Brittan on Blyth on austerity

FT columnist Samuel Brittan reviews (favourably) a forthcoming book by Mark Blyth, a political scientist of British origin who is a professor at Brown University in Rhode Island. The book, Austerity: The History of a Dangerous Idea, will be published by Oxford University Press in March, 2013.

Ignore the political bile and partisanship – the author succeeds in demonstrating that austerity policies have mainly succeeded in making depressions and unemployment worse, both now and in the interwar period. Indeed, they have often failed in their own terms, as by reducing growth or inducing recessions they have made budget deficits even worse.

Prof Blyth’s ire is directed at public spending cuts – tax increases seem to be all right. He would also have preferred leaving ailing banks to their fate, as in Iceland. Whatever one thinks of this, it is difficult to rebut his critique of budget cuts as a cure for all woes.

It is easy to forget that the original advocate of expansionist demand management, John Maynard Keynes, saw his mission as saving capitalism rather than destroying it. Then, as would be the case today, he was up against the self-destructive instincts of political leaders, who transferred home truths about family budgets to wrong-headed principles for running national economies.

Samuel Brittan,”A funny way of firing up the locomotive“, Financial Times, 18 January 2013.

Samuel Brittan’s column is gated, but will be posted in a few days to www.samuelbrittan.co.uk

You can watch Prof Blyth deliver the main thesis of his book, in just five and a half minutes, here.

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