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The Economic Consequences of Austerity


#1

The Economic Consequences of Austerity

Amartya Sen

On 5 June 1919, John Maynard Keynes wrote to the prime minister of Britain, David Lloyd George, “I ought to let you know that on Saturday I am slipping away from this scene of nightmare. I can do no more good here.” Thus ended Keynes’s role as the official representative of the British Treasury at the Paris Peace Conference. It liberated Keynes from complicity in the Treaty of Versailles (to be signed later that month), which he detested.

Why did Keynes dislike a treaty that ended the state of war between Germany and the Allied Powers (surely a good thing)?


#2

Conservatives don't favor austerity over increased governmental spending because they have a good faith belief that austerity is the best way to grow an economy. They favor austerity because they have ill will against people who are not like them. They do not practice loving kindness for all living things. Austerity is nothing other than a psychic strangling of the "other."


#3

"There are good reasons to think that it would have done the same today had open and informed public dialogue been given a proper chance, rather than being ruled out by the alleged superiority of the judgements of financial leaders, with their breathtakingly narrow view of human society and a basic lack of interest in the demands of a deliberative democracy."

While I appreciate Mr. Sen's history lesson particularly in comparing the economics of post W.W.I with what is underway now... in Europe; there are some naïve statements made.

Regarding the quote above, it occurs mid-way through the article and finally gets at the crux of the matter. U.S. former Supreme Court Justice Brandeis offered a statement of merit and relevance: That a society could have Democracy OR vast concentrations of wealth; but it could not have both.

Given the obvious direction that maneuvered the deregulation of speculative banking to send massive sums of money to the top of the "fiduciary food chain," it should be evident that those orchestrating this newest system of graft knew it would collapse the equity of working peoples' assets while bloating the coffers of the 1% "owner caste."

Turning the matter of a deliberate destruction of the middle class (added to that of pushing labor's bargaining power to that of a groveling 3rd world nation) into a problem based on stubborn adherence to a particular economic theory is a form of analysis that's quite similar to the way that media pundits discuss the relative failures emanating from Middle East wars as if these were also mere accidents.

Those in power fund and prop up the experts their think tanks and academic institutions (through "contributions" that do to academia what campaign bribes do to set particular political agendas into place) christen; and then through these channels--deferential to those that sponsored them, ideology is put in place to JUSTIFY agendas that are designed to benefit the 1%.

It's interesting to debate Keynes and the recurring "Austerity Chorus," but it's more important to recognize that philosophies--moral, economic, and otherwise--tend to be assigned AFTER the fact to justify goals and policies desired by those with the power to enact them.

And when elections divide the polity so that a Conservative "wins" on the basis of divided spoils, (or in the case of the U.S., a decision reached by either The Supreme Court's conservative majority or the Billionaire Boys' clubs that fund today's pre-vetted presidential candidates), it can hardly be seriously termed a majority mandate or a reflection of genuine Democratic interests or fair play.

Austerity is an economic outgrowth of Calvinism--a particularly vicious religious principle that alleges that God shows his favor on those who ARE doing well, and punishes (for their alleged sins) those who are struggling. This premise, an outgrowth of "Divine right of king" is used to enact punitive measures and has its roots in patriarchal religions.

It is this sickening concept--the antithesis of Jesus's compassion-based teachings that is behind the incarceration rates in the U.S., and many other martial policies that grant to the dominator the alleged right to dominate others while destroying their homes, cultures, habitats, livelihoods, and where possible--their indwelling Spirits.


#4

"The public debt-to-GDP ratio was very considerably larger in Britain in every year for two decades, from the mid-1940s to the mid-1960s, than it has been at any time since the crisis of 2008. And yet there was no panic then (when Britain was confidently establishing the welfare state), in contrast to the confused anxiety, not to mention the orchestrated fear, that seems to run down the spine of the terrorised British today, making austerity look like a fitting response."

Who controls the media controls The Narrative, and through it, much in the way of public perception.

There are tremendously propagandistic messages being promulgated as truth these days.

What percentage of U.S citizens, under thrall to Fox "news" believed that Saddam Hussein was responsible for 911?

How long has it taken to awaken the public about the man-made/fossil fuel links to global warming due to such massive disinformation or otherwise black-outs on sensible, informed discussions on this critical subject?

How many in the West still think Putin was the aggressor in Ukraine or that Assad gassed his own people, etc?

This idea that the public is the key to those policies implemented is LUDICROUS. The public is constantly told that the debt is dangerous (hence--"the panic") rather than hearing suggested the intelligent things--like properly taxing Wall St. and properly taxing global corporations (and in the case of the U.S, ceasing and desisting from subsidizing major industries with all kinds of financial perks and benefits, and raising the cap on Social Security).

The things that WOULD work are seldom to never discussed because in precisely the same way that an ENEMY (Bin Laden, Saddam Hussein, ISIS) must CONSTANTLY be drummed into place in order to maintain a pretext for foreign imperialistic war-exploits, the "enemy" of debt is constantly POUNDED in to justify taking yet more (benefits, protections, wages) from The People.

These attacks are deliberate. All of them. And those orchestrating them WANT the world to return to a system of nobles-pharaohs-corporations ruling serfs-slaves-debtors-drone workers. THAT is their agenda. Trying to paper it over with discussions on the relative strengths or weaknesses of economic theories, or suggesting that these outcomes are the fruit of Democratic processes essentially ENABLES the robber barons and lends them cover for their disastrous acts, policies, and propagandistic campaigns of mass deception.


#5

You are correct; note that ill will underlies all conservative positions. By the way, you are a good writer but great writers never use CAPS (or any other device such as italics) for emphasis. Let the emphasis speak for itself. Great writing is subtle and includes no blunt instruments. I look forward to the evolution of your writing as it improves.


#6

Thank you for the compliment. You may be correct about the use of caps but I use them to convey a more passionate emphasis. It's a Yin thing... while what's considered polite conversation or even good grammar too often derives from (and accords with) what patriarchal emissaries deem valuable. (I'll think about it... )


#8

Siouxrose11:

I often like your comments better than the article that you are commenting on. Please keep them coming. If I knew you personally, I think we would be great friends.


#9

Both really good posts SR


#10

"Britain steadily reduced its debt-to-GDP ratio through economic growth,
while establishing the welfare state and a huge array of new public
services."

Let's rephrase that. "Britain steadily reduced its 1939-1945 war debt to the USA, and repaid the 1947 loan from the USA, made to stave off national bankruptcy, whilst establishing and maintaining what, until Margaret Thatcher and the Murdoch Press came along, was a fair welfare state providing decent public healthcare, just-adequate old-age pensions, sound basic public housing, free access to university and an excellent primary, tertiary, secondary and tertiary public education system together with nationally supported R&D that pulled its weight internationally."

The place was not perfect but it was a damn sight better than it has been since 1979.


#11

"They favor austerity because they have ill will against people who are not like them."

There seems to be no end to the creativeness humans can exhibit when rationalizing their re-rationality in the name of self - interest.