What’s more rewarding for the average economist than being charged with understanding the emerging models of market behaviour derived from the sales of player-created game content? How about running the national treasury for a mid-sized European country which has the potential to blow up the political structure of the entire continent if you get it wrong?
It’s fair to say that only one person in the world knows the answer to that question, and that’s Yanis Varoufakis. In 2012 he accepted an unsolicited job offer from Gabe Newell to go work at Valve Software and study what was happening on Steam. Today he became minister of finance for Greece.
That’s some career change, right there that is (albeit one that went via professorships at the Universities of Texas and Athens), and to Varoufakis’ fans it will underline the importance of the radical and unorthodox beliefs that made him favourite of Greece’s new prime minister, Alexis Tsipras. To fiscal conservatives it may well provide fuel for their hatred of a man who once described the austerity measures placed on Greece as “fiscal waterboarding”.
Whatever side you’re on, the appointment of Varoufakis is hugely significant. He’s been well known as a commentator on the European financial crisis since it began in 2008, and usually drawn on by the likes of the BBC as a go-to voice for why the modern financial system is broken. You can get an idea of his beliefs by reading this excellent post on the internal workings of Valve Software, which asks the important question “how does Valve’s management structure fit into the corporate world”.
For those who don’t know, the 400-strong staff at Valve have no official boss. The company – which is privately owned – encourages employees to work on any project they want, start new projects when they want and abandon things they’re working on when they want. It’s a flat structure helped by the fact Valve can afford better-than-the-cream-of-the-crop staff, and the question everyone wants to know is “would it work at my company?” (Varoufakis’ answer is more or less “No evidence either way, but probably.)
Varoufakis’ essay is great reading, partly because it points out that corporate structures are the very antithesis of free market capitalism and simultaneously loved by free market capitalists (except Frederick Hayek), but also because it signals what Greece might be in store for.
The current system of corporate governance is bunk. Capitalist corporations are on the way to certain extinction. Replete with hierarchies that are exceedingly wasteful of human talent and energies, intertwined with toxic finance, co-dependent with political structures that are losing democratic legitimacy fast, a form of post-capitalist, decentralised corporation will, sooner or later, emerge. The eradication of distribution and marginal costs, the capacity of producers to have direct access to billions of customers instantaneously, the advances of open source communities and mentalities, all these fascinating developments are bound to turn the autocratic Soviet-like megaliths of today into curiosities that students of political economy, business studies et al will marvel at in the future, just like school children marvel at dinosaur skeletons at the Natural History museum. I trust that Valve’s organisation will become, if not a central chapter, at the very least an important footnote in this historical turn.
Of course, the last thing he wrote for Valve was more than two years ago, but who knows? If Greeks start receiving achievements and badges for – say – opening a bank account for their child or choosing a fetching hat we’ll know that his time at the firm has influenced him forever.More pertinently, he’s begun his time as Greek finance chief with a blog post saying that although he’s been advised maintaining a personal blog is improper for a politician and a party member, he’s going to carry on doing it anyway. If only more local politicians had the same sort of nerve.