For more than a century, governments facing financial crisis have resorted to the economic policies of austerity—cuts to wages, fiscal spending, and public benefits—as a path to solvency. While these policies have been successful in appeasing creditors, they’ve had devastating effects on social and economic welfare in countries all over the world. Today, as austerity remains a favored policy among troubled states, an important question remains: What if solvency was never really the goal? In The Capital Order, political economist Clara E. Mattei explores the intellectual origins of austerity to uncover its originating motives: the protection of capital—and indeed capitalism—in times of social upheaval from below.
Mattei traces modern austerity to its origins in interwar Britain and Italy, revealing how the threat of working-class power in the years after World War I animated a set of top-down economic policies that elevated owners, smothered workers, and imposed a rigid economic hierarchy across their societies. Where these policies “succeeded,” relatively speaking, was in their enrichment of certain parties, including employers and foreign-trade interests, who accumulated power and capital at the expense of labor. Here, Mattei argues, is where the true value of austerity can be observed: its insulation of entrenched privilege and its elimination of all alternatives to capitalism.Drawing on newly uncovered archival material from Britain and Italy, much of it translated for the first time, The Capital Order offers a damning and essential new account of the rise of austerity—and of modern economics—at the levers of contemporary political power.
Clara E. Mattei is Associate Professor in the Economics Department of The New School for Social Research, and was a 2018-2019 member of the School of Social Sciences at the Institute for Advanced Studies. Her research contributes to the history of capitalism, exploring the critical relation between economic ideas and technocratic policy making. She recently published her first book, The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism (University of Chicago Press, November 2022). It investigates the origins of austerity after the WWI crisis to understand its logic as a tool of reaction against alternatives to capitalism. She is currently working on a book project which critically reassesses the Golden Age of Capitalism (1945-1975) and its Keynesianism through the lens of austerity capitalism.
Sponsored by: The Miami University Humanities Center, The L.P. Irvin Lecture fund, and the Department of French, Italian, and Classical Studies
