Austerity
The History of a Dangerous Idea
Oxford University Press
2013
Présentation de l'éditeur
Politicians today in both Europe and the
United States have succeeded in casting government spending as reckless
wastefulness that has made the economy worse. In contrast, they have
advanced a policy of draconian budget cuts–austerity–to solve the
financial crisis. We are told that we have all lived beyond our means
and now need to tighten our belts. This view conveniently forgets where
all that debt came from. Not from
an orgy of government spending, but as the direct result of bailing out, recapitalizing, and adding liquidity to the broken banking system. Through these actions private debt was rechristened as government debt while those responsible for generating it walked away scot free, placing the blame on the state, and the burden on the taxpayer.
an orgy of government spending, but as the direct result of bailing out, recapitalizing, and adding liquidity to the broken banking system. Through these actions private debt was rechristened as government debt while those responsible for generating it walked away scot free, placing the blame on the state, and the burden on the taxpayer.
That burden now takes the form of a global turn to austerity, the
policy of reducing domestic wages and prices to restore competitiveness
and balance the budget. The problem is, I argue here, that austerity is a
very dangerous idea. First of all, it doesn’t work. As the past four
years and countless historical examples from the last 100 years show,
while it makes sense for any one state to try and cut its way to growth,
it simply cannot work when all states try it simultaneously: all we do
is shrink the economy. In the worst case, austerity policies worsened
the Great Depression and created the conditions for seizures of power by
the forces responsible for the Second World War: the Nazis and the
Japanese military establishment. The arguments for austerity are tenuous
and the evidence thin. Rather than expanding growth and opportunity,
the repeated revival of this dead economic idea has almost always led to
low growth along with increases in wealth and income
inequality. Written not for the academy, but for all of us with an
interest in how we’ve come to our current disastrous economic situation,
this book demands that we recognize austerity for what it is, and what
it costs us.
Mark Blyth is Professor of International Political Economy at Brown University. His books include Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century.
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