The perils of austerity

Mark Blyth’s Austerity:The History of a Dangerous Idea is at heart a morality tale, or, more accurately, an account of two competing and diametrically opposed morality tales jostling to explain both the recent Global Financial Crisis (GFC) that engulfed much of Europe in 2008 and the austerity policies that were implemented by most governments in that region in its aftermath. According to proponents of austerity, economic growth can only be achieved through reductions in state spending. Blyth argues with great passion and intelligence that the austerity policies, which have involved severe cuts to government services and higher tax rates for average wage-earners, have not only caused great misery but are, in the end, economically counter-productive.