Brian Eno How did you get here?

Yanis Varoufakis I walked from Waterloo to Marble Arch, then got the tube. I enjoy walking.

BE I do a walk every morning in Hyde Park. I’ve got a friend who’s got two huge dogs – English mastiffs, great big things. They cost so much to keep. I don’t know why people keep dogs.

YV They are a very good substitute for kids.

BE But he’s got children as well. So why does he want two enormous dogs? One of these dogs has cost my friend £12,000 in vets’ bills. They are twins, hard to tell apart, except the one who keeps getting ill is now a little thinner than the other one.

YV There are fantastic stray dogs in Greece.

BE I saw a funny thing in Crimea 18 years ago. It’s a town on two levels, a mountaintop and a ground bit. There was a lift that carried you to the top. There are stray dogs that live on top of the mountain, and they get in the line with all the people to step into the little lifts to carry you down. You get in your lift, and a little dog will jump in with you. They go all the way to the bottom, where they raid the dustbins round the restaurants, then they line up again and go back up.

YV You should see the stray dogs in Athens. They are fantastic at crossing the road. They look at the light at the pedestrian crossing and wait. Of course, it is a Darwinian process. Those that have not learned this are not alive.

BE I guess it’s the same with the dogs on the hill. The ones who survive are the ones who’ve learned to use the lift… I’m on deadline today for my new album. I’ll play you a bit of the brass section. It’s very different from anything else I’ve done. I’ll play it loud.

[They sit together for photos.]

YV Two bald heads collide.

BE This is showbiz.

YV You’re used to that.

BE No, economists are much more showbiz than pop stars now. You know Prospect magazine? Every year they have 50 leading figures, and last year 17 of them were economists. You were one of them. I was in there once, but artists aren’t important any more.

YV When there is an earthquake seismologists become important. Now we have an economic crisis, economists are important. During the 1930s we had to wait for the upturn before artists became significant. When the going is really tough, art is stifled.

BE Yes. Have you seen that lovely book called When Art Worked? It’s about art in the Depression and the New Deal; how the American government decided to do something that no government would dream of doing now, which is to employ a lot of artists. That was such an interesting idea. It really got things moving in America, and showed people themselves.

YV During the worst part of the crash, progressive politics and art die.

BE Yes. If there aren’t any alternatives, there is no reason for having art. Art is a way of thinking about other possibilities. Do you want to hear this so you can just get a feeling?

[Eno plays a loud and brassy five-minute segment.]

BE I suspect it will get used in movies. This record just has two long pieces on it. They are both about 25 minutes.

YV Progressive rock! Like the 1970s.

BE It won’t fit on an LP – that’s the only trouble. The more bass you have, the less you can get on vinyl. We have to think of vinyl nowadays because everybody is buying vinyl again.

YV Isn’t that great? I don’t know why I like it, but I do. Our son, who had never heard vinyl, discovered my old record collection, and now he will only listen to vinyl. He says it is a more chromatic sound. I suspect he just likes the whole experience more. Taking it out of a sleeve, cleaning it, reading the sleeve notes. He wasn’t particularly interested in the Greek stuff; what caught his attention was Led Zeppelin’s album covers. And he was impressed by Pink Floyd’s Ummagumma cover.

BE The sleeves were so much more interesting. And I love cover notes. I’m just going to put the kettle on.

YV Apple has a factory in the US that employs almost no workers, and the factory itself was built by robots, so the question is, who’s going to buy the Apple machines? The robots won’t. Now, how this will pan out is impossible to know. Maybe the crisis is going to be so ruthless that machinery will become so expensive that human labour will get a temporary reprieve. That reprieve leads to an increase in wages, which leads to an increase in demand, and so the machines come back again.

At the moment, in the US, a human welder costs $25 per hour, including benefits and pensions and stuff, and a mechanical welder about $18 per hour. But if the level of unemployment reaches the level we have, say, in Greece, the price of a human welder might go to $15. So suddenly the human becomes competitive again.

BE There is another possibility: basic income. That is, you give people a certain amount of money, whether they work or not. So you avoid the crushing poverty of people who have no money and you also stimulate the economy, because when people have money, they buy things. We always think money should go in at the top and it will trickle down and people will get employed and so on. But what they tried in Brazil was giving people in favellas about $1,000 for sending their children to school. The result is that people spend that money, and spend it locally, so local shopkeepers benefit, too.

YV Services are going to require a lot fewer people as a result of artificial intelligence, so the call centres and paralegal professions will be replaced by robots who can do the job better. Turing said if we can communicate with a machine and we can’t tell it’s a machine, then we can assume that machine is intelligent. Now the Turing test has been passed, that will destroy hundreds of millions of jobs. But will the ones created, making this artificial intelligence, be enough to replace the ones lost? So far with capitalism, every labour-saving technology has created more jobs than it has destroyed. The car destroyed jobs for horsemen and stage coach people, but then auto workers and those building the motorways and petrol stations brought more jobs than they destroyed.

For the first time, we are running the risk that technology will destroy a lot more jobs than it creates. Now, philosophically, what’s wrong with machines doing our work for us?

BE We’re happy to accept that they do a lot already.

YV But the question is ownership. With capitalism you have a minority owning the machinery – the means of production, as Marx used to say. If we continue with this and ownership of the machinery gets even more unequal, then that will create huge problems for capitalism because the demand won’t be there. There won’t be enough people earning to buy the stuff that the machines can produce.

BE Even at the moment there are people, particularly on the west coast of America, who would say we are living in Star Trek, and there are others, likeEvgeny Morozov, who would say we are living in The Matrix. So these utopias and dystopias aren’t in the future – we are actually in one or the other now.

YV I think Evegeny is right. We are closer to the Matrix than Star Trek.

BE I think we are as well.

YV If there are human slaves behind the machine, then it is not Star Trek.

BE It’s that thing whereby if you’re getting something for free, it probably means you are the product. People say the internet is wonderful – it’s all free. Actually, it’s not: you’re the thing that’s being bought and sold.

[They talk about the politics of video games and why Darwinism can’t be applied to the free market.]

YV How did your progressive politics blend into the possessive individualism that seemed central to the mindset of the rock scene in the 1970s?

BE Well, when I was young I thought of myself as an anarchist; gradually that position moved to something you might call minarchism – minimum constraint. I got fascinated by a piece of music by the English composer Cornelius Cardew. It’s a piece that anybody can do; you don’t have to be a trained musician. In fact, it’s usually done by a roomful of people – it’s just voices, and it always sounds pretty much the same. I thought, “How can something have form and be identifiable with so few constraints?”

YV The rock opera?

BE Yes, the rock opera, which is arguably what I have just done!

YV Yes, that sounded very much like an epic rock opera with byzantine elements.

BE Nice to know you can still change direction late in your career! One of the things that made Roxy interesting was that nobody really agreed with anybody else. It wasn’t a group of mates who all came from the same background; it was a group of people who enjoyed the fact that they weren’t like each other, and had different skills and interests. I came from a musical background, for instance, quite different from Bryan [Ferry]. Bryan came out of soul; I came out of experimental music. I don’t remember a single political conversation we had. That might have been because we knew it would be catastrophic.

YV Where you were raised? In Ipswich?

BE Just outside it. You were at the University of East Anglia?

YV First I was in Colchester, then in Norwich. I sandwiched Ipswich. I used to pass through.

We’ve just talked about politics; what about our kids, wives? I’ve got three daughters.

YV I have three children, too: one is biologically mine, and two are from my wife’s previous marriage.

BE So my daughter, who is about to become a junior doctor, was at a demonstration yesterday because, as you know, they are cutting the pay of junior doctors, and you know the health minister is called Jeremy Hunt? She said there was somebody with a placard saying, “I’m not a gynaecologist but I know a Hunt when I see one.”

YV Hahaha – that’s excellent.

BE I was saying to my friend this morning, as we were out walking the dogs, “Isn’t it funny that we have created a system which gives the biggest rewards to the greediest people and the worst rewards to the most generous, the people who work in hospitals?”

YV Wasn’t that always the case? We had a glimmer of hope after the war that things could change, but they only changed because of the Soviet scare and the rise of the left. The moment the left imploded due to its own failures – our own failures, I should say, as a leftist – there was no reason any more.

BE Wouldn’t it be nice if somebody wrote a short essay saying, “What did communism do for us?” I remember Octavio Paz said that communism might have been the wrong answer, but it wasn’t the wrong question. Because we decided the answer was wrong, we thought we didn’t need to ask the question about inequality any more.

BE I am because I think what you believe is what you make happen. That’s a fundamental aspect of one’s life philosophy. You either believe you stand outside life and watch it, or else you believe you’re engaged and the set of beliefs you take to it forms part of the future. If you take a set of beliefs that is pessimistic and paranoid and defensive – maybe the set of political beliefs North America now has, for example – then you end up with a different future. We are constantly writing our future ourselves. It sounds as if I’m talking about faith, but I’m not – because I’m an atheist.

YV I would call myself an atheist too, but I don’t want to be associated with the evangelical atheists who are disrespectful towards theists. I’m completely respectful towards people who have faith. Richard Dawkins is religious in his anti-religion.

BE Yes, he has become that. If you love gospel music – as I do – you can’t not see the value of a certain type of religious experience. The fundamental thing that is happening in religion is that people are surrendering.

YV We surrender, too – to optimism. I have no empirical data that makes me optimistic about the world or human nature. If I was a pure empiricist all the evidence is that we’re a very nasty lot, but I’m not allowing that to come in the way of my faith, which is in humanity. So I’m completely optimistic through my heart, and I do not allow my brain to rule over my heart.

BE It’s an act of faith that creates its reality.

YV We have faith; we just don’t have faith in a divinity.

BE It’s interesting to see everybody’s reactions to Paris. It is not completely kitsch and sentimental that when something like this happens everybody else says, “We don’t agree with this: this isn’t us.” People don’t ignore it. It will be worrying when people start ignoring it, and just carry on with life as normal. And I don’t think it has created the simplistic characterisations of anti-Islamism.

YV No, but it does add impetus to closing down borders and re-erecting barriers, and that worries me.

But you were saying optimism is almost like religion – it is a faith. So you can look at what happened in Paris and empirically deduce that the world is going to be a very bleak place, or you can choose to be optimistic about it. It’s an activist optimism. These people are prepared to sacrifice their lives in order to close minds and close borders and erect barriers; the great question for us on the receiving end is, “Are we prepared to make the sacrifices necessary to keep the borders open, and to open minds instead of closing them down?”

BE I read an interesting book by [the anthropologist] Scott Atran called Talking To The Enemy. He spoke to a lot of jihadis, and tried to decide what their moral compass was. And he said they almost all agree the atomic destruction of Hiroshima and Nagasaki was completely immoral. So they are not amoral, which is interesting. One of the people Atran quoted said, “But they were just innocent people!” It’s interesting that he would have that mindset that they were innocent, but the ones they killed were not.

BE Look at the time: it’s been two hours. I’m so sorry, but I have to finish the album. You can stay if you want, but I have to work.

YV No, I must get on. I have to meet Slavoj Žižek.

BE I’ll see you out. See you soon.

• Introduction by Simon Hattenstone. This conversation has been edited for length.