The Global Minotaur 

by Kelechi Okoye-Ahaneku

Varoufakis, the once finance minister of Greece associated the name of his book to the American economic system, bringing parallels to Greek mythos of the “Minotaur of Crete”. It was a creature that consumed its subjects (seven boys and seven unwed girls) as a foreign tribute that of which kept the Minotaur well nourished.

Beyond myth, historians suggest that Minoan Crete was the economic and political hegemon of the Aegean region. Weaker city-states, like Athens, had to pay tribute to Crete regularly as a sign of subjugation. This is an important assertion to pinpoint in correlation to the American economic system and this is because, in the same way the “Bull of Minos” consumed and devoured all subjects, similarly Varoufakis remonstrates how the American economic system has also not just encapsulated the economic and societal structures of the entire world but more importantly has captured or let’s put it more crudely kidnapped the imagination of the entire world.

Varoufakis highlighted in an introductory manner how the main feature of the second post-war phase that began in 1971 with an audacious strategic decision by the US authorities: instead of reducing the twin deficits that had been building up in the 1960’s (the budget deficit of the US government and the trade deficit of the American economy.)

This act of liberalization of both deficits, both being increased to insurmountable levels was to see the eventual breakup of the Bretton Woods agreement, the move away from the Gold standard and the rendering of the dollar as a fiat currency. The “Nixon Shock” as this came to be known, subsequently saw the dollar become a reserve currency and used by various nations the world over. The rest of the world would have to pay for the liberalization of the twin American deficits through the capitalization of surpluses slushing all around the world economic system. As Varoufakis pinpointed,

“The twin deficits of the US economy thus operated for decades like a giant vacuum cleaner, absorbing other people’s surplus goods and capital.”

Varoufakis further stated that this system gave rise to something resembling a global balance: an international system of rapidly accelerating asymmetrical financial and trade flows capable of creating a semblance of stability and steady growth.

Powered by America’s twin deficits, the world’s leading surplus economies such as Germany, Japan and Germany kept churning out goods that Americans gobbled up. Wall St then went about churning up these capital inflows into direct investments, shares, new financial instruments, new and old forms of loans, and most importantly of all nice little earners for the bankers themselves.

These structural attributes of the American economy, makes things clearer to understand. It helps to explain the rise of financialization, the triumph of greed, the retreat of regulators and the domination of the Anglo-Celtic growth model.

As Varoufakis asserts, this structural understanding more than hypothesizes the causes and effects of the system, it turns the phenomena into reality. They suddenly appear as mere by-products of the massive capital inflows necessary to feed the twin deficits of the US.

This is where the parallels to the minotaur become somewhat traumatic, the Greek conceptualization of the monster saw only consumption and greed. Forever hungry and irritated if it didn’t consume more of its victims. Its fate was only going to see its own downfall and destruction. I know reading this, you would think I am being a bit of a doom merchant. Well I am to be fair. All I can say is that if we are drawing on the parallel’s made in Greek mythology, should this be a pertinent warning of our own reality? Will our own incessant need for perpetual consumption bring about the downfall of the world economic system? Who knows, but what we must do is heed the warnings that were inadvertently made in classical times and more importantly in more recent times through the various major financial crises we have faced.