Making sense of austerity: The rationality in an irrational system

Abstract

This article understands contemporary austerity through historical comparisons informed by Marxist insights into the nature of the state. It argues that austerity policies make sense from the perspective of capital–labour, inter-capitalist and international competition. Differences among states over time, in terms of their size and international situation and contested domestic relations, produce varied imperatives towards austerity and prospects of effective resistance.

The Habermas-Streeck debate revisited: Syriza and the illusions of the left-Europeanism

“…Simply put, the austerity is not designed to spur the growth and solve the crisis of democratic capitalism, it is designed to use the crisis (Krugman 2012). The official tale decrying the irresponsible social spending of governments for the explosion of fiscal deficits, even though it was evident that the bank bailouts were to blame, served as a pretext for the restoration of capital’s profitability through the destruction of the popular classes’ living conditions (Dunn 2014; Milios 2015). Thus, austerity is what David Harvey defines as neoliberalism in practice (Harvey 2005): a class-driven policy of asserting the capitalists’ power, which in fact quite reasonably reacted to the crisis by enforcing the socialization of banking losses and privatization of public wealth.…”