How Economists Invented Austerity and Paved the Way to Fascism (with Clara Mattei)
Dec 12, 2023
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Clara Mattei, an economist promoting austerity measures, discusses the connection between austerity and fascism. Topics include the negative impact of austerity on working people, the historical evidence and power dynamics of austerity, the need for democratic participation in economic systems, perspectives on work and capitalism, and the connection between austerity and capitalism.
Austerity measures promoted by economists create conditions for fascism to take root globally.
Understanding the historical context of austerity helps in imagining alternative economic systems and questioning mainstream economics.
Deep dives
The Impact of Austerity on Working People
Clara Matei, an associate professor of economics, discusses how austerity is a strategy for making working people more precarious and limiting their power to advocate for better circumstances. Austerity operates through fiscal, monetary, and industrial policies that shift resources away from working people toward savers and investors. Matei emphasizes that austerity is not just a policy mistake, but a deliberate tool to maintain wage relations and reinforce capitalist economies. She highlights how austerity measures disproportionately affect social expenditures, regressive taxation, and the power dynamics in labor markets. Matei argues that understanding the historical context and political underpinnings of austerity is crucial for imagining alternative economic systems.
The Historical Influence of Austerity and Fascism
Matei delves into the historical impact of austerity and its connection to the rise of fascism in Italy and Britain. She explains how economists supported fascist leaders like Benito Mussolini and implemented authoritarian measures to curb working people's rights to advocate for change. The analysis reveals that austerity functions as a powerful weapon during times of social and economic transformation, suppressing demands for greater democracy and challenging wage relations. Matei stresses that austerity is not a policy mistake, but a structural feature of capitalism that prioritizes the accumulation of capital over people's needs and sustainability.
The Economics behind Austerity
Matei critiques mainstream economic justifications for austerity, highlighting the inherent flaws in economic models that prioritize preserving wage relations and suppressing inflation. She points out how economic experts are committed to their models and believe in their truth, perpetuating a classist mindset that disempowers people and maintains the dominance of unregulated markets. Matei argues that economics as a discipline depoliticizes economic issues like inflation, failing to address the role of corporations and political decisions in driving price increases. She calls for a rethinking of mainstream economics by incorporating historical analysis and recognizing the complex interplay between economics and politics.
Reimagining Economic Systems and Empowering Workers
Matei emphasizes the need for more democratic participation in shaping economic systems and empowering workers. She challenges the notion that capitalism is the only viable system and highlights the potential for alternative societal structures that prioritize meeting people's needs, social welfare, and ending war. Matei argues that exploring history can reveal the manipulative tactics used by economists to reinforce capitalist ideologies and maintain power imbalances. By understanding the compulsion of capitalism and questioning mainstream economics, she believes that transformative changes can be achieved to create a more democratic and equitable society.
We already know that many mainstream economists advocate against the economic interests of the majority of working Americans and for the benefit of a tiny handful of super-rich people and corporations. But Clara Mattei argues that economists are actually guilty of something even more insidious: By promoting austerity measures that destabilize working people and consolidate wealth and power at the very top of the income scale, economists have created the perfect conditions for fascism to take root around the world. Is it too late to rebuild our democratic institutions through a new economic understanding?
Clara Mattei is a distinguished academic in the field of economics and an Associate Professor of Economics at The New School for Social Research in New York City. Her research examines the history of capitalism, exploring the critical relationship between economic ideas and technocratic policymaking. She’s the author of the book, The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism.
