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The Economics of Austerity
Through her judicious selection of previously published material, Dr Konzelmann investigates the key social, political and financial developments that have shaped the evolution of austerity economics. These include the early classical debates, the politicization of austerity, the Keynesian challenge to existing thought and the revival of pre-Keynesian ‘Neo-Liberal’ ideas during the 1970
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Contributors
Contents
More Information
Through her judicious selection of previously published material, Dr Konzelmann investigates the key social, political and financial developments that have shaped the evolution of austerity economics. These include the early classical debates, the politicization of austerity, the Keynesian challenge to existing thought and the revival of pre-Keynesian ‘Neo-Liberal’ ideas during the 1970s. Discussion of the radical changes to economic thought and policy in the decades before the 2007–8 financial crisis and the key dimensions of the post 2007–8 debate bring the account right up to the present day.
The editor’s insightful and lucid introduction provides an illuminating guide to this crucial topic. The volume will be an invaluable resource for students and scholars seeking a wider understanding of austerity economics.
The editor’s insightful and lucid introduction provides an illuminating guide to this crucial topic. The volume will be an invaluable resource for students and scholars seeking a wider understanding of austerity economics.
Contributors
47 articles, dating from 1714 to 2012
Contributors include: R. Eisner, J.A. Frieden, J.K. Galbraith, M. Kalecki, J.M. Keynes, B. Mandeville, J. Robinson, R. Solow, J. Ruskin, F. Wilkinson
Contributors include: R. Eisner, J.A. Frieden, J.K. Galbraith, M. Kalecki, J.M. Keynes, B. Mandeville, J. Robinson, R. Solow, J. Ruskin, F. Wilkinson
Contents
Contents:
Acknowledgements
Introduction Suzanne J. Konzelmann
PART I THE CLASSICAL DEBATE ABOUT AUSTERITY
1. Bernard Mandeville ([1714, 1732] 1924/1988), ‘The Grumbling Hive or Knaves Turned Honest’ and ‘An Enquiry into the Origin of Moral Virtue’
2. Isaac De Pinto (1774), ‘New Means of increasing the Sinking Fund of England, and paying off Part of the National Debt’
3. David Hume ([1742, 1777] 1985), ‘Of Public Credit’
4. Adam Smith ([1776] 1976), ‘Of publick Debts’
5. David Ricardo ([1821] 1846), ‘Essay on the Funding System’
6. John Stuart Mill ([1848] 1965), ‘Of a National Debt’
PART II FROM WARFARE TO WELFARE – THE POLITICIZATION OF AUSTERITY
7. John Ruskin (1862-63), ’Laws and Government: Labour and Riches’
8. W.H. Beveridge (1931), ‘Conclusion’
9. J.A. Hobson (1909), ‘Socialism and the Social Income’
10. C.E. Ayres (1918), ‘The Function and Problems of Economic Theory’
PART III THE BRITISH “TREASURY VIEW”, THE “KEYNESIAN” CHALLENGE AND THE POLITICS OF AUSTERITY
11. R.G. Hawtrey (1925), ‘Public Expenditure and the Demand for Labour’
12. John Maynard Keynes and Hubert Henderson ([1929] 2012), ‘Can Lloyd George Do It?’
13. Winston Churchill (1929), ‘Disposal of Surplus’
14. Paul H. Douglas (1927), ‘The Modern Technique of Mass Production and its Relation to Wages’
15. David Laidler and Roger Sandilands (2002), ‘Memorandum Prepared by L.B. Currie, P.T. Ellsworth and H.D. White (Cambridge, Mass., January 1932)’
16. United States Congress, House, Committee on Ways and Means (1932), ‘Memorandum to Hon Samuel B. Pettengill, dated April 26th, 1932’
17. J.M. Keynes ([1933] 2012), ‘Open Letter to President Roosevelt, New York Times, 31 December 1933’
18. D.H. Macgregor, A.C. Pigou, J.M. Keynes, Walter Layton, Arthur Salter and J.C. Stamp ([1932] 2012), ‘Letter to the Editor of The Times 17 October 1932’
19. T.E. Gregory, F.A. Von Hayek, Arnold Plant and Lionel Robbins (1932), ‘Letter to the Editor of The Times, October 19, 1932’
20. D.H. Macgregor, A.C. Pigou, J.M. Keynes, Walter Layton, Arthur Salter and J.C. Stamp ([1932] 2012), ‘Letter to the Editor of The Times, 21 October 1932’
21. John Maynard Keynes ([1933] 2012), ‘The Means to Prosperity’, in Elizabeth Johnson and Donald Moggridge (eds), The Collected Writings of John Maynard Keynes. Volume 9: Essays in Persuasion, Cambridge: Cambridge University Press for the Royal Economic Society, 335-6, 338-66 [31]
22. J.M. Keynes ([1937] 2012), ‘“How to Avoid a Slump: I. The Problem of the Steady Level”, The Times, 12 January, 1937’
23. J.M. Keynes ([1937] 2012), ‘“How to Avoid a Slump: II. “Dear” Money. The Right Time for Austerity”, The Times, 13 January 1937’
24. J.M. Keynes ([1937] 2012), ‘“How to Avoid a Slump: III. Opportunities of Policy”, The Times. 14 January, 1937’
25. Abba P. Lerner (1943), ‘Functional Finance and the Federal Debt’
26. J.K. Galbraith (1939), ‘Fiscal Policy and the Employment-Investment Controversy’
27. M. Kalecki (1943), ‘Political Aspects of Full Employment’
PART IV NEO-LIBERALISM, DEFICIT GROWTH AND EXPOSURE TO FINANCIAL MARKETS
28. Joan Robinson and Frank Wilkinson (1977), ‘What has become of Employment Policy?’
29. Nigel Lawson (1984), ‘The British Experiment’
30. Evelyne Huber, Charles Ragin and John D. Stephens (1993), ‘Social Democracy, Christian Democracy, Constitutional Structure, and the Welfare State’
31. Paul Pierson (1996), ‘The New Politics of the Welfare State’
32. Francesco Giavazzi and Marco Pagano (1990), ‘Can Severe Fiscal Contractions Be Expansionary? Tales of Two Small European Countries’
33. Olivier Jean Blanchard (1990), ‘Comment on Francesco Giavazzi and Marco Pagano, “Can Severe Fiscal Consolidations Be Expansionary? Tales of Two Small European Countries”’
34. Giuseppe Bertola and Allan Drazen (1993), ‘Trigger Points and Budget Cuts: Explaining the Effects of Fiscal Austerity’
35. Robert J. Barro (1989), ‘The Ricardian Approach to Budget Deficits’
36. B. Douglas Bernheim (1989), ‘A Neoclassical Perspective on Budget Deficits’
37. Robert Eisner (1989), ‘Budget Deficits: Rhetoric and Reality’
38. Mario Seccareccia (2012), ‘The Role of Public Investment as Principal Macroeconomic Tool to Promote Long-Term Growth: Keynes’s Legacy’
39. Robert M. Solow (2005), ‘Rethinking Fiscal Policy’
PART V THE ECONOMICS OF AUSTERITY IN THE WAKE OF THE 2007/8 FINANCIAL CRISIS
40. John H. Cochrane (2011), ‘Understanding Policy in the Great Recession: Some Unpleasant Fiscal Arithmetic’
41. P. Krugman (2012), ‘Austerity is So Wrong!’
42. Simon Wren-Lewis (2010), ‘Macroeconomic Policy in Light of the Credit Crunch: The Return of Counter-cyclical Fiscal Policy?’
43. Robert H. Wade and Silla Sigurgeirsdottir (2012), ‘Iceland’s Rise, Fall, Stabilisation and Beyond’
44. Robert Boyer (2012), ‘The Four Fallacies of Contemporary Austerity Policies: The Lost Keynesian Legacy’
45. Yiannis Kitromilides (2011), ‘Deficit Reduction, the Age of Austerity, and the Paradox of Insolvency’
46. International Monetary Fund (2010), ‘Will It Hurt? Macroeconomic Effects of Fiscal Consolidation’
47. Jeffrey A. Frieden (2009), Global Imbalances, National Rebalancing and the Political Economy of Recovery, Center for Geoeconomic Studies and International Institutions and Global Governance Program Working Paper
Acknowledgements
Introduction Suzanne J. Konzelmann
PART I THE CLASSICAL DEBATE ABOUT AUSTERITY
1. Bernard Mandeville ([1714, 1732] 1924/1988), ‘The Grumbling Hive or Knaves Turned Honest’ and ‘An Enquiry into the Origin of Moral Virtue’
2. Isaac De Pinto (1774), ‘New Means of increasing the Sinking Fund of England, and paying off Part of the National Debt’
3. David Hume ([1742, 1777] 1985), ‘Of Public Credit’
4. Adam Smith ([1776] 1976), ‘Of publick Debts’
5. David Ricardo ([1821] 1846), ‘Essay on the Funding System’
6. John Stuart Mill ([1848] 1965), ‘Of a National Debt’
PART II FROM WARFARE TO WELFARE – THE POLITICIZATION OF AUSTERITY
7. John Ruskin (1862-63), ’Laws and Government: Labour and Riches’
8. W.H. Beveridge (1931), ‘Conclusion’
9. J.A. Hobson (1909), ‘Socialism and the Social Income’
10. C.E. Ayres (1918), ‘The Function and Problems of Economic Theory’
PART III THE BRITISH “TREASURY VIEW”, THE “KEYNESIAN” CHALLENGE AND THE POLITICS OF AUSTERITY
11. R.G. Hawtrey (1925), ‘Public Expenditure and the Demand for Labour’
12. John Maynard Keynes and Hubert Henderson ([1929] 2012), ‘Can Lloyd George Do It?’
13. Winston Churchill (1929), ‘Disposal of Surplus’
14. Paul H. Douglas (1927), ‘The Modern Technique of Mass Production and its Relation to Wages’
15. David Laidler and Roger Sandilands (2002), ‘Memorandum Prepared by L.B. Currie, P.T. Ellsworth and H.D. White (Cambridge, Mass., January 1932)’
16. United States Congress, House, Committee on Ways and Means (1932), ‘Memorandum to Hon Samuel B. Pettengill, dated April 26th, 1932’
17. J.M. Keynes ([1933] 2012), ‘Open Letter to President Roosevelt, New York Times, 31 December 1933’
18. D.H. Macgregor, A.C. Pigou, J.M. Keynes, Walter Layton, Arthur Salter and J.C. Stamp ([1932] 2012), ‘Letter to the Editor of The Times 17 October 1932’
19. T.E. Gregory, F.A. Von Hayek, Arnold Plant and Lionel Robbins (1932), ‘Letter to the Editor of The Times, October 19, 1932’
20. D.H. Macgregor, A.C. Pigou, J.M. Keynes, Walter Layton, Arthur Salter and J.C. Stamp ([1932] 2012), ‘Letter to the Editor of The Times, 21 October 1932’
21. John Maynard Keynes ([1933] 2012), ‘The Means to Prosperity’, in Elizabeth Johnson and Donald Moggridge (eds), The Collected Writings of John Maynard Keynes. Volume 9: Essays in Persuasion, Cambridge: Cambridge University Press for the Royal Economic Society, 335-6, 338-66 [31]
22. J.M. Keynes ([1937] 2012), ‘“How to Avoid a Slump: I. The Problem of the Steady Level”, The Times, 12 January, 1937’
23. J.M. Keynes ([1937] 2012), ‘“How to Avoid a Slump: II. “Dear” Money. The Right Time for Austerity”, The Times, 13 January 1937’
24. J.M. Keynes ([1937] 2012), ‘“How to Avoid a Slump: III. Opportunities of Policy”, The Times. 14 January, 1937’
25. Abba P. Lerner (1943), ‘Functional Finance and the Federal Debt’
26. J.K. Galbraith (1939), ‘Fiscal Policy and the Employment-Investment Controversy’
27. M. Kalecki (1943), ‘Political Aspects of Full Employment’
PART IV NEO-LIBERALISM, DEFICIT GROWTH AND EXPOSURE TO FINANCIAL MARKETS
28. Joan Robinson and Frank Wilkinson (1977), ‘What has become of Employment Policy?’
29. Nigel Lawson (1984), ‘The British Experiment’
30. Evelyne Huber, Charles Ragin and John D. Stephens (1993), ‘Social Democracy, Christian Democracy, Constitutional Structure, and the Welfare State’
31. Paul Pierson (1996), ‘The New Politics of the Welfare State’
32. Francesco Giavazzi and Marco Pagano (1990), ‘Can Severe Fiscal Contractions Be Expansionary? Tales of Two Small European Countries’
33. Olivier Jean Blanchard (1990), ‘Comment on Francesco Giavazzi and Marco Pagano, “Can Severe Fiscal Consolidations Be Expansionary? Tales of Two Small European Countries”’
34. Giuseppe Bertola and Allan Drazen (1993), ‘Trigger Points and Budget Cuts: Explaining the Effects of Fiscal Austerity’
35. Robert J. Barro (1989), ‘The Ricardian Approach to Budget Deficits’
36. B. Douglas Bernheim (1989), ‘A Neoclassical Perspective on Budget Deficits’
37. Robert Eisner (1989), ‘Budget Deficits: Rhetoric and Reality’
38. Mario Seccareccia (2012), ‘The Role of Public Investment as Principal Macroeconomic Tool to Promote Long-Term Growth: Keynes’s Legacy’
39. Robert M. Solow (2005), ‘Rethinking Fiscal Policy’
PART V THE ECONOMICS OF AUSTERITY IN THE WAKE OF THE 2007/8 FINANCIAL CRISIS
40. John H. Cochrane (2011), ‘Understanding Policy in the Great Recession: Some Unpleasant Fiscal Arithmetic’
41. P. Krugman (2012), ‘Austerity is So Wrong!’
42. Simon Wren-Lewis (2010), ‘Macroeconomic Policy in Light of the Credit Crunch: The Return of Counter-cyclical Fiscal Policy?’
43. Robert H. Wade and Silla Sigurgeirsdottir (2012), ‘Iceland’s Rise, Fall, Stabilisation and Beyond’
44. Robert Boyer (2012), ‘The Four Fallacies of Contemporary Austerity Policies: The Lost Keynesian Legacy’
45. Yiannis Kitromilides (2011), ‘Deficit Reduction, the Age of Austerity, and the Paradox of Insolvency’
46. International Monetary Fund (2010), ‘Will It Hurt? Macroeconomic Effects of Fiscal Consolidation’
47. Jeffrey A. Frieden (2009), Global Imbalances, National Rebalancing and the Political Economy of Recovery, Center for Geoeconomic Studies and International Institutions and Global Governance Program Working Paper
