Across the world, renewed social unrest—from public sector wage strikes in the United Kingdom, to protests against pension reform in France—are being read as a repudiation of austerity. The inflationary crisis afflicting the global North has had the knock-on effect of precipitating a debt crisis in the global South as the cost of servicing debt increases. “Repayments on public debt owed to non-residents for a group of 91 of the world’s poorest countries will take up an average of more than 16 per cent of government revenues in 2023,” the Financial Times recently reported. To make repayments possible, government’s usually resort to austerity, cutting social spending on healthcare, education, and social security.

This is how we usually understand austerity, as caused by some kind of economic shock. But what if that is not the case? What if rather than being exceptional to modern capitalism, austerity is in fact inherent to its stability? This is what Clara Mattei argues in The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism (University of Chicago Press, 2022). Rather than painful medicine states are forced to administer in times of crisis, austerity is a fundamental tool for stabilizing class relations and increasing market dependence. But if austerity is intrinsic to capitalism, what does this mean for the anti-austerity agenda that has captured the global left? Can we resist austerity without dismantling capitalism? This week on the podcast we explore these questions with Mattei, an assistant professor of economics at the New School for Social Research in New York City.