Blyths book is important and informative John M. Legge, Dissent Magazine Blyths analysis provides answers that are as much complex as they are comprehensive. Nevertheless, the book is not particularly hard reading, offering accessible political economy at its best even for non-economists. At times it is indeed polemically entertaining, and I highly recommend reading it. Andreas Botsch, Transfer [a] timely, authoritative account. Peter Geoghegan, Sunday Business Post [a] fascinating account ... among the best and most clear-sighted that I have read on the matter. The Crack [C]lear, simple, and occasionally humorous ... It's a pity the two Eds didn't read this book before they announced that 'we're all Austerians now.' Austin Mitchell, The House Magazine [A]n excellent new book by Mark Blyth The Guardian Blyth writes in the tradition of Keynes, slashing away at orthodoxy and the orthodox, emphasising the power of ideas as well as interests in shaping outcomes, ranging widely over the history of economic and political thought, expressing deep scepticism about financial actors, and rejecting the curtailment of spending as the solution to a period of excess. Lawrence Summers, Financial Times Austerity: The History of Dangerous Ideas is a masterful combination of economic history and intellectual history that puts the current policy debate into a balanced and sophisticated perspective. Anyone who wants to understand what is going on in the world at the moment should read it. Right away. Ha-Joon Chang, Irish 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, Professor of Economics and Political Science University of California, Berkeley, author of 'Exorbitant Privilege'
Selected as a Financial Times Best Book of 2013
Governments today in both Europe and the United States have succeeded in casting government spending as reckless wastefulness that has made the economy worse. In contrast, they have advanced a policy of draconian budget cuts--austerity--to solve the financial crisis. We are told that we have all lived beyond our means and now need to tighten our belts. This view conveniently forgets where all that debt came from. Not from an orgy of government spending, but as the direct result of bailing out, recapitalizing, and adding liquidity to the broken banking system. Through these actions private debt was rechristened as government debt while those responsible for generating it walked away scot free, placing the blame on the state, and the burden on the taxpayer.
That burden now takes the form of a global turn to austerity, the policy of reducing domestic wages and prices to restore competitiveness and balance the budget. The problem, according to political economist Mark Blyth, is that austerity is a very dangerous idea. First of all, it doesn't work. As the past four years and countless historical examples from the last 100 years show, while it makes sense for any one state to try and cut its way to growth, it simply cannot work when all states try it simultaneously: all we do is shrink the economy. In the worst case, austerity policies worsened the Great Depression and created the conditions for seizures of power by the forces responsible for the Second World War: the Nazis and the Japanese military establishment. As Blyth 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.