Contemporary austerity orthodoxy is a recycled 1930s doctrine with no success record

Evidence

If these ideas sound familiar today, it’s because, like the ideas of Hume and Smith, the same arguments are being recycled again, eighty years later. The idea that the current crisis was generated by the malinvestment of the past, particularly in real estate, is hardly an unreasonable point of view. That Fannie and Freddie caused a global crisis, the extension of that viewpoint, is not. The notion that taxes should be raised to balance budgets in the middle of a recession is the policy orthodoxy of the IMF-EC-ECB troika in the Eurocrisis and US budget reformers such as the Simpson-Bowles Commission. The need for “the return of business confidence” to start the recovery forms the centerpiece of contemporary British austerity policy, despite its yielding zero results to date. But then, as now, the Americans were far from alone in expounding such ideas. Indeed, back in the 1920s such ideas had a pronounced British accent. — Mark Blyth, Austerity, 327

Categorization

• XREF: Directly feeds the reader’s Mattei-focused project on austerity — this is the core intellectual-history bridge showing the persistence of the malinvestment and business-confidence narrative across a century. — connects to: Austerity persists as an ideology that resists empirical refutation — Mark Blyth, Austerity: The History of a Dangerous…, 613; Austerity only rarely works and its success conditions do not apply today — Mark Blyth, Austerity: The History of a Dangerous…, 274; The 1937 recession was a deliberate natural experiment in austerity that failed — Mark Blyth, Austerity: The History of a Dangerous…, 510 (+7 more)
• SEED: Angle for an essay: the ‘business confidence’ ritual as a twenty-first-century hostage mechanism — proving to markets via self-inflicted recession that the state will not intervene, recycled faithfully for ninety years despite zero results.

Broader Connections

• The 1937 recession was a deliberate natural experiment in austerity that failed #exemplifies (0.85) — Mark Blyth, Austerity, 510
• Austerity’s core principles predate the twentieth century by a century of classical economics #contradicts (0.85) — Clara E. Mattei, The Capital Order, 718
• Austerity only rarely works and its success conditions do not apply today #contradicts (0.80) — Mark Blyth, Austerity, 274
• Austerity is not a coherent doctrine but derivative of scattered state-role beliefs #contradicts (0.80) — Mark Blyth, Austerity, 66
• Repeated austerity in Europe is failing despite being tried again and again. #exemplifies (0.80) — Mark Blyth, Austerity, 262
• Austerity persists as an ideology that resists empirical refutation #corroborates (0.75) — Mark Blyth, Austerity, 613
• Austerity lacks an actual theory and is only a default sensibility in liberal economics #corroborates (0.75) — Mark Blyth, Austerity, 264
• Austerity policy triumphed despite its authors conceding weak empirical evidence #qualifies (0.75) — Mark Blyth, Austerity, 468
• The liberal funding anxiety hardened into austerity doctrine by the 1920s #qualifies (0.75) — Mark Blyth, Austerity, 270
• Austerity is economically irrational yet politically rational for preserving capitalism #complicates (0.75)