Austerity

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"The austerity policies that have been rolled out in many Western countries have brought all the pain of economic stagnation but hardly any of the promised benefits of debt reduction, renewed growth and prosperity. Nonetheless, support for such measures has remained strong among economists, politicians and substantial parts of the public. How can we explain this steadfastness in the face of economic failure? A way to make sense of this paradox is to place the current debates in the historical perspective and look at the deep and ancient roots for austerity ... Today the term austerity is often used to denote public spending cuts in general. This captures an important manifestation of austerity policies but it misses their main rationale. Austerity polices are proposed to restore balance in government finances and regain economic dynamism and competitiveness. The former objective is pursued mainly by cutting back on government expenditure that funds individual and collective forms of consumption ... The second objective, stimulating growth, is mainly sought by lowering the cost of labor, that is, reducing wages and hence individual consumption ... Austerity policies have many facets but ultimately they are about abstinence from consumption ... This small book is meant to be a guide to the historical roots of the arguments about austerity in the Western world. It does not offer a comprehensive discussion of the history of economic thought and the focus is only on Western traditions. This limitation reflects the geography of today's austerity policies, which are mostly applied and contested in the industrialized nations of Europe and North America. The main actors and arguments will be introduced along with as much information about their period as is necessary to fully understand what their concerns were. At the same time, we will read the contributions of these men and women -- mostly men, really -- and their arguments with the question in mind of how their views are linked to today's debates about austerity. The last chapter offers some suggestions of what we many learn from the masters of the past to guide us in our present predicament"--Introduction