Austerity enforces the wage-labor relation that capitalism requires for growth

Evidence

But to the extent that we stop perceiving austerity as a sincere toolbox for managing an economy, and when we consider its history through the lens of class, it becomes clear that austerity preserves something foundational to our capitalist society. For capitalism to work in delivering economic growth, the social relation of capital— people selling their labor power for a wage— must be uniform across a society. In other words, economic growth presupposes a certain sociopolitical order, or capital order. Austerity, viewed as a set of fi scal, monetary, and industrial guardrails on an economy, ensures the sanctity of these social relations. Th e structural limitations it imposes on spending and wages ensure that, for the vast majority of those living in a society, “work hard, save hard” is more than just an expression of toughness; it’s the only path to survival. — Clara E. Mattei, The Capital Order, 29

Austerity has been so widespread in its uptake over the last century that it has become largely undetectable: the economics of austerity, with its prescribed budgetary cuts and public moderation, is largely synonymous with today’s economics. Th is makes a critical history of austerity, especially one rendered in class terms, profoundly challenging. But to the extent that we stop perceiving austerity as a sincere toolbox for managing an economy, and when we consider its history through the lens of class, it becomes clear that austerity preserves something foundational to our capitalist society. For capitalism to work in delivering economic growth, the social relation of capital— people selling their labor power for a wage— must be uniform across a society. In other words, economic growth presupposes a certain sociopolitical order, or capital order. Austerity, viewed as a set of fi scal, monetary, and industrial guardrails on an economy, ensures the sanctity of these social relations. Th e structural limitations it imposes on spending and wages ensure that, for the vast majority of those living in a society, “work hard, save hard” is more than just an expression of toughness; it’s the only path to survival. — Clara E. Mattei, The Capital Order, 29

Categorization

• DEFINE: Defines the book’s key concept ‘capital order’ — that economic growth presupposes a uniform sociopolitical order of wage labor.
• XREF: Connects to Mattei’s framing but also to Marxist political economy on reproduction of labor power, and to Foucault’s biopolitics and ‘work hard, save hard’ as disciplinary imperative. — connects to: Alesina’s econometrics framed expenditure cuts as growth-promoting and the new policy norm — Mark Blyth, Austerity: The History of a Dangerous…, 462; Export-led growth structurally demands wage suppression and anti-inflationary monetary dominance — Mark Blyth, Austerity: The History of a Dangerous…, 368; Central banks trigger recessions to enforce workers’ acceptance of wage labor. — Clara E. Mattei, Escape from Capitalism, 39 (+12 more)
• corroborated: 2 independent passages support this claim — Clara E. Mattei, The Capital Order: How Economists…, 29

Broader Connections

• Austerity was capitalism’s manufactured response to worker challenges #corroborates (0.92) — Clara E. Mattei, The Capital Order, 585
• All capitalist growth rests on a gap between wages and value created #corroborates (0.88) — David Harvey, The Condition of Postmodernity, 1137
• Capitalist growth fundamentally depends on paying workers less than they produce. #expands (0.85) — Clara E. Mattei, Escape from Capitalism, 104
• Austerity is economically irrational yet politically rational for preserving capitalism #expands (0.85)