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The faux moral superiority of austerity

By now, it should be obvious to anybody paying attention that the austerity policies of various European governments are destroying their economies and driving millions of people into poverty. But if you listen to the bloviations of the European elite, you’ll hear that these destructive measures are morally imperative. Their mindset seems to be that before the financial crisis Europeans were living beyond their means, so now great swathes of them must suffer for a prolonged period. They have sinned (not the Eurozone wannabe “technocrat” elites who created the mess, but the laboring classes), so they must be punished. If this seems absurd to you, you’re right. If this seems surprising to you, then you haven’t been paying attention to what European “leaders” have been saying.

At Yves Smith’s excellent Naked Capitalism blog, Bill Black writes of the schadenfreude that Europe’s right wingers are feeling as they decimate the continents social safety nets. His window into their mentality is a column by the Washington Post’s Anne Applebaum:

The pro-austerity framing that Applebaum described also means that austerity must represent superior morality and that the greater the austerity we champion the greater our moral superiority. This explains the competition in calling for “savage” cuts and the delight in gore. The more programs that aid the poor that we “amputate”; the greater moral superiority we demonstrate. It reverses the Gospels, but it certainly is an attractive framing for the wealthy.

According to Applebaum, the British welcomed austerity in 2010 because “Austerity is what made Britain great. Austerity is what won the war.” This reading of history is totally false. While regular Britons embraced austerity to win the war, going above and beyond government rationing to voluntarily raise extra funds and materials for the troops, the government racked up enormous fiscal deficits. Can you imagine Winston Churchill saying, “We shall go on to the end. We shall fight in France, we shall fight on the seas and oceans, we shall fight with growing confidence and growing strength in the air, we shall defend our island, whatever the cost may be. Er, unless the financial cost exceeds government revenues, which would really hurt the market’s confidence in our economy.”

Bill Black illustrates the insanity of fiscal austerity during a recession with a great analogy:

Fiscal austerity by a nation with a sovereign currency is not a moral issue. In the context of a Great Recession it is simply a self-destructive fiscal policy. A potlatch, (rivals compete in destroying valuable household possessions in order to gain status) involves self-sacrifice but it is simply self-destructive as an economic policy. Britain’s austerity was a massive potlatch in which the parties competed in claiming moral superiority based on their zeal in competing to destroy working class families.

With all due respect to the First Nations who conducted potlatch ceremonies, I think this is spot on. The potlatch was never meant to be economically productive, though — unlike the bizarre human sacrifices of the acolytes of austerity. Like ancient, pre-scientific cultures that sacrificed virgins to the weather gods, today’s priest-technocrat class demands human suffering as an offering to an unseen god of the market. In their religion, the spirit they hope to conjure is “confidence”, confidence that will somehow materialize when governments reduce their sinful spending. If you ask them where the confidence will come from when unemployment is over 20% and nobody has any money but the priests themselves, they’ll tell you not to trouble yourself with metaphysical questions.

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