(Clara E. Mattei, University of Chicago Press, 2022)
This is a book for our times.
All around us, whether in South Africa, our continent or our world, we can feel more than ever the crushing and oppressive weight of the multiple political, economic and social consequences wrought by decades of neoliberal capitalism.
Most of humanity is not only simply trying to survive – both materially and mentally/emotionally – but is also searching for explanations as to how and why we got here. Clara E. Mattei’s 450 page tome offers some serious and timely assistance.
Not only is The Capital Order the product of over 6 years of painstaking archival research, it is one of those increasingly rare books which combines impressive scholarship (there are almost 100 pages of meticulous endnotes and a 30 page bibliography) with a seriously radical, anti-capitalist analysis that seamlessly weaves the past into the present. Besides that, it is written in a generally accessible style, which engages the reader by telling a long and complex ‘story’ with humility and wit.
Austerity as capitalism’s enabler and protector
From the start, Mattei sets out her central argument in unambiguous terms: namely, that “austerity is capitalism’s protector … it functioned – and still functions – to preserve the indisputability of capitalism (and as) … a vital bulwark in defence of the capitalist system”.
In playing this role over the last century, austerity has acted as “a mainstay of modern capitalism”, during which it has “proven wildly effective … in insulating capitalist hierarchies from harm” during crises (which are intrinsic to the system) and moments of real and potential social and economic change. In other words, it “must be understood for what it is and remains: an anti-democratic reaction to threats of bottom-up social change”.
More specifically, austerity comes to the rescue when the “core relationship” of capitalism, “the sale of production for profit – and its two enabling pillars – private property and wage relations – are contested” by the working class and the public in general. As such, a key part of its protective role has been to silence calls for and the possibilities of, alternatives to capitalism.
Mattei shows how this history can be practically traced precisely because, when capitalism is faced with any economic/financial crisis, the first act of the ruling class – through the nation/the state – is to attack the most basic services and the most needed and necessary public benefits. We all know the main vehicle used – budget cuts – and the main rationales proffered – to reduce budget deficits, control debt, increase economic ‘efficiency’ and restore ‘competitiveness’; it is a package that she calls the “austerity effect”.
Besides taking an axe to what the majority of the population deserves and needs the most – i.e., public education, housing, healthcare and social/unemployment benefits – the austerity agenda doubles down on several other fronts. Crucial components include “regressive taxation, regressive deflation, privatisation, wage repression and employment deregulation.”
Austerity’s origins and incubation
In order to show us how these core characters and contents of austerity surfaced and developed over the last 100 years, Mattei spends a significant part of book telling us the story of austerity’s emergence and pursuit in Britain and Italy in the years following World War 1. She reveals how this was the direct result of the increasing strength/power and confidence of workers following confirmation – during WW1 – of the necessity and indeed success of state interventionism and collectivism.
It was not just workers but the majority of the general public who expressed their broad support for more participatory forms of democracy, radical economic measures and possible alternatives to capitalism. In turn, this triggered the ruling class, through the work and voices of “economic experts”, to implement an austerity which removed, both in form and content, economic policymaking from democratic control. As Mattei puts it: “austerity materialised as a state-led, technocratic project in a moment of unprecedented political enfranchisement of citizens and mounting demands for economic democracy.”
In Britain this was achieved by giving decision-making responsibility directly to the Treasury and the “independent” Bank of England, both of which were not subject to any meaningful democratic control or accountability. In Italy, Mussolini’s fascist state set about forcefully imposing austerity through decree, political and physical violence, electoral fraud and the crushing of basic democratic freedoms. While there were differentiated degrees of resistance, these “austerity counteroffensive(s) … disempowered the majority (and) subjugated (them) to capital”.
Austerity’s tools
Mattei layers this story with an extensive and illuminating discussion and analysis of what she calls the “austerity trinity” – fiscal austerity, monetary austerity and industrial austerity – which “at once require and advance each other”. Since the foundations of the austerity ‘house’ were laid in the 1920s, this “trinity” has, with degrees of variance more or less continued to be followed and implemented uninterrupted until the present.
The key components of each will ring many bells with most of humanity. For fiscal austerity: a general reduction in government spending but especially in respect of social services and income support to the broad working class/poor, as well as regressive taxation (think VAT) combined with the opposite for the wealthy propertied class.
For monetary austerity: constricting access to credit (think interest rates and inflation targeting), particularly when wages rise and there is a demand for labour, occasioning the creation of what Gary Mongiovi labels, “a state-generated recession” which necessitates a “redistribution of income away from workers and towards capitalists”.
For industrial austerity: weakening or doing away with worker-friendly laws and institutions (think basic conditions of employment and anti-union measures) to make the “labour market” more flexible and casualised and thus also the organisation and protection of workers hugely difficult if not virtually impossible.
Mattei does not just provide us a compelling discursive, theoretical and analytical story, she also includes a substantive chapter that “offers quantitative analysis to support the story”. Here, she compiles empirical evidence, to surface the practical results of the “austerity effect” in the 1920s. The most compelling evidence of austerity’s “dramatic impact on class relations” is the ratio between profits and wages, which concretely measures the “trend of exploitation”. In Britain’s case, exploitation increased by 32% between 1920-1930 and for Italy it increased by a whopping 54% between 1922-1928.
Austerity’s normalisation
When the framing theory, incisive analysis and affirming statistics are combined, arguably the most crucial points which emerge from Mattei’s century-long story, is that austerity has become normalised as “mainstream economics”, that it “acts to ensure … the capital order” (i.e. the “socio-political order” required for capitalist “economic growth”), and that it “was and remains an elaborate exercise in class domination”.
These points are all the more important given that, as Mattei also shows, austerity has never consistently succeeded in achieving its “stated goals” of boosting economic growth or reducing debt. Indeed, the real and very tragic ‘success’ of austerity, is that it has been able to “transcend all ideological and institutional differences” across highly differentiated countries in pursuit of its foundational goal; namely, “the necessity to rehabilitate capital accumulation in settings where capitalism has lost its innocence …”.
A Luta Continua!
Yet, for all of its scholarly excellence, it is ultimately the personal which grounds the purpose and politics of Clara Mattei’s book. She dedicates the book to her great-uncle, Gianfranco Mattei, a 27 year old university chemistry professor in Milan who resigned his position in 1943 to become part of an anti-fascist partisan bomb-making unit in Rome. After being compromised in February 1944 he was taken to a fascist prison, where “following two days of constant brutalization Gianfranco hanged himself with his belt rather than betray his comrades in the resistance”.
Austerity breeds fascism but it also breeds resistance.
This is a book for our times.
(Book Review)
