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It's the TED Radio Hour from NPR. I'm Guy Raz. And on the show today - Democracy on Trial. Ideas about when democracy works and how to improve it, even if it'll never be perfect.
YANIS VAROUFAKIS: It's good to strive for it. You never get there. It's a bit like the horizon.
RAZ: This is Yanis Varoufakis.
VAROUFAKIS: I was an academic all my life, teaching mathematical economics and political economy. I was Minister of Finance in Greece.
RAZ: So should I call you Mr. Minister?
VAROUFAKIS: I insist you call me Yanis.
RAZ: OK, great. Just out of curiosity, has there ever been a functioning democracy in your view that worked well?
VAROUFAKIS: No, there hasn't. But that doesn't mean that democracy is not a powerful weapon against tyranny.
RAZ: A strong democracy, Yanis says, is just much better equipped to handle crisis than, say, a dictatorship is. And a couple of years ago he was at the center of a crisis. It was in Greece. The country was basically bankrupt. And Yanis had to negotiate paying Greece's debts to the European Union.
VAROUFAKIS: People asked me, what was the worst part of the negotiations? Well, the worst part of the negotiations is that there were no negotiations. I was negotiating for the right to negotiate.
RAZ: Yanis, like the Greek people, had very little say in what actually happened to his country, which ultimately was forced to accept a huge austerity plan. And the outcome made a lot of people in Greece and in Europe feel like democracy wasn't exactly living up to its promise.
VAROUFAKIS: Liberal democracy is the child, if you want, of the Magna Carta.
RAZ: Yeah.
VAROUFAKIS: And later on the Federalist Papers. The whole point was to have legitimacy of an oligarchic structure. The idea was to keep the riffraff, to keep the hoi polloi out of power, but to consult with them and to have their representatives speak on their behalf in a Congress, in a parliament in order to create checks and balances. But it was never about empowering them with the right to govern. So the problem is that we haven't had democracy for quite a while, if ever.
RAZ: Yanis argues that in an authentic democracy, the power has to sit with the demos - with the people. But today in most western democracies, he says, power is tied to money. Here's Yanis on the TED stage.
(SOUNDBITE OF TED TALK)
VAROUFAKIS: In the West, we mistakenly believe that capitalism begets inevitably democracy. It doesn't. Allow me to point out an interesting paradox that is threatening our economies as we speak. I call it the twin peaks paradox. One peak is the mountain of debts that is - has been casting a long shadow over the United States, Europe, the whole world. But few people discern its twin, mountain of idle cash belonging to rich savers and the corporations, too terrified to invest it into the productive activities that can generate the incomes from which you can extinguish the mountain of debts.
The result is stagnant wages and consequently low aggregate demand, which in a never-ending cycle reinforces the pessimism of the investors. This is my quarrel with capitalism, its gross wastefulness. The more capitalism succeeds in taking the demos out of democracy, the greater the waste of humanity's wealth.
RAZ: So essentially what you're saying is that the notion of power residing in the people in a democracy is a smokescreen and that a capitalist system ultimately means that power will reside in the hands of corporations?
VAROUFAKIS: Well, you just stated it. And there's nothing - I need to answer this. Isn't it so? Is there anyone who disagrees? The idea of, you know, people power because that's what democracy means. The demos is the people. It is the regime of the people by the people for the people. This is a wonderful, a splendid notion. It is something to aspire to and something to struggle for. But it's not a reality. The reality is there is a huge tension between capitalism and democracy. And this is the point I was making in my TED Talk.
RAZ: So democracy and capitalism are not compatible in your view?
VAROUFAKIS: There is a great deal of incompatibility that is baked into capitalism. Think about it. In political science departments throughout the United States - but everywhere else as well - professors like to compare and contrast two different kinds of voting systems. One is the one-person, one-vote that you have in general elections like the one in November now for the president of the United States.
But there's another voting mechanism called the market. When you go to the supermarket, to a store and you purchase an iPhone or a bottle of fizzy water, you are voting for it. Except that you don't have one vote, you have as many votes as you have money. If you go to a shareholders meeting for any corporation, you'll find that there is voting. Except that it's not one-person, one-vote. So in capitalism the whole point about profit maximization is all about monopoly power. There is a quest for monopoly, which is exactly the opposite of what democracy's all about.
(SOUNDBITE OF TED TALK)
VAROUFAKIS: Have you wondered why politicians are not what they used to be? It's not because their DNA has degenerated.
(LAUGHTER)
VAROUFAKIS: It is rather because one can be in government today and not in power because power has migrated from the political to the economic sphere which is separate. Earlier this year, while I was representing Greece, the newly elected Greek government in the eurogroup as its finance minister, I was told in no uncertain terms that our nation's democratic process - our elections - could not be allowed to interfere with economic policies that were being implemented in Greece. At that moment, I felt that there could be no greater vindication of some recalcitrant friends of mine who kept telling me that democracy would be banned if it ever threatened to change anything.
In our democracies today, this separation of economic from the political sphere, the moment it started happening, it gave rise to an inexorable epic struggle between the two with the economic sphere colonizing the political sphere to such an extent that it is undermining itself causing economic crisis.
RAZ: It seems like when you talk about capitalism undermining itself, I wonder whether the very same market forces that produced the inequality you talk about, you know, could also in theory produce the kind of democracy that you're looking for.
VAROUFAKIS: That has always been my mindset, my way of thinking about history. History, as far as I'm concerned, is what happens when two forces clash - one is technological innovation which constantly destabilizes the existing order, and the second force is the social relations of production and the power relations production. And the result of this clash between the power relations generates history, but that, of course, I didn't invent this historical theory. This is Karl Marx. But think about it. Capitalism burst upon the scene historically in the 18th century in England, so we must never imagine that capitalism is a natural system of doing things. It is just one phase of human development. It will certainly pass.
My great worry is what happens after capitalism? Capitalism is undermining itself magnificently with technologies which it is producing. Now we're going to have a multitude of machines capable of becoming our slaves, but at the same time capable of enslaving us. What we do with this magnificent technology - and don't get me wrong I'm completely gung ho about technology. I think that it is the greatest weapon against misery - but what do we do with this technology? It will depend on politics, and it better be democratic politics that determines our future.
RAZ: What would an ideal democracy look like, one that you had a hand in in creating or one that you at least could influence? What would that democracy be like?
VAROUFAKIS: So imagine a world in which our political rights and our economic rights were in sync. They're not in sync at the moment. Imagine that you worked in a corporation where the only people who had the right to be shareholders of a corporation is those who worked in it. But, you know, the kind of model that I'm describing to you is not just buying this kite. It exists. I know companies in the United States that operate on those lines.
RAZ: Yeah. Profit sharing. Yeah, right.
VAROUFAKIS: Profit sharing - this is a market system what I am describing, by the way, except that the rules are different. The whole point about democracy is that we have a capacity to control our lives on the basis of one person, one vote. If corporate power can shape our lives, can destroy our lives or in the case of a very small minority it can make us supremely rich, but that corporate power is not subject to democratic checks and balances then effectively what I am proposing a surge of democracy. Either we are going to democratize our societies and civilize our civilization or our societies are going to come tumbling down.
RAZ: What are you optimistic about when it comes to democracy? Anything?
VAROUFAKIS: I'm optimistic that the idea of democracy is consistent with the better side of humans and that it will always resonate with them. Democracy is the kind of regime that people who don't think they have all the answers favor. Those who believe that they know best and they know everything, they obviously don't like the idea of democracy because it's a constraint. But those of us who believe that none of us have the answers and the only way of finding the answers to the interesting questions about social life is to get together, we appreciate the possibility that democracy gives us.
RAZ: Yanis Varoufakis is an economist and the former Greek finance minister. You can see his entire talk at ted.com.
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