WHAT IS AUSTERITY?

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Clara Mattei FULL INTERVIEW

Sam Seder hosts Clara Mattei, Assistant Professor of Economics at the New School for Social Research, to discuss her recent book The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism. Professor Mattei turns specifically to the policy of austerity, parsing through how it came to be viewed as a necessary party of our inevitable system of capitalism, disciplining the labor market into its position of exploitation while undermining the possibility of alternative social models. They then tackle the trinity of austerity policies, outlining fiscal austerity’s dismantling of social welfare, monetary austerity reinforcing reliance on wage labor by taking away credit and employment, and industrial austerity’s emphasis on privatization and deregulation to dismantle labor power. After expanding the discussion of undermining labor as a tactic to protect capital, Professor Mattei walks through the role of World War I in inspiring the political elites’ shift to favor austerity, as belligerent nations had been forced to nationalize in the face of war, incidentally exposing wage-exploitation to be a political choice while highlighting the thriving (if smaller-scale) alternative economies – from guilds to coops and councils – and a post-war clamor to re-legitimize their system of capitalist exploitation. This brings them to the pivotal post-war financial conferences in Brussels and Genoa where the capitalist states brought in economic experts touting this new tactic of austerity, framing taking from the many and giving to the few as a mass sacrifice for mass benefits, taking off in European states like the UK and Italy, and setting the stage for a rising fascism that was legitimized by the liberal establishment, and a deeper and deeper acceptance of capitalism via fiscal, monetary, and industrial austerity. Wrapping up, they tie the revelations of the Great War to the revelations we saw in capitalist societies in the wake of the COVID-19 pandemic, and the parallels to the ongoing attempt to use inflation to discipline labor, before Professor Mattei walks through the role of Capital Order in helping us unpack our current political moment.

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