 And it seems that the lesson was learned from the 1930s by mainstream politicians or by those who had to muddle through the crisis in so far as they expanded, like fiscally expanded. But would you agree with the hypothesis that it was the lack of social resistance from below that led to the global austerity turn of 2010, like with the memorandums of understanding in Greece or Southern Europe? And Obama's turn towards austerity at the federal level while there was already hidden austerity taking place at the state level. I have a different reading of that. One could argue that what neoliberalism succeeded doing in the United States and England was austerity before the crisis. It began in the 1980s. It reduced the wages of workers, brought them, slowed them down in their growth, and eventually flattened them out. So that meant that productivity is still rising. You can easily measure that. So in Marx's terms, it made the rate of surplus value rise very sharply. You can see this in the profit-wage ratio in these countries. But that didn't happen to the same degree in Europe because the welfare state was not unraveled yet. It was frayed. Certainly many nations backed off from some parts of the welfare state. The crisis gave the opportunity for European and international capital to attack and finish off the job on labor and bring to labor the same austerity that took 30 years or 25, 30 years in the US and England bring to Greece and by implication to Portugal and France and Italy that necessity of lowering real wages. So I think the austerity argument is from the point of view of the capitalist system the correct argument, the logical extension of the system's own needs and logic. That doesn't mean we have to accept it, but it's a mistake to think because they don't understand that Schoble doesn't understand that austerity is going to make people unhappy and miserable and destroy it. He understands it perfectly. That's his job to carry it out. On the other side, we say that the opposite, the correct thing is a stimulus. But that notion of a stimulus implies that it has no negative consequences. And part of what I show in the book is that insofar as a stimulus has a negative impact on profitability, you're going to get the reaction from capital itself. You won't get growth if they don't get profits from it. And one thing that I find interesting is that it's especially Keynesians that are saying, look, austerity isn't working. The public debt of the Greek state is worse now even though you've shrunk the economy by 25%. So obviously we need stimulus to prevent the situation, not realizing that the goal, like actually implying that they would be the better people to run the state. Like it is a very status top-down perspective, I would say, whereas the actual goal of privatizations, for instance, opening up aspects of the economy that weren't, like year-to-four weren't open for capital, are now opened and it actually does that pressurizing on the working classes in Southern Europe. See, I would argue that here, if you take the key thing, that if you're going to keep capitalism, which both sides are arguing now, the dominant argument both sides is we're staying with the system, then you have to ask, is there a way to thread through these difficult path? Stimulus in the sense of providing cushion and jobs for workers and all of that could be a means of reviving what is the real problem of competitiveness, of profitability for capital, problem for capital, not for people, but for capital. So it's a path, it's a path to certainly follow even in the United States in the 1930s. But then you have to have a means of raising the productivity of labor. You have to do something about the people who are displaced now, and they may be permanently displaced by industry that doesn't need them anymore, as happened in Poland and Eastern Europe in many cases. So it's a difficult path. It's a path that may well be and could be much less destructive on the existing populations. And so I'm not opposed to the idea of stimulus. I'm just opposed to the idea of thinking that a stimulus alone is the problem. The problem from the point of view of capital is they need to bring those wages or unit labor costs down. And there are ways to do that if you accept that as your goal or as your directive. If on the other end we're talking about leaving capitalism or modifying it, then there's another set of possibilities, which are politically of course much more difficult, given that Europe is united against even the stimulus part, but they're possible. What I tried to say yesterday is that if we're going to ask about these possibilities, we're going to have to understand how capitalism works concretely. You cannot just deal in the realm of concepts. It's not going to help you because you need to answer questions like that. What's going to happen to employment? What's going to happen to growth? What's going to happen to productivity if you intervene? And these are the questions that at least economists must be able to answer in a systematic way. What I find interesting is that if you look at the various, like the neoclassical tradition, the institutionalist political economy tradition and the Marxist tradition, that they seem to be, like the institutionalists seem to be closer to the neoclassical tradition with regard to the premises that they have with like the theoretical foundations, just seeing exceptions to it, and very opposed to Marxism as a different, generally different approach to political economy. But when it comes to politics, it seems that the Keynesian politics are much closer or are much more opposed to neoclassical policy proposals and are much closer to Marxism, especially if you think of Yanis Varoufakis, for instance, who calls himself an erratic Marxist, he said, at the beginning of the crisis, well, at the moment there is no Marxist economic policy to turn things around in Greece or to alleviate the humanitarian catastrophe, but there's only Keynesian solutions. Would you agree with that statement? No, I don't. I know Yanis well. And I think that when he said he was an erratic Marxist, he's really describing the Marxist tradition itself, right? Which has been fractured and very erratic, focused, fixated on individual problems, transformation problem, everybody's written something about the transformation problem, everybody's got about the theory of value, but how many Marxists have written about the theory of exchange rates, which is a central issue now, or about the theory of productivity, or the theory of interest rates, or the theory of capital flows, not just the description, but the theoretical foundations of that. They're quite few, and often they focus on one thing. So he's right to be an erratic Marxist because there isn't anything in the Marxist tradition would provide a systematic framework. That's one of the things that motivated me all along was to say that we cannot just ad hoc invent for every problem a solution without recognizing that that may contradict something else. We have to have a framework that is systematic, and this is where the neoclassicals are ahead of everyone else. Well, however they do it, they have a point of departure, a fictitious one, but one where they begin from and measure their outcomes and their departures from. Keynesians don't have that for the level of this kind of detail. They have the idea of effective demand, but when you come to the microeconomics and the theory of prices and all that, they don't have anything systematic. Post-Keynesians have something systematic, which is monopoly all the way through, but then in my opinion, it's tied exactly to the neoclassical story by inversion. They say competition, we say monopoly, and I think that's a trap. So again, part of what I try to do is show that there is a way to explain the phenomena that Post-Keynesians talk about. So when someone like Varoufakis says, well, he's an erratic Marxist, he's, I think, making a true statement about where the Marxist tradition is, which is that it had devolved into a series of partial inquiries and partial answers, which actually you can't add together in any systematic way. And I think that there is a virtue to having a framework that is grounded in actually what Smith, Ricardo, and Marx were arguing about and talking about and can encompass Keynes and Kaletsky in a systematic way without there being any sort of new stages of capitalism or departures on the foundations. And so that's what I tried to do. And it took a long time because I had to do the empirical work also. I had to do not only the theory, but the empirical work. But if it's true, then we have answers to the kinds of questions we're talking about. For instance, what can you do in Greece? You can certainly do something in Greece. You can do a lot in Greece. Within capitalism, you can't just do anything. And so that's where the understanding of how capitalism operates comes into direct play. We have to know the limits, and on the other hand, the flexibility of the system. It's not infinitely flexible, but it's not a rigid system. We have to know how the limits begin to assert themselves when we approach them and be prepared for that. And I mean, isn't it also, do you think it would be something that the Marxist oriented left should strive for to develop policy proposals because in the end, so much depends on politics itself. Like that depends on, for instance, with Greece, it was a government was elected from the left that said we can stay within the Eurozone, but at the same time break with austerity. And those two demands were politically incompatible because of the makeup of the European Union and the relationships of forces within the European Union. So it was something that had to be learned. Like there was no way as Lapavitzas would have wanted that there was a lexit, like a grexit from the left because the Greek population was not prepared for like a sudden devaluation of the drachma and then like a deterioration of the humanitarian crisis because of medication would have been more expensive, fruit would have been more expensive to be imported. So it seems that it's difficult from a Marxist perspective to even try and find solutions to some of those questions. I would say it's difficult in part because we don't have much of a systematic understanding of this concrete phenomena and these concrete reactions. What happens when you have a devaluation? We draw on some empirical stuff, some practical stuff, some Keynesian stuff, some neoclassical stuff and we come up with an understanding, in my opinion, that's not an adequate way to proceed. Maybe you have no choice at the moment but it's not an adequate way to proceed. The other side is that if you do have a framework then you can prepare for the actual outcomes. If the framework is adequate and is able to understand what you're going to get then if you want to venture that path you have a better preparation and also better possibilities of the twists and turns in that path. I understand that politics can often be decisive in these things. You have to be able to do what you want to do but we also know that many times when the left has had an opportunity to have an influence on practical things it led to problems that the left itself didn't understand. One of the points I make in my book, for instance, the original practical left was the Keynesian left because they came in saying, look, we have the Great Depression, capitalism has squandered the opportunity to do something about it because it doesn't even understand the theoretical issue involved and Keynes says, let me show you how it can be addressed. And little by little governments pick up on the idea that the state becomes the regulator in the last instance of capitalism on the banking system or employment but the key proposition of Keynesian economics which is that employment is elastic and unemployment is elastic and I can make it disappear by just pumping up the system without any consequences until I reach full employment then maybe I have inflation. That was the Phillips curve. That turned out to be false. It turned out that the Phillips curve didn't exist. It fell apart within five or seven years of its practical application but the question was still there. What happens when you pump up a system? And I tried and show in the book that what happened was what you would have expected and could have expected if you had an understanding of the impact of effective demand on profitability. And the point is a simple one. If I pump up the system and reduce unemployment then as Mark's long ago pointed out in the discussion of the Reserve Army of Labor if you reduce unemployment you're going to raise wages relative to whatever their trend is relative to productivity. So you're going to raise the rate of surplus value. Other things being equal it lowers the profit rate. So it puts a downward pressure on the profit rate and that is the limit because with the profit rate if the profit rate begins to go down then growth slows down and the unemployment comes back up. Well that's exactly the story of the Reserve. We've had it all along. We just never use it because we do these things at Hock. And so we put these things together then a picture emerges that helps explain why Keynesian theory was knocked off the pedestal also by its failure to explain inflation coming back and unemployment coming back at the same time. But that's something that can be explained. If it can be explained then hopefully we can at least deal with the options as they appear and accept them rather than being taken by surprise. And also although from a Mark's perspective one could say it showed the limits of Keynesianism that there was a dialectic or a dynamic within Keynesianism that got it into a situation where it either had to move forward into a direction of invoking the question of property, of private property and private capital accumulation or in the neoliberal direction of recreating competitiveness and profitability by hampering down on trade unions and that's right. And I think Keynesians never really accepted Keynesianism's own ambivalence. Keynes's clearly pro-capitalism is no doubt about that and he believed, at least said he believed that if his policies were put into place capitalism would be like what was taught in the textbooks and ideal social institution that would provide justice and equality and democracy and full employment. Well, whatever I did about the others surely did not provide full employment and that is a difficulty that Marxists and the left in general, because I don't see my book as a Marxist book though. Anybody reading can recognize the influence of Marx but also of Keynes. Also Ricardo in the theory of relative prices, Smith on exchange rates. I tried to put together a coherent framework but anyone on the left or coming from anti-neoclassical economics would have to address the same questions. How much can you go within this system? What are its responses and limits? And that forces you to also think about if you don't accept those limits how do you go outside the system? Because if you think the system is infinitely flexible and can be adapted then you don't have to pose that other question at all. And that's one of the things that came up in my presentation yesterday. Most of the questions were not about what I was saying. They were about the implication. How do you go beyond the system? And do you think, I mean your book is called Capitalism and historically the antagonist to capitalism has always been socialism. Now in the US you have a regenerated interest in socialism especially from the young generation partly because it's been more significantly affected by the crisis I would say compared to the generation crisis here in Europe because of austerity and the increase in tuition fees and like the over-qualification of young workers in the labor market, et cetera. And the message resonated free healthcare, free public education and so the $15 minimum wage. But the concept of socialism of course varies like many of them understand it in similar terms as Bernie Sanders understands it more like a Scandinavian welfare state which itself has come in trouble under neoliberalism. But have you noticed a regenerated interest in Marxist and critical political economy through the Sanders phenomenon with young students? I haven't noticed it through the Sanders phenomenon to be honest. I've noticed an interest in the critique of capitalism but my graduate students are a bit older, my students are older because they're mostly graduate students but I have noticed over the last 10 years alongside Sanders so to speak because he's responding, the tremendous interest in inequality, tremendous interest in unemployment, in stagnation and an interest in having a framework that explains all of these things in a systematic way rather than a series of externally imposed outcomes due to this or that. But I have to say that my point of view in even in my own department which is a purely heterodox department is a minority, definitely a minority. Most of my colleagues adopt a different set of views ranging all the way from DSGE models that take a single individual with an infinite lifespan and optimizing utility under some conditions of imperfection or non-linearity and that can explain, it's been used to even explain patterns in Europe that way to people who focus on game theory as another way of understanding capitalism or on stochastic processes as another way. Econometrics is a favorite tool so we are a proper economic department that way. We encompass the whole world of heterodox tools and approaches. So the point of view, my argument is definitely a minority but I have noticed that students are more open to seeing to the idea that you should have a unified framework. Now the difficulty is they have to go on the job market, they have to present themselves as something other than what they are usually and that means they have to emphasize technical skills, empirical studies, that kind of thing but definitely they are asking the question. Whether that lasts, I don't know. I mean, to be honest, political tides change very quickly and it could happen that they'll shift again in the other way, I hope not, but it's possible. So you have provided, you've been working on this book for almost 20 years? I worked on this draft for 15 years and the draft before, which was essentially began with a history of Marxian economics, beginning with Marx and his unfinished work and his struggles but then had to go also to deal with Ricardo because you can't talk about Marx, Dodd-Smith and Ricardo and then moving onward to Marxism after Marx, which is Hilfening, Luxembourg, Kautzky-Bernstein, as a project, a group of us in order to clarify our own thinking, sat down and did a book, which is also unpublished, on the economic theory of the left in the United States, the Socialist Party, Socialist Workers Party, the Communist Party, Revolutionary Communist Party, Progressive Labor. We wanted to see if we could identify what was their implicit economic theory. It was very interesting because their implicit economic theory would be, I would call it Kaletsky in monthly review schools, another one had monopoly, concentration, centralization, capital, power relations, but the economic foundations were weak. If they did them, they mostly adaptations of Keynesian arguments. And that already, from my mind, this was done 25 years ago, I'd say, was to try and clarify our own thinking and force us to understand the relationship between theory and politics and the practical need in political platforms for having an understanding of what would happen if you managed to get a policy that you like and play or government or whatever. So it comes back to your earlier thing. Do we need policy proposals? Yes, of course we do. If we're going to get into that discussion, we can't just say capitalism is bad, bad, bad and run away, right? So we have to be able to do that. Then on what basis do we do it? Max was a policy person. If you think about the conditions of labor and the working class and the first international are focused on changing social and economic policies about employment. And so he was very practical, understood very concretely how that process worked and devoted a good portion of his life to understanding how theory has to be related to the concrete struggles. And I think that's something that has been a good thing of the Marxist tradition all along, but it's been fractured for political and historical reasons and therefore not really connected. And often in opposition to each other more than to anyone else. So and now that you've written this, you're so far Opus Magnum, I would say you probably agree. I don't have any more left in me that way. What's your next project? Are you going to return to the two manuscripts that you described about the Socialist platform or the Marxological one? They are part of my historical development, but what interests me is a different project. Two different projects actually. The project that binds everything together for me is to have a way to change the way the profession is presented and represented in academia because from this training comes all the ministers and the government and all the practical people as well as a politically active people get some kind of training about economic should be part of that training. So how do we change that? And unfortunately, I don't have a clear answer to that. Obviously we would spread the word. There are groups of people who are interested in these things. The good thing about the modern era is that people communicate across the whole world. And so groups bring together to study and to discuss and all of that. And I want to be part of that. And I want the book as much as possible part of that.