Monetary austerity deliberately induced recession to discipline workers.

Evidence

At the end of the 1970s, when workers’ organizations were strong, Fed Chairman Paul Volcker began raising interest rates, which would peak at 20 percent in the early 1980s. These decisions caused an economic recession in the US and many parts of the world, with American unemployment rising to 10 percent, breaking the back of workers at a moment of historical mobilization for higher wages and anti-capitalist alternatives. If you, as a worker, fear losing your job and, with it, the ability to pay for medical care, you become more controllable. If job opportunities are scarce, wages decrease. The risk of spiraling an economy into a recession is a short-term cost for capital accumulation: securing workers’ subordination and a healthy rate of exploitation come first. — Clara E. Mattei, Escape from Capitalism, 154

Categorization

• XREF: Volcker shock as the paradigm case Mattei will reuse across her Chile and Argentina chapters — tracks her ‘systematic’ argument that austerity is a recurrent instrument, not an error. — connects to: The Fordist regime collapsed with the 1973 recession — David Harvey, The Condition of Postmodernity: An…, 847; A tiny economy’s crisis was weaponized as a metaphor for austerity — Mark Blyth, Austerity: The History of a Dangerous…, 202; U.S. officials viewed unemployment as a deliberate worker-discipline tool. — Clara E. Mattei, Escape from Capitalism, 18 (+46 more)