Nils Ole Hagen
Hagen is freelance critic and regular contributor to Modern Times Review.
Published date: March 5, 2018

By cutting the principles of capitalism to the bone and by using language that is straightforward, Yanis Varoufakis pulls out the essence of modern economy.

Talking to My Daughter About the Economy: A Brief History of Capitalism

Yanis Varoufakis

The Bodley Head


The Greek professor of economics Yaris Varoufakis should be known to Norwegian readers through his part as finance minister (from January to July 2015) and politician under the economical crisis in Greece from 2008 onwards.

His book Talking to My Daughter About the Economy: A Brief History of Capitalism, published for the first time in 2013 and updated in connection with the new release, is written as a long letter to Varoufakis’ teenage daughter Xenia, who has travelled to Australia to study. The writer wants her to get familiarised with real and large correlations in the world in relation to the global world economy’s beginning and development. In addition, the book is just as much about how the global economy is working today, a topic that should concern most people.


Through very few pages Varoufakis manages, by simplifying and using fine storytelling, to distil the essence of what modern economy really is about. He quotes the Greek mathematician Archimedes in the text who allegedly talked about “the law of the lever” by using the Earth as an example: “Give me a place to stand and with a lever I will move the whole world!” This means that with a pole that is long enough, he would be able to move the planet Earth only with one single hand movement. With this, Varoufakis shows that by looking at the way in which the world economy works from a distant perspective one can quite easily do something to change it, assuming one wants to.

«The book is just as much about how the global economy is working today, a topic that should concern most people.»

The writer has consciously removed several terms in his descriptions, and the most evident is perhaps that he avoids the word “capitalism.” The storytelling techniques are also effective in other ways, in which strategy is used in the form of a dialogue. He often introduces a chapter with a personal experience from summertime on one of the Greek islands–the birthplace of the ancient Greek culture. This serves as a basis for his further anecdotes where, among others, Homer’s achievements are mentioned. Varoufakis commutes unforced between literary and practical examples to illuminate relations of the world economy, and these work as bridges that guide the readers over a complicated and abstract theoretical-economical terrain.

Money and Debt

It has been said from as far back as the early nineties that “the great story” is dead, and we can easily say that Varoufakis brings it back. A wide historical tableau of examples is woven together from the history of economy, money and debt. Varoufakis’ great story opens with an anecdote about how the money system of old Mesopotamia emerged around year 600 BCE. Thereafter the writer explains how money and debt have been an inseparable couple throughout history.

Yanis Varoufakis

As a red thread, emphasis is placed on how a working market economy cannot be imagined without its twin, debt, by its side. This is one of the reasons why we can see the development of economy as a hazardous journey; the twins are always standing in an unstable and tense relation to each other. With the example from the cradle of civilisation in the old river cultures, Varoufakis shows what was one of Marx’s most central points, that work truly is the real determinative value in all economy. The value of “goods” stands in an inseparable dependant relation to the necessary labour required to produce them. The logic around this is complicated, but the writer justifies the point of view well.


Everything is connected in a symbiosis: work, money and goods. But power and interdependencies are unevenly distributed, and it is always the ones who produce or buy the values that draw the shortest straws, both during upswings and crises. Some of the “magic”–a word Varoufakis uses several times–lies in the way the finance and money systems work together.

«The twins, market economy and debt, always stand in an unstable and tense relation to each other.»

The recessions that follow the market economy, in the same way upswings follow the good times, are leading capitalism towards a series of devastating crises. The writer shows how this is built into the relation between debt and investments: To be competitive, businesses must regularly secure loans to stimulate new investments. In reality, this money is being printed by banks or simply typed into a screen with some sort of magical manoeuvre performed by the ruler.

«The book is about how the global economy is working today, a topic that should concern most people.»

The loans are realising the construction of new factories and production, but it is creating a collective expectation of the market needs. Over time this will always lead to bobble-like conditions, where businesses, but also finance institutions, are being threatened to fail. The State comes in to save the banks and the biggest corporations for the country not to fall into a deeper crisis. Again like magic, the most resourceful manage, while the ordinary man and woman must pay off debt, and endure unemployment.

The Oil Epidural

Varoufakis’ proposed solutions are rather limited, but a few things are mentioned. One of the things the writer talks about is that democracy should be expanded to also apply to the economy, but he doesn’t go further into details.

The historian Harald Berntsen, belonging to the left side and specialising in labour movement history, has pointed at the period 1945-1980 as a remarkable upswing in the history of capitalism. The crises have otherwise haunted the economy as a solid ghost regularly throughout the centuries. After the war a special revival climate with an inevitable request of goods was created. For decades everything seemed stable and safe. Most Norwegians who are living today have experiences from this particular period. For Norway, the oil revenues have also created a windshield for the big economical crises that have hit Europe in the 21st century.

“The 400 year night [the Danish reign over Norway] brooded over monkeys [Norway],” Ibsen writes in Peer Gynt. In our time it is the oil money being pumped into the Norwegian economy that numbs Norwegians for the economy crisis’ painful realities. This is precisely why Varoufakis’ book should be translated into Norwegian.

Jan Guillou recently mentioned in an interview that in 1968 the world was clear and ready, not only for him, but for everyone. Today it is far more difficult to orientate in it. This is also why enlightening and critical books such as Talking to My Daughter About the Economy should be welcomed with open arms.

Modern Times Review