Yanis Varoufakis: Power, Markets & Power Markets - Ep104

Yanis Varoufakis is an academic economist and politician. He’s a member of Greek Parliament, Founder and Secretary-General of MeRA25, a left-wing political party, and famously served as Minister for Finance in Greece in 2015. He subsequently wrote a book about the experience called Adults in the Room (2017), about how the EU stymied his attempts to renegotiate Greece’s debts in the aftermath of the financial crisis.

Varoufakis was elected to Greek parliament and appointed Finance Minister in January 2015 by Alexis Tsipras, in the midst of the Greek government-debt crisis. Varoufakis led negotiations over Greece’s bailout conditions with the European Commission, the International Monetary Fund and the European Central Bank, but failed to agree terms. Varoufakis resigned from government and parliament in August 2015, despite a referendum indicating popular support for his stance. Varoufakis founded MeRA25 in 2018, under whose banner he returned to parliament in 2018.

Varoufakis has authored numerous books on the Financial Crisis, austerity and debt, including The Global Minotaur (2011), And the Weak Suffer What They Must? (2016), Talking to my Daughter about the Economy (2017) and Adults in the Room (2017), as well as primers on modern economics and Game Theory.

Varoufakis holds a PhD in Economics from the University of Essex, has held posts at the University of Cambridge and the University of Sydney among others, and was Professor of Economic Theory at the University of Athens. Varoufakis is a self-described ‘erratic Marxist’.

Watch Episode 32 of Cleaning Up with Greg Jackson, CEO of Octopus Energy, here:

Read Yanis' response to Michael's takeaways from the episode here:

[garethyoung]

Great discussion. Take a look at South Africa and then Russia. The link is good engineering. In my experience.

[buddypalomo]

Great discussion and thanks for having Yanis as a guest - his systems view, macroeconomic, and game theory background is amazing and hopefully we can figure out ways to make our systems sustainable and workable for all people.

[simondowdeswell]

Agree with Yanis. Trying to privatise such massive an hugely important facility like energy or health is just going to impede social benefits with the profit motive. In terms of public services providing innovation please remember that Alan Turing, the father of the modern computer, worked for the Post Office.

[chromgoog]

Yanis is such a clear thinker and such sound concepts….need leaders like him….Thanks for hosting Yanis

[fluflu]

In Poland we have time of day tariffs for electricity. This is my answer to the host’s question: “name one outside of UK”. Poland of all places.

[richiec]

Yanis is correct here; markets are good for some things and not for others. The production and distribution of energy is included precisely in the latter category. Forcing middlemen at every step into the system - all of whom must demand their cut - in order to simulate a market will require future, more technically advanced generations to fully appreciate the absurdity and inefficiency of this phenomenon (like we can look back now at the true absurdity of mesmerism despite even people like Alfred Wallace falling for the nonsense at the time). Assuming we don't blow ourselves up in the meanwhile. Anyway, I find it humorous Michael's unstated implication that bright people cannot be hired by the publicly owned utility (or perhaps intelligence is created by energy markets).

[larryyank]

Excellent discussion gentlemen.
To my mind the foundational premise should be Need/Want based. Want fullfillment, by human nature, quickly outstrips need fulfillment, once the Individuals needs are met. And from there, many seek to 'Corner' Resources over and against others, effectively 'enslaving' them. Also problematic, becomes the passion to Strip resources Brutally, at high speed with intent of 'Eternal' procurrement (a grotesque indulgent fantasy at best). Very quickly gaps develop into Haves/Have Nots of a Class based society, upon which all forms of Exploitation are affirmed.
Wants, Resource allocated, should not be allowed by a society to outstrip the basic needs fullfilment of its citizens or to work against a Life Giving Biosphere. As well, the idea of Endless Possesion/Consumption is a Contortion which mutilates and abuses the "Social Contract" This kind of Stress and Destruction CANNOT be practised if we are to fullfill potential evolution of our species. However, it is my fear in the dark recesses of my own humanity, that we may not be able to maximize an Escape Velocity sufficient to leave our Greed in the rear view mirror.
Regards, Viet vet/Ecologist VFP

[wookoodoo]

Phenomenal interview as always, was looking forward to these two big egos having a discussion and I was not disappointed! As I’ve said before and as you mentioned, video is soooo important to better understand the dynamics, I really could feel you and Yanis having lots of fun while disagreeing but also agreeing on a lot!

I think a one-day workshop with you two (and Greg Jackson) in one room working on an ideal electricity system would be absolutely epic! I would pay to watch that on a live stream!!!

One point that was only touched upon but not explicitly talked about is, where does competition actually happen?
Just ask yourself, what is the difference between SSE, EDF or RWE running a 600MW gas-fired power plant? Maybe one does it with a 35 man (and woman) team. And the other needs 37. So lets say 200k in labor costs difference. This is absolutely nothing compared to the fuel costs.

The competition that is responsible for the great technology advances is actually in the manufacturers of the power generation equipment. It is Siemens Gamesa and Vestas one-upping each other on the biggest rotor and biggest generator for offshore wind generators. It is (was) the fight between Mitsubishi, GE and Siemens on getting 1%-point higher efficiency of their gas-turbines each generation.

As Michael rightly pointed out, there are special skills in developing generation projects, and there are definitely good and bad ways to procure equipment and manage the construction. However, those skills could be outsourced or just properly done by a state-owned power generation Co.
I think at the end the only place where innovation can come from (aside from the equipment manufacturers) is companies like Octopus who then optimize the use of the electricity if that electricity is sometime in scare supply. Arguably though, Greg could just head a department at the National Generation Co which is responsible for demand side optimization hard and software and you might get similar results as what Octopus was doing.

On second thought, seeing how Octpus is pushing heat pumps, and seeing how much of government in the UK (and Germany) don’t understand heat pumps, maybe it is good for Greg to not be a bureaucrat….

Again, the more I think about it, a (in person) meeting between Yanis, Michael and Greg would be just absolutely mind-blowingly epic….

[jreyn]

Very engaging and stimulating discussion. Thank you.

[kennytheclown]

"The state comes into create a market that fails, and then comes into regulate it. That's madness." Yanis.

[andrewcomplainer]

Behind Yanis there is a beautiful nord stage piano <3

[tracyharrison]

Yanis is awesome. Especially when he is being unimpressed!!

[grahamjohn]

Yes, Yanis. Spot on. We don't need all of this "control your thermostat from your phone" crap. UK households' energy prices have just DOUBLED when we've seen a huge increase in millionaire and billionaire wealth. That's the innovative thing that I care about. The current economic system is destroying the world.

[rosselliott]

Go Yanis! Very calm and rational response to a religious non- believer

[mm-tckt]

Imo, Michael thinks an earring on the pig turns it into a unicorn.

[FrancescoMarasco-gpqb]

Best episode in a while, finally a polarised debate, I missed that. Managed to listen to the whole thing despite how irritating I found listening to the nonsense of Varoufakis' pseudo analysis. Proposing both a centralised and a decentralised energy system in the same interview was the best example of doublethink I have witnessed in a while. The spiel on EDF is pure comedy! One sentence after the other putting EDF both as an example of technology innovator and "profiteer" at the expense of other countries' nationalisation programmes... divine.. Can't wait to hear his populist thoughts around EDF's nuclear (centralised) programme. Thanks Michael for this episode!

[lizhang]

Yanis is right. In China electricity is provided by a national owned company and it works quite well. The price is cheap and it functions stably. Internet is provided by national owned companies as well, but you can choose among several. I used to live in the U.S. and internet companies there is terrible. It took forever for ATT or Time Warner to set up my internet.

[CleaningUpPod]

Watch Episode 32 of Cleaning Up with Greg Jackson, CEO of Octopus Energy, here:

Read Yanis' response to Michael's takeaways from the episode here:

[JohnKimble-kz]

Has TOU pricing just come to the UK...it has been a regular part of pricing in the US for decades. Did I misunderstand something at 20:57?

[luisguerra]

If gas sets the price there is no competition. Germany that uses a lot of gas does not have to compete with Spain that uses a lot of renewables and little gas. Prices should be set in each country as average cost plus small margin and import and exports at the maximum price on any county in Europe. This would favor competition.