Austerity Is an Antidemocratic Strategy to Boost Capital

&quot;Democratic control over economics&quot; looks like people voting for more services and lower taxes.<p>Austerity occurs when the cost of government borrowing becomes so high governments are would be functionally unable to operate in the medium term without brining it down.<p>After the finance crash the UK was increasing it&#x27;s debt load at something like 200bn GBP&#x2F;yr, iirc. A rate that credit-nervous markets wouldnt sustain cheaply.<p>Austerity is the way the ideologues talk about the consequences of economic collapse without having to learn anything.<p>What you never hear from them is alternative policies that address the specific economic problems periods of austerity are solving. You hear instead about ever more elaborate abstractions that ever less map on to any observed reality.

From a European perspective, I would not say it&#x27;s antidemocratic if parties who are pro-austerity get elected while being transparent about their policies.<p>However in my opinion, there is a great lack of &quot;class consciousness&quot; from the people who vote for these parties, in a sort of Stockholm syndrome, or because people easily fall prey to the sensationalist idea that you can apply household economics to macro-economics.

I would say there are two problems here that are different: intervention as it stands can regulate in favor of a few groups of people. More intervention can easily lead to more corruption.<p>As for austerity: reasonable people do not spend beyond what they have and if they do they do it in reasonable ways: things with an expected return on investment and with limited, calculated risk.<p>Yet what I see is increasing intervention and out of control debt.<p>Starting from these two premises...<p>I do not think austerity is antidemocratic in itself. What I see is that a high degree of intervention ends up doing a cost transfer to normal people.<p>But that would be a problem of hyperregulation, not from austerity itself IMHO. After all, I would say the correct philosophy is to spend what you have and measure the risk every time you go beyond that. Sometimes you have less, sometimes you have more, but I would not advice any person, business or state to go out of control about this. However, a state incentive is different from the former two, since they continuosly transfer costs by the force of law to unrelated people. Namely, I do and you pay, be it by friends regulation or by direct expenses and taxes increases.

Ok, austerity bad, but the alternative isn&#x27;t better. Either way it&#x27;s the &#x27;little man&#x27; who ends up paying through the nose.<p>The article mentions how war time economy is evidence how the society can do whatever it wants, and implies this should be done during peace time too. And then later in the article mentions how war time leaves the economy heavily indebted. So you can do the same during peace time - take on as much debt as needed to do everything. The issue with this approach is that this increases the money supply, effectively debasing the currency. Due to the Cantillon effect, the first people to use the new money will be able to spend it at &#x27;old value&#x27;, while people further down the line will get less and less value out of it.<p>If you&#x27;re wealthy enough, you can short the currency by taking out debt, and buying assets. If the assets are yield bearing (dividend, rent), your income automatically adjusts for increased money supply. If you depend on your wage, tough luck, wages are last to adjust, so you just keep silently getting poorer.<p>So there&#x27;s no free lunch. Either explicitly or implicitly, the poorest pay the most.<p>I don&#x27;t think that&#x27;s a predicament though. It&#x27;s just that the answer likely doesn&#x27;t lie in the extremes. A prudent enough government should be able to navigate this by not devaluating the currency too much, yet also taking on reasonable amounts of debt to fund the functions with the highest ROI.

modern democracy is a sham anyway. lets examine a recent large crisis we had in Finland - the border crisis, in which Russia systematically weaponized migrant waves - where the democratically elected government was initially unable to act with any measures on, because it would&#x27;ve been in violation of a UN convention which was agreed on in the 60&#x27;s.<p>This was one of the most prolific decisions to be done in the 2020&#x27;s and yet we could just barely enforce the will of the people over the interests of extragovernmental groups. Now imagine the thousands of small decisions being done which the average voter has no transparency into.<p>A good start to real democracy would be completely outlawing lobbying, NGO&#x27;s, think tanks and other garbage organizations who&#x27;s only raison d&#x27;etre is subverting the peoples right to their own governance.

The book &quot;The Capital Order&quot; by Clara Mattei is recommended. Subtitle is &quot;How economists invented austerity and paved the way to fascism&quot;.<p>It&#x27;s a study of WW1 and the early 1920s from an economic and social POV.

The non-austere &quot;Free stuff for you! Vote for me!&quot; political strategy has worked pretty well while technology improvements has made stuff faster than politicians can give it away. But it&#x27;s a precondition. If technology ever stops improving at this rate, we&#x27;re going to have a hard time, and no amount of words will change that fact.<p>To be for free stuff and <i>at the same time</i> be for degrowth, decel, limit resource use, etc.... seems naive to say the least.

I appreciate the review, especially in making connections between fascism and economic policy. Historically, fascists had support from powerful economic groups because of their ability to deliver on highly unpopular economic measures. The current state of politics in the West is that while (some) governments are not outright fascist, any pretense of them representing the political will of the majority of its population is crumbling. They serve a minority of very wealthy individuals much more than they do their general populace, and we accept that as fact.<p>To play devil&#x27;s advocate, however, I would argue that there is sound rationale for not allowing economic policy to be decided in an a purely democratic way. If everyone had equal vote in what the government should do monetarily, the result could quickly evolve to a disaster, which we have also seen in places where dictators try to appease to the population as a whole by subsidizing costs and wages.

The title is linkbait-ish and the author is ideological, but the book reviewed in the OP, &quot;The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism,&quot; by Clara Mattei, <i>is truly worth a read.</i><p>Recommended by economists as different as Tyler Cowen and Thomas Pikkety, the book won Best Book of the Year by the Financial Times.<p>Ignore the OP&#x27;s review of the book. Instead, read the book itself:<p><a href="https:&#x2F;&#x2F;press.uchicago.edu&#x2F;ucp&#x2F;books&#x2F;book&#x2F;chicago&#x2F;C&#x2F;bo181707138.html" rel="nofollow">https:&#x2F;&#x2F;press.uchicago.edu&#x2F;ucp&#x2F;books&#x2F;book&#x2F;chicago&#x2F;C&#x2F;bo181707...</a><p><a href="https:&#x2F;&#x2F;www.amazon.com&#x2F;Capital-Order-Economists-Invented-Austerity&#x2F;dp&#x2F;022681839X" rel="nofollow">https:&#x2F;&#x2F;www.amazon.com&#x2F;Capital-Order-Economists-Invented-Aus...</a>

The opposite of austerity, stimulative spending (by printing money), has also been argued, by similar groups, to increase inequality due to the inflation of asset prices. Which way, left-leaning man?

State profligacy in the era of Central banking is an anti Democratic strategy to boost capital too. You borrow money, which increases the money supply, stealing value from everyone through inflation. This hurts the poor the worst, and benefits the rich, who rely on debt for capital instruments (the value of the debt, which is nominal, is reduced over inflation). Then you spend that money on contractors (even when it&#x27;s used for social services).

When run unchecked, capital will happily suck all the money from the economy and into its coffers, and the fun thing is, it has no idea what to do next. Next it would very likely invest these money in the worst possible way and cause a big crash. Think about is like of a centipede instead of sentient creatures at work. It does not know what to do once it eats its leaf. We know it&#x27;s going to morph but the thing is oblivious to it itself.

Voting to fire people working in government to lower costs is antidemocratic? In government, you aren&#x27;t even fired but retired, allowing you to collect your pension and benefits. It&#x27;s as humane a practice as it can be while addressing financial responsibility.<p>It&#x27;s undemocratic to continue growing in perpetuity and not be held accountable to those who pay for it.

It scares me a lot that modern economies don&#x27;t understand yet the worst tax on citizens is the Inflation tax. Still can&#x27;t understand why we&#x27;re still trying to make things work after centuries of failures. Obviously monetary base expansion to support non austerity policies is the biggest inflationary factor.

&gt; Capitalism gave rise to a value system that teaches us to find meaning in our work; yet millions are employed in low-paying, soul-crushing jobs.<p>Many philosophies throughout history emphasize finding meaning in your work:<p>- Ikigai: discover your reason for being, which is at the intersection of passion, mission, vocation, and profession. It is not just about yourself, but contributing to the world and bringing joy to others<p>- Stoicism: while not solely focused on work, Stoicism emphasizes finding purpose and virtue in whatever situation you find yourself in, including approaching work with a sense of duty and striving to contribute to a greater good, even if the task itself is mundane<p>- Confucianism: stresses the importance of hard work, diligence, and skill in all aspects of life, incl. work. Emphasizes fulfilling your roles and responsibilities in society with excellence, finding meaning and respect through well-performed work<p>- Protestant work ethic: sees work as a moral obligation and way to glorify the Christian god. Encourages hard work, diligience, and productivity, finding meaning through creation &amp; contribution to society through labor<p>- Existentialism: encourages individuals to create own meaning in life, incl. through their work. Involves taking responsibility for your choices, pursuing authentic goals, and engaging authentically with your work.

Few democratic countries can manage their finances well. Switzerland comes to mind. But the general experience is that if the population can vote itself more money and services at the cost of a) either someone else, or b) growing national debt, they usually will. We are well down the same road in Czechia.<p>Europe has a very long history of banking, but at the moment when the Euro was created, most of the obliterated national currencies were weak, reflecting distrust towards their overlords. Switzerland, the country with the strongest national currency in Europe, never felt compelled to join the bloc.<p>Historically, authoritarian countries tend to go bankrupt over war expenses, democratic countries over handouts. The British pound was strongest at the time when the country was somewhat semi-democratic, neither-nor. But that is a very unstable configuration.<p>Pick your poison.

Austerity is result of reckless state money printing and waste.

Ridiculous. Working class != labor unions. Militant labor unions murdered numerous members of the working class who dared to cross their picket lines.

With all the temporary embarrassed and actual millionaires here on HN I&#x27;m not so sure that this article will go over well.<p>Most people who are into this space are doing relatively well, but then remember that more than 60% of Americans can&#x27;t spare 400 dollars for an emergency and this simple fact shows how absolutely bonkers the whole system is.<p>You may be free to say hateful things if that&#x27;s your definition of freedom, if we define freedom as having the means to develop your true potential or just do things you like sometimes without a constant feel of existential threath, that&#x27;s what I call freedom.

Marx hasn&#x27;t been around for a while. With the corporate world sucking so hard on government teats, in the US and Europe in particular, austerity has a more distributed but still intensely negative impact. I strongly recommend Mark Blyth&#x27;s book Austerity: The History of a Dangerous Idea as a more modern and nuanced take on what is going on.

I got most of the way through this and found many things to disagree with. I started to write a reply and then I read this part:<p>&gt; Expertise is, in a certain sense, a bourgeois concept, a by-product of the ideological imperative to organize our lives and activities in a rational way.<p>God help anyone who takes this shit seriously.<p>I don&#x27;t know when, if ever, austerity is called for (even Paul Krugman has called for deficit reduction in certain circumstances: <a href="https:&#x2F;&#x2F;www.nytimes.com&#x2F;2023&#x2F;10&#x2F;10&#x2F;opinion&#x2F;us-budget-deficit-interest-rates.html" rel="nofollow">https:&#x2F;&#x2F;www.nytimes.com&#x2F;2023&#x2F;10&#x2F;10&#x2F;opinion&#x2F;us-budget-deficit...</a>). But this review is dripping with ideology to the point that it&#x27;s genuinely disconcerting.

It is funny. For like 4 or 5 years ago I would have waived away the article as communist hallucinations. But somehow covid made me realize that we don&#x27;t live in a market economy, but rather have a central power that benefits the rich via monetary policy and lower tax.<p>It is the same realization as when I stopped consider the GNU guys paranoid crackpots.

I come to HN for tech news and recently I get a heaping of 100% political, 100% partisan, non-tech-related drivel that is not even news - it&#x27;s just opinion blog.<p>I&#x27;d apply it to both sides, but I only see one side on HN:<p>Dear leftists! Can you please take your propaganda and fuck off to reddit, twitter&#x2F;X, or wherever?

This is nonsense, the opening paragraph isn&#x27;t a contradiction, it&#x27;s describing an equilibrium, and the difference between the actions of a single firm and aggregate demand&#x2F;supply.<p>This has been studied for over a century, why this being repeated uncritically in media?

Hacker news needs a butthurt marxist flag....<p>Yet another butthurt marxist misinterpretting (among other things) the fact that free markets evolve into oligopolies to mean twar the whole system apart. The correct interpretation is that we screwed up going full rehnquist and nerd our antitrust enforcement to move back nearer to what it was doing pre rehnquist supreme court.

I&#x27;m a bit surprised to see this at the top of HN. Maybe the US is still asleep, and the Friedman fanboys have not read that yet.<p>This look like a good book and I am likely to buy it. From a systems standpoint it is quite obvious that capitalism tends to concentrate wealth in the hands of those who already own capital.<p>Piketty showed the historical data agree with that: as long as growth is less than capital rewards, wealth concentrates.<p>We need a systemic solution to that, and that can&#x27;t happen with représentative democracy. We need direct control of the means of production by those who make them work. This means stronger unions, but also platform régulations, as users are unpaid knowledge workers giving away their data in exchange for a service, an exchange so one-sided and highly beneficial to the platforms that states are losing their sovereignty to the platforms.<p>See bratton&#x27;s The Stack to know more.