THE BLOG
01/30/2015 03:15 pm ET Updated Apr 01, 2015

Yannis Varoufakis and the New Economics for Greece

Yannis Varoufakis is not a household name in North America or Western Europe. But in the coming days people who pay attention to the press and other mass media will hear more about him. He was chosen as the new finance minister by the coalition government led by SYRIZA, the left coalition in Greece.

To a small group of mathematically-inclined progressive economists, however, the themes on which Yannis Varoufakis, a former economics professor at University of Sydney, University of Athens and University of Texas at Austin are not unknown. For them, Yannis Varoufakis has a sharp, critical mind. His is a mind that is equally at home in the realms of abstract mathematical models of game theretical economics, or the myth of Minotaur and other ancient Greek myths that can be mobilized to describe many tragic situations.

With a Ph.D. from the University of Essex, Yannis Varoufakis is equally at home with the English language and literature. In one of his recent books, he uses the tragic figure of Shakespeare's Macbeth to make his point about the tragic flaws in human character.

Varoufakis has also written insightfully about the limits of rationality and the role of indeterminacy in human affairs -- particularly in economic affairs.

He also has experience advising the former Greek government of George Papandreou and has an honorable record of making his principled disagreements known to his fellow citizens.

This will come as a surprise to his uninformed rightwing and neoliberal critics, but he has also been a consultant to cutting-edge private enterprises.

On balance, at least this economist who has also advised the private and public sectors and international organizations, thinks that in Yannis Varoufakis Greece has found an almost ideal crisis-time finance minister. He is a skilled technocrat who knows enough about human hubris and character flaws to be cautious. He is a principled man who cares more about his fellow citizens than the bankers.

To be sure, he faces an infernally complex situation -- and, yes, even a tragic situation resulting from human stupidity and human greed -- that will not be easy to manage. But given his background, I expect him to combine firmness in principles and strategy with flexibility in tactics. He, together with the new prime minister and other elected leaders, will provide the kind of tough-minded leadership that can address international negotiations with courage and conviction with the full support of ordinary Greek citizens.

This new government will thus negotiate its anti-austerity policies and the medium and long-term growth with equity policies for Greece from a position of genuine strength by going outside the proverbial conventional neoliberal toolbox.