Monetary austerity deliberately aimed to rein in workers’ purchasing power

Evidence

To defeat infl ation and to fully rein in the purchasing power of workers, fi scal austerity was to be supplemented by monetary austerity. Th e latter meant a direct and deliberate credit contraction through an increase in interest rates, which would defl ate prices and in turn boost confi dence in the value of the currency. Th is was the core of the socalled policy of “dear money” (Resolution VII, Commission on Currency and Exchange, Brussels 1920, vol. 1, 19). Vissering declared: “the purchasing power of money [can], by way of remedy, be forced up somewhat by making money scarce” (Verbatim Record, Brussels 1920, vol. 2, 45). — Clara E. Mattei, The Capital Order, 757

Categorization

• DEFINE: Defines the ‘dear money’ policy — deliberate credit contraction via high interest rates — as the monetary complement to fiscal austerity.
• XREF: The explicit ‘rein in purchasing power of workers’ wording documents the class-targeting intent that modern austerity discourse conceals; parallels the reader’s understanding of Thatcher-era and 2010 coalition economics. — connects to: Currency devaluation causes import inflation and cuts real wages — Mark Blyth, Austerity: The History of a Dangerous…, 210; Central banks trigger recessions to enforce workers’ acceptance of wage labor. — Clara E. Mattei, Escape from Capitalism, 39; Austerity’s core purpose is to deepen workers’ dependence on wage labor — Clara E. Mattei, Escape from Capitalism, 145 (+24 more)

Broader Connections

• Monetary austerity deliberately induced recession to discipline workers. #corroborates (0.95) — Clara E. Mattei, Escape from Capitalism, 154
• Monetary austerity deliberately manufactures unemployment to compress wages. #corroborates (0.90) — Clara E. Mattei, Escape from Capitalism, 284
• Austerity treats citizens’ consumption as the cause of inflation to justify repressing demand #expands (0.85) — Clara E. Mattei, Escape from Capitalism, 349
• Austerity economists read inflation as a threat to capitalist subordination #expands (0.85) — Clara E. Mattei, The Capital Order, 784
• Austerity policies function to silence working class economic demands #corroborates (0.85) — Clara E. Mattei, The Capital Order, 774
• Stabilizing currency deliberately imposed the costs on workers. #qualifies (0.80) — Clara E. Mattei, The Capital Order, 983
• Austerity regimes aim to break organized labor #corroborates (0.80) — Gary Mongiovi, Austerity Is an Antidemocratic Strategy…, 83
• Austerity experts see public spending as fueling union wage pressure on capital #expands (0.80) — Clara E. Mattei, The Capital Order, 1738
• Austerity suppresses consumer demand by starving the population that sustains the economy #corroborates (0.80) — Clara E. Mattei, Escape from Capitalism, 349
• Austerity was capitalism’s manufactured response to worker challenges #complicates (0.75) — Clara E. Mattei, The Capital Order, 585
• Austerity masquerades as apolitical science while bending workers to capital’s will #expands (0.75)