Not Synced
who tells you after six months in a job,
-
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especially in such a stressful situation,
-
Not Synced
that they had made no mistake,
-
Not Synced
[they're dangerous people],
-
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of course I made mistakes.
-
Not Synced
The greatest mistake
-
Not Synced
was to sign the application
for the extension of a loan agreement
-
Not Synced
in the end of February.
-
Not Synced
I was imagining
-
Not Synced
that there was a genuine interest
on the side of the creditors
-
Not Synced
to find common ground.
-
Not Synced
And there wasn't.
-
Not Synced
They were simply interested
in crushing our government,
-
Not Synced
just because they did not want
to have to deal
-
Not Synced
with the architectural fault lines
that were running through the Eurozone,
-
Not Synced
and because they didn't want to admit
-
Not Synced
that for five years they were implementing
a catastrophic problem in Greece.
-
Not Synced
We lost one-third of our Nominal GDP.
-
Not Synced
This is worse than the Great Depression.
-
Not Synced
And no one has come clean
-
Not Synced
from the tribe of lenders
that have been imposing this policy
-
Not Synced
to say, "this was a colossal mistake."
-
Not Synced
BG: Despite all this,
-
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and despite the aggressiveness
of the discussion though,
-
Not Synced
you seem to remaining
quite pro-European.
-
Not Synced
YV: Absolutely.
-
Not Synced
Look, my criticism of the European
Union and the Eurozone
-
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comes from a person
who lives and breathes Europe.
-
Not Synced
My greatest fear is that
the Eurozone will not survive.
-
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Because if it doesn't,
-
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the centrifugal forces
that would be unleashed
-
Not Synced
would be [demonic],
-
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and they would destroy the European Union.
-
Not Synced
And that would be catastrophic
not just for Europe
-
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but for the whole global economy.
-
Not Synced
We are probably the largest
economy in the world.
-
Not Synced
And if we allow ourselves
-
Not Synced
to fall into a [route?]
of the post-modern 1930's,
-
Not Synced
which seems to me what we are doing,
-
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then that will be detrimental
-
Not Synced
to the future of Europeans
and non-Europeans alike.
-
Not Synced
BG: We definitely hope
you are wrong on that point.
-
Not Synced
Yanis, thank you for coming to TED.
-
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YV: Thank you
-
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(Applause)