 Good evening everyone and welcome and can I first of all of ask you to give a very warm round of applause for our musician tonight Jamey, Le Mercier. I would like to welcome all of you to Sowe'us, particularly those of you who have travelled a long way to be here and a very special welcome to Professor Costa Lapavitos' friends and colleagues and a thank you also to those from other institutions who have joined us. Y soas yn awgwril is very, very special. It's a cause for celebration and an intellectual event for the whole soas community. This is the second of this year's inaugural lecture series. Professor Makota Ito will introduce Professor Lapavitas tonight. Dr Ito is Emeritus Professor of the University of Tokyo. He is one of the leading political economists in the world, and he has taught widely at many universities, including the new school for social research at New York University, Tamasat University in Bangkok, Cambridge University, London University, York University in Canada at the University of Sydney, and he has written extensively. Dr Ito has worked with Dr Lapavitas for 25 years and invited him to join the University of Tokyo as an associate professor for a year in 1993. This association led to the co-authored book Political Economy of Money and Finance. Professor Terence Byers will deliver the vote of thanks. Terence Byers is Emeritus Professor of Political Economy at the University of London. He joined SOAS as a research fellow in economics in 1962 for the Department of Economic and Political Studies which was founded that year. During his long tenure at SOAS, he was the first head of the new economics department which was established in 1990. Professor Byers is best known for his work on agrarian political economy and has written extensively on the comparative political economy of historical agrarian change in a variety of countries. His last book, Capitalism from Above and Capitalism from Below, is a comparison of capitalist agrarian transition in Prussia and the United States. One final point in terms of introduction. Many of you will tweet during the lecture. I encourage you to do this, but please make sure that your phones are in silent mode. I'm very grateful to Professor Ito and also to Professor Byers for being part of this evening's event. Please also join us for the drinks reception in the area just outside the lecture theatre at the conclusion of the lecture. To introduce Professor Lapavitas, I will now pass over to Professor Ito. Good evening, ladies and gentlemen. It is my great honour and pleasure to celebrate and to introduce inaugural lectures by newly promoted Professor Kosta Lapavitas here at SOAS. I still remember very well when he first visited me a quarter century ago already at my office in the University of Tokyo. He gave me a very strong impression as an intellectual, active and honest person knowing what he wants to work on. He was not yet 30 years old in my memory and 25 years younger than I. He was on the way back to London from Hokkaido, the northern big island in Japan, after working for several months at Hokkaido Taksoku Bank, a traditionally leading bank in Hokkaido. His work there had, in my belief, nothing to do with its tragic bankruptcy in 1997. As a rare case among western scholars in economics, he could command well, very good, not very fluent Japanese language. He did not take much time to convince me of his deep interest as well as academic background in theories of money and finance and studies of Japanese economy. Therefore, I asked him to work with me as an associate professor of economics at the University of Tokyo for a year in 1993. We enjoyed weekly regular discussion group meetings with a young colleague and postgraduate student together with more frequent mutual communication. I planned to write a joint work on the political economy of money and finance, Macmillan and St. Martin's, 1999, which naturally started in the summer of this year, 1993. We believed that the veritable renaissance of Anglo-Saxon radical political economy since the 1970s relatively neglected the roles of money and finance in comparison with Japanese tradition in political economy. In view of the interesting importance of this topic in contemporary world economy, it seemed very necessary to present and promote systematic theoretical studies of money and finance from the view of political economy in English. Costa contributed very much on the assessment of long history of theories of money and finance since the classical political economy, Marxian political economy, Kenzian and post-Kenzian economics. In our understanding, James Stewart in 18th century, Karl Marx in 19th century, and John Maynard Keynes in 20th century, three by far great memorable monetary theorists. They all believed in importance of function of money holding, unlike the mainstream classic or neoclassical economists. Costa's paper in 2000 clarifies that in Marx's analysis of monetary holding is based objective foundation upon turnover of capital itself, and not depend on subjective personal psychological expectation unlike in Kenzian tradition. It was very interesting paper, and the objective foundation by incentive among business circles moves in certain direction at certain period of time must be similarly important also in the analysis of contemporary bubbles and their collapses. Following our joint work when it was translated into Japanese, Chinese and Greek, Costa's published social foundation of market, money and credit in 2003 from Routledge and edited financialization in crisis from BRIL in 2003 and wrote many other articles. He established his professional position as a leading political economist of money and finance, especially on recent global financialization. Financialization seemed to me a little bit clumsy wording, but it became very, very popular now following his work. His style of research is always respects objective reasons and foundations for any socio-economic issues separate from ideological judgment. In this regard, his style is quite close to an original political theorist, Kozo Uno, my foreigner in Japan, and his followers in Japan called Uno School, seriously attempting to develop Marxian political economy as an objective social science. However, he showed exceptionally clear political view in his analysis Eurozone crisis and argued clearly for Greek to withdraw from Euro so as to regain Greeks independent budgetary policies, among others, as we will probably hear in his lecture today as well. He attracted global attention on this argument in the world scale and became even Greek MP. As you know, I was honestly worried very much if he becomes tragic Papandreu of leading Keynesian political economists in prison, if not so gratis. It probably cost us new what I felt and worried as he never came in contact with me in those two years' time. He has successfully made many, many radio friends in Japan by his friendly personality and annually attracted many scholars from Japan to source. I also enjoyed meeting widely international excellent graduate students in his seminar every time when I visit here. Probably for younger generations in many countries including Japan who potentially want to come to source to learn from him or work with him, this inaugural lecture is a wonderful news rather than the previous news on him to be elected as a Greek MP. I think I thank all related person in source to get him back from Greek political circle and would like to ask them to treat him favorably enough, not just today in order not to lose him anymore for the future as a key academic professor to work for the world. Thank you. I'd like first of all to thank Makoto Ito for his kind words. He's never been anything other than very generous towards me. I'd also like to thank all of you for coming to this occasion which is an important day for me. Now, I was once told by a reliable source that an inaugural lecture should be heard but not seen. Now, I will follow this advice and I will discuss broadly and fairly loosely what I have been doing for many years in the past and also pointing towards what I might be doing in the near future. Now, for much of my academic career, I have researched money. I have not researched money as a matter of policy alone, monetary policy in its institutions. I've looked into that but mostly I've researched money as an economic, social and political phenomenon. A key concern of mine has been and remains, actually it's become more so, money as power. Power represented by money and the power magnified and delivered by money. So I want to talk about that in this lecture, particularly in view of my recent involvement in public affairs to which Makoto Ito has referred to. I will talk about money as political power, where it comes from and what does it do. I've called money an invisible bind for purposes of this lecture, an invisible bind on both individuals and society. We need to go into this at some depth in order to understand where the power of money comes from. Money is an invisible bind because of course it holds the market and provides the means for adjusting consumption and production. That's how we do it. It's also the thing that provides a bridge for allowing current decisions to affect the future. It is the instrument for affecting saving and investment. So quite clearly money is the thing that keeps together the glue, the nexus realm of an unplanned market economy. But money is not just that. It's also a bind because it welds together, it keeps together a whole host of social beliefs, of customs and practices. So money spurs the basest instincts of humanity. Cupidity, acquisitiveness, dishonesty, you name it, is there. At the same time, it offers a certain sense of independence, of freedom even, of a certain kind to the individual. If you can pay, you don't depend on others. So in the perfectly opposite terms of English colloquialism, if you can pay your own boss. At the same time, money breaks ancient traditions, obligations, understandings, and it creates its own. It creates its own fluid monetary interdependence. Society becomes anonymous and linked through money and obligated through money. Famous sociologist and anthropologist Marcel Morse understood this very well and counterposed the world of the gift with its own obligations and mutual obligations and generating the need for countergift to the world of the commodity, which, of course, contains money and which has no need to reciprocate to answer the transaction, has been completed. All these, I believe, are elements of the power of money in modern society. They've been multiplied, they've been expanded and augmented, and there is no better example of all this than my own home country, Greece, to which I will turn in the course of this lecture. Now then, where does the complex, multi-layered, economic, social, individual, et cetera, character of money come from? What is the source of this power? And I mean what is the source of this power theoretically, not in immediate everyday terms. It's in this connection that we need to approach the issue with sophisticated political economy and do some profound theoretical searching. And we could do worse than go to Karl Marx on this issue. Karl Marx wrote a lot on money, some of you might know. In fact, he quipped. No one has written more about money amidst a greater lack of it because he was skinned, obviously, while he was writing on money. For me, his writings were of critical importance and they became even more important when I came into contact with the Japanese tradition of the UNOR school. And through doing so, even my command of Japanese became more fluent and better in the course of time. So we should start with that, but I should hasten to add, Marx is no more than a starting point on this issue, no more than that, a point of departure. A lot more needs to be said is necessary to say, in order to comprehend modern money, especially in social and political role today. And two aspects of money, a key both of which I will develop briefly in the coming few minutes. First, money is a thing of the market. We must start with that. It's a creature of the market. Money emerges in the process of commodity exchange, a word for the market, a little bit more precise. It is an economic entity, first and foremost. Hence we must start with economics. There is no analysis of money that really carries weight, which doesn't start with economics. But second, money is also a thing of the non-market. And even of the non-economic, money is also a category and an entity that pervades social practice, shapes perceptions, feelings, behaviors, and so on, and no one has discussed that better than Georg Zimmel, the famous sociologist who opened the path for all of us to consider these aspects of money. As contemporary sociologists like to say, money is a social relation. I like the way this is said in contemporary sociology. It's as if it's a major discovery. Yes, of course it's a social relation. The real issue is what kind of social relation. And that's what I want to spend a little bit more time on. I believe that the social relation that's at the heart of money and helps us understand the power of money is a relation of asymmetry. Money is something that contains an asymmetry with it organically, intrinsically. It's the asymmetry between the seller and the buyer. This notion that there is an asymmetry between the seller and the buyer comes directly from Marx's analysis of the forms of value. The dialectic of the forms of value and of the most famous sections or parts of Marx's writings, one of these things that will continue to be read for centuries in the future, which is basically a kind of microeconomics but philosophically informed. Essentially the argument is when two agents meet in the market, one of them is the relative or the active, and the other is the equivalent or the passive, as Marx calls them. The key thing here is the active makes the passive in this kind of analysis. The active offers a good for sale, the passive accepts and gives own good. In return buys, in other words. Money in this kind of analytics comes out of the dialectical interplay between the active and the passive. We have a classic exposition of the dialectic here how one form leads to the next until we get money. I should hasten to add here that Marx's active and passive are not actually his but they come from Aristotle. They come from Aristotle and in particular they come from Aristotle's discussion of nature and the human mind in the animal where Aristotle discusses the existence of the passive and the active side in nature. The active is the cause, the energy. It is in Greek topion. The passive is that which potentially becomes a kind. It is topascun. And so with the mind. There is the active mind and the passive mind and the active mind makes the passive mind, argues Aristotle. Because you see for Aristotle as for Marx the active is always superior to the passive. That is how the Aristotelian logic works on this issue. So approaching the question from this perspective money is the universal equivalent. Money is the thing that passively acquires this role from acting by the other commodities. It's the other commodities that make money into what it is. And so in this approach to the issue money is the thing that buys all others because the other commodities made it do so. But of course it isn't merely economics that makes money less. For you see money acts as money also because people expected to act as money. It is a matter of beliefs and of the asymmetry of beliefs in society. People invest in money a social belief of its unique acceptability. They give it a peculiar asymmetric usefulness of the thing that can buy others. This belief occurs in the context of societies that contain trading and markets. Societies that have the market as an integral aspect of them. It reflects the separateness of traders from each other the foreignness of trainers from each other and it allows traders to relate to each other without violence, without violence and war. It is the link between traders that allows them to give and take. The conjunction of commodity interaction and social beliefs gives to money its unique place in society. Makes it the unique category that it is. Money then is absolute buying and paying power in a society that integrally contains the market. That is the source of money's social and political power. That is why money is such a powerful category and operates so powerfully in the modern world. So let's come to the modern world. I've also been looking into money and capitalism for quite a while and we need to say something useful about modern money and modern capitalism. Money of course predates capitalism. Money is not a capitalistic thing. Money was present in societies lost in the mists of ancient times. So it predates money, it's an ancient phenomenon. Capitalism makes money its own. It is unthinkable without money. Capital must be invested in the money form. Profit accrues in the money form. Capitalism is based on money in important ways. But it transforms money and that's really what matters in this context. Of all societies that have dealt with money none has transformed money more profoundly than capitalism has done. None has incorporated so fully and transformed it so thoroughly. Here things will start to become a bit more interesting I believe because we will approach modern times. There is commodity money of course. All of us are familiar with commodity money in one way or another, gold and silver. The capitalist world inherits commodity money from previous societies. It makes it its own, it uses it and it kept using it throughout this century. The previous century. But it isn't as important to the operations of capitalism as other forms of money. The capitalist world also gives birth to fiat money. In other words, symbols of the money commodity created by the state. Things that replace gold and silver and circulate based on the arbitrary say so of the state. We know and we have known many forms of that during the last two centuries when the modern state has created these symbols time and time again. The best known case is perhaps the Assignate of the French Revolution but since then we've seen many many of these occasions of fiat money circulating widely. The truly capitalist form of money however is neither commodity money nor fiat money. The truly capitalist form of money is credit money. That the capitalist world creates in profusion and really rests on is the money created by the financial institutions. It is credit money. It is bank liabilities. It is bank deposits. Things created privately as banks make loans. Private money is the dominant form of money in the modern world. A byproduct of the banking business. This private money however is backed by the ultimate means of payment by legal tender. As it must be and the legal tender has the backing of the state although it's created by a bank itself. This is a very special bank. It's a bank that has got a public character. So modern money is a hybrid. It's private but resting on public fiat for its acceptability. It is managed money for this reason. In Cain's terms it is managed money. We live then in a world of managed money and to understand the power of money we must understand the nature of its management. Money is exceptionally powerful today because it is managed. And the nature of its power and the forces that lead to its power can be better understood because of the management process. Money then is managed domestically. It is perfectly clear that it is managed domestically and it is managed by the central bank. The key institution of modern capitalism the dominant public institution. It is a public monopoly. A gigantic public monopoly over the means of final payment. Its monopoly rests on public credit. In other words it rests on the state. We should never lose sight of that. The modern world is a world that talks about free markets, liberalism or neoliberalism but that is based on an absolute monopoly over the final means of payment by an institution that is a state institution that relies on public credit. The power of money, modern money then is condensed in the power of the central bank and attains a public aspect. It becomes a public lever. The crisis of 2007-2009 demonstrated amply. The incredible power of money and the way in which it is used in modern society. For the crisis was overcome using a variety of measures to which were of fundamental importance. First was the provision of abundant liquidity by the central bank to the private banks. Abundant liquidity means very simply creating the legal tender, the final means of payment freely by the central bank by resting on public credit. Second driving the rate of interest down to zero. This is an unprecedented development in the history of capitalism. Interest rates being driven down to zero and being kept there for years and that again is done because of the absolute command by the central bank of the money. It would have been impossible otherwise. Public credit then has been deployed in the interest and capital during the last few years. It's been a huge public subsidy and that's exactly how the power of money works in modern society in the domestic sphere. But there is also the international dimension. Money is also managed internationally and here things become much more complex. Because internationally there is no single authority that manages modern money. There is no such thing. World money, the money that's used globally for payment, for reserve, creation, for holding wealth is of course fundamentally the US dollar. What is the US dollar? A domestically created money. It is managed but not conjointly. It is managed by companies. So what have we got here? A huge privilege for the United States. The power that accrues to the United States is vast. It gives it freedom to exercise monetary policy. It transfers surpluses from the rest of the world to the United States as the rest of the world keeps reserves of dollars at zero percent. This is a vital part of hegemony. It is a vital component of modern power exercised through modern money. It is, to put it differently, a huge asymmetry magnified from the seller and the buyer into the world stage that takes us directly into the political realm. The political power of the United States globally very much depends on global access to global money. Which, at last, brings me to the euro. A euro is a very peculiar form of money. We must start with how peculiar it is and understand the peculiarity. It is very peculiar because first it is a domestic form of money for all 19 participants in the monetary union. At the same time however it is an international form of money the main competitor of the US dollar globally. It is managed by an array of transnational institutions in Europe based on treaties agreed among sovereign states. It didn't have to be thus. There was no need for the euro to be constructed in that way. There was no need for Europe to create a money that would be thoroughly domestic as well as international. Acting in both rounds at the same time. It was a huge leap taken by Europe European Union into the unknown and it's a leap that has failed, I will argue. The main managing agent of the euro is of course the European Central Bank. The power of the European Central Bank comes very clearly in the first instance from the commanded exercises of the money market of Europe. It commands the money market and it commands the behaviour of the banks in the money market. That's where it draws the first elements of its power which it then passes on to the money it creates. The difference with other managing agents of this type of money in the case of the euro of course is that the European Central Bank has got no state behind it whether a unitary state or a federal state. There is no equivalent to what other Central Banks would have and thus acquire the power they need to support the fiat money they create. European Central Bank is a very private Central Bank. It's bizarre. It's in a very strange arrangement. It's a very private Central Bank that creates a form of legal tender that reflects an alliance of states. It is a presumed alliance of equals except that some are more equal than others in this arrangement. The power of the euro created in this way and managed in this way has rebounded in the interests of one of the members of the alliance more than anywhere else Germany in particular and in doing so he has created vast asymmetries in Europe and it is these asymmetries that make the project of the monetary union and of the European Union itself highly untenable in the coming years. How has German power then been projected through the euro? There is a series of steps here. A series of steps evolving around this modern form of money. The first and very clear step is domestic in Germany. Wage restrained. The main source of German power obtained through the euro is wage restrained. It's a matter of domestic class relations in Germany. That's where it comes from. It's because German wages have been effectively frozen or risen very little for 15 years. This in a system of fixed monetary arrangements is a vast source of competitive advantage for Germany. This is where it comes from. Not through technological prowess, efficiency or anything else. Plain, simple, wage freeze or wage restraint. So that's the first element. The second element is fiscal restraint in Europe including Germany through the stability and growth pact. Austerity. Austerity spread across Europe. Emanating from Berlin basically as the type of policy that needs to apply to Europe. The third. An ideology of reform. Neoliberal reform across Europe and this reform means basically privatisations and liberalisation of markets bringing wages down to the logic being that if other countries did that and would themselves gain competitiveness and would be as successful as Germany this of course is a logical non-secretary. It's impossible to do that in the context of a monetary union and that's not why Germany has succeeded anyway. Be that is it may these arrangements have afforded Germany vast power in Europe coming from its surpluses created in that way because of its competitive advantage and therefore from its lending from its command over resources denominated in Europe. The institutions of the Europe sustain German power. I believe that this is a unique situation in the history of Europe. I don't think we've seen anything like that ever before. It's an extraordinary arrangement of power, imperial power in Europe but it is also a precarious power. Highly precarious power because the institutions that create this power mean that Europe is not growing. The spread of austerity and everything else that goes with it means that Europe is not growing. Unemployment is high. Austerity is also creating reaction in individual countries. The power of the Europe might have rebounded in the interests of Germany but not in the continent. So it's a highly unstable highly precarious form of domination here and power. And now we come to the case that demonstrates most clearly why this is unstable. Because the colour of the Europe on the continent is most clearly seen in the case of Greece. Here I want to tell you a few things about other aspects of the power of money that have emerged in the case of Greece which were a revelation to me in the course of the last few years. For Greece membership of the euro of this form of money since 2010 has been nothing other than a complete disaster, economic and social collapse. Whichever way you look at it remaining in the euro has brought contraction of GDP by 25% unemployment at 25% industrial production contracting by 35% youth unemployment at 50% and more and youth immigration in vast numbers. The markets of Europe are full of young Greeks well qualified seeking jobs right now. The euro then is marginalising the country this is perfectly obvious it was never a very big country it was never very important in Europe now but it links on to the monetary union. Rational observer any detached rational observer would look at the situation and would say immediately the answer is exit and restructuring the economy in the interest of growth social justice inequality it's perfectly obvious from the perspective of monetary theory it's not an issue in economics it's trivial there's nothing to resolve it's obvious Greece doesn't belong in this arrangement and yet it's not happening it's not happening doggedly so and one must ask why why is it not happening it's now six years this is where the power of money has emerged in a very interesting way this is what was new to me as I observed this situation and became closely involved in it here we see the power of money modern money in the new guys and I want to take you through it a little bit now of course when you approach it in immediate terms it's fairly clear why this is happening why Greece is doggedly sticking to this dysfunctional arrangement first because of course there are substantial domestic interests that insist that this be the case and these domestic interests have got names and addresses that are very well known there's no mystery about them and big business both of which are very keen to keep the country where it is clearly so they admitted they say it openly second there's a dysfunctional political system utterly dysfunctional political system that is incapable of offering to the country a new path that would make sense that would actually allow it to survive in the world division of labour with some prospects of progress and rising incomes and everything that goes with it to see how these things relate to money and its power we have to look more closely of course at the shambles that's called Syriza now I don't really want to spend too much time and there isn't much time to spend I only look at it because the power of modern money is also political and by looking at Syriza one can comprehend what Syriza means the shambles of Syriza is quite simply unprecedented in political history I believe because Syriza came to power less than a year ago unbelievable as it might seem it came to power using deploying a huge range of sensible proposals the proposals it was making were perfectly sensible abandon austerity redistributing common wealth nationalise the banks restructure the debt who in the right mind can pick an argument with these proposals they make sense it's obvious that they make sense and there's nothing terribly revolutionary about them they're just basic fundamental economic sense even Keynes in many ways then there were several months of negotiation I'm not going to comment on the negotiation because I might resort to very rough language if I did that but let's say for the sake of argument that there was a negotiation that lasted several months what was the end result of this brave and hard negotiation I'll tell you what the result was abject surrender complete defeat abject surrender and for the first time in political history we have the most incredible phenomenon of a party of the left that gets elected in this way that promises all these wonderful things adopting the programme of the opposition and coming around and saying we will sign a bailout and a bailout is the only way we can go and we will implement it that's what Syriza did I'm not going to bore you with the details but you all know that this is what he did the question is why why the answer is perfectly obvious and it is admitted by the leadership and high membership of the high cater of Syriza to stay in the euro openly said in the beginning weasel words were deployed it was covered in a thousand ways when it came to it though eventually it was admitted to stay in the euro this takes priority over everything else it is actually the euro that has defeated Syriza not just defeated it triumphed it the power of money modern money utterly destroyed Syriza as a political agent that was going to change Greece and hopefully Europe and then the world and the universe of course why how was that possible because I repeat it's an economic issue it doesn't exist it's nonexistent Greece doesn't belong in this arrangement the more it stays in it the more it destroys its economy and society it doesn't even arise as an economic problem how was it possible why was the euro as it is constituted as modern money able to defeat this government that came to power with all these promises and I think that economics is not enough we need to look into psychology psychological issues psychological responses and behavioural responses at least that's how it seemed to me after living and being involved basically in the thick of it several months what lies then behind this obsessional attachment to a destructive malfunctioning monetary association well the power of money in the case of Greece the modern money of Europe has appeared in two further forms the first is fear if you don't appreciate the importance of fear you will never understand why Greece is still where it is fear palpable fear that you can cut with a knife fear in a variety of forms fear of banks the banks are scared of nationalisation because they knew any other option would mean becoming nationalised the fear of big business because they feared that any other option would mean being cut off from the markets the fear of deposit holders because they feared that if they are not in the euro they would lose their savings the fear of the nation as a whole because it feared being isolated being left alone and being destroyed fear emanating from money the form of money magnified by the mass media and played on a daily basis through all avenues of information an entire nation has been made prisoner to this form of money in the mind more than anywhere else and what emerged on top of that what is even more interesting to observe is a form of the Stockholm syndrome in the case of Greece those who run the euro and benefit from it and impose the policies that have destroyed the country in order to remain in the euro the tormentors of the country essentially appear in the case of domestic given taking Greece as the wise people the ones who understand what is good for us because of course you see in a typical case of the Stockholm syndrome on national scale we Greeks are useless we cannot run a state we cannot run an economy we cannot run our affairs we are dishonest we need someone to tell us what to do that's exactly how policy and debate has moved in Greece during the last 5 or 6 years and that is the power of modern money this kind of neo-colonial attitude has been perpetrated through this form of money that has taken over people's minds and made them stick to this arrangement second dimension though second thing that is made for holding on to this dysfunctional form of money is of course identity and that I must admit I had expected even less than fear identity is very important to modern money precisely because it's managed and it's created by institutions institutions attached to the modern state the euro makes peripheral European countries European this is a very important aspect in the case of Greece which has always been a small place on the margins the eastern margins of Europe always a town's length from the core of European capitalist development the Greeks until quite recently when they went abroad went to Europe that's how they say to each other what they were travelling the euro has been very important ideologically in that regard it has made the country in the minds of its inhabitants properly European and not properly European only in the sense that they share the same currency and they belong to the hard core they're in a group but also better than their neighbours we might be in the Balkans and in the eastern Mediterranean because we've got the euro this perception this issue of identity is unspoken not often admitted but it's there and it's very very powerful in how people relate to this form of money and this has created an incredible new tension in Greece of national identity because the national which is traditional in terms of what makes you a Greek has come into conflict with the transnational which is now associated with the euro which is inherently transnational in my judgement Greece has remained in this dysfunctional arrangement at huge cost to economy and society fundamentally because of these two factors fear and identity manipulated and used by those who've got an interest in keeping the country where it is no matter the cost it is a false ideology but it exists now I've nearly finished I do not wish to finish on this note there must be a positive message the power of money today is probably greater than ever I don't think there's been a period in the history of capitalism or any other society in which the power of money is greater than today in contemporary society but that does not mean that this power cannot be controlled that does not mean that people and humanity and society are helpless in the face of this bmw of course finding ways to control the power of money is an old quest going back to Aristotle whom I mentioned at the beginning of this talk to achieve it, this control one must intervene in the economic sphere of course because this is an economic phenomenon but also go way beyond it because money exists in the non-economic as well and simply intervening in the economy is not enough to control the power of money for reasons that I think are now clear given what I've been saying all this time and so I would argue three things first the power of money can be controlled domestically but evidently to control the domestic power of money what one must do is strengthen the collective and the social for reasons that should be clear now in other words one must strengthen access to things goods, commodities and so on that are socially provided one must strengthen the welfare state and social provision in order to limit the domestic power of money the power of money must also be controlled and restrained internationally and this means of course strengthening cooperative forms of give and take among nations among different people what better place to start than controlling finance imposing regulations and control on finance to limit the power of money globally third the power of money can be controlled in Europe at least by dismantling the bind of Europe that's struggling Europe by dismantling the monetary union just perhaps in time to avoid the collapse of the union altogether because the longer this dysfunctional monetary arrangement persists the grave are the dangers for the European Union as a whole because it's now become thoroughly intertwined with the monetary arrangements that's as some institutional pointers to what might take place in the years to come but of course the most important thing here is not that really the most important thing is for those who are thinking critically about the world for those who want a different set of arrangements social and other to prevail in the world the most important thing here is to find again a narrative a new politics a new story that can be told that will break the hold over the mind and the imagination of people exercised by modern money that's really what we've been deficient at doing we need to shape the promise of a better, more rational future one that goes beyond capitalism because without a narrative of this type there is no breaking the power of money this is what we've got in front of us and I believe that we must rise to the challenge thank you very much it remains for me to give the vote of thanks on this important and happy occasion firstly I would thank the school for organising and supporting this occasion and in particular I would thank Samantha Farr for her efficiency and good humour in ensuring that it would run smoothly so far it has run smoothly secondly I thank the director Baroness Amos for opening the proceedings and presiding over them thirdly thanks her due to Professor Makoto Ito who has come a long way from Tokyo to deliver his introduction and has done so cogently, elegantly and with some humour fourthly I must thank you the audience for turning up in such numbers and for being so far as I could see so attentive so I was sitting in the front I couldn't really see you but still but most of all I must thank Costas who has delivered an outstanding lecture at once rigorous and lucid with potent contemporary relevance indeed current and immediate relevance has been a great pleasure for me to attend Costas's inaugural lecture and a privilege to follow him on the platform it's always a pleasure to see someone whom one knew as a young scholar who has blossomed into a scholar of considerable standing when I was head of the new as it was then Department of Economics at SOAS which had separated from economic and political studies in 1990 his was one of the early appointments for which I was responsible when he was appointed to a Lectureship in Economics in April of 1991 he was clearly, very clearly an accomplished political economist in the intervening period he has become powerfully so incidentally talk about his linguistic qualities we in fact at the time were extremely impressed as well as by his political economy by his remarkable linguistic competence as well as his native Greek he was fluent in English and he had a working knowledge of French Russian and classical Greece and although he spoke little Japanese in 1990 he rapidly actually became fluent in Japanese and able to lecture in Japanese in Tokyo that I think was no mean feat now obviously I don't want to recapitulate this lecture but very very briefly what struck me about the lecture was his pointing to money's diffuse pervasive power its market power and its power as a social relation he has noted the vast power conveyed by money to the United States the great power it gives to Germany as a surplus country and its chief lender in Europe he is considered the Greek collapse the economic and social disaster since 2010 and the fear in Greece endemic among banks, among businesses and deposit holders and alarmingly the widespread and continuing fear of the unknown as he says we have a form of money that is holding a nation to hostage he has argued the need to restrain the power of money domestically to strengthen the collective and the social and to restrain the power of money internationally and all in all to dismantle himself the bind that is throttling Europe Hercules himself faced at one level faced no greater labors yet we remind ourselves that Hercules was successful with immense effort I wouldn't like to finish without noting an important aspect of Costas's work the fact that his work and his lecture indeed is informed of a long historical sense that's a quality not always displayed by economists indeed it is seldom displayed by economists and in particular his work is rooted in a rich knowledge of the history of economic thought he has of course published extensively in the field of political economy of money and finance those familiar with his work will know of his mastery of writing on money and finance back to and including most notably classical political economy I would finish where he started when he quoted the aphorism that inaugural lectures generally speaking should be heard and not seen well it was in fact someone who taught me at the University of Glasgow a very accomplished political economist the late Ronald Meek who actually made that observation and he made it I think 14 years after he had delivered his own inaugural lecture at the University of Leicester in 1964 he eventually decided to publish it and in fact Meek's inaugural lecture was imminently worthy of being seen of being read so too is the one that we have just heard having heard it I will certainly read it too so also I am sure many of you who have listened to it so us is indeed fortunate to have cost us as a member of its professoriate he brings to the economics department and to so us true quality and distinction thank you