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Austerity: The History of a Dangerous Idea

Governments today in both Europe and the United States have advanced a policy of draconian budget cuts—austerity—to solve the financial crisis. This view conveniently forgets where all that debt came from—the direct result of bailing out, recapitalizing, and adding liquidity to the broken banking system. As this book amply demonstrates, the arguments for austerity are tenuous and the evidence thin. Rather than expanding growth and opportunity, the repeated revival of this dead economic idea has almost always led to low growth along with increases in wealth and income inequality. austerity demolishes the conventional wisdom, marshaling an army of facts to demand that we austerity for what it is, and what it costs us.

"One of the especially good things in Mark Blyth's Austerity: The History of a Dangerous Idea is the way he traces the rise and fall of the idea of 'expansionary Austerity', the proposition that cutting spending would actually lead to higher output. As Blyth documents, this idea 'spread like wildfire.'"

Paul Krugman, The New York Review of Books

"An important polemic... valid and compelling."

Lawrence Summers, Financial Times

"Essential reading... The economy is much too important to leave to economists. We need to understand how ideas shape it, and Blyth's new book provides an excellent starting point."

Washington Monthly

"Splendid new book."

Martin Wolf, Financial Times

"Austerity is an economic policy strategy but is also an ideology and an approach to economic management freighted with politics. In this book Mark Blyth uncovers these successive strata. In doing so he wields his spade in a way that shows no patience for fools and foolishness."

Barry Eichengreen, George C. Pardee and Helen N. Pardee Professor of Economics and Political Science University of California, Berkeley

"Of all the zombie ideas that have been reanimated in the wake of the global financial crisis, austerity is the most dangerous. Mark Blyth shows how austerity created the disasters of the 1930s and contributed to the descent of the world into global war. He shows how European austerity policies have prevented any recovery from the crisis of 2009 while rescuing and protecting the banks and financial institutions that created the crisis. An essential guide for anyone who wants to understand the current depression."

John Quiggin, author of Zombie Economics

"Most fascinating is the author's discussion of the historical underpinnings of austerity, first formulated by Enlightenment thinkers Locke, Hume and Adam Smith, around the (good) idea of parsimony and the (bad) idea of debt. Ultimately, writes Blyth, austerity is a 'zombie economic idea because it has been disproven time and again, but it just keeps coming.' A clear explanation of a complicated, and severely flawed, idea."

Kirkus Reviews

"Informed, passionate."

Dissent Magazine

"Mark Blyth's fascinating analysis guides the reader through 'the historical ideology which has classified debt as problematic.' In doing so he outlines the relevance of century-old debates between the advocates and opponents of laissez faire, and explains why, after a brief reemergence in 2008-09, and despite the lack of evidence supporting austerity, the world turned its back on Keynesian policies."

Robert Skidelsky, author of Keynes: The Return of the Master

"Among all the calamities spawned by the global financial crisis, none was as easily avoidable as the idea that austerity policies were the only way out. In this feisty book, noted political scientist Mark Blyth covers new territory by recounting the intellectual history of this failed idea and how it came to exert a hold on the imagination of e onomists and politicians. It is an indication of the sorry state of macroe onomics that it takes a political scientist to expose so thoroughly one of the e onomics profession's most dangerous delusions."

Dani Rodrik, Rafiq Hariri Professor of International Political Economy, The John F. Kennedy School of Government, Harvard University

"Blyth makes a compelling case that governments should give pause before embarking on a course of austerity. He approaches the subject with a seriousness that is to be welcomed and applauded."

Benjamin Grob-Fitzgibbon, University of Arkansas, International Social Science Review