Financial market structure itself imposes austerity without any external body

Evidence

Foreign capital has no incentive to risk its funds with long-term developmental projects, preferring investment in sectors like natural resource extraction and construction, where surplus value is created from cheap labor. Pressure to attract foreign capital, or at least prevent capital flight, induces monetary authorities in peripheral countries to keep their interest rates high in order to convince investors that their currency will not collapse. In an effort to remain integrated into the global capital system, these countries lose all autonomy in economic policymaking. In this way, austerity policies are not merely imposed by external bodies like the IMF; rather, they are embedded in the very structure of financial markets and the process of capital accumulation. — Clara E. Mattei, Escape from Capitalism, 302

Categorization

• XREF: Directly extends chapter 2’s IMF conditionality argument by adding a structural mechanism; connects to Milgrom’s insight that institutions substitute for information systems — here market signals substitute for direct coercion.
• ADDENDUM: The ‘invisible order’ thesis — austerity appearing as natural market fact — could be folded into the trees/sacrifice pieces as another instance of naturalized exploitation.