Greece’s Economists Take a Pounding

A Greek academic builds a department, then has to emigrate | “Either enter politics or we must leave the country”

Brendan Greeley, with Oliver Staley and Eleni Chrepa

By the end of 2011, Yanis Varoufakis was a celebrity. The director of the Ph.D. program in economics at the University of Athens, Varoufakis had been arguing for two years that Greece was insolvent and the country should default while staying in the euro region. In late December, after a day when supporters mobbed him on the street and abusive phone calls reached him at home, his wife told him, “Either enter politics or we must leave the country.” So, as many of his students and professors had already, Varoufakis left.

It was a hard decision. After training and teaching abroad, Varoufakis returned to Athens in 2000 to build a Ph.D. program to solve one of his profession’s problems: the excessive reliance on economic models that often failed to predict what happened in the real economy. His curriculum, which expected students to master the demanding math of models while learning the history and philosophy that debunked them, drew praise from prominent economists such as Axel Leijonhufvud at the University of California at Los Angeles and James Galbraith at the University of Texas at Austin. “I have a fair feel for his perspective and we are kindred spirits in some ways,” Galbraith writes in an e-mail. The program lured foreign Ph.D. candidates and brought Greek students home.

Seed money from the European Commission got Varoufakis started, and in 2005 a group of private trade unions offered the program €150,000 ($188,600) a year for student stipends and travel costs for visiting professors (salaries were paid by the university). In 2006, Varoufakis gave a talk in Athens predicting a financial crisis that would start in U.S. real estate, move through Wall Street, and on to Greece.

In 2010 the crisis hit home. Varoufakis says he got a phone call from his union contact: He had to stop inviting guests. Greece’s national pension fund, which collects union dues, had begun slashing disbursements to cover its liabilities. This left the doctoral program at the mercy of a state-run higher education system that has seen its budget cut by 23 percent since 2009.

In late 2010, Tassos Patokos, an adjunct professor in the department, learned he probably wasn’t going to get paid for a year’s worth of lectures he had already delivered for the Ph.D. program. Unemployment had swelled applications, though, and Patokos says he was teaching some of the best students he’d ever had. “I remember feeling quite optimistic,” he writes in an e-mail, “despite the lack of funding and the associated practical problems, for example no photocopy machine, no toner for the printers.” Then last summer, Greece dismissed almost every adjunct professor in the country, and Varoufakis urged him to leave. Patokos now teaches at the University of Hertfordshire. Other ex-adjuncts from the program landed at the City University of New York, the University of Warwick, and several Greek think tanks. The remaining full professors run the doctoral program on hope. They are, says Varoufakis, “exhausted and battered.”

Now, says Patokos, Greece’s Ph.D. candidates in economics often finish a few courses and go abroad, which seldom happened in the early years of the program. According to a January poll by Panteion University, 53 percent of university-age Greeks said they might emigrate, and 17 percent already planned to.

In late 2011, through Galbraith, the University of Texas offered Varoufakis a chair in economics. He’s also chief economist for Valve, an online gaming company in Bellevue, Wash., that uses a virtual currency in its games. About to board a plane for Seattle, he writes from his phone that the company “asked me to study their ‘economy’ so as to prevent the formation of bubbles.”

The bottom line A brain drain from Greece has begun as more than half of university-age Greeks say they may move abroad.


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