Austerity

Austerity is a set of economic policies implemented with the aim of reducing government budget deficits. Policies grouped under the term 'austerity measures' may include spending cuts, tax increases, or a mixture of both, and may be undertaken to demonstrate the government's fiscal discipline to creditors and credit rating agencies by bringing revenues closer to expenditures. Quotes Austerity is not new, nor is it a product of the so-called Neoliberal Era that began in the 1970s. Outside, perhaps, of the less than three booming decades that followed World War II, austerity has been the mainstay of capitalism. It has been true throughout history that where capitalism exists, crisis follows. Where austerity has proven wildly effective is in insulating capitalist hierarchies from harm during these moments of would-be social change. Austerity is capitalism's protector, popular among states for its effectiveness and billed as a means of "fixing" economies by increasing their "efficiency"—short-term readjustments for long-term gains. Clara Mattei Clara E. Mattei, The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism. University of Chicago Press (2022). 978-0226818399 p. 3 When I refer to a crisis of capitalism, I do not mean an economic crisis—say, slowdown in growth or an uptick in inflation. Capitalism is in crisis when its core relationship (the sale of production for profit) and its two enabling pillars (private property in the means of production and wage relations between owners and workers) are contested by the public, in particular by the workers who make capitalism run. As part of these expressions of unhappiness, people have historically demanded alternative forms of social organization. indeed . . . austerity's primary utility over the last century has been to silence such calls and foreclose alternatives to capitalism. Mostly austerity serves to quash public outcry and worker strikes—not, as is advertised, to spontaneously improve country's economic indicators by practicing greater economic discipline. Clara E. Mattei, The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism. University of Chicago Press (2022). 978-0226818399 pp. 3-4 Austerity as we know it today emerged after World War I as a method for preventing capitalism's collapse: economists in political positions used policy levers to make all classes of society more invested in private, capitalist production, even when these changes amounted to profound (if also involuntary) personal sacrifices. In the early 1920s, austerity functioned as a powerful counteroffensive to strikes and other forms of social unrest that exploded on an unprecedented scale after the war—a period traditionally, and oddly, overlooked by political and economic scholars who study austerity. The timing of austerity's invention reflects its animating motivations. Of greater importance than austerity's purported economic efficacy was its ability to guard catalyst relations of production during a time of unprecedented social organizing and public agitation from working classes. Clara E. Mattei, The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism. University of Chicago Press (2022). 978-0226818399 p. 4 Austerity is not about spending less but about spending in favor of the economic and financial elite and to the detriment of the majority of the population. We struggle to afford basic medical treatment, find secure affordable housing, and send our children to adequately funded schools. Though social expenditures are slashed, for the capitalist class the message that "there's no money" doesn't apply. The American state bought nearly $50 billion in arms from Lockheed Martin in 2023 alone. In fact, Lockheed Martin and BlackRock overflow with our tax money. Clara Mattei Clara E. Mattei, Escape from Capitalism: An Intervention. (2026). 978-1668085141 p. 59 Finally, and very importantly, the cause of necessary economic reforms has not been served by confounding that necessity with the policy of austerity. Indeed, serious consideration of the kinds of reform that are needed has been hampered, rather than aided, by the loss of clarity about the distinction between reform of bad administrative arrangements (such as people evading taxes, government servants using favoritism, banks being exempt from necessary discipline, or—for that matter—preserving a nonviable system of early retiring ages), and austerity in the form of ruthless cuts in public services and basic social security. The requirements for alleged financial discipline have tended to amalgamate the two, even though any analysis of social justice would view policies for necessary reform in an altogether different way from drastic cuts in important public services. Even if that distinction may have been lost in rather crude financial thinking, opportunities for adequate public reasoning, in “government by discussion,” could have brought out its relevance clearly enough.Europe has been extraordinarily important for the world, which has learned so much from it. It can remain globally important by setting its own house in order—economically, politically, and socially. The first step is to understand properly, with some clarity, the policy challenges that Europe faces today. A failure to do so will reverberate far beyond Europe’s own borders. Amartya Sen, "What Happened to Europe?", New Republic (August 2, 2012) In Italy Austerità: costume di parsimonia nel comportamento e nell'utilizzo dei beni; tanto più meritevole se non imposta e strettamente necessaria. Austerity: a custom of thrift in behavior and the use of goods; all the more deserving if not imposed and strictly necessary. Giulio Andreotti, Le frasi celebri di Andreotti, IlSole24Ore.com. Gli uomini di devozione e di austerità aborrono ogni cosa perché sono assenti da Dio; se lo vedessero in ogni cosa, non aborrirebbero da alcuna cosa. Men of devotion and austerity abhor all things because they are absent from God; if they saw him in all things, they would not abhor anything. Ibn Arabi, quoted in M.M. Moreno, Antologia della mistica arabo-persiana, Laterza, Bari, 1951, p. 232. The boom, not the slump, is the right time for austerity at the Treasury. John Maynard Keynes, from a radio speech, 1937. In qualunque epoca, una politica di austerità finanziaria risulta sempre impopolare. In any era, a policy of financial austerity is always unpopular. Yukio Mishima, Cavalli in fuga (A briglia sciolta), in Neve di primavera, translation into Italian by R. Mainardi, 1953. La nostra lotta è quella di ogni popolo che combatte contro l'austerità. Our fight is that of every people fighting against austerity. Alexis Tsipras, Grecia, Tsipras trionfa: "Il popolo greco ha fatto la storia", Euronews.com, 26 January 2014. Per difendere l'euro e uscire dalla crisi del debito ogni Stato membro deve fare fino in fondo la sua parte in termini di austerità fiscale e rilancio della crescita economica. Nessuno può sottrarsi alle sue responsabilità. Traendo forza vitale dalla sua fiducia nel progetto europeo, l'Italia sta dando il buon esempio. Non siamo più causa del problema, ma siamo diventati parte della soluzione. Abbiamo operato con rapidità e efficacia, adottando misure significative che ci hanno restituito credibilità internazionale. In Europa e nel mondo, riscontriamo gratitudine e apprezzamento per il lavoro svolto. To defend the euro and emerge from the debt crisis, each Member State must do its part to the fullest in terms of fiscal austerity and revitalizing economic growth. No one can shirk his responsibilities. Drawing vital force from its confidence in the European project, Italy is setting a good example. We are no longer the cause of the problem, but we have become part of the solution. We have operated swiftly and effectively, taking significant steps that have restored international credibility. In Europe and around the world, we find gratitude and appreciation for the work done. Giulio Terzi di Sant'Agata, Intervento del Ministro Terzi all'inaugurazione dell'Anno Accademico Università degli Studi di Bergamo, 16 March 2012. Una società più austera può essere una società più giusta, meno diseguale, realmente più libera, più democratica, più umana. A more austere society can be a more just, less unequal, truly freer, more democratic, more humane society. Enrico Berlinguer, Austerità, occasione per trasformare l'Italia, Roma, 1977, p. 13, quoted in Paul Ginsborg, Storia d'Italia dal dopoguerra a oggi, traduzione di Marcello Flores e Sandro Perini, Einaudi, Torino, 1989. ISBN 8806160548, p. 481. L'austerità, avendo causato l'esportazione dei forti squilibri interni all'eurozona nel resto dell'economia globale, fatalmente ha urtato contro gli interessi dei nostri partner, mi riferisco in particolare a quelli statunitensi. Austerity, having caused the strong internal imbalances within the eurozone to be exported to the rest of the global economy, has fatally come at odds with the interests of our partners, I am referring in particular to those of the United States. Alberto Bagnai, from a speech held at the Italian Chamber of Deputies, Session Assembly n. 15, 29 November 2022. Ma l'euro comporta l'austerità, e quindi per opporsi veramente all'austerità bisogna opporsi all'euro. But the euro brings austerity, and so to truly oppose austerity you have to oppose the euro. Alberto Bagnai, Grecia, l'esempio del Paese di Tsipras: dentro l'euro non c'è sinistra, Il Fatto Quotidiano.it, 6 June 2015. Nel quadro dell'euro la politica tributaria in Italia può operare solo nel senso dell'austerità. La cosa interessante è che la politica dell'austerità è stata efficace ed inefficace. È stata inefficace rispetto agli obiettivi dichiarati ex ante che erano quelli di risanare le finanze pubbliche [...] È stata però efficace rispetto all'obiettivo vero, che è stato dichiarato ex post, che era quello di aggiustare i conti con l'estero. Within the framework of the euro, tax policy in Italy can only operate in the sense of austerity. The interesting thing is that the austerity policy has been effective and ineffective. It was ineffective with respect to the objectives declared ex ante which were to restore public finances [...] However, it was effective in relation to the real objective, which was declared ex post, which was to adjust the accounts with foreign countries. Alberto Bagnai, COMMISSIONE FINANZE - Presidenza italiana Unione europea, audizione Bagnai, Camera.it, 4 December 2013. Non ci può essere un euro senza austerità. There can be no euro without austerity. Alberto Bagnai, Demagogia e menzogne, Il Tempo.it, 4 July 2015. Quello che non viene mai notato a sufficienza è che l'austerità corrisponde al delirio mercantilista di alcuni ideologi di Paesi europei, secondo i quali un Paese è sano solo se è un esportatore netto. Di fatto, applicando le politiche di austerità, i Paesi del Sud hanno ammazzato le loro importazioni e sono diventati esportatori netti, e, quindi, l'Eurozona è diventata, nel suo complesso, un esportatore netto. What is never sufficiently noted is that austerity corresponds to the mercantilist delusion of some ideologues of European countries, according to whom a country is healthy only if it is a net exporter. In fact, by applying austerity policies, the countries of the South killed their imports and became net exporters, and, therefore, the Eurozone became, as a whole, a net exporter. Alberto Bagnai, from a speech held at the Italian Chamber of Deputies, Session Assembly n. 15, 29 November 2022. External links Category:Economics