“A must-read, with key lessons for the future.”—Thomas Piketty
A groundbreaking examination of austerity’s dark intellectual origins.
For more than a century, governments facing financial crisis have resorted to the economic policies of austerity—cuts to wages, fiscal spending, and public benefits—as a path to solvency. While these policies have been successful in appeasing creditors, they’ve had devastating effects on social and economic welfare in countries all over the world. Today, as austerity remains a favored policy among troubled states, an important question remains: What if solvency was never really the goal?
In The Capital Order, political economist Clara E. Mattei explores the intellectual origins of austerity to uncover its originating motives: the protection of capital—and indeed capitalism—in times of social upheaval from below.
Mattei traces modern austerity to its origins in interwar Britain and Italy, revealing how the threat of working-class power in the years after World War I animated a set of top-down economic policies that elevated owners, smothered workers, and imposed a rigid economic hierarchy across their societies. Where these policies “succeeded,” relatively speaking, was in their enrichment of certain parties, including employers and foreign-trade interests, who accumulated power and capital at the expense of labor. Here, Mattei argues, is where the true value of austerity can be observed: its insulation of entrenched privilege and its elimination of all alternatives to capitalism.
Drawing on newly uncovered archival material from Britain and Italy, much of it translated for the first time, The Capital Order offers a damning and essential new account of the rise of austerity—and of modern economics—at the levers of contemporary political power.
ineteconomics.org/ The Capital Order – video interview with Clara Mattei
jacobin.com 10-2022 When Liberals Fell in Love With Benito Mussolini – by Clara E Mattei
theguardian.com 10-2022 Don’t be fooled: policymakers are quietly invoking austerity by other names – Framing monetary policy as a war effort has been part of the playbook for instituting austerity policies for over a century – by Clara E Mattei
promarket.org 11-2022 How Austerity Emerged after World War I to Preserve Capitalism – excerpt by By Clara E Mattei
“In March 2020, during the earliest days of the COVID- 19 pandemic, the Democrat governor of New York, Andrew Cuomo, announced plans to slash Medicaid spending to hospitals by $400 million as part of his state budget. It was a shocking announcement: on the threshold of a pandemic, one of the country’s most high-profile politicians was informing the public that he planned to underpay hospitals caring for New York’s poorest and most vulnerable. “We can’t spend what we don’t have,” Cuomo explained with a shrug in a press conference. The cuts were expected to go deeper in the following years, with similar cuts to come for the state’s public schools….”… read at source
…”… Clara Mattei discusses the origins of austerity as an economic policy, noting the “success” of austerity in shaping our societies and how we think about our society and how it informs what she calls the “tropes of contemporary policy making” – budget cuts, welfare cuts, and reductions in spending on schools and universities, healthcare, housing and unemployment benefits, and the introduction of higher taxation which invariably burdens the middle class. Sometimes, as Mattei points out, these policy prescriptions were also enacted simultaneously with tax cuts instead of tax increases, with high income earners and corporates receiving significant tax breaks. This specific aspect of policy paradigms in the wake of a recession was only recently introduced in the UK by then PM Truss and her Chancellor Kwarteng, both of whom had to resign within weeks…”…
theguardian.com 11-2022 Discipline the poor, protect the rich – it’s the same old Tories, same old class war – Brexit didn’t change the party: austerity was as heartless under Cameron and Osborne as it is under Sunak – by Aditya Chakrabortty
…”…that is the form of government we face now. Let us call it authoritarian austerity, for it is an ideology with a long and terrible history. In a new book titled The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism, the economic historian Clara E Mattei reminds us that the greatest austerity the UK ever faced was not under Osborne or Margaret Thatcher but in the early 1920s, when Whitehall slashed spending in short order by 20%. Wages cratered, while the economy was crippled for most of the decade. The technocrats at the Bank of England acknowledged: “The process of deflation of prices … must necessarily be a painful one to some classes of the community”, which at least is more honest than declaring, as Cameron did, that “we’re all in this together”…”…
adamtooze.substack. 10-2022 …”…We tend to think of the interwar period as the incubator of the New Deal and the “postwar welfare state”, which brought to power new kinds of expertise, above all Keynesian economics. But, as Clara Mattei of the New School shows us in a powerfully argued new book, if the name of the game was incorporating economic expertise into the state machinery, it was in fact the fascists who got there first…”…
marginalrevolution 10-2022 Tyler Cohen “When I first saw the title of Clara E. Mattei, The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism, I thought it was some kind of satire, or perhaps GPT-3 run amok. Nonetheless some of the book is a serious economic history of the 1920s and its fiscal and credit policies, and you should not dismiss it out of hand. That said, mechanisms such as the supposed “logic of capital accumulation” are assigned too much explanatory power. The book also will convince you that “austerity” is almost always poorly defined.”
t@ThomasPiketty 7-2022 A fascinating history of the rise of austerity policies in post-WW1 Europe & how it paved the way for fascism. Historical political economy at its best. A must-read
opendemocracy.net 10-2022 No one voted for Rishi Sunak to return the UK to crippling austerity – Sunak wants yet another round of cuts to public spending. And just like in 2010, we didn’t vote for it – by Adam Ramsay
taxresearch 10-2022 The only winners from Truss are those who want to impose austerity on the UK – by Richard Murphy
realinstitutoelcano.org 9-2022 A return to austerity in Europe: feasible or fictional? by Federico Steinberg, Jorge Tamames
Monetary Policy Institute Blog 7-2022 The Descent into Monetary Austerity
academic.oup.com 2019 Anti-Austerity on the Far Right – by Melinda Cooper
>anti-capitalism, authoritarian, austerity, deflation, far right, national socialism, neofascism, neoliberalism, populism
Abstract – After almost a decade of punishing austerity and social-democratic paralysis, the electoral success of the far right appears as a real and credible threat across Europe. This chapter focuses on the resurgence of a specifically anti-neoliberal or national-social far right in Europe today and investigates its complex relationship with a hitherto hegemonic neoliberal far right. This resurgent anti-capitalist far right has obvious affinities with the German conservative revolution of the Weimar Republic and the National Socialism of the Third Reich. But it also has more proximate origins in the French Nouvelle Droite of the late 1960s, which very rapidly distinguished itself through its opposition to neoliberal economics and its mimetic relationship to the new left. This chapter looks at the disquieting parallels between the German debt deflation of the 1930s and the long aftermath of the sovereign debt crisis today. It then turns to the complex relations between the pro-neoliberal and anti-neoliberal factions in the European far right, focusing in particular on the key influence of the French intellectual Alain de Benoist in articulating an anti-capitalist neofascism for the twenty-first century. The chapter argues that the left needs to take the anti-capitalist far right more seriously than it often does.
youtube 2013 Austerity: The History of a Dangerous Idea – by Mark Blyth
goodreads 2013 The Body Economic: Why Austerity Kills – by David Stuckler, Sanjay Basu
Politicians have talked endlessly about the seismic economic and social impacts of the recent financial crisis, but many continue to ignore its disastrous effects on human health—and have even exacerbated them, by adopting harsh austerity measures and cutting key social programs at a time when constituents need them most. The result, as pioneering public health experts David Stuckler and Sanjay Basu reveal in this provocative book, is that many countries have turned their recessions into veritable epidemics, ruining or extinguishing thousands of lives in a misguided attempt to balance budgets and shore up financial markets. Yet sound alternative policies could instead help improve economies and protect public health at the same time.
In The Body Economic, Stuckler and Basu mine data from around the globe and throughout history to show how government policy becomes a matter of life and death during financial crises. In a series of historical case studies stretching from 1930s America, to Russia and Indonesia in the 1990s, to present-day Greece, Britain, Spain, and the U.S., Stuckler and Basu reveal that governmental mismanagement of financial strife has resulted in a grim array of human tragedies, from suicides to HIV infections. Yet people can and do stay healthy, and even get healthier, during downturns. During the Great Depression, U.S. deaths actually plummeted, and today Iceland, Norway, and Japan are happier and healthier than ever, proof that public wellbeing need not be sacrificed for fiscal health.
Full of shocking and counterintuitive revelations and bold policy recommendations, The Body Economic offers an alternative to austerity—one that will prevent widespread suffering, both now and in the future.