The Global Minotaur: America, The True Origins of the Financial Crisis and the Future of the World Economy (Economic Controversies)

The Global Minotaur: America, The True Origins of the Financial Crisis and the Future of the World Economy (Economic Controversies)

Yanis Varoufakis

Language: English

Pages: 170

ISBN: 1780320140

Format: PDF / Kindle (mobi) / ePub


In this remarkable and provocative book, Yanis Varoufakis explodes the myth that financialization, ineffectual regulation of banks, greed, and globalization were the causes of the global economic crisis. Rather, they are symptoms of a much deeper malaise which can be traced back to the 1970s; the time when a "Global Minotaur" was born. Just as the Athenians maintained a steady flow of tributes to the Cretan beast, so the "rest of the world" sent incredible amounts of capital to America and Wall Street. Thus, the Global Minotaur became the 'engine' that pulled the world economy from the early 1980s to 2008.
 
Today's crisis in Europe, the heated debates about austerity versus further fiscal stimuli in the US, and the clash between China's authorities and the Obama administration on exchange rates are the inevitable symptoms of the weakening Minotaur, evidence of a global "system" which is now as unsustainable as it is imbalanced. Going beyond this, Varoufakis lays out the options available to us for reintroducing a modicum of reason into a highly irrational global economic order.
 
This is an essential account of the socio-economic events and hidden histories that have shaped the world as we now know it.

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the rise of capitalism, all of the world’s trade relied on a single currency (the dollar) and was financed from a single epicentre (Wall Street). While half of Europe was under the control of the Red Army and Europeans generally were openly questioning the merits of the capitalist system, the New Dealers who had been running Washington since 1932 realized that history had presented them with a remarkable opportunity: to erect a post-war global order that would cast American hegemony in stainless

crucial roles in fashioning the Global Plan. They were, not by chance, also the architects of the Cold War. They shared a pragmatic view that was conceived in the shadow of the Great Depression and forged during the war. Convinced that ‘free market capitalism’ had to be planned meticulously by Washington, and in a manner not too dissimilar to the successful running of the war economy, they sought to project onto a global canvas the successful recipe that had brought America out of the doldrums.

the idea that currencies would soon be allowed to float freely created a stampede toward the dollar. To this day, whenever a crisis looms, capital flees to the greenback. This is exactly why the Crash of 2008 led to a mass inflow of foreign capital to the dollar, even though the crisis had begun on Wall Street. Furthermore,the United States is the only country where demand for its currency does not just reflect an increase in the demand for the goods and services it produces. Whenever a Nigerian

simple recipe, which shaped the world for a good nineteen years: since nothing disciplines human greed like the unyielding masters of supply and demand, let the markets function as they will, but with the state remaining ready and willing to step in to clean up the mess when the inevitable disaster strikes. Like a liberal parent who lets his children get into all sorts of mischief, he expected trouble but thought it better to remain on the sidelines, always ready to step in, clean up after a

of Star Trek fame, spotted a CDS and had to describe it to Captain Kirk, he would have said, in his usual expressionless way: ‘They are insurance policies, Captain, but not as we know them.’ CDSs pay out pre-specified amounts of money if someone else defaults. The difference between a CDS and a simple insurance policy is this: to insure your car against an accident, you must first own it. The CDS ‘market’ allows one to buy an ‘insurance policy’ on someone else’s car, so that if, say, your

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