Process
Status Items Output None Questions None Claims None Highlights Done See section below
Highlights
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wartime interventions exposed an inconvenient fact. Economic forces never operate independently of society’s political dynamics. If the state could mold the economy to serve the needs of war, in peacetime it could mold it to promote the well-being of those whose sweat, muscles, and brains are the basis of national prosperity. The war had demonstrated “the profoundly political nature of the capitalist economy.” When the war ended, workers, who had toiled and bled for their country, wanted a fairer share of the income their labor was generating; they wanted the right to unionize; and they wanted better working conditions, decent housing, and an effective social safety net.
✏️ Here’s the heart of the matter with capitalism. When needed, a government can control things to mold the economy to serve specific needs. And it works. Think about wars, pandemic, etc. If it can work there, it can work during times of peace and quiet as well. 🔗 View Highlight
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workers were organized, had suffrage rights, and, by 1919, were making demands on employers and the state for a revision of the social contract. This threat to the prerogatives of capital, Mattei argues, provoked a reaction in the form of a comprehensive set of state-imposed austerity policies aimed at pounding the working class into a state of docility. In addition to repelling the existential menace of working-class militancy, these policies would establish lasting mechanisms for channeling income and wealth upward from workers to capitalists.
✏️ And here’s where austerity is birthed (and used every single time). When people demand things, government has a powerful tool to wield.. a hammer to pound them back into subservience. Austerity scales back social nets, destabilizes the foundation of having your basic needs met, and then gives the capitalists the reins to run things, lower wages, force work, and make crazy profit. 🔗 View Highlight
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three kinds of austerity policies: fiscal austerity, monetary austerity, and industrial austerity
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Fiscal austerity involves reducing government spending, particularly on programs aimed at providing social services and income support to working-class people; regressive taxation, aimed at buttressing the after-tax incomes of the propertied classes, is also part of the fiscal austerity mix.
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Monetary austerity entails restricting access to liquidity and credit when labor markets get tight and wages start to rise.
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Industrial austerity is the weakening or abolition of laws and institutions that protect the interests of workers: right-to-work laws, lax enforcement of fair hiring rules, legislative impediments to the formation of labor unions, tolerance of noncompete clauses in labor contracts
✏️ 1. How did the historical context of post-World War I Europe shape the development and implementation of austerity policies as a tool for class warfare? 2. In what ways do austerity policies undermine democratic control over economic policy, and how does this impact the power dynamics between workers and capitalists? 3. What role do technocrats and economic experts play in perpetuating austerity measures, and how does this influence public perception of economic policies and their effects on workers? This text explains how austerity policies have historically been used to benefit the wealthy at the expense of workers. It highlights the need for democratic control over economic policy to protect workers’ rights. Reading it will deepen your understanding of the economic struggles faced by the working class and the role of technocrats in shaping these policies. 🔗 View Highlight