Mr. Varafoukis makes the mistake all Economists make. Money is a variable and not good as a measure. Resources are the basis of wealth and Energy is the basis of converting resources into wealth. We face energy constraints because the Energy Return on Energy invested has fallen drastically for conventional Fossil Fuels, whilst we can generate sufficient energy we will struggle to do so at the very high EROI levels we have enjoyed for the 20th Century. Our average EROI in the coming century is unknown but wind power Solar and Hydro together with some Nuclear ( Thorium, SWR) will be probably around 10-15 ( more work needs to be done on this, Steve Keen has started to try to get his head around it, Yannis would do well to chat it through with his Australian Freind) The point is that Money needs to be rebased to entropic physical realities and pretending that Old Economic Thinking will have any place in the future of our Energy economy realities is magical thinking. What Mr. Varafoukis suggests is nothing more than re arranging the deck chairs on the Titanic. Mr. Varafoukis in this short piece can be given the benefit of the doubt as to his grasp of horizontalist and Verticalist niceties, ( Basil Moore, http://letthemconfectsweeterlies.blogspot.se/2017/08/economic-models-and-political-economy.html) (fundamentally though the whole premise of Mr. Varafoukis´s article is incorrect. Energy and Energy returned on Energy invest will be the determinant of future economic realities and the World can no longer stand by and leave the practitioners of the dismal science to play with the Trainset of Political Economy.
ATHENS – Western capitalism has few sacred cows left. It is time to question one of them: the independence of central banks from elected governments.
The rationale for entrusting monetary policy fully to central banks is well understood: politicians, overly tempted during the electoral cycle to create more money, pose a threat to economic stability. While progressives have always protested that central banks can never be truly independent, because their autonomy from elected officials increases their dependence on the financiers they are meant to keep in check, the argument in favor of removing monetary policy from democratic politics has prevailed since the 1970s.