Austerity is back with a vengeance, or one could argue, it has never left us. For more than a century, governments facing financial crisis have resorted to the economic policies of austerity—cuts in social expenditure, interest rate hikes, privatizations, labor deregulation—as a path to solvency. The question remains: what if solvency was really never austerity’s goal? We need to rethink austerity, not merely as a “policy mistake” but as a crucial political weapon to preserve capital as the social relation grounding accumulation. A different framework of austerity, which connects fiscal and monetary policy to the more fundamental urge of “taming citizens”, is crucial in order to make sense of the predicaments of contemporary society.
Clara E. Mattei is an Associate Professor in Economics at The New School for Social Research of New York City and was a member of the Institute for Advanced Studies at Princeton in 2018-2019. Her research focuses on the relationship between fiscal, monetary, and industrial policies in contemporary capitalism. In particular, she studies the logic of austerity policies and how they shape our society. Her recent book, Capital Order: How Economists Invented Austerity and Paved the Way to Fascism (University of Chicago Press, November 2022) has received widespread acclamation: A Financial Times Best Book of the Year “A must-read, with key lessons for the future.”—Thomas Piketty