Austerity’s Two Parents

This was an incisive post from B. Gray, which I thought deserved much more attention:

It follows:

Austerity has two parents: greed and fear, both of which are powerful motivators among the wealthy elites and the politicians that do their bidding.

Greed: Austerity promotes privatization of public services and assets, and increased private debt, all of which help transfer economic surpluses to the wealthy elites in the financial sector.

Fear: Money is how real resources, and by extension, power, are allocated in the economy. Elites fear if the public understood MMT and the power of the government purse, it would lead to anarchy in the allocation of real resources, which would lead to a reduction in the elites share of resources, as well as their influence in the political process.

Unfortunately a proper government response to the economic devastation of the pandemic would expose the fraudulent nature of the austerity narrative and would represent a full frontal assault on the neoliberal paradigm.

Very strong armour indeed….

I concur with all this and think we should all take on board particularly, that important sentence, repeated below:

“Money is how real resources, and by extension, power, are allocated in the economy.”

Quite so.

Thank you.


  1. Jim Osborne -

    “Money is how real resources, and by extension, power, are allocated in the economy.”
    I disagree with this punch line in the article….here’s why……:

    Money embodies a power relationship and capitalism is an unequal relationship between capital and labour……as David Graeber notes in his Book “Debt-the First 5000 Years” “labour” is just another form of slavery (wage slavery) and this is a manifestation of debt and the power balance which underpins it.

    Power determines how resources are allocated in the economy and money is the medium which facilitates it and reproduces it.

    1. Peter May -

      On further thinking you’re strictly right to disagree!
      Creating money is a reflection of the original ‘power’ but in creating money it gives you or those it is distributed it to, power.
      So I do agree that it is the power to create money that comes first…but if you have money it also makes you more powerful…

  2. Jim Osborne -

    that’s what I meant by money as a social relation of power reproducing that social relation. Actually this is not new….Marx said it long ago.

  3. Jim Osborne -

    PS – that’s what my “Rewiring…..” piece is about… to redesign the monetary and banking system to rupture the power relationships embedded in the present. Whether it provides an answer, or part of the answer, is up for grabs but my personal feelings are that it seems to point in the right direction. It’s a “work in progress” and would benefit from critical examination. There hasn’t been much follow up comment on it so far

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