Alberto Mingardi  

Two concepts of "austerity"

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On "Spiked" (a must-read on line magazine), Brendan O'Neill has written a powerful and most courageous article on the word "austerity" and how it creates confusion (for an egregious example, see Mark Blyth's book on the subject).
O'Neill points out an "irony" in the contemporary anti-"austeritarian" rants:

the observers rashly describing a few Tory cuts as 'austerity' are the ones who really want to impose austerity. Real austerity. In fact, before they developed their newfound emotional attachment to describing everything they don't like as 'austerity', they were openly calling for austerity. George Monbiot is one of the Guardian's chief complainers about Tory austerity -- the same George Monbiot who in 2006 proudly described environmentalism as a 'campaign not for abundance but for austerity' and who inspired the radical group Riot 4 Austerity.

Indeed, austerity once was a word that belonged to the vocabulary of the left, with positive undertones. "Austerity" was a flag always waved with pride by Enrico Berlinguer, the Secretary of the Italian Communist Party in the 1970s. Confronted with the "austerity" to which Italian consumption was forced by the oil crisis, Berlinguer argued it could actually be the occasion for a palingenesis. For Berlinguer, the oil crisis forced the West to "shelve the delusion that we can preserve a development model based on a fabricated expansion of individual consumption, which is a source of waste, parasitism, privilege, resource depletion, and financial disarray" (this is from a 1977 speech). So, austerity was good insofar as it was a portent of end of a phase in which people consumed too much (as they were brainwashed by advertising etc.).

Chris Trotter, a former editor of the "New Zealand Political Review", has an interesting piece in which he, like O'Neill, remembers that the word "austerity" experienced a shift in its meaning. In fact, he gets close to reclaiming the word "austerity" for the left:

The original Age of Austerity was a time of enforced social equality, Osborne's austerity was an exercise in looking after the interests of the well-to-do at the expense of the poor. Unlike Labour's post-war Britain, market forces were in no way restrained and all the advantages of wealth were taken by those fortunate enough to possess them.

O'Neill maintains that the word "austerity" came to be used by the Left as a scapegoat for any policy that threatens public spending because they equate, almost instinctively, a shrinking public sector with shrinking opportunities for the common people:
Left-wing observers' rage against 'austerity' is not a reflection of anything happening in the real world. Rather, it reveals their weddedness to the state, their belief that 'ordinary people' could not survive without the public sector. In recent years, as its faith in working men and women waned, and eventually gave way to open contempt for these obese, anti-EU sections of society, the left has come to see the state as the key force for progress. It views the public sector not only as the provider of resources for the poor, but as a provider of therapy and health advice, parenting advice, racial-awareness lessons for employees and school kids alike. The state is seen as the solution to every economic and social ill. So any suggestion that the state and its army of employees should be cut back, or even rearranged, is met with angst, and concern about how the little people will cope without the monetary benefits and moral advice of the authorities. It isn't 'austerity' the left is worried about (since there is none); it's anything that chips away at the Byzantine modern state which they view as the saviour of society.

But Trotter argues somewhat differently. He appreciated the sobering effect of reigning in the market. The idea (very much like Berlinguer's) is that social equality will go hand in hand with parsimonious living standards: better equal than plentiful. Nowadays, talking about austerity, and Greece in particular, left wing opinion makers are advocating many things: but certainly not parsimony.


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COMMENTS (10 to date)
SD Motak writes:

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Shane L writes:

I had assumed that what was happening was a revival of an old left-wing pro-growth perspective and a decline of a modern left-wing, environmental, anti-growth perspective.

Am I wrong in thinking communists believed their economies would outgrow the liberal ones? Stalin and Mao seemed to be obsessed with increasing output.

Yet in the late 20th century the environmentalist movement seemed to overlap with a new left-wing approach that favoured redistribution over growth. My guess is that the economic crisis caused many people to see what economic decline or stagnation really looked like and it horrified them. Hence left-wing parties in many places urged stimulus policies that would cause growth. The modern left who sought frugal, egalitarian, environmental life lost ground to the old left of growth and industry.

Lee Waaks writes:

Here is the Spiked link:
http://www.spiked-online.com/newsite/article/this-is-not-austerity/16164#.VZ01pPlVhHw

ColoComment writes:

"He appreciated the sobering effect of reigning in the market."

Right up there with its and it's, and their, there, and they're, is rein v. reign as my internet bete noir.

Last paragraph, second line. Should be "reining" in. As in, a rider slowing a horse's speed by tightening the bridle reins.

Feel free to not publish this comment. I've sent it solely for highlighting the typo.

ThomasH writes:

The conceptually correct way to consider "austerity" is (downward) departures of expenditures from an NPV rule, presumably by incorrectly incorporating into the decision function the amount of public sector debt or one of its derivatives with respect to time. It is likely that what Mr Osborne is doing is reducing expenditures that he judges fail the NPV test, but claiming that the reason is related to debt.

Sol writes:

I hate to play the cynical libertarian here, but doesn't it mostly come down to: Austerity applied to people is good. Austerity applied to governments is bad.

Craig writes:

I gotta agree with Sol on this one. It doesn't seem that complicated.

Austerity that results in people spending less = Yay for liberals!

Austerity that results in govt. spending less = Boo for liberals...

ThomasH writes:

I can only conclude that the commentators of this thread have never ever met a real live liberal and have had to conjure one up from newspaper figments as antipodeans were assumed to walk on their heads.

Hint: Sr. Berlinguer (or Paul Ehrlich) was not a typical liberal in 1970 and he still isn't.

Your typical liberal thinks Capitalism is pretty nifty (See PK's paean to New Jersey!) but not necessarily Eden. For example he knows we lack a market in which these that emit CO2 and those who will be harmed by those emissions can work out the optimum path for CO2 emissions/ sequestration over the next few centuries. He also thinks there is something slightly fishy about the increase in income inequality over the last few years. And he does not worry a lot about privatizing lighthouses. So he's willing to entertain the idea that a few tweaks may be in order.

Koz writes:

Your comment is well-taken, but imo there's another, simpler, problem with "austerity" as that word is typically used in current circulation. Deliberately or otherwise, the use of "austerity" in this way obfuscates important issues of agency.

In the case of the Greeks especially (but not limited to them), austerity is not a policy path chosen by them but one chosen for them. Therefore, to say things like "The Greek voters rejected austerity" obscures the fact they never chose austerity on their own behalf in the first place. From the pov of interested Americans, the situation is different but not that much. We're not affected by cuts in Greek gov't spending but we're also not intending to contribute money to change things either. And if we did, we don't necessarily control federal gov't policy either.

Therefore, above all else it is important to understand that austerity is not a policy path implemented by the people affected but by would-be future lenders and aid-givers (who are likely to be the same as the current creditors but not necessarily).

If we don't have any influence or control over those people, we don't have any control over austerity and we can think of austerity as something that just happens, like a hurricane or a flood.

So, in terms of what can be controlled, it's pretty clear that prolifigate gov't spending leaves the borrowers in danger of austerity in the same way that building a house on a floodplain leaves a homeowner vulnerable to flooding.

shecky writes:

I'm thinking along the lines of Sol here. Austerity from the top-down is bad, but from the bottom-up is good, is what I think the view might be. Perhaps a perception that government austerity's effects are punishment forced on people whereas personal austerity's effects are noble and more voluntary. I find many on the left hold conspicuous consumption in disdain, and try to justify that disdain more on the concept of taking more than one's fair share of resources, and thus feel that personal austerity is more fair or sustainable in some way. The trouble is nobody ever agrees on quantifying how big that slice of pie should be, and the calculations quickly veer off into the weeds. One person's fair share is another's excess. So the formula never really gets ironed out. Thankfully.

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