 Our final keynote speaker needs no introduction to this audience. Professor Dr. Yanis Varoufakis was the Greek Minister of Finance in 2015. He's a leading participant in current debates on the global and European financial crisis. He is an author and professor. He's the author of the Global Minotaur. Several academic articles on game theory and economics. He's a professor of economic theory at the University of Athens and holds visiting professorships at the universities of Texas and Stockholm. Please, please give a very warm welcome to our final keynote speaker of the day, Mr. Minister, Yanis Varoufakis. Let me put my time around so that I don't overdo it. Well, ladies and gentlemen, organizers, thank you so much for the warm welcome. It's wonderful to be here because basic income is a necessity. I'm going to actually argue that this is not a question of whether we like it or not. It will be a major part of any attempt to civilize capitalism, as capitalism is going through a spasm caused by its own generation of technologies that undermine itself. To put it simply, in the 20th century, we had the stabilization and civilization of capitalism through the rise of social democracy. The new deal in the United States, the social democratic social market developments in Europe. Unfortunately, this social democratic new deal paradigm is finished, and it cannot be revived. I shall make some comments on this. But first, let us remind ourselves of what the social democratic new deal tradition is all about. It's about two things. Firstly, redistribution of income within waged labor, a kind of insurance for the working class. The working class insuring the working class. Take, for instance, the National Insurance Contribution Scheme in Britain after the Second World War. Unemployment insurance in the United States. Working waged laborers effectively providing insurance payments to those out of a job. Same with health provision, pensions, those working today providing for the pensions of those who have stopped working. So, insurance and redistribution within the working class, to put it very bluntly. The second dimension, of course, is redistribution between capital and labor, between the rents and labor. This takes the form of minimum wages that are negotiated by the state. It's also a process of collective bargaining, usually triangular involving trade unions, employers, and the state. And, of course, taxation transfers through the taxation system. Now, this social democratic tradition, I made a very big statement a moment ago, didn't I, is dead in the water. And it is dead in the water or dying in the water for two reasons. For reasons that have to do with two earthquakes that have hit our societies on both sides of the Atlantic. One is the process of financialization, which created a huge wedge between capital and labor. It created a new form of capital, financialized capital, that essentially depleted the energy of both labor and of industrial capital. And this inexorable financialization drive had its comeuppance in 2008. Ever since, you remember, after 1991, socialism died with the collapse of the Soviet Union. And then, after 2008, capitalism died. We have a new regime now, I call it bankruptocracy. It's ruled by the bankrupt banks. The more bankrupt banks, the greater its capacity to mobilize and usurp economic rents and economic value from the rest of society, including industrial capital and labor. The problem with bankruptocracy, the fact that for six years now, we have a cynical, massive transfer of wealth, of income, of value, from production towards the financialized financial sector that remains insolvent in reality, despite this cynical transfer. The problem with this is that it has created two things. Firstly, deflationary forces, ask anyone working in the central bank of Switzerland today, or in the Buddhist bank, or in the European central bank, or the bank of Japan, or the bank of England, or the Fed. They can't sleep at night because of the fact that about half of the global economy now is languishing in negative interest rate territory. And this is a reflection of the collapse of the socio-democratic New Deal bargain contract, social contract, if you want, of the 20th century. And that collapse happened in 2008. The world after 2008 cannot be understood anymore in terms that made sense before 2008, just like the world after 1929 could not be made sense of in terms that make sense in the gold exchange standard era prior to 1929. The second reason, so with the deflationary process, we have now the first plank of the socio-democratic tradition is that in the water because the working class can no longer insure itself. It's stagnant wages, the fact that youngsters are caught up in a dual labor market and they find it very difficult. I'm not talking about Switzerland, of course, now, but I'm talking about the rest of the developed world. Switzerland is successful only because it's only one of them, and nobody else can be like Switzerland. But that's another discussion, we can have it later if you want. The fact remains that the first plank, the insurance amongst wage laborers, is simply not possible because wages have stagnated to such an extent that it is impossible for the working class to insure itself. And the second plank, the redistribution between capital and labor, is becoming increasingly impossible for two reasons. First, the politics that has become quite toxic, just look at what's happening in the negotiations between Greece and the Troika within the European Union at the moment. In the United States where you've got a congress vetoing the White House and a White House vetoing the Congress, this redistribution between capital and labor that was part and parcel of the New Deal and Social Democracy required political governance. Europe and the United States are ungovernable, as we speak, utterly completely ungovernable. And so that's the first earthquake. The second earthquake has to do, this is nothing new, I'm sure it has been discussed already today, I caught glimpses of this discussion, let me put it very bluntly in science fiction terms, the rise of the machines. Artificial intelligence will consume very, very soon, it's already doing it. All repetitive routine work or algorithmic work is going to be replaced, especially the moment machines pass the Turing test and it is impossible for you and I to understand when we speak to somebody on the phone whether we're speaking to a machine or to a human person, once we have that we're going to have a massive displacement effect which for the first time in human history, in capitalist history, is going to overwhelm the creation effect, more job destruction than job creation. Because remember that the bankruptocracy that I have referred to came at the tail end of a 30-year period of replacement of manufacturing jobs in the developing world with low wage repetitive work. Employment rates for instance in Britain, since the previous speaker comes from Britain, employment rates are quite high in Britain and they're quite high in the United States, but the bulk of those jobs that were created to replace the jobs that were lost after 2008, after 1975 and 1983 are low wage routine jobs, the ones that will be called immediately the moment artificial intelligence overcomes the Turing test and we are facing a major issue there. And to link it with what I was saying before, this displacement is going to reinforce the deflationary processes that keep our central bankers awake at night because it will eliminate a significant measure of aggregate demand, it will create an even greater level of income inequality and primarily disparity between savings and investment. And this disparity between savings and investment will force the price of money, the rate of interest, even below the current low, low levels. So this is why I'm saying that basic income is going to be an essential part, a necessary part of any attempt to stabilize society and to civilize it, I don't need to define basic income. Let me just say that the struggle we are going to have to carry hearts and minds will be an ethical one and an ethical one that doesn't simply spring out of opposition from the haves but also from opposition from the have nots, from social democrats, from leftists, from those whose own sense of dignity responds against naturally the idea of something for nothing. This is why it's important to couch basic income as what it is. It is the idea that, and allow me to narrate it in broad terms, we are going to overturn the current narrative on life under capitalism. The current narrative, the dominant paradigm, is what? That we have private production of wealth which is then appropriated by the state for social purposes. In reality, our wealth production is collective, it is social and it is only then privately appropriated. Unless we make the shift in the narrative, we're not going to be able to succeed to convince even those who will benefit from basic income that it is worthwhile striking for it. Take an iPhone and pick it, open it, what do you find in it? You find a variety of technologies. Each one of them was created by some government grant. None of them was produced by Apple, none of them was produced by Google, none of them were produced, was produced by Facebook. They were all produced by some government grant. This is what I'm saying about, this is why I'm referring to the collective production of wealth which is then privately appropriated. If you start thinking of it that way, then it's very easy to start thinking of basic income as a dividend. A dividend that goes to the collective that was responsible for collectively producing the wealth and the gadgets and the products and the markets, because this false separation, illusory separation between the market and the state needs to be dissolved. There would have been no markets if there were no states, there would have been no capitalism if there was not a state, there would be no Apple, no Google if there was no state. And similarly, there would be no state if there were no private entrepreneurs, there would be no state if there were no private firms. We need to dissolve this false division. And we have to attack the narrative head on. Basic income is about giving money to the undeserving. It is about giving money to the rich. It is about giving money to the surfers, the beach bombs, the ones that we dislike, the ones that we would not like to be our children. And if they were our children, we would be scolding them. So, we must not sidetrack, be sidetracked by simply talking about good people getting money that they deserve. We should talk about undeserving people that get money courtesy of the fact that they are members of a society that is collectively producing wealth. And then on top of this, we need to add the narrative of stabilisation. Think about it. Think about it. In Europe today, in the United States today, basic income would really help central bankers go to sleep at night. It will be counter-deflationary. It will be a unique defence against the slow-burning recessionary impact of 2008. Now, there are decent arguments against basic income that we must not avoid. Somebody may say to you, yes, but the rich do not need a basic income. Well, sure. But they don't need to have the first 10,000 Swiss francs that they make being tax-exempt either. And nobody is worried about that. Surely, we hear being said, it's better to target the money that society has on those who are deserving. Well, yes, but you have to think of the other side of the story, too. To separate the deserving from the undeserving, you need a bureaucracy whose purpose is to do that. That bureaucracy tends to replicate itself. Bureaucrats love to reproduce themselves and to reproduce their power over society and to do so by creating a stigma attached to those whom they consider to be undeserving. It is very similar to psychiatry. The moment you introduce psychiatry, remember Michel Foucault, and the story about the madhouse, you create a narrative of reason on unreason. You create a power structure. The person who has the certificate to be the psychiatrist decides who is sane and who has the right to be a free citizen. The other argument, which I think also one that needs to be confronted, is that people should have a right to a job, not a right to basic income, and that we should be promoting work, not sloth. Well, I think that there are two points here that need to be made. Well, firstly, nothing stops us as a society from censuring those who are idle. Why should we have them starve? I know that if my kids were idle, I would be censuring them, but I would not be throwing them out of the house. Secondly, and more importantly, the right to turn down a job is essential for a well-functioning labor market and for a civilized society. And to have the right, a genuine right to turn down a job, you must have an alternative, an outside option, because desperate people will accept to do desperate things. I had somebody here today earlier talking about a cleaner whose job is not respected, whose name is not known. I have a story to tell you about that. I've worked in a number of universities, and I remember in the old days, we had cleaners that worked for the university, and they were like my boss in the department. They would come into my office and they would know about my family, they would know about my wife, they would know about me, they would tell me off, they would say what's it's eight o'clock at night, go do your wife, what are you doing? And they had a sense of belonging to an institution and being institutionally important. And then what happened? We subcontracted all the labor to firms that hire by night people that are faceless, who are turned over all the time, who are paid less, who are not institutionally connected to the place, whether this is the university, the national gallery in London, and so on and so forth. But why did this process spin out of control? It did because the cleaners had no outside option, no right to say no to the subcontracted contract. Now, just so that we do not face only the negative arguments, let me just, before I conclude and we open this up to a discussion, let me mention what I think are essential aspects from a social perspective, not just from a macroeconomic perspective. It is important to state the macroeconomic case for basic income, for stabilizing the financial markets, investment, overall aggregate demand. But there are others at the level of the micro and the sociological. Social democracy put forward the idea of a social safety net, remember that? Well, we need to counter this. Nets are very good for catching you when you're falling, but when you're caught in them, it's sometimes very difficult to get out of them. It's sometimes very easy to be trapped. Think of basic income as a foundation, not a net. A floor on which to stand solidly and to be able to reach for the sky. Exploitation. Libertarian economists, political economists, political theorists, politicians who claim that liberty is their driving force, define liberty in a negative sense, in the sense of the absence of constraints, of voluntarism. If you've said yes to some contract, that contract must by definition be a free contract, therefore it must be some act of free will. Well, it's not. The mafia loves to give us options that we can't refuse, to make us offers we can't refuse. The fact that we say yes to them doesn't mean that they were chosen freely. The fact that the Greek government accepted the terms last summer of the Troika does not mean that it was a voluntary transaction. To have a free contract, to have a contract that is signed by both sides representing and exuding the freedom of both sides, each side must have a capacity to say no. I said that before, I'm saying this once more, in the sense freedom in action requires a basic income. Finally, again, beyond the macroeconomic, a basic income will allow for creative work to replace the kind of routine algorithmic work which is anyway being displaced by artificial intelligence. So if we want to ameliorate for the ill effects of capitalism undermining itself through producing gadgets that itself cannot survive, then we need to create a system whereby society takes a claim to the returns to aggregate capital and this claim becomes an income stream that goes to everyone. I don't see why my children and your children have a right to a trust fund. Why Paris Hilton has a right to a trust fund when nobody else does or very few people do. Think of basic income as a trust fund for all our children to be financed by dividends from our aggregate capital which was after all created collectively. Thank you. So we're going to take a few questions for Professor Varoufakis. So we've got one there, I see one up here. Yep. You've mentioned three reasons, the technology, the banks and also the politics. Do you think is it an unfortunate coincidence or is it related? Look, I always take a holistic approach, an organic approach. Of course they're related. The reason why we've had the financialization drive of the 1980s, 90s and 2000s which led us to where we are today has a lot to do with technological change and this technological change now with 3D printers and machines that can replace human intelligence at the level of the service sector is going to be in a vicious feedback effect with the effects of the combustion of financial capital. So the answer is they are utterly interwoven, interconnected and interrelated. So I have one right here. Thank you. Yes, thank you very much for your talk. I appreciate it. I would like to be a little bit more radical and that is my question. You say that a reason for the existence of a basic income and a conditional basic income is the fact that basic income in any case in a context of capitalistic valorization of today has to do comes from a collective label that is organized by state and all the investment in R&D and technologies come from the relationship between public property and private property, we can say. My radicality says that I think that the new technological transformation changes structurally the way of valorization and producing of wealth. That means in a very slogan way we can say that life itself is put to labor and is put to value. Can you repeat the last sentence? The life, our life is put to labor and to value. There is an exploitation of life, a sort of substantion of life that goes beyond the classical substantion between real and formal substantion in Marxian terms. It is a new way for labor organization and labor valorization. So I think that maybe the cultural shift that we need to do is to consider basic income as a sort of remuneration of productive life, not only part of social security and so on. So I think that there is something that goes beyond the fact that there is a collective work by something more. I think that it is very useful to stress about these topics just to give confidence to the idea, to the cultural idea of basic income. But I don't see why we disagree. I don't see why we disagree. So I don't disagree. I would say that it is better to talk in terms of basic income as a sort of remuneration. It's complementary to wage. The way I prefer to say it is that it gives us an opportunity to reconsider the notion that wealth is privately produced and collectively appropriated when the reality is exactly the opposite. And now with the Internet, for instance, take Google, take Huffington Post, take all the value creation by users, the complete breakdown of the distinction between consumer and worker. So all these corporations have huge input from their own customers. Their customers are producing value and then they are being turned into fodder, which has been sold to advertisers for value to return, exchange value, to be returned directly to these corporations and exclusively to those corporations, especially given that these corporations pay hardly any tax. So basic income is a very simple way of ensuring that those who produce the value get a larger share of it. So I agree with you. Let's take one right there. Yep. Yes, thank you very much. I have a question that has kind of been bothering me all day concerning what you call the second earthquake or the rise of the machines. What about those jobs that are not being displaced by technological development, but kind of evolving parallel to it? Like let's say digital sweatshops on the Philippines or a click working. So I feel like there's some kind of myth that digital technological innovation is going to replace everything, but isn't there also a job sector, a new job sector evolving where humans are actually doing rather machining work to train algorithms, to click, to do Facebook censorship that actually requires human work? You're quite right. But every technological innovation displaces jobs and create jobs. What we're facing now is the first time in the first moment in history where the ones that are about to be displaced are far more numerous to the ones that which are being created. And the ones who are being created are much, much low level jobs and more badly remunerated than the ones that are being destroyed. So yes, you're right. Okay, one right here and then one right there. Hi, good afternoon, Yanis. Hi, Andrew. Hi. Good to see you. Good to see you. Having seen each other for ages. The question I've got, Yanis, is tangential to universal basic income, but on your experience in government, what do you think the role of the state should be in the transition to the age of automation and the digital economy and how the state tries to reorientate the skills agenda? At present, we have in many countries in Europe, apprenticeship and skills agenda, which actually embed the structural weaknesses. So how do you think the state can perform a role in preparing the labour force for the age of automation? That's a great question. I don't think I have an answer to this, Andrew. We certainly need the state to guide the process of not so much human capital formation, but the formation of the body of difficult knowledge which is necessary. You see, the problem is that we have an educational system and an apprenticeship system that creates human capital of a low-brow variety, both in universities and in apprenticeships. We are dumping down our educational system. We are creating incentives for students to study that which they are not good at and which is going to, by the time they graduate, it will be relevant anyway. For instance, by ensuring that they leave universities with a great amount of debt, we are pushing them at the age of 18, 19 to make choices as to what they study on the basis of their own conception of what is lucrative, which firstly doesn't prove to be lucrative, and secondly, which forces them to do things that they're not good at and therefore depletes the overall effect of education for society. Regarding apprenticeships, I think that, look, in Britain today, even a fantastic apprenticeship system is not going to work, because the level of investment is so low. So what jobs will these apprentices get? To say that, you know, a supply side story, that if you create a good apprentice, good industry is going to move to Britain, is a bit pie in the sky material. The level of investment is very low and it's not just in Britain. I am appalled by the statistic of recent that in Germany, the most successful European state economy, we have the highest level of savings in the history of Germany and the lowest level of investment since 1945. So unless you have together an aggregate investment policy and educational settings and training settings that are in sync with investment, you're going to fail as a society. I saw a last question, I saw a hand right there. Thank you very much, Janis, for a really interesting talk. I just, I want to sort of push you a little bit further maybe and just get some more reflection because I completely agree that being able to say no to a job is a requirement. But I also think the next step needs to be, there needs to be some kind of system that helps people figure out what they want to walk towards, right? What is it you want to self-actualize at? And I was wondering, do you have any ideas if we introduce a basic income? What other systems does the state should the state introduce in order to help people figure out in that process? I don't agree with you on this, you know. I mean, I'm not, don't confuse me for a statist. I don't want the state to tell me what I should be aspiring to. I don't want the state to tell my daughter what she should become when she grows up. Indeed, I have very little time for all these professional orientation schemes, whether they're state or private, you know, especially when they go, they take 13-year-olds at school and they give them these silly surveys and they tell them, you will become an engineer, you will be a hairdresser and you're going to be a musician. This is all, you know, I have a very deep belief in the capacity of human minds to work things out for themselves if they don't have to live in terror. That is the main thing. And with that, let's please give Yanis a warm thank you. Thank you.