The Capital Order

 How Economists Invented Austerity and Paved the Way to Fascism

  by Clara E. Mattei 2022

|  Amazon Intro  |  Review by Dilara Özer  |  How Austerity Coerces - book excerpt  |
|  Restoring the Firewall Between Capital & Democracy  |  ChatGPT Summary  |

Amazon Summary - "A must-read, with key lessons for the future."—Thomas Piketty

A groundbreaking examination of austerity’s dark intellectual origins.

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.

https://www.amazon.com/Capital-Order-Economists-Invented-Austerity

Review by Dilara Özer

The Capital Order leaves even the most skeptical of readers with the question: "Has capitalism lost its innocence to its classist tendencies?"

As most of the world collectively undergoes a time of economic crisis, pressure continues to build on the public as governments in the 21st century first look to make cuts from services provided to citizens to contain the negative effects on the economy and increase solvency. Throughout the years, public distress has translated to protests resulting from the decline of social and economic welfare in many countries. The key tool we see policymakers implementing is austerity from the decrease in wages to public benefits cuts.

In The Capital Order, Clara E. Mattei explores austerity as we know it by taking the reader back to its origins: interwar Europe, a time when a new order was emerging as capitalism was fighting its most crucial battle for consolidation. Mattei highlights that

after intensive wartime mobilizations capitalism’s inevitability was shattered in the eyes of many workers, and therefore strikes and social unrest increased as more of the population demanded collective power. That is when
- the austerity counteroffensive was launched.

Mattei brings attention to the fact that despite austerity measures’ failure to deliver their economic promises (such as reducing debt or boosting economic growth) policymakers continue to opt for them. Why so? In this case, she evaluates austerity from a different lens;

austerity as - crisis management for capitalism - rather than the economy.

Mattei argues that - austerity functions to discipline society;

It - enforces the protection of capital - and creates conformity in society when means of production and wage relations are contested by the public or when there are calls for alternative forms of social organization. 

Austerity protects what she refers to as the “capital order”

– a sociopolitical order that presupposes economic growth.

Considering austerity’s role in a societal class dynamic, Mattei finds that; 

it insulates capitalist hierarchies from harm during times of would-be social change by placing structural limitations to wages and spending, inevitably imposing it as the only path to a worker’s survival.

Through meticulously compiled archival material, Mattei explores austerity by studying economists in the 1920s from the birthplace of liberalism (Britain) and the birthplace of fascism (Italy) to draw a provocative conclusion about its nature: “an anti-democratic reaction to threats from bottom-up social change.”

Mattei elucidates the thin line between liberalism and fascism that could be derailed by capitalism’s tendencies. 

The remarkable comparison between the cases of Britain and Italy reveals similarities beyond the sacrifice of citizens. 

While Italy chose direct coercion, Britain utilized coercion indirectly through a repression concealed in rationality and a seemingly apolitical technocracy that manipulated consensus.

The Capital Order touches upon a period often overlooked by economists when examining austerity. It illuminates the reader on the topics of class relations, the rise of modern economics, and political choice, and leaves even the most skeptical of readers with the question, “Has capitalism lost its innocence to its classist tendencies?”

https://politicstoday.org/the-capital-order-austerity-fascism/

How Austerity Coerces: “work more consume less”  -  book excerpt

The crisis of capitalism that followed the Great War was, for some people of means, an acute and terrifying development.

Once workers stormed the stage of history with ideas for an alternative society, the defense of capitalism took on novel and more powerful forms. Guardians of capitalism went back to the drawing board to refurbish the old order, and their manufacture of austerity became their main weapon. Austerity consisted of a twofold process, at once material and ideological. Or better, it consisted of a twofold strategy: coercion and consensus.

The coercion of workers was clear in the motto of austerity that was formulated at two pivotal international financial conferences, in Brussels (1920) and in Genoa (1922): “work more, consume less.” The capitalist states and their economic experts secured capital accumulation through policies that imposed the “proper” (i.e., class-appropriate) behavior on the majority of their citizens. The three forms of austerity policies—fiscal, monetary, and industrial—worked in unison to disarm the working classes and exert downward pressure on wages.

The operation of this austerity trinity and its material unfolding as a strategy for economic coercion is illustrated in the italicized text below. This illustration stresses the mechanisms through which fiscal, monetary, and industrial austerity mutually reinforce one another, revealing the overall mechanics of coercion under austerity.

............................................................

fiscal austerity → monetary austerity

Fiscal austerity takes the form of budget cuts, especially welfare cuts, and regressive taxation (i.e., tax policy that takes a greater proportion of money from people who have less of it). Both reforms allow the transfer of resources from the majority of citizens to the minority—the saving-investing classes—so as to secure property relations and greater capital formation. Meanwhile, budget cuts also curtail inflation through two main mechanisms. First, the reduction and consolidation of public debt diminishes the liquidity in the economy, since debt-holders can no longer use maturing bonds as means of payment. Second, budget cuts reduce aggregate demand: the general public has less disposable income, and the state itself is investing less. Less demand for goods and capital means that internal prices are kept down. Moreover, such stifling of aggregate demand also increases the foreign value of the currency by discouraging imports and thereby improving the balance of trade (i.e., ensuring that exports exceed imports). Indeed, the foreign value of a currency is favorable if the balance of trade of a country is favorable.

monetary austerity → fiscal austerity

Monetary austerity (or monetary deflation, described above) entails a curtailment of credit in the economy, and it primarily coincides with a rise in interest rates. This so-called “dear money” policy, in which money is harder to come by, increases the cost to the government of borrowing money, and thus limits its expansionary projects. In twentieth-century history, the limit to state expenditure becomes more entrenched once the gold standard is reestablished (for Britain this occurred in 1925): in order to maintain gold parity, the avoidance of capital flight takes precedence; hence, fiscal policy has to prioritize retaining capital in its economy. It does so by minimizing government expenditure and creating a capital-friendly environment via lower taxation on capital.

industrial austerity → monetary austerity

Industrial austerity refers to an imposition of industrial peace, i.e., non-contested, hierarchical relations of production. Such “peace” is of course the basis of capital accumulation, as it enables some to secure property rights, wage relations, and monetary stability in the long run. Industrial austerity also guarantees expedient monetary deflation—which makes assets on hand more valuable. In fact, successful revaluation (i.e., an increase of the value of money) crucially requires downward price adjustments, particularly labor prices (i.e., lower wages), in order to cut the costs of production. This is because lower production costs keep commodity prices low, thus boosting international competitiveness at a moment when a country is seeking to improve its exchange rates through greater exports. Thus, lower production costs are ever more essential to compensate for a loss of competitiveness once the currency is revalued so as to not lose foreign market share. If the state has enough coercive powers, as the Italian Fascist state did, it can intervene directly to curtail nominal wages through legal action, thus securing immediate downward price adjustments and ensuring the competitiveness needed to achieve the gold standard. Of course, even in less authoritarian societies, such as Britain, restrictive labor laws may limit the legitimacy of industrial manipulations, for example through a criminalization of solidarity strikes. Industrial peace and wage repression are also important to attract capital and avoid its flight, another prerogative for gold convertibility. Low wages also decrease consumption demand, which in turn decreases imports and thus has a positive effect on the exchange rate that favors revaluation.

monetary austerity → industrial austerity

Dear-money policy means that the economy will slow down because borrowing becomes costlier and investors are disincentivized. Once deflation kicks in and prices decline, pessimistic expectations regarding future profits reduce investments further. Less investment means less employment. Higher unemployment not only reduces workers’ wages, it also ensures “industrial peace” by killing the political leverage and militancy of labor.

industrial austerity → fiscal austerity

A weak and docile working class is one whose pressuring action for social measures, progressive taxation, and other redistributive policies is subordinated to the austere priorities of shifting resources, which favor the saver-investor classes. Unions forgo radical proposals and practices that challenge private property and are willing to engage in collaboration toward increasing the efficiency of production in the name of a national cause.

fiscal austerity → industrial austerity

Budget cuts mean curtailment of public works and of public employment more generally, leading to an enlargement of the reserve army of labor (the pool of people wanting to work), which jeopardizes unions’ bargaining power, depresses wages, and increases competition between workers.

.............................................................

The circular blueprint we have just detailed makes an important point in the story and history of austerity. Upon closer inspection, governments’ austere fixations on balancing budgets and curbing inflation serve the main goal of making sure capital (as a social relation) is indisputable, and that its pillars of wage relations and private property remain strong. For example, the main achievement of fiscal and monetary austerity was identical to that of industrial austerity: the subjugation of the working class to the impersonal laws of the market. Indeed, all three forms of austerity served to recreate the divide between economics and politics that war collectivism had temporarily suspended. Once the state stepped down as an economic actor (and as an employer), wage relations would again be subjected to impersonal market pressures. Austerity ensured and facilitated this retreat to the norm.

Here emerges a core argument of my new book, The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism: the main objective of austerity was the depoliticization of the economic—or, the reinstallation of a divide between politics and the economy—after the wartime political landscape had dissolved it. In practice, the reinstallation of this divide took three forms.

Depoliticization refers to the state’s backing off of economic pursuits, which in turn allowed for (1) relations of production (owners versus labor) to revert to the command of impersonal market forces—while also suffocating any political contestation of such wage relations, or of private property. There was more to depoliticization, however. The book shows that depoliticization also meant (2) exempting economic decisions from democratic scrutiny, especially by establishing and protecting “independent” economic institutions; and (3) promoting a concept of economic theory as “objective” and “neutral” and thereby transcending class relations—the sort of omniscience that was the foundation for one of austerity’s ends: building consensus.

These three conventions were mutually supportive. Cultivating a notion of economic objectivity (3), for example, first required the rehabilitation of the rule of the impersonal laws of the market (1). This, particularly in a moment of high contestation, could only be achieved through their unchecked governance (2).

Hence, austerity found its primary ally in technocracy: a belief in the power of economists as guardians of an indisputable science. The Capital Order explores the consolidation of this powerful austerity-technocracy partnership. It introduces the reader to two international financial conferences, at Brussels (1920) and Genoa (1922), that contemporary scholars have largely disregarded. But the reality is that these two events were pivotal in securing the longevity of capitalism as a socioeconomic system...

https://www.publicbooks.org/capital-order-economic-austerity-fascism/

Restoring the Firewall Between Capital and Democracy in the Capitalist Economy
   - Robert H. Wade

Clara Mattei’s excellent book (University of Chicago Press 2022) focuses on the British, Italian and wider European movement – of capitalists, politicians, and especially the “economic technocracy” including academic economists – to restore the pre-World War One capitalist system after the end of the war. That restoration was challenged by workers and intellectuals (including Gramsci) inspired by the new political-economy order in operation during the war, when belligerent governments became actively interventionist in the economy, allocating resources into military and civilian industries and controlling the labour market. There was wide popular support after World War One for continuing with a more active role of government in resource allocation and labour markets, including a welfare state.

This constituted a “structural crisis of capitalism”, in Mattei’s term. The economic technocracy in Italy and Britain, and many other countries, urgently focused on how to restore the fully capitalist model, based on private property, market allocation of resources, and the wage relationship whereby most of the population depended on selling their time and attention to a much smaller number of buyers of their labour power, with most of the balance between revenues and wage costs accruing to the owners of capital as profit, and not, for example, as taxes to finance public spending. The capitalist logic to be restored was: no profit, no production, no employment.

The emerging strategy for restoring the “capital order” in the post-war years was the state’s “austerity agenda” focused on lowering taxes (especially on the wealthy), cutting government spending on welfare-related activities, tightening monetary conditions, and limiting the workers’ rights to unionize and protest. The intended outcome of austerity was wide scope for private enterprise, income highly concentrated in the hands of those who saved and invested rather than those who consumed, and especially, disempowered workers. This would pave the way to “social harmony” in society, with people in their proper status,  and “fair” distribution of prosperity. Also, internationally,  the agenda promoted – in some countries more than others – free trade and free capital mobility.

The underpinning idea was a deep distrust of the state and government, and a trust in markets (assuming markets to be competitive rather than monopolistic).

“The capital order” in wider context beyond Britain and Italy after World War One

Mattei’s account of the post-World War One debate between those who championed the austerity agenda and a return to something like the pre-war political economy, and those who wanted to bring forward into the post-war years a more active role of the state in the economy inspired by the dirigiste role of the war-time state, focuses narrowly on Italy and Britain.

We can put it in wider context by starting with Alexander Hamilton’s question. Hamilton began the Federalist Papers, in 1787, by saying that US independence offered an experiment to decide “whether societies of men are really capable or not of establishing good government from reflection and choice”. Hamilton said “yes”, and went on to originate the “infant industry argument” for state-led industrialization in the US, later adopted by Japan, Germany, Russia, and after World War Two, countries of Northeast Asia.1

Those who pushed back and said “no” to this positive role of the state came later to be known as “neoliberals” and their approach or mindset, the “neoliberal” paradigm. It championed “austerity” in fiscal, monetary and industrial realms as the way to protect and strengthen the “capital order”.

Unsurprisingly, the  “neoliberal” movement opposed the surge in popular and political support for democracy, even before World War One – for the idea that the people, operating through elected political representatives, were the highest authority in each nation state, and entitled to write laws, property rights and contracts in the “public interest”.

The neoliberal movement, with its distrust of the state and trust in the market, resisted this notion of the good society and the appropriate role of government in a democracy.

Since we are at LSE, let me make the point that LSE in its departments of Economics and of Government has been a leading center of neoliberal philosophy going back to the early decades of the 20th century. Two of LSE’s leading economists were exponents of neoliberal philosophy as applied to economics: namely, Lionel Robbins and Friedrich Hayek. Robbins was appointed to the Economics faculty of LSE in 1925 and retired in 1961, 36 years later. He was “eminence gris” of all things LSE and built up a group of economists of free-market and anti-Keynesian views. (Robbins remains the only person at LSE commemorated with a bust of his head, made by his son and proudly displayed at the entrance to the LSE library, as though still the presiding angel.) Hayek joined LSE as Professor of Economics and Statistics at LSE in 1931 at Robbins’ invitation and stayed till 1950, nineteen years, boosting LSE’s  reputation as a major center of anti-Keynesian neoliberal philosophy.2  Hayek imported his bosom friend Karl Popper after the Second World War to head up LSE Philosophy. They were complemented by Michael Oakshott, a famously conservative political philosopher and “baron” of political science at LSE.  Oakshott was appointed to LSE in 1951 and remained till 1980, 29 years. However,  LSE also had distinguished professors of very non-neoliberal views, notably William Beveridge and Harold Laski; its faculty was not monolithically neoliberal.

Hayek, Robbins, and others in the neoliberal movement (eg von Mises, Wilhelm Ropke), and their business backers,  identified the urgent overarching question as being how to sustain the hierarchy of wealth and power in the face of the spread of, first, organized labour in the West and, second, movements in the global South for decolonization and development. Both trends brought claims by previously excluded people for larger shares of GDP, challenging existing property rights and social hierarchies. Both sets of claims had to be resisted.  Robbins disparaged both claims in his sour comment, “’Mines for miners’ and ‘Papua for Papuans’ are analytically similar slogans.”

Many neoliberals admired colonial empires and opposed decolonisation. Von Mises especially admired the Belgian Congo, and the Swiss businessman Albert Hunold, who funded neoliberal organizations, declared that the end of white rule in Rhodesia was a disaster comparable to Hitler’s rise to power in Germany. Robbins saw decolonization and economic planning at home as reinforcing each other, in the wrong direction.

But Hayek, Robbins and other neoliberals knew they could not oppose democracy directly, at least not at home. As they opposed the claims of organized workers and the decolonizing countries of the South, they tried to imagine a “capital order” which would appear to be a democratic order, with a firewall between the affairs of the democratic order and the affairs of the capital order – so that the masses in each country could not distort the workings of private property and markets.

How was this “capital order” with a firewall between it and democracy to be constructed? They did not set it out like this, but we can infer that they envisaged a three-step mechanism.

  • First, states agree to shift some sovereignty upwards to the international realm, where inter-state bodies set rules of property rights, international trade and international investment constraining the actions of national governments (at first to the League of Nations, and after World War Two, the IMF, World Bank, GATT, and some others).
  • Second, these international rules promote property rights across national borders, such that if one government breaches the property rights of a foreign investor it will invite conflict with that investor’s government. This threat of retaliation is a principle mechanism for enforcing the firewall between the democratic order and the capital order.
  • Third, the nation state must be strong in the specific task of enforcing property rights, anti-union laws and the like within its territory – but not strong in using a democratic mandate to “interfere” with resource allocation of the private owners of capital, whether domestic or foreign.

So the neoliberals wanted a strong state, not a laissez faire state, but strong only for enforcing their agenda favouring the private property hierarchy and the firewall between the democracy and the capital order.

In short, the main instrument of the neoliberal project – beyond the “austerity project” at home – was and is today international agreements on trade and investment. Why? Because agreements to require free trade and free movement of capital constrain national governments in several ways – by the ever-present threat of “capital flight”, by the threat of retaliation by governments of the foreign firms operating in their territory, and by the need to offer capital-friendly conditions to attract foreign capital.

Today, Investor-State Dispute Settlement (ISDS) clauses written into most so-called free trade agreements illustrate the success of this neoliberal vision in shaping the rules of the international political-economy. ISDS gives a foreign investor in country X the right to bring charges for damages against that government if the government takes actions which limit the company’s present or likely future profits – the cigarette company Philip Morris can bring charges against a government that introduces bans on cigarette advertising, for example. The cases are heard by a special ISDS tribunal. The tribunal has awarded damages running into hundreds of millions of dollars. The government of country X cannot bring charges against the company to this tribunal, however. The playing field is stacked against the government in favour of the foreign corporation.

1 Here and later in this section, I draw on J. W. Mason, “The market police”, Boston Review, June 1, 2018.
2  In 1947 Hayek organized a meeting of 39 economists and businesspeople at Mt Pelerin, on Lake Geneva in the Swiss Alps, including Lionel Robbins. This was the start of the Mt Pelerin Society, which became a celebrated global gathering place for intellectuals of neoliberal views. It held its 75th anniversary general meeting in October 2022 in Oslo.

Today’s legacy of the post-World War One capital order

As is clear from the above, the post World War One vision of the desirable capital order continues to be influential in government circles today, even to the point of being the standard from which other policies can be judged as deviations. For example:

  • Wolfgang Schauble, German finance minister, “Austerity is the only cure for the eurozone”, Financial Times, 5 September 2011.
  • New York Times journalist Louis Uchitelle summarized the consensus at the World Economic Forum meeting in Davos, 2002: “A nation that opens its economy and keeps government’s role to a minimum invariability experiences more rapid economic growth and rising incomes.”
  • Charles Koch, the American billionaire businessman:   “Our movement must destroy the prevalent statist paradigm” (1978).
  • “Charles Koch believes that an unregulated free market is the only sustainable structure for human society” (C. Leonard,  “A Koch brother’s big bet on Judge Barrett”, New York Times (International), October 14 2020).

But in post-Second World War democracies, the project to advance the capital order has to be disguised, advanced through organized hypocrisy. Here are two examples:

  • Alan Budd, a top UK Treasury civil servant during the Thatcher years:  “The Thatcher government never believed for a moment that [monetarism] was the correct way to bring down inflation [though this is what it claimed]. They did however see that this would be a very good way to raise unemployment. And raising unemployment was an extremely desirable way of reducing the strength of the working classes….[This] has allowed the capitalists to make high profits ever since” (in Cohen 2003).
  • “Reagan’s head of the Office of Management and Budget, David Stockman, publicly divulged the ideological strategy to camouflage tax cuts that redistribute income to the elite. In an unguarded moment, he characterized the supply- side theory behind the tax cuts of 1981 as a ‘Trojan horse’ to re- craft fiscal policymaking to benefit the wealthy: ‘It’s kind of hard to sell “trickle down”, so the supply- side formula was the only way to get a tax policy that was really “trickle down.” Supply- side is “trickle- down” theory’” ( Greider 1981, 46).

Budd and Stockman could scarcely be clearer in explaining the code used to hide the reality of the austerity agenda from the public.

But today, especially since the smart phone in 2010 and then algorithmic social media, politicians have learnt to combine (a) attracting support and donations from the wealthy by advocating low taxes on the wealthy, cuts in public welfare spending, rises in police and military spending, with (b) attracting voting support from non-wealthy sections of the population by stoking moral outrage and promoting anti-liberal “identity” values  –  including anti-abortion rights, anti-feminism, anti-gay marriage, anti-LGBTQ rights, anti-people-of-colour, anti-immigrants, anti-non-Christians, anti-elites, anti-globalization, anti-European Union. Trump is just one case of many who have used this playbook, which we could call the “pluto-populist” playbook.

The populist side of the pluto-populist playbook builds the politics of resentment into a promise to older voters to restore the society to the “way things were in the good old days”, to “Make America, or Britain, or Brazil, or Hungary, or India, or Turkey, or Israel, many others, Great Again”, with emphasis on the last word. In effect, a promise to cure the widespread sense of “disorientation” and “loss of “status”  experienced by many in the older generations, especially white men without college education.

I am not clear to what extent the global phenomenon of the rise of the far right in the past decade is tied to the “austerity” strategy. For example, to what extent do: Italy’s new government under President Georgia Meloni, France’s  Marine Le Pen (who won 40% of the vote in the final round of the presidential elections), Sweden’s hard-right party which won the second highest number of seats in Parliament in elections earlier this year, Bolsonaro’s government in Brazil, Modi’s government in India – to what extent do they adopt a “pluto-populist” playbook which combines austerity, income concentration at the top, and identity politics based on anti-liberal values?  To what extent do they mobilize mass electoral support by softening the austerity agenda with forms of targeted economic protection – which then join the standard populist components of “tough on crime”, cultural reaction in the form of identity politics, topped off with electoral chicanery like gerrymandering?

How do the strategies of populist authoritarians like Putin, Lukashenko and Xi compare with the strategies of these more democratic leaders? Putin and Xi have both moved in the past several years to exercise broader and deeper state control of the economy, expanding state firms and further constraining non-state firms. (Neither Russia nor China has “private” firms in the sense understood in the West, because ostensibly private firms have much less legal protection from state intrusions than they do in the West.) President Xi used the important Communist Party congress in October 2022 to establish almost-one-man-rule and make it clear that national security trumps the economy as the top priority. He mentioned “security” 52 times, “Marxism” 15 times and “markets” three times.3

https://blogs.lse.ac.uk/internationaldevelopment/2022/11/21/restoring-the-firewall-between-capital-and-democracy-in-the-capitalist-economy/

Contents

 Introduction

The introduction sets the stage for a critical examination of the relationship between austerity measures, economic theories, and the rise of fascism. The introduction begins by highlighting the relevance of austerity both in historical contexts and contemporary societies.

Austerity, Then and Now

The first section establishes the importance of understanding the historical origins of austerity policies. Mattei emphasizes that austerity measures have been implemented throughout history during times of economic crisis, often with severe consequences for the working class. By examining past instances of austerity, the author aims to shed light on the underlying motivations and ideological underpinnings of these policies.

Technocracy and “Apolitical” Theory, Then and Now

In the subsequent section the focus shifts to the role of technocrats and the supposedly apolitical nature of economic theories. Mattei argues that economists have often presented their theories as objective and value-neutral, detached from political ideologies. However, the author asserts that this supposed apolitical stance has allowed economists to wield significant power and influence over economic policy decisions, often resulting in the implementation of austerity measures.

Liberalism and Fascism, Then and Now

This section explores the complex relationship between liberalism and fascism, drawing parallels between historical and contemporary political landscapes. Mattei contends that the economic theories and policies associated with liberalism can inadvertently create conditions conducive to the rise of fascism. By analyzing historical cases, the author seeks to elucidate the link between economic liberalism and the erosion of democratic institutions.

Wage Repression, Then and Now

This section delves into the role of wage repression in austerity measures. Mattei argues that wage repression has long been used as a tool to achieve economic stability and control inflation. The author contends that this approach disproportionately affects the working class and perpetuates economic inequality. By examining historical examples of wage repression, Mattei aims to expose the underlying power dynamics and social implications of such policies.

Methods and Sources

Finally the author outlines the methodology and sources used throughout the book. Mattei emphasizes the importance of interdisciplinary research, drawing on a wide range of historical, economic, and political sources to provide a comprehensive analysis of the subject matter. The author's commitment to rigorous scholarship and extensive sourcing sets the stage for an in-depth exploration of the relationship between austerity, economic theories, and the rise of fascism.

 Part I: War and Crisis

The author sets the stage for a comprehensive exploration of the relationship between war, economic crises, and the emergence of austerity policies. Mattei highlights the historical context of the two World Wars and their profound impact on the global economy, leading to significant social and political transformations.

The introduction begins by discussing the intertwined relationship between war and the economy. Mattei argues that war acts as a catalyst for economic crises and the subsequent implementation of austerity measures. The author contends that during times of war, nations often experience an expansion of state power and a reorientation of economic priorities. This reconfiguration of the economy creates fertile ground for the emergence of new economic theories and policies that prioritize stability and control.

The subsequent section focuses on the aftermath of World War I and the economic turmoil that ensued. Mattei explores the Treaty of Versailles and its impact on Germany, which faced massive reparations and economic devastation. The author examines the role of economists and financial experts in devising strategies to address the economic crisis, particularly the imposition of austerity measures. Mattei argues that these policies, driven by the desire to stabilize the economy and repay debts, had severe consequences for the working class and contributed to social unrest.

Continuing the analysis, Mattei explores the interwar period, marked by economic crises and the rise of fascist regimes. The author emphasizes the role of economists in shaping policy responses to the crises, drawing attention to the competing economic theories and ideologies that emerged during this period. Mattei argues that austerity measures gained prominence as a means to restore economic stability, and economists played a crucial role in formulating and advocating for these policies. The author highlights the impact of austerity on social inequality, which ultimately created conditions conducive to the rise of fascism.

In summary, the introduction to Part I of the book provides a historical framework for understanding the interplay between war, economic crises, and the emergence of austerity policies. Mattei emphasizes the transformative effects of World War I and the interwar period, shedding light on the role of economists in shaping economic theories and policies during times of crisis. The author's analysis underscores the social and political implications of austerity measures, highlighting their role in paving the way for the rise of fascism.

 Chapter 1 - The Great War and the Economy

Chapter 1 explores the profound impact of the Great War on the economy. The introduction to this chapter sets the stage for the discussion of the economic effects of the Great War. It highlights the significant changes that took place during this period and emphasizes the role of economists in shaping economic policies. The chapter aims to provide an in-depth analysis of the transformations that occurred and their consequences.

A Remarkable Transformation

This section delves into the remarkable changes brought about by the Great War. It focuses on the state's increased control over private property and production, marking a departure from the traditional dynamics of the capitalist system. This shift in power represents a pivotal moment in economic history, laying the foundation for further exploration.

State Control over Private Property and Production:

This section examines the state's control over private property and production in greater detail. It explores the mechanisms through which the state gained power and influence over these aspects. This analysis sheds light on how the dynamics of ownership and production were redefined during the war.

State Control over Wage Relations:

Within the context of state control, this section investigates the state's impact on wage relations. It delves into three key aspects: disciplining labor, coping with a small labor supply, and setting the price of labor. By regulating these elements, the state aimed to manage and control the workforce during the war.

Disciplining Labor: This subsection explores the methods employed to discipline labor during the war. It examines the strategies used to ensure compliance, productivity, and efficiency within the workforce.

Coping with a Small Labor Supply: The subsection focuses on the challenges posed by a scarcity of workers during the war. It investigates the measures taken to address this issue and maintain the necessary labor force for production and other essential sectors.

Setting the Price of Labor: This subsection examines how the state determined and regulated the price of labor during the war. It explores the factors taken into consideration and the policies implemented to ensure a fair and sustainable wage system.

The Consequences of a Remarkable Transformation:

This section delves into the consequences of the transformative changes brought about by the Great War. It presents two distinct visions that emerged as a result: the vision of the bureaucrats and the vision of the workers. It explores how these differing perspectives shaped the understanding and evaluation of the economic outcomes of the war.

Conclusion

The chapter concludes by summarizing the key points discussed throughout. It underscores the significance of the Great War as a catalyst for transformative economic measures and presents the varying perspectives on the outcomes of these changes. This chapter sets the stage for the subsequent exploration of how these developments laid the groundwork for the rise of austerity measures and, ultimately, fascism.

 Chapter 2 - A Wholly New School of Thought

Chapter 2 explores a paradigm shift in economic thinking during the post-war period. The introduction to this chapter sets the stage for the discussion of a new school of economic thought that emerged after the war. It highlights the limitations of the pre-war economic creed and emphasizes the need for alternative approaches. The chapter aims to examine the rise of a new economic paradigm and its implications for social welfare and reform.

Beyond "the Tyranny of Economic Creed"

This section explores the limitations of the pre-war economic creed and the need to move beyond its constraints. It discusses the dominant economic theories and ideologies that prevailed before the war and the criticisms they faced. It sets the foundation for the exploration of alternative approaches that prioritize social welfare.

Social Welfare for Social Peace

This section delves into the concept of social welfare as a means to maintain social peace in the aftermath of the war. It examines the idea that a fair and equitable distribution of resources and opportunities can contribute to stability and prevent social unrest. It explores the role of social welfare policies in promoting societal well-being.

Reformists in Action

This section focuses on the efforts of reformists who sought to implement changes in the post-war period. It discusses the agenda of the Ministry of Reconstruction, which aimed to address the socio-economic challenges and rebuild society. It explores the initiatives and policies implemented to improve living conditions, infrastructure, and social services.

The Agenda of the Ministry of Reconstruction: This subsection examines the specific agenda and goals of the Ministry of Reconstruction. It explores the key areas of focus, such as housing, employment, healthcare, and education, and how these initiatives aimed to promote social progress and reconstruction.

The Reach of Reconstruction: This subsection explores the extent and impact of the reconstruction efforts. It discusses the geographical and social reach of these initiatives, highlighting their effects on different segments of society and regions. It examines the successes, challenges, and limitations of the reconstruction efforts.

Reformism: Pacification or Polarization?

This section addresses the question of whether reformism led to pacification or polarization in society. It explores the divergent perspectives on the outcomes of the reformist agenda. It examines how the implementation of social welfare policies and reforms affected different societal groups and the potential implications for social cohesion or division.

Conclusion

The chapter concludes by summarizing the key points discussed throughout. It emphasizes the emergence of a new economic school of thought that prioritized social welfare and reform. It highlights the efforts of reformists and the initiatives undertaken to rebuild and improve society in the post-war period. The chapter sets the foundation for further exploration of the consequences of these reforms and their connection to the rise of austerity measures and fascism.

 Chapter 3 - The Struggle for Economic Democracy

Chapter 3 focuses on the labor movement and the fight for economic democracy during the post-war period. The introduction to this chapter sets the stage for the discussion of the struggle for economic democracy. It highlights the significance of the labor movement and its emergence as a key player in shaping post-war economic and social policies. The chapter aims to explore the various forms of labor activism and their impact on the quest for economic democracy.

Labor Storms the Stage of History

This section delves into the rise of labor movements and their increasing influence on the socio-economic landscape. It examines how workers became an active force in demanding better working conditions, fair wages, and a voice in decision-making processes. It explores the changing dynamics between labor and capital in the post-war era.

Strikomania

This section focuses on the prevalence of strikes as a tool of labor activism. It discusses the frequency and intensity of strikes during this period, highlighting the demands and grievances of the workers. It examines how strikes became a significant catalyst for social and economic change.

Strikes Get Political

This section explores how strikes evolved from being solely industrial disputes to becoming political in nature. It investigates how workers and labor unions began to engage in political activism to address broader societal issues beyond workplace concerns. It examines the intersection of labor activism and politics.

The Miners' Struggle and the Sankey Committee

This section centers on the miners' struggle for improved working conditions and their confrontation with the capitalist establishment. It examines the pivotal role played by the Sankey Committee, which was tasked with investigating and making recommendations on mining industry reforms.

The Miners Take Charge: This subsection discusses how the miners took charge of their struggle and organized collective action to demand better wages and improved working conditions.

In the Foyer of the Capitalist Fortress: This subsection explores the confrontations and negotiations between the miners and the capitalist owners. It sheds light on the power dynamics and the challenges faced by the workers in their fight for economic justice.

Nationalization and Worker Control: This subsection delves into the calls for nationalization and worker control within the mining industry. It examines the debates and proposals regarding the ownership and management of the mines.

The Rise and Defeat of the Coal Miners: This subsection focuses on the outcomes of the miners' struggle. It discusses their victories, setbacks, and the ultimate defeat they faced in their pursuit of economic democracy.

Cooperatives and Guilds

This section examines alternative models of economic organization such as cooperatives and guilds. It explores the experiences of Italian co-ops and British guilds as examples of worker-led economic initiatives.

Italian Co-ops: This subsection delves into the Italian cooperative movement, its origins, principles, and impact on the local economy and society.

British Guilds: This subsection focuses on the British guild movement and its attempts to establish worker-controlled economic structures and challenge the dominance of traditional capitalist models.

Conclusion

The chapter concludes by summarizing the key points discussed throughout. It highlights the significance of labor activism in the struggle for economic democracy. It emphasizes the evolving nature of strikes, the miners' fight for reform, and the exploration of alternative economic models. The chapter lays the groundwork for further exploration of the consequences of these labor movements and their role in shaping subsequent economic and political developments.

 Chapter 4 - The New Order

Chapter 4 explores the emergence of new forms of organization and thought during and after World War I. The introduction to this chapter sets the stage for the discussion of the "New Order" that arose during and after the war. It highlights the seeds of change and alternative forms of organization that began to emerge in response to the social and economic upheavals of the time. The chapter aims to examine these transformative forces and their implications.

The War and the Seeds of the Factory Committees

This section delves into the impact of the war on society and the seeds of the factory committees that sprouted during this period. It explores how the war created conditions that led to a reevaluation of existing power structures and gave rise to new forms of organization and participation.

L'Ordine nuovo and the Exchange of Ideas

This section focuses on L'Ordine nuovo, a publication and a platform for intellectual and political discourse during this time. It examines the exchange of ideas and the debates that took place within this intellectual milieu.

The Foundations for an Emancipatory Form of Knowledge: This subsection explores the efforts to establish a knowledge base that challenges the prevailing capitalist order. It examines the development of alternative theories and frameworks that sought to emancipate workers and break away from the established economic and political structures.

Against the Naturalization of the Capitalist Order: This subsection discusses the rejection of the naturalization of the capitalist order and the belief that alternative systems were possible. It explores the critique of capitalism and the call for a reimagining of economic and social relationships.

For Workers' Agency: This subsection focuses on the emphasis on workers' agency and their active role in shaping their own destinies. It explores the concept of workers as active agents of change and the belief in their ability to transform society.

Praxis: This subsection delves into the notion of praxis, the integration of theory and practice, and the importance of translating ideas into action. It explores how theory and action intersected in the pursuit of transformative change.

Against the Political and Economic Divide: This subsection examines the rejection of the traditional political and economic divide and the call for a more integrated and holistic approach. It explores the attempt to bridge the gap between political and economic spheres to create a more just and equitable society.

The Factory Occupation

This section explores the phenomenon of factory occupations that took place during this period. It examines the motivations behind the factory occupations, the tactics employed, and the impact they had on labor relations and the broader society.

Impressions and Reactions

This section focuses on the impressions and reactions generated by the new forms of organization and thought. It examines the responses of different societal groups and the wider public to these transformative forces.

The Seeds of Counterrevolution

This section delves into the emergence of counterrevolutionary forces and the efforts to suppress the transformative changes that were taking place. It examines the resistance and backlash faced by the new order and the subsequent erosion of the gains made during this period.

Conclusion

The chapter concludes by summarizing the key points discussed throughout. It underscores the significance of the new forms of organization and thought that arose during and after the war. It also highlights the challenges and resistance faced by these transformative forces. The chapter sets the stage for further exploration of the consequences of these developments and their connection to the rise of austerity measures and the eventual ascent of fascism.

 Part II: The Meaning of Austerity

The introduction to Part II introduces the central theme of austerity and its profound implications in shaping political and economic landscapes.

Mattei begins by acknowledging the prevailing notion that austerity measures are necessary for economic stability and recovery. However, she questions this widely accepted belief and delves into the historical origins of austerity. She argues that economists have played a pivotal role in inventing and promoting the concept of austerity, which has had far-reaching consequences.

The author elucidates how austerity measures have been justified as a means to restore economic equilibrium and reduce public debt. She highlights the influential voices of economists who championed the virtues of austerity and how their ideas have been embraced by policymakers around the world. Mattei argues that this widespread adoption of austerity measures has had profound effects on society, not only economically but also politically.

Furthermore, Mattei draws attention to the relationship between austerity and fascism. She contends that the economic policies of austerity paved the way for the rise of fascist regimes in the past. By examining historical examples, she demonstrates how the socio-economic distress caused by austerity created fertile ground for the emergence of authoritarian and nationalist movements.

The author also emphasizes the need to critically analyze the consequences of austerity in the present day. Mattei posits that austerity policies have contributed to rising inequalities, social unrest, and the erosion of democratic principles. She calls for a reevaluation of the assumptions underlying austerity and a deeper understanding of its implications on society.

In conclusion, the introduction to Part II serves as a thought-provoking entry point into the exploration of how economists have shaped and justified austerity measures. By delving into historical contexts and drawing connections to the rise of fascism, Mattei urges readers to critically examine the repercussions of austerity and its potential impact on socio-political systems.

 Chapter 5 - International Technocrats and the Making of Austerity

Chapter 5 explores the role of technocrats in the development and implementation of austerity measures.

Reassessing Brussels and Genoa

The chapter begins by reassessing the influence of Brussels and Genoa, two important international conferences, on shaping economic policies. It then delves into how technocrats took charge and their understanding of the nature and purpose of austerity.

Technocrats Take Charge

In the section Mattei examines the rise of technocratic power in economic decision-making. She highlights the increased influence of international organizations, such as the International Monetary Fund (IMF) and the World Bank, in shaping economic policies globally. Mattei argues that these technocratic institutions have played a crucial role in promoting and enforcing austerity measures as a response to economic crises.

On the Nature and Purpose of Austerity

The subsequent section explores different dimensions of austerity policies. The first subsection, "Fiscal Austerity," focuses on the reduction of government spending and the rationale behind it. Mattei examines how technocrats argue that fiscal austerity is necessary to control public debt, restore investor confidence, and promote economic growth.

Fiscal Austerity: The next subsection delves into the role of monetary policy in austerity measures. Mattei discusses the impact of inflation and the pursuit of "dear money" policies to curb inflationary pressures.

Monetary Austerity: She also explores how technocrats use monetary austerity as a means to achieve political immunity and reconfigure the relations of production, thereby transforming labor dynamics and wealth distribution.

Industrial Austerity: - Privatization and the Crowding-Out Argument: This section focuses on the privatization of public assets and the "crowding-out argument." Mattei analyzes how technocrats justify privatization as a way to improve efficiency and promote competition. - Disciplining Labor and Cutting Wages: She also explores how austerity measures are used to discipline labor and cut wages, thereby exerting control over the workforce.

Conclusion

In the concluding section of the chapter, Mattei summarizes the key findings and arguments presented throughout the chapter. She emphasizes the significant role played by international technocrats in shaping and implementing austerity policies worldwide. Mattei raises concerns about the social and economic consequences of these measures and calls for a critical examination of their effectiveness and underlying motives.

In summary, Chapter 5 provides an insightful analysis of the role of international technocrats in the making of austerity policies. Mattei examines the influence of these technocratic institutions, their understanding of austerity, and the various dimensions of austerity measures, including fiscal, monetary, and industrial aspects. The chapter serves as a critical examination of the power dynamics at play in shaping economic policies and raises important questions about the consequences of austerity on society.

 Chapter 6 - Austerity, a British Story

Chapter 6 delves into the British experience with austerity policies. The chapter begins by examining the role of technocrats in implementing and defending austerity measures in the United Kingdom. It then explores the challenges faced by the austerity agenda from within, the defense of austerity through economic theory, and the specific dimensions of fiscal, industrial, and monetary austerity.

Technocrats at the Helm of Power

In this section Mattei explores the influence of technocrats in shaping and implementing austerity policies in the British context. She highlights the role of institutions like the International Monetary Fund (IMF) and the European Central Bank (ECB) in providing guidance and imposing conditions for economic recovery.

The Challenges to Austerity from Within

This section examines the internal struggles and opposition faced by the austerity agenda. Mattei discusses how public discontent and political resistance influenced the trajectory of austerity policies in the UK. She also addresses the impact of protests, strikes, and grassroots movements that emerged in response to the social and economic consequences of austerity measures.

The Defense of Austerity: Economic Theory to the Rescue

This section explores the ideological justifications and economic theories used to defend austerity.

Tackling Inflation & Teaching Abstinence

Mattei analyzes the arguments put forth by economists and policymakers to justify fiscal consolidation, emphasizing the importance of tackling inflation and teaching abstinence in public spending.

Fiscal Austerity

The subsequent section focuses on the specific dimensions of fiscal policy during the era of austerity in Britain.

Taxation to Impose Thrift: Mattei examines how taxation was used as a means to impose thrift and cut public expenditures.

The Attack on Social Expenditures: She also delves into the attack on social expenditures and the consequences it had on welfare programs and public services.

Industrial Austerity: This subsection explores the role of privatization and depoliticization in the context of austerity measures.

Privatization and Depoliticization: The Crowding-Out Argument. Mattei analyzes the crowding-out argument, which advocates for privatization as a way to improve efficiency and reduce government intervention.

Wages, Unemployment, Strikes: Additionally, she addresses the impact of austerity on wages, unemployment rates, and strikes, emphasizing the challenges faced by the workforce.

Monetary Austerity

The section "Monetary Austerity" delves into the impact of dear money policies and the promotion of savings.

Dear Money and Savings: Mattei examines how monetary policy was used to curb inflation and control interest rates, which had implications for investment and economic growth.

The Technocratic Project

In the concluding section of the chapter, Mattei reflects on the technocratic project of austerity and summarizes the key findings presented throughout the chapter. She emphasizes the complexities and challenges faced by the British experience with austerity policies, as well as the societal implications and resistance that arose.

Conclusion

In summary, Chapter 6 of "The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism" offers a comprehensive examination of the British story of austerity. Mattei explores the influence of technocrats, the challenges faced by the austerity agenda, the defense of austerity through economic theory, and the specific dimensions of fiscal, industrial, and monetary austerity. The chapter provides insights into the dynamics and consequences of austerity policies in the United Kingdom and raises important questions about their long-term effects on society.

 Chapter 7 - Austerity, an Italian Story

Chapter 7 explores the Italian experience with austerity policies. The chapter begins by examining the role of experts in positions of power and their influence in shaping and implementing austerity measures in Italy. It then delves into the relationship between pure economics and the technocratic project, the contrast between the virtuous saver and the unruly worker, and the connection between austerity, technocracy, and authoritarianism.

The Experts in Power

This section focuses on the influence of technocrats in the Italian context. Mattei analyzes how these experts, often appointed rather than elected, played a significant role in implementing and enforcing austerity policies. She highlights their power and the implications of their decision-making on the lives of ordinary people.

Pure Economics and the Technocratic Project

In this section the author explores the alignment of economic theories and the technocratic project. Mattei discusses how economists' ideas and theories played a pivotal role in justifying austerity measures. She examines the ideological underpinnings and intellectual foundations that shaped the technocratic approach to governance.

The Virtuous Saver and the Unruly Worker

This section examines the contrasting narratives surrounding austerity policies. Mattei discusses how austerity measures often depict savers as virtuous individuals who contribute to economic stability, while workers are often portrayed as disruptive or resistant to necessary reforms. She delves into the social and political implications of these narratives and how they shape power dynamics in society.

Austerity, Technocracy, and Authoritarianism

The subsequent section explores the interplay between austerity policies, the rise of technocracy, and the erosion of democratic principles. Mattei analyzes how austerity measures have been used as a means to concentrate power in the hands of technocrats and undermine democratic decision-making processes. She highlights the potential risks of authoritarianism that can arise in the context of technocratic governance.

Austerity in All Policies

This section examines the different dimensions of austerity in Italy.

Fiscal Austerity - The Retreat of the State - Taxes - Social Policy: Mattei explores fiscal austerity and its impact on the retreat of the state, specifically addressing tax policies and changes in social policy.

Industrial Austerity - Privatization - Wages, Strikes, Corporativism: She then delves into industrial austerity, focusing on privatization, wage dynamics, strikes, and the influence of corporativism.

Monetary Austerity: Finally, she discusses monetary austerity and its implications for the Italian economy.

Conclusion

In the concluding section of the chapter, Mattei summarizes the key findings and arguments presented throughout the chapter. She reflects on the Italian experience with austerity and highlights the connections between technocracy, authoritarianism, and the implementation of austerity policies. The chapter raises critical questions about the impact of austerity on democratic governance and socioeconomic dynamics in Italy.

In summary, Chapter 7 of "The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism" provides an in-depth analysis of the Italian story of austerity. Mattei examines the role of experts in power, the relationship between pure economics and the technocratic project, and the narratives surrounding savers and workers. The chapter also explores the connections between austerity, technocracy, and authoritarianism, as well as the specific dimensions of fiscal, industrial, and monetary austerity in Italy. Overall, the chapter offers valuable insights into the consequences of austerity policies and their impact on democratic governance and societal dynamics.

 Chapter 8 - Italian Austerity and Fascism through British Eyes

Chapter 8 examines the perception and impact of Italian austerity policies from the perspective of British observers. The chapter begins by addressing the problem of Italian dependence and explores how austerity measures were linked to the idea of a strong state. It then delves into the role of key figures such as Signor De Stefani, the connection between austerity and authoritarianism, the issue of political repression, and the international double standard. The chapter also examines the impact of austerity on debt and the consolidation of the lira, as well as the question of an independent central bank.

The Problem of Italian Dependence

This section discusses Italy's economic dependence on foreign capital and how this influenced the implementation of austerity policies. Mattei analyzes how Italy's vulnerability to international financial pressures contributed to the adoption of austerity measures as a means to restore economic stability and regain international credibility.

Austerity and the Strong State

This section explores the association between austerity policies and the notion of a strong state.

Signor De Stefani: The Good Soldier of Austerity: This subsection highlights the role of Antonio De Stefani, a key figure in promoting and implementing austerity measures in Italy. Mattei examines De Stefani's policies and their alignment with the idea of a strong state capable of implementing tough economic reforms.

The Invincible Duo: Austerity and Authoritarianism: This subsection delves into the connection between austerity measures and the rise of authoritarianism in Italy.

Political Repression and the International Double Standard: Mattei discusses how austerity policies were implemented hand in hand with authoritarian measures, including political repression and limitations on civil liberties. She also explores the international double standard in evaluating these actions, highlighting the selective criticism and tolerance of authoritarian tendencies.

Debt and the Consolidation of the Lira

This section examines the impact of austerity on Italy's debt and the consolidation of its currency, the lira. Mattei analyzes the measures taken to manage debt and restore financial stability, including currency devaluations and the negotiation of loans with international creditors.

An Independent Central Bank?: This subsection explores the question of whether Italy had an independent central bank during the period of austerity. Mattei discusses the relationship between the central bank, fiscal policy, and the influence of external actors in shaping Italy's monetary policies. She examines how the independence of the central bank was affected by the pursuit of austerity and the priorities of international financial institutions.

Conclusion

In the concluding section of the chapter, Mattei summarizes the key findings and arguments presented throughout the chapter. She reflects on the British perspective of Italian austerity policies and their connection to the rise of fascism. The chapter raises important questions about the role of austerity in shaping political and economic dynamics, as well as the international perception and response to these developments.

In summary, Chapter 8 of "The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism" provides an insightful analysis of Italian austerity policies through the eyes of British observers. Mattei examines the problem of Italian dependence, the association between austerity and a strong state, the role of key figures, the connection to authoritarianism, the issue of political repression, the impact on debt and currency consolidation, and the question of an independent central bank. The chapter sheds light on the complex interplay between austerity, politics, and international perceptions, contributing to a deeper understanding of the historical context and consequences of Italian austerity measures.

 Chapter 9 - Austerity and Its "Successes"

Chapter 9 examines the economic dynamics and outcomes of austerity policies. The chapter begins by discussing the relationship between class shares, exploitation, and profit rates, highlighting the distributional implications of austerity measures. It then delves into the operation of austerity and its impact on various economic factors. Finally, the chapter concludes by summarizing the key findings presented throughout the book.

Class Shares, Exploitation, and Profit Rates

This section focuses on the distributional consequences of austerity policies. Mattei explores how austerity measures can affect the relative shares of income between capital and labor, as well as the level of exploitation experienced by workers. She delves into the dynamics of profit rates and discusses the implications of austerity on income inequality and social stratification.

On the Operation of Austerity

This section examines the mechanisms through which austerity policies operate. Mattei analyzes the impact of fiscal austerity, monetary austerity, and industrial austerity on different aspects of the economy. She discusses how fiscal austerity measures, such as spending cuts and tax changes, can affect aggregate demand, investment, and economic growth. Furthermore, she explores the role of monetary austerity in controlling inflation, interest rates, and the availability of credit. Finally, she examines the consequences of industrial austerity, including wage dynamics, privatization, and labor market conditions.

Conclusion

The chapter concludes by summarizing the key insights and findings presented throughout the book. Mattei reflects on the complexities and trade-offs involved in implementing austerity policies. She highlights the distributional implications, economic dynamics, and social consequences of austerity measures. The chapter also raises critical questions about the effectiveness and long-term sustainability of austerity policies in achieving their intended goals.

In summary, Chapter 9 of "The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism" provides a comprehensive analysis of austerity and its "successes." Mattei examines the relationship between class shares, exploitation, and profit rates, delving into the distributional implications of austerity measures. She then explores the operation of austerity, discussing its impact on various economic factors such as fiscal policy, monetary policy, and industrial dynamics. The chapter concludes by summarizing the key findings of the book, emphasizing the complexities and challenges associated with implementing austerity policies and their socioeconomic consequences.

 Chapter 10 - Austerity Forever

Chapter 10 explores the persistence and implications of austerity policies. The chapter begins by discussing the "Austerity Trinity," a concept referring to the reemergence of austerity measures, fiscal discipline, and the neoliberal agenda. It then delves into the disempowerment of "apolitical" theory and its consequences. Finally, the chapter examines the connections between austerity, anti-democracy, and authoritarianism.

The Austerity Trinity: Back in Action

This section highlights the enduring nature of austerity policies. Mattei analyzes how austerity measures continue to be reintroduced and implemented despite their contested outcomes. She explores the intersection of austerity, fiscal discipline, and the broader neoliberal agenda, discussing their intertwined relationship and their impact on socioeconomic dynamics.

Disempowering “Apolitical” Theory

This section explores the limitations and challenges of "apolitical" economic theory in addressing the complexities of austerity. Mattei argues that economic theories claiming to be neutral or detached from politics often fail to account for the political dimensions and power dynamics that shape austerity policies. She discusses how such theories can perpetuate and legitimize the implementation of austerity measures while overlooking their social and political implications.

Anti-Democracy and Authoritarianism

This section examines the relationship between austerity policies and democratic governance. Mattei highlights the anti-democratic tendencies that can emerge in the context of austerity measures. She explores how the concentration of power, technocratic decision-making, and the erosion of democratic processes can undermine democratic values and institutions. The chapter raises concerns about the potential for austerity to pave the way for authoritarianism and poses critical questions about the compatibility of austerity and democratic governance.

Conclusion 

In this chapter, Mattei critically analyzes the persistence of austerity policies and their broader implications. She questions the "apolitical" nature of economic theory and its role in shaping austerity measures. Moreover, she highlights the anti-democratic tendencies and potential for authoritarianism that can arise in the context of austerity policies. The chapter sheds light on the challenges and risks associated with the perpetuation of austerity and raises important considerations about the relationship between austerity, democracy, and governance.

In summary, Chapter 10 of "The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism" delves into the enduring nature of austerity policies. Mattei discusses the reemergence of the "Austerity Trinity," the limitations of "apolitical" economic theory, and the connections between austerity, anti-democracy, and authoritarianism. The chapter raises critical questions about the impact of austerity on democratic governance and the need to reassess the role of economic theories in shaping policy decisions. It provides valuable insights into the long-term consequences and risks associated with the persistence of austerity measures.

 Afterword

The Afterword provides a concluding reflection on the themes and arguments presented throughout the book. It offers a summary of the key insights and implications of the research conducted, highlighting the historical context and the relevance of austerity policies in contemporary society.

The Afterword begins by revisiting the central thesis of the book: the invention of austerity by economists and its role in paving the way to fascism. Mattei emphasizes the link between economic theories, policy choices, and their broader societal impact. She underscores the importance of understanding the historical origins and development of austerity in order to comprehend its present-day manifestations.

The Afterword further explores the broader implications of austerity beyond economic policy. Mattei argues that austerity is not solely an economic phenomenon but rather a multifaceted social and political process. It examines how austerity measures have reshaped power dynamics, affected social structures, and altered the relationships between states, markets, and citizens.

Additionally, the Afterword addresses the ongoing debates surrounding austerity and its impact on democracy, inequality, and social cohesion. Mattei highlights the need for critical engagement with austerity policies and the exploration of alternative approaches that prioritize social well-being and sustainability.

Furthermore, the Afterword raises important questions about the future trajectory of austerity. Mattei challenges the notion that austerity is an inevitable and desirable response to economic challenges. She calls for a reevaluation of economic paradigms and policy frameworks to ensure that they prioritize human welfare, social justice, and democratic governance.

In conclusion, the Afterword of "The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism" offers a thought-provoking summary and reflection on the themes explored throughout the book. Mattei emphasizes the complex nature of austerity and its far-reaching implications. She underscores the significance of understanding the historical context of austerity and encourages critical engagement with its present-day manifestations. The Afterword serves as a call to action for reimagining economic policies and frameworks that prioritize the well-being and dignity of individuals and societies.

Detailed Table of Contents

Introduction

Austerity, Then and Now
Technocracy and “Apolitical” Theory, Then and Now
Liberalism and Fascism, Then and Now
Wage Repression, Then and Now
Methods and Sources

Part I: War and Crisis

1 The Great War and the Economy

A Remarkable Transformation
State Control over Private Property and Production
State Control over Wage Relations
- Disciplining Labor
- Coping with a Small Labor Supply
- Setting the Price of Labor
The Consequences of a Remarkable Transformation
- The Vision of the Bureaucrats
- The Vision of the Workers
Conclusion

2 "A Wholly New School of Thought"

Beyond “the Tyranny of Economic Creed”
Social Welfare for Social Peace
Reformists in Action
- The Agenda of the Ministry of Reconstruction
- The Reach of Reconstruction
Reformism: Pacification or Polarization?
Conclusion

3 The Struggle for Economic Democracy

Labor Storms the Stage of History
Strikomania
Strikes Get Political
The Miners’ Struggle and the Sankey Committee
- The Miners Take Charge
- In the Foyer of the Capitalist Fortress
- Nationalization and Worker Control
- The Rise and Defeat of the Coal Miners
Cooperatives and Guilds
- Italian Co-ops
- British Guilds
Conclusion

4 The New Order

The War and the Seeds of the Factory Committees
L’Ordine nuovo and the Exchange of Ideas
- The Foundations for an Emancipatory Form of Knowledge
- - Against the Naturalization of the Capitalist Order
- - For Workers’ Agency
- - Praxis
- - Against the Political and Economic Divide
The Factory Occupation
Impressions and Reactions
The Seeds of Counterrevolution
Conclusion

Part II: The Meaning of Austerity

5 International Technocrats and the Making of Austerity

Reassessing Brussels and Genoa
Technocrats Take Charge
On the Nature and Purpose of Austerity
- Fiscal Austerity
- Monetary Austerity
- - Inflation and Dear Mone
- - Achieving Political Immunity and Reconfiguring the Relations of Production
- Industrial Austerity
- - Privatization and the Crowding-Out Argument
- - Disciplining Labor and Cutting Wages
Conclusion

6 Austerity, a British Story

Technocrats at the Helm of Power
The Challenges to Austerity from Within
The Defense of Austerity: Economic Theory to the Rescue
Tackling Inflation
Teaching Abstinence
Fiscal Austerity
- Taxation to Impose Thrift
- The Attack on Social Expenditures
Industrial Austerity
- Privatization and Depoliticization: The Crowding-Out Argument
- Wages, Unemployment, Strikes
Monetary Austerity
- Dear Money and Savings
The Technocratic Project
Conclusion

7 Austerity, an Italian Story

The Experts in Power
Pure Economics and the Technocratic Project
The Virtuous Saver and the Unruly Worker
Austerity, Technocracy, and Authoritarianism
Austerity in All Policies
- Fiscal Austerity—The Retreat of the State
- - Teaxes
- - Social Policy
- Industrial Austerity
- - Privatization
- - Wages, Strikes, Corporativism
- Monetary Austerity
Conclusion

8 Italian Austerity and Fascism through British Eyes

The Problem of Italian Dependence
Austerity and the Strong State
- Signor De Stefani: The Good Soldier of Austerity
- The Invincible Duo: Austerity and Authoritarianism
- Political Repression and the International Double Standard
Debt and the Consolidation of the Lira
An Independent Central Bank?
Conclusion

9 Austerity and Its "Successes"

Class Shares, Exploitation, and Profit Rates
On the Operation of Austerity
Conclusion

10 Austerity Forever

The Austerity Trinity: Back in Action
Disempowering “Apolitical” Theory
Anti-Democracy and Authoritarianism

Afterword

The Dawn of Austerity An interview with Clara E. Mattei, the author of The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism. 
https://www.dissentmagazine.org/online_articles/the-dawn-of-austerity

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