Money and Plausibility in Yanis Varoufakis’ Another Now (2020)

One of the most mysterious and complex forces humans encounter is money. Its workings have long been a source of wonder to writers and to all of us born into a society where our status is defined by access to money or the lack thereof. There is a classic passage in Dombey and Son (1848) by Charles Dickens wherein Little Paul seeks enlightenment on this very question from his businessman father:

[L]ittle Paul broke silence thus:

‘Papa! what’s money?’

The abrupt question had such immediate reference to the subject of Mr Dombey’s thoughts, that Mr Dombey was quite disconcerted.

‘What is money, Paul?’ he answered. ‘Money?’

‘Yes,’ said the child, laying his hands upon the elbows of his little chair, and turning the old face up towards Mr Dombey’s; ‘what is money?’

Mr Dombey was in a difficulty. He would have liked to give him some explanation involving the terms circulating-medium, currency, depreciation of currency, paper, bullion, rates of exchange, value of precious metals in the market, and so forth; but looking down at the little chair, and seeing what a long way down it was, he answered: ‘Gold, and silver, and copper. Guineas, shillings, half-pence. You know what they are?’

‘Oh yes, I know what they are,’ said Paul. ‘I don’t mean that, Papa. I mean what’s money after all?’

Heaven and Earth, how old his face was as he turned it up again towards his father’s!

‘What is money after all!’ said Mr Dombey, backing his chair a little, that he might the better gaze in sheer amazement at the presumptuous atom that propounded such an inquiry.

‘I mean, Papa, what can it do?’ returned Paul, folding his arms (they were hardly long enough to fold), and looking at the fire, and up at him, and at the fire, and up at him again.

Mr Dombey drew his chair back to its former place, and patted him on the head. ‘You’ll know better by-and-by, my man,’ he said. ‘Money, Paul, can do anything.’ He took hold of the little hand, and beat it softly against one of his own, as he said so.

Dombey and Son, Chapter 8

Dickens, of course, goes on to imply that money cannot do those things that are of most value. Yet it is the lingering on the questions of What’s money? and What can it do? and Mr. Dombey’s stupified reaction to them that remain in memory, not the rather facile answers ultimately provided.

Dickens’ contemporary Herman Melville also produced an extended meditation on the nature of money in The Confidence-Man (1857), which I have written about in this blog before. Melville provides an insight into the link between money and trust:

“Confidence is the indispensable basis of all sorts of business transactions. Without it, commerce between man and man, as between country and country, would, like a watch, run down and stop.”

(Signet, 1964, p. 136)

That is, money works because we believe in it and it stops working if enough people stop believing in it and act accordingly. This is quite an insight, and one which Melville spends the novel exploring. It is far from an eccentric or unsupported notion. The economic historian Niall Ferguson writes:

“[M]oney is a matter of belief, even of faith: belief in the person paying us, belief in the person issuing the money he uses or the institution that honours his cheques or transfers. Money is not metal. It is trust inscribed.

(The Ascent of Money, Penguin, 2009, pp. 30-31)

Thus the notion of money as a materialist phenomenon is very much misplaced. It is a material to which is added belief and around which that belief constructs a sophisticated system of ownership, privilege and deprivation. This is not something one can simply learn and file away. It has to be relearned and re-emphasised again and again to counter the sense ingrained in us as we go about our daily business that money is a material thing that is, in itself, worth something, that one has earned and can, in proportion, spend. The latter may be situationally true for now, but the underlying truth is that money is a willingness to play the game of belief and, as such, rests on uneasy foundations.

Nineteenth-century novelists had a strong sense of the provisionality and arbitrariness of money. Twenty-first century economists may have a more developed theoretical understanding of it but that does not translate into the ability to question and defamiliarise the financial system that many nineteenth-century novelists had. We are deeper into money than they were.

It is interesting in this context to read the recent work by Yanis Varafoukis, Another Now. Varoufakis is a well-known politician and political thinker, but this work is, nominally at least, a novel, the first he has published. It is firmly in the tradition of the novel of ideas.

The term “novel of ideas” usually suggests a book light on narrative interest, in which abnormally articulate characters bat philosophical questions back and forth between themselves, with brief intervals for eating, drinking and flirtation.

(David Lodge, The Art of Fiction, Penguin, 1992, p. 198)

Lodge also notes that several of the most influential 20th-century novels of ideas are set in the near future. He focuses on A Clockwork Orange (1962) and also mentions Nineteen Eighty-Four (1949) and Brave New World (1932). Varoufakis’ book is also set in the near future. Despite the title, Another Now is mostly set in 2025, both our 2025 and 2025 in another now. This other now is one where, in the wake of the 2008 financial crash, banking has been centralised and commercial banking rendered redundant, the stock exchange has withered away and companies are owned by their workers. That is opposed to our now, where we remain entrenched in capitalism, prey to investment bankers, stockbrokers and the like.

Varoufakis takes up where Melville left off and tries to explain the concept of money:

In Eva’s university lectures, money was the hardest thing to explain even to the smartest of students. In fact, it had taken Eva herself months of working in Wall Street to escape fully her own misconception of how money is created. As a physics major, before getting her hands dirty in New York, she had assumed that money is printed by a nation’s central bank, from where it is distributed to commercial banks. But while this is indeed how cash is created, cash accounts for only 3 per cent of all money. What of the remaining 97 per cent? Surprise and then foreboding were the reactions of every student to whom she had explained how the missing 97 per cent was created – and by whom: not by central banks but by commercial and investment bankers. At this point, her students would ask, ‘Without access to state-sanctioned printing presses, how do private bankers create money?’

‘Simple,’ she would reply. ‘Every time a banker approves a loan of, say, one million dollars for Jack, a typical business customer, the banker just types 1,000,000 on Jack’s bank statement. However incredible it may seem, that’s all it takes. Bankers create money by granting loans by typing in some numbers!’

For this system to be sustainable, and not merely a pyramid scheme, there is a single condition: that, somewhere down the line, the one million dollars which some banker typed into existence on Jack’s behalf results in new goods and services whose total market value exceeds one million dollars.

Another Now, Vintage, 2020, loc 1624)

The fundamental point here is again one of faith. The money conjured into existence by bankers can be realised if people believe in it and act as if it exists. That means that bankers are, in Varoufakis’ term, “borrowing from the future” (loc 1352, 1417, 1644). They can keep borrowing from that timeframe until such time as the scale of their borrowing and prevailing material conditions render it implausible that the money could exist. With this implausibility, the money fails to come into existence, there is a run on the bank and it is discovered to be massively in debt.

Yanis Varoufakis

I have written before about bullshit and the art of the plausible, and Varoufakis shows that this is applicable to capitalist economic relations. Perhaps, indeed, it is the structural centrality of plausible claims to economics that gives rise to the rampant social phenomenon of bullshitting, which, rather than lying, is the real enemy of the true. Varoufakis certainly explains how our financial system gives rise not to adherence to strict truth but to a constant tendency towards expressions of faith and optimism. In the short term, this creates money and when the inevitable crash comes, it is only he who is left holding the bag that gets burned.

Varoufakis’ book is a stimulating read. The emphasis is very much on the ideas and not on the novel – unlike, say, A Clockwork Orange and more like William Morris’ News From Nowhere or H.G. Wells A Modern Utopia. Though Another Now does not do much with narrative or character, the fictional framework gives Varoufakis free rein to reimagine his own theories and provides a backdrop against which the reader can evaluate them. Novels of ideas are not to every taste and the shelf-life of the pure novel of ideas, like those by Morris and Wellls, is usually short, but they can play an important role in dissemination, defamiliarisation, and stimulation. Varoufakis’ work – part prophecy, part instruction manual, part utopian fantasy – seems well equipped to play such a role in our now.