Austerity: The History of a Dangerous Idea
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- Author：Mark Blyth
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Summary
Selected as a
Financial Times
Best Book of 2013
Governments 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。
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， according to political economist Mark Blyth， is 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。 As Blyth amply demonstrates， 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。 Austerity demolishes the conventional wisdom， marshaling an army of facts to demand that we austerity for what it is， and what it costs us。
Governments 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。
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， according to political economist Mark Blyth， is 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。 As Blyth amply demonstrates， 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。 Austerity demolishes the conventional wisdom， marshaling an army of facts to demand that we austerity for what it is， and what it costs us。
Reviews
António
，
Usa "factos" que são na realidade argumentos e conta a história que lhe convém da realidade Usa "factos" que são na realidade argumentos e conta a história que lhe convém da realidade 。。。more
Delta
，
للوهلة الأولى سيبدو لك الكتاب وكأنه ينتقد حلًا بديهيًا للأزمات الإقتصادية، لكنك لتفهم لما هذا الحل انتهازيًا عليك أولًا أن تطلع على الكواليس
Ietrio
，
Apparently Austerity is the toxic idea that the Governments should limit how much value they extract to serve minor bureaucratic lords like Blyth。 And that is dangerous。 What would be next？ The nephews hired by people like Blyth would have to get honest jobs instead of taking care of the needs of the sinecured uncle。
CLOVER
，
dont take this seriously jus 4 future me to readspoiler alert: austerity = bad （as an economic recovery method）why？ it doesn't work， it unfairly relies on the poor to fix the problem， and composition-wise， we can't all be austere at oncei don't know how i feel ab the colloquial writing style; even though it was more entertaining 2 read， it wasn't necessarily more accessible dont take this seriously jus 4 future me to readspoiler alert: austerity = bad （as an economic recovery method）why？ it doesn't work， it unfairly relies on the poor to fix the problem， and composition-wise， we can't all be austere at oncei don't know how i feel ab the colloquial writing style; even though it was more entertaining 2 read， it wasn't necessarily more accessible 。。。more
Steve Stinson
，
I was really turned off when I started this book， partly because of Blyth's assertion that the economics profession （full disclosure: I am an economist） somehow led the world astray。 As I read further， I started to appreciate his point of view although the manner in which he expressed it still irked me。 Austerity， in itself， is not the big bad wolf that Blyth makes it out to be。 It is eminently wise for a state not to spend significantly more than it takes in over the business cycle。 Servicing l I was really turned off when I started this book， partly because of Blyth's assertion that the economics profession （full disclosure: I am an economist） somehow led the world astray。 As I read further， I started to appreciate his point of view although the manner in which he expressed it still irked me。 Austerity， in itself， is not the big bad wolf that Blyth makes it out to be。 It is eminently wise for a state not to spend significantly more than it takes in over the business cycle。 Servicing large amounts of debt means there is less money available for public services and infrastructure unless taxes are raised – in other words， bad fiscal policy can force austerity on the populace。However， the real culprit in his story is the propensity of governments to bail out their financial sectors when they get into trouble because they are considered "too big to fail"。 On this， I share his view。 Socializing risk on the backs of the citizenry is wrong。 Such bailouts also build moral hazard into the system and encourage excessive risk-taking。 To be sure， disruption in a country's financial sector has serious implications for the real economy。 State intervention， whether fiscal or monetary， is sometimes required to offset its effects but it should not be the people who take the haircut。 Blyth goes through many examples to make his case that austerity is a form of malpractice by economists。 Without being intimately familiar with the literature it is hard to assess his conclusion that austerity does not work。 I agree that it certainly does not work on its own in countries without their own currencies as in the EU。 But my take is that austerity primarily does not work when a country's financial sector offloads its risk on the government。 The ripple effects of reduced incomes and employment only aggravate the shock。 Bank executives must have real skin in the game。 And the solution to that is to make sure they do。 。。。more
Carla Groom
，
Best economics book I've read。 Fascinating history of Government intervention in the economy， from Locke and Hume through the Gold Standard dilemmas of the early twentieth century to a detailed account of what prompted the 2008 Financial Crisis and the international economic debates about how to clear up the mess。 I'd love to hear a good critical review from someone who knows far more than me （not difficult）， but for now， it makes a very persuasive case。I listened to the audiobook， which wasn't Best economics book I've read。 Fascinating history of Government intervention in the economy， from Locke and Hume through the Gold Standard dilemmas of the early twentieth century to a detailed account of what prompted the 2008 Financial Crisis and the international economic debates about how to clear up the mess。 I'd love to hear a good critical review from someone who knows far more than me （not difficult）， but for now， it makes a very persuasive case。I listened to the audiobook， which wasn't ideal due to technical elements and numbers， but it was just about manageable。 。。。more
Paul Floyd
，
Thorough deconstruction of austerity and why it does not work。I'm sure that after Covid 19 the same ideas will come out， in order that the haves can keep having and the have-nots can foot the fill。 Thorough deconstruction of austerity and why it does not work。I'm sure that after Covid 19 the same ideas will come out， in order that the haves can keep having and the have-nots can foot the fill。 。。。more
Paige McLoughlin
，
I have read this in 2019 I am familiar with Mark Blythe I also check him out on youtube。 I will drop a video here。 Punishing the majority with austerity usually makes a population more angry， polarized， and extreme both on the left and right。 People lose faith in the system and that's when you have trouble。 Definitely， a case where the cure is much worse than the disease except for the well off probably why it never gets old with them。https://www。youtube。com/watch？v=oXK0Z。。。 I have read this in 2019 I am familiar with Mark Blythe I also check him out on youtube。 I will drop a video here。 Punishing the majority with austerity usually makes a population more angry， polarized， and extreme both on the left and right。 People lose faith in the system and that's when you have trouble。 Definitely， a case where the cure is much worse than the disease except for the well off probably why it never gets old with them。https://www。youtube。com/watch？v=oXK0Z。。。 。。。more
Diego
，
Una revisión de la genealogía de la idea de la Austeridad， su historia intelectual y su historia natural。 Partiendo de los resultados de la crisis de 2008-2009 y lo que sucede en Europa， Mark Blyth construye un solido argumento sobre porque la austeridad no funciona y como de hecho sólo ha servido para causar problemas y no resolver ninguno de los que se supone resolvera。 Un libro muy bien escrito， con un estilo muy amigable， divertido y sobre todo necesario para los tiempos en que vivimos。
Rob Gott
，
Love blyths style。 I listen to his podcast because of this book。 His lectures are very well thouvht out and are put in a clear manner。 You could do with skipping "the intellectual history of austerity" Love blyths style。 I listen to his podcast because of this book。 His lectures are very well thouvht out and are put in a clear manner。 You could do with skipping "the intellectual history of austerity" 。。。more
Able D。
，
More State is not the Solution。
Michelle Waters
，
I was， tbh， impressed with myself for deciding to read this， so I want to make one thing clear: I absolutely did not understand most of it
Aaron
，
I bought this book after i was really disappointed by Stephanie Keltons take on the topic。 What （i think） bothered me there， was that the book was written to lecture the reader， more than to educate him/her。This is here absolutely not the case in the lucid historical analysis， and the overall context provided。 If the book had only been that， i might have considered a 4 maybe 5 star rating。Unfortunately it isnt just that - as the title suggests， Mark Blyth set out to make a point。 And he does it， I bought this book after i was really disappointed by Stephanie Keltons take on the topic。 What （i think） bothered me there， was that the book was written to lecture the reader， more than to educate him/her。This is here absolutely not the case in the lucid historical analysis， and the overall context provided。 If the book had only been that， i might have considered a 4 maybe 5 star rating。Unfortunately it isnt just that - as the title suggests， Mark Blyth set out to make a point。 And he does it， as Stephanie Kelton does， in a "how on earth could people think this could work - first， its obvious， and second， if somebody would have asked me， i could have told them its a bad idea" kind of way。 The rethorical certitude employed is （i believe） unwarranted and unnecessary。 E。g。 there seems to be a clear divergence from the （in the book） predicted development of the REBLL states post austerity， and the actual trajectory taken。It clearly a good book， but its also short of a great or outstanding book。 。。。more
Carlos
，
A must read。
George
，
Only a few chapters in， one gets the feeling they've read this book before。 It quickly becomes apparent that Varoufakis' 2016 "And the Weak Suffer What They Must？" is just a more polemical， less technical copy of Blyth's 2013 "Austerity。" Only a few chapters in， one gets the feeling they've read this book before。 It quickly becomes apparent that Varoufakis' 2016 "And the Weak Suffer What They Must？" is just a more polemical， less technical copy of Blyth's 2013 "Austerity。" 。。。more
Matthew
，
3。5 stars， generously rounded up， possibly to be rounded back down at a later date。My main issue with this book was that I just didn't understand who the audience was。 As someone with a technical but non-economic background， I can confirm it was not me。 The economic content is certainly not entry level stuff， and frequently relies on specialist terminology。 The author does make some effort to explain this terminology， but often after they have used it several times， and often only with reference 3。5 stars， generously rounded up， possibly to be rounded back down at a later date。My main issue with this book was that I just didn't understand who the audience was。 As someone with a technical but non-economic background， I can confirm it was not me。 The economic content is certainly not entry level stuff， and frequently relies on specialist terminology。 The author does make some effort to explain this terminology， but often after they have used it several times， and often only with reference to other pieces of specialist terminology。 However， I also can't see that this is a book for people with an advanced background （ie degree） in economics - I imagine much of the content would be obvious or boring， and it seems an oddly specific market to write a mass market book for。 So all in all I found it to be interesting but dry and unapproachable， and I'm not sure who the people are who would find it approachable but not uninteresting。This aside， there were a couple of points I disagreed with。 Most notably in the early chapters the author discusses various proposed causes for the financial crash of 2008， but eventually attributes it primarily to factors internal to the market rather than blaming specific actors。 The problem with this is that it provides no insight into how to avoid similar crises in the future， and neglects the point that the markets were being run by people， and their results ought to be attributable to these people。 Most importantly he claims that the government was not necessarily to blame because they subscribed to an economic position that didn't allow them to get involved in the market。 However， this still makes them responsible for a failure to regulate properly in my view。 The most important passage:"Again， and especially at this level， the crisis had nothing to do with either personal morality or state profligacy。 The state had been written into irrelevance beyond providing courts， weights， measures and defense goods。 Just as it didn't start the run on the repo， amplify the crash， or cause risk blindness， so the state had nothing to do with the design of the new instruction sheet。 Indeed， the new instruction sheet was designed to keep the state as far away from the market processes as possible。" - But if anyone has the power to write the state into irrelevancy， it can only be the state itself。 If the design of the instruction sheet is to be blamed， it requires the cooperation of the state to subscribe to these instructions。Finally， I suspected that I could detect hints of undue bias throughout。 The book obviously adopts a position and is inevitably biased in favour of this position， but it felt at times like it was potentially glossing over some factual realities in favour of the position it was trying to discuss。 For example， the second part of the book is largely dedicated to discussing classic positive examples of austerity that turn out not to be so positive after all。 However， this section neglects to highlight any counterpoint economies， and in particular doesn't return to the German 1800s economy that the author earlier admits （in limited detail） achieved growth through austerity。 This may be an unfair point since this specific economy does get some discussion， but by framing it elsewhere in the book it feels like the author may be disguising their message by hiding other positive examples。 Another example - the author claims that Austrian austerity ideas were hammered down in the face of superior intellectual forces， but later mentions in passing that long after this debate was 'concluded'， a key proponent of austerity and Austrian economics was awarded the nobel prize - so presumably they were not reduced quite to the degree of irrelevancy that the author claims。All in all these are minor points in an otherwise very rigorous book， but they did take some of the shine off。 。。。more
Robert C
，
This isn't just a rehash of the author's lectures， and if you have never heard him speak do a search on him on YouTube。 He takes a look at both the supposed successes and the many failures。 IN addition to this， he takes a look at the origins of the trend and what it continues to be so attractive， in spite of its many failures。A co-worker borrowed it when I was about halfway through， so I restarted it。 However， I was impressed that the book presented a compelling case to my co-worker， who is not This isn't just a rehash of the author's lectures， and if you have never heard him speak do a search on him on YouTube。 He takes a look at both the supposed successes and the many failures。 IN addition to this， he takes a look at the origins of the trend and what it continues to be so attractive， in spite of its many failures。A co-worker borrowed it when I was about halfway through， so I restarted it。 However， I was impressed that the book presented a compelling case to my co-worker， who is not interested in economics。 It simply is that well written。 。。。more
Mer
，
This is one-sided， I suggest everyone read "Austerity: When It Works and Doesn't" with solid data analysis for economic historiography。 Link: https://www。google。com/url？sa=t&s。。。 This is one-sided， I suggest everyone read "Austerity: When It Works and Doesn't" with solid data analysis for economic historiography。 Link: https://www。google。com/url？sa=t&s。。。 。。。more
Mohamed IBrahim
，
إن التقشف هو الثمن الذي ندفعه جميعاً تكلفة حفلة لم نكن مدعوين إليها هكذا يمكن تلخيص الفكرة المتعلقة بخضوع الحكومات لسياسات التقشف والتي كانت ناتجة عن الأزمة الاقتصادية العالمية التي تسببت فيها سياسات المصارف التي كانت مستقلة فى عملها إلي حد كبير وقامت بادارة مخاطرات غير مأمونة وكان جشع النخب الذي جعلهم يقودون الاقتصاد العالمي إلي أكبر ركود له منذ قرن。 يوضح الكتاب أن الحجة الأساسية لمروجي التقشف هو أن الحكومات بشراهتها واسرافها فى الانفاق قد جعلت الركود أعمق ويوضح أن هذه الدعاية تحاول حجب حقيقة م إن التقشف هو الثمن الذي ندفعه جميعاً تكلفة حفلة لم نكن مدعوين إليها هكذا يمكن تلخيص الفكرة المتعلقة بخضوع الحكومات لسياسات التقشف والتي كانت ناتجة عن الأزمة الاقتصادية العالمية التي تسببت فيها سياسات المصارف التي كانت مستقلة فى عملها إلي حد كبير وقامت بادارة مخاطرات غير مأمونة وكان جشع النخب الذي جعلهم يقودون الاقتصاد العالمي إلي أكبر ركود له منذ قرن。 يوضح الكتاب أن الحجة الأساسية لمروجي التقشف هو أن الحكومات بشراهتها واسرافها فى الانفاق قد جعلت الركود أعمق ويوضح أن هذه الدعاية تحاول حجب حقيقة مهمة وهو أنه فى تلك الحالة فان هذا الانفاق ذهب لانقاذ تلك البنوك التي تسببت بتلك الأزمة والتي اعتبرت لضخامتها أكبر من أن تترك لتنهار لأنها ستأخذ معها اقتصاد البلاد المختلفة إلي الانهيار الكامل。 ويأخذنا الكاتب فى جولة تاريخية حول نشاة التقشف والأفكار المتعلقة به ويفند الادعاءات المختلفة لمناصري التقشف والنماذج المختلفة التي طرحوها منذ الكساد العظيم حتي أزمة 2008。 كتاب قيم للغاية وليس بتلك الصعوبة وكان ممتع أثناء القراءة وسلس بعكس عادة الكتب التي تتحدث عن مفاهيم اقتصادية 。。。more
ميم
，
تعوزني الكثير من الخبرة الاقتصادية لإبداء رأيي في أطروحة الكاتب， لكن أعتقد أنه نجح في تقديم تفسيرات مقنعة لكثير من الوقائع。 تتبع الكاتب تاريخ فكرة التقشف كحل تقدمه الأدبيات الرأسمالية للحكومات كسياسة للنمو الاقتصادي。 ويتتبع أيضًا تجارب الدول مع التقشف خلال القرن الماضي والفشل الذي منيت به هذه السياسات， والعديد من الآثار الاجتماعية والأمنية التي خلفها هذا السلوك。
Simo
，
Summary : we should never bail banks！
Sergiu S。 Dobre
，
O carte spectaculoasa dar extrem de tehnica si de dificila pentru un ne-specialist in economie。 Cu toate acestea （dar si cu eforturi macro） am reusit sa o inteleg in mare parte！ O recomand cu caldura！
Cassie Anne
，
We could all learn a bit more about conservative economics。 However the people who need to learn of most will never open this book。
Karen Sesek
，
Great！ Dense subject。 A reread or 6 needed to actually understand， but this author educates on a dense subject in such an entertaining way。。。 I may just do that！
Bert Bruins
，
This is an information-dense book about the history and effectiveness of the notion of austerity in economic policy by Mark Blyth， a Scottish professor of political economy at Brown University in Rhode Island， USA。 He argues convincingly that austerity （shrinking the government budget） as an economic policy to overcome the damages caused by economic slumps hardly ever works， and always hurts the poor most （and leaves the rich alone）。In a modest 272 pages Blyth explains the reason for writing thi This is an information-dense book about the history and effectiveness of the notion of austerity in economic policy by Mark Blyth， a Scottish professor of political economy at Brown University in Rhode Island， USA。 He argues convincingly that austerity （shrinking the government budget） as an economic policy to overcome the damages caused by economic slumps hardly ever works， and always hurts the poor most （and leaves the rich alone）。In a modest 272 pages Blyth explains the reason for writing this book （the damage done by the resurgence of austerity policies after a brief renaissance of Keynesianism during the 2007/8 banking crisis）， the roots within classic economic theory of the idea of austerity， the instinctive attractiveness of the idea to many （particularly if you are rich）， and why austerity has failed every time it has been tried。 It's attractiveness to some is essentially political， in that it makes the less-well off pay for crises not created by them。It helps to have some background in economics to read this book， although Blyth does his best to explain economic terms whenever he uses them first time。 Anybody with a serious interest in the economic politics of the last 13 （austerity） years since the 2007 banking crisis however can glean much from this book。The main thing I took from this work is that economics is not a science， in the sense that opposing theories and conclusions by economists can ultimately be traced back to their political or moral opinions， not the other way around。 The rest， all the graphs and the collecting of data to prove one's point， are the debating weapons of people who are just better than most of us at making their case。 To dress this up as objective scienctific advice to politician is wrong and deceptive。So when Milton Friedman famously quipped that "There is no such thing as a free lunch"， this was not a （audience friendly） conclusion of what he had found empirically， it is actually a clue to his original belief-system， a belief that he set out with at the start of his economic research。 Therefore economists are politicians and/or moralists in disguise。 Hume and Smith's economic works are formed by their middle class Presbytarian Scottish belief in the value of frugality。 The German love of an independent central bank with only one cautious aim， low inflation （which became the model for the European Central Bank in Frankfurt）， stem from Lutheran roots of thrift （"Erst sparen， dann kaufen"）。 Ricardo and Hayek's deeply anti-statist economic theories stem from understandable middle class anxieties about absolutist monarchs taking away one's wealth on just a whim （as still happens in Russia to this day）。 In other words， dig a little deeper and you find the economist's underlying， often deeply political presumptions that are not scientific at all。Blyth is clearly a Keynesian at heart， and he supports the counter-cyclical economic policy ideas of the later Keynes， that is to say the state encouraging consumption when the private sector is （once again） in a mess。 He also makes the point that Keynes was late at the party of economic stimulus （Sweden， Hitler's Germany and Roosevelt's USA arguably got there earlier）， which led contemporary economist Joan Robinson to comment that "Hitler had already found how to cure unemployment before Keyenes had finished explaining why it occurred"。This puts Keynes's famous apocryphal riposte in a different perspective。 "When the facts change， I change my mind。 What do you do， Sir？" he is supposed to have responded to criticism that he had no settled opinion。 Keynes did really change his mind on the importance of state intervention in dire times， and Blyth's criticism of the advocates of austerity （neo-liberals， German "ordo-liberals" etc） is that they are blind to facts on the ground。 They are in other words as ideological as orthodox Marxists。Blyth loves pointing out the contradictions in liberal， anti-state economic theory， summed up in the phrase; "Can't live with it， can't live without it， don't want to pay for it。" In other words， the ultra-liberals and libertarians who love making big money when the times are good （and don't want to be taxed on their proceeds）， scream for government bail-outs and support when the shit hits the fan of their free-market， laissez-faire playground。There is lots more in this book than I can cover in a short review。 Blyth explains for example why the gold standard was so damaging to economies who stuck with it in the 1930 （still relevant as plenty of US libertarians advocate returning to some mythical gold standard）。 I was convinced by Blyth's criticism of the Euro currency as a new type of gold standard， having equally damaging consequences to partaking countries as the gold standard did in the 1930s。The postscript to this book was written in late 2013， so lots has happened since。 Blyth expects austerity to be dumped due to various pressures and its inherent flaws， but also points out that despite the austerity rhetoric in the UK， some （embarrassed） stimulus did take place， partially explaining Britain's return to growth in 2013。 As far as I can tell what happened since 2013 justifies the labeling of the 2010's as "the lost decade"， a decade of stagnant wages and a standstill for education and infrastructure， with dire consequences for the disabled， policing and public health amongst others。 Blyth believes it could have been so very different。。。。 。。。more
Timo
，
This gives the history of Austerity， how it's an intuitively good idea， but lots of reasons and examples of why it doesn't work。 It talks a lot about various financial crashes in the last century， and in particular the 2008 crash。 It makes the argument that both the 2008 crash and the eurozone problems are private sector banking problems that are being taken on by the government and causing problems and which are now getting undeserved blame。 Maybe the simplest idea worth remembering is that cou This gives the history of Austerity， how it's an intuitively good idea， but lots of reasons and examples of why it doesn't work。 It talks a lot about various financial crashes in the last century， and in particular the 2008 crash。 It makes the argument that both the 2008 crash and the eurozone problems are private sector banking problems that are being taken on by the government and causing problems and which are now getting undeserved blame。 Maybe the simplest idea worth remembering is that countries often grow by being net exporters， but if all countries do that， no one wants to buy， so the markets decline and everyone is worse off。 That is one of the ideas that sounds great and often works， but only in some circumstances and not for everyone。 。。。more
MichaelK
，
A great book that explains the history of austerity in theory and practice， and how it became such a popular policy around the world after the 2008 crash。 Learnt a lot。 I recommend。
David Gilani
，
A book unaware of how dense it is。 Takes a complicated idea and struggles to break it down into the type of structure and tone that’s needed to make it clear
Jatan
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（This is the first in a series of books that I intend to read in 2020 that focus on how the current global economic system came to be， why there's an element of bait and switch between it's stated ideals and actual outcomes， and how we can go from here in reforming that system as well our selves that are， to a large extent， inextricable from it。）We live in interesting times， enmeshed within economic forces that alternatively benefit or harm us， either still seemingly beyond our control。 However， （This is the first in a series of books that I intend to read in 2020 that focus on how the current global economic system came to be， why there's an element of bait and switch between it's stated ideals and actual outcomes， and how we can go from here in reforming that system as well our selves that are， to a large extent， inextricable from it。）We live in interesting times， enmeshed within economic forces that alternatively benefit or harm us， either still seemingly beyond our control。 However， when the economic juggernaut screeches to a halt， the way out is often presented， quite accurately， as a trolley problem between profligate companies and vulnerable individuals。 To push this metaphor， it's the individuals that are made to pull the lever for the trolley because the companies pose a 'systemic risk' ， and if not saved the fragile prosperity we have accrued since the last downturn will evaporate。 That these companies and their executives got even wealthier in this duration is， we are told， completely besides the point。 This is more less what happened in the aftermath of the economic meltdown in 2008。 In the recession that followed， massive economic stimulus packages were announced to bailout the banks。 The same courtesy was not extended to those that the banks evicted by demanding absurd mortgage payments to cover their losses， or to countless other victims of the market crash。 When compared to its central bank peers across the world， the US Federal Reserve actually turned out to be an effective economic buffer。 If you lived in Greece， though， here's where things got funkier: in order to 'pay' for the insolvent assets owned by German and French banks， the troika （ECB-IMF-EC） forced austerity reforms curtailing the government's spending on wages， pensions， and other essential public services。 Similar versions of the austerity program have also been implemented in Spain， Italy， Ireland， and Portugal。 Suffice to say that the erosion of local civic life and institutions in these countries on orders of Brussels bureaucrats will not inspire more faith in the already precarious European project。Mark Blyth's excellent treatise provides a layman version of what he terms as austerity's twin histories -- an intellectual one starting with 18th century British enlightenment， weaving through the 20th century Austrian and Italian schools， along with a natural one about austerity's track record in praxis。 Even from a purely historical point of view， it's fascinating to trace the roots of 'get the state out of my business' to the origin of liberal economics， which arose largely in response to the tyrannical monarch/state。 Of course， the counter-notion of markets as the ultimate arbiter of （whose？ who decides？） economic interests is deeply flawed as well。 It was also very helpful， personally， to learn more about the specific historical contexts in which Ordoliberal and Neoliberal ideas were proposed， and how they came to dominate the policy conversation。Blyth persuasively argues， as much as possible without wielding econometrics， about how austerity works only under a limited set of macroscopic circumstances。 He also reveals how its appeal to the 'sensibility' of academic and governing classes has wrecked havoc on just about every economy that implemented austerity measures in times of market failure， often creating far worse socio-political outcomes in tow。 。。。more
Aurel Mihai
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