Austerity: The History of a Dangerous Idea

Michael Dear, Author, M J Dear, Author
Mark Blyth. Oxford Univ., $21.95 (256p) ISBN 978-0-19-989798-8
Reviewed on: 01/14/2013
Release date: 02/01/2013
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Brown University political economist Blyth (Great Transformations: Economic Ideas) abhors macroeconomic policies designed to curb debt and inflation by shrinking public benefits and, out of necessity, increasing unemployment. Blyth ably reviews Keynes’s anti-austerity arguments and outlines the risks of deflationary pull. He also examines the 2008 bank crisis in the U.S. and subsequent Euro crisis, stepping around Germany’s success as a leading force for austerity in the international economy. In an effort to strengthen his case, he offers a selective economic history since the 17th century, omitting the fiscal disaster of prerevolutionary France. “Austerity doesn’t work,” Blyth concludes, taking a line of thought that aligns with New York Times columnist Paul Krugman. Repeating this charge throughout the book, he argues that the “underlying crisis” in today’s global economy is “private, not public, finance.” Blyth never questions the quality of public expenditure or explains how to address voter expectations for the future. Though he calls his opinionated, learned, and sometimes glib volume “modular,” it feels more like a set of connected, fairly jumpy essays. Many readers will finish the book still wondering how to contain behemoth private and government debt and if Blyth’s solution—a sophisticated soak-the-rich tax program in the U.S. and Europe—is the best cure. (Apr.)
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