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on 25 February 2017
Blyth's book is an eye-opening examination of austerity as a political policy and as an ideology. This is not just a dry history book (although a thorough history it is), but brings the analysis of the success of austerity almost up-to-date, explaining why Greece has been subjected to round after round of damaging cuts, why fundamentally the Euro cannot work, and why growth rates remain low across the European Union.

Blyth writes in a stimulating and readable style, and, although it is technical at times for non-economics experts like me, it is a rip roaring read. It definitely is an accessible book about economics, and would recommend it to the general reader, although I'm sure that for students of economics it must also be an essential reference.

I have had the vague suspicion for a long time that (a) most politicians seem to have no idea what they are talking about and (b) neo-liberal policies seem to have run off their map, and don't seem to have any predictive abilities any longer. Blyth confirms my suspicions and illustrates some of the entirely counter-productive strategies that are so beloved by our current batch of ruling politicians.

The book now has a useful postscript written in 2014, reflecting on some of the material in the book (originally from 2012). I read the book in late 2016 and often wished that it came right up-to-date, as the Brexit arguments and following referendum were conducted in an economic environment caused by the bank bailouts, austerity policy and Eurozone unrest that Blyth describes in his book.
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on 6 April 2017
A great book which shows that Austerity as an economic answer is a Lie and cannot work except in very rare situations. How such nonsense ideas gain traction and keep coming back despite all the evidence is the broader subject of Mark Blyth's excellent book. His videos on the subject are also well worth watching. From now on Austerity should not be weakly resisted while the idea is apparently accepted..the idea is False ans should be actively and strongly argued as such both here in the UK and in Europe.
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on 21 May 2017
Mark is clearly very knowledgeable and extremely well read on the topic, because he has countless references and deeply explores the history from many angles. And he has a talkative writing style which makes the book feel very personal, to the point where you can almost read it in his distinct Scottish voice.

However his talkative style gets out of hand when he's being technical, because it can be very hard to follow, and you find yourself having to re read segments because your brain has almost given up on deciphering when you're reading
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TOP 1000 REVIEWERon 29 April 2014
If this book is representative of his other work, Mark Blyth possesses that rare quality in an economist of being able to distill the concepts of his field into an easy to read and comprehend format. In the current book he focuses on austerity, the poster child economic ideaof our post 2008 time and takes the reader on a journey of its intellectual / theoretical background, covers the factual support for its success from prior real life applications and finally offers both some conclusions on the likelihood of it succeeding, as well as on possible alternative futures.

As is apprent from the title, there is not a neoliberal bone in the author's body. While some may call him an unashamed Keynesian, he has the (to some) annoying characteristic of working both the economic literature and the real life factual examples down to the bottom line, which often leaves the austerity arguments severely wanting. He also clearly points out the redistribution aspects of the austerity message - and not in a Marxist manner - and how those affect the popularity of the policy.

The book is built up around several main facets. The first one being that the current predicament came about as a result of a banking crisis and not of public spending running amok (with the exception of Greece). This then led to the 'too big to fail' meme in the US and the consequent state bailout. In Europe some countries drew the same conclusion, however the banking sector is different - being accoridng to the author very much in the 'too big to bail' category. The moral hazard that played out is covered next - but make no mistake - the author by no means attacks the integrity or morality of bankers, just points out how the structure of the system encouraged certain behaviour, which turned out to be very counterproductive for society as a whole in the long run.

Following that the intellectual history of the austeriy idea is covered from Hume, Hobbes, Smith and Ricardo to the present day, with the Austrian school, the German ordoliberal thinking and the Bocconi support all getting appropriate air time. The author is openly critical of most of their approaches from both a theoretical and empirical point of view but makes a good case for a reasonable debate (as in not being uniformly and rabidly against on ideological grounds).

All the real life poster children for austerity working are examined next, including a short rerun of the austerity approaches in the post WW1 world (US, UK, Sweden, France, Germany and Japan being amongst the cases), the 1980s, where the standard cases of Ireland, Sweden, Denmark and Australia are examined and the currently popular Irish case and the REBLL alliance. As a counterpoint from today's world he brings the case of Iceland, a rare example of banks being allowed to fail and which alone amongst the examples has a truly positive development to show post crisis.

Where I find the book earns the last star is in the author doing an excellent job in distinguishing the cases, where austerity may work from those, where we only have rhetoric at play. Another reason for the high score in my opinion is that the author manages to pull off something of a Heilbroner (famous for his The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers (Penguin Business Library)) here - namely ensuring that complex concepts are broken down to be both understandable to the regular reader, while at the same time not sounding inane to someone familiar with the topic.

The only slight fly in the ointment is the relative paucity of advice how alternative solutions could look like. Sure enough, the author presents some plausible next steps but these are nowhere as comprehensively covered as the subjects in the rest of the book.

Irrespective, this is a very important book and one would do well to read it and understand the consequences of where current policies are likely to lead the countries implementing the austerity mantra. Not perhaps for the hardcore neoliberal but thoughtful enough to let the other readers seriously reconsider the current path the world is following.
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on 8 November 2015
If you wish to understand why intelligent people and politicians prattle nonsense like 'we must live within our means' this is the book to read.
If you wish to understand how the costs of the lunacy known as the 2007/8 banking crisis are being distributed throughout modern democracies this is the book to read.
'Something is rotten in the state of Denmark/Britain/France/Germany/US...' as Shakespeare said with such foresight.
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VINE VOICEon 1 September 2013
Format: Hardcover|Vine Customer Review of Free Product( What's this? )
One of the best overviews I've read concerning our current financial circumstance. Broadened so as to not only explain what's going on but how we arrived here, Blyth repeatedly addresses the reality of how (and why) a disaster caused by a private few - the financial markets -- was rebranded, to allow both the blame and the debt to be pinned on the greater public.... in other words, us.

In terms of narrative styling, Austerity is slightly more dense than a mainstream read, but far less stuffy or pedantic than the vast majority of academic essays that pass for contemporary investigation these days. In Blyth's hands, a veritable history of our modern world emerges; one in which the micro and macro are explained clearly but above all relatively simply. The overall narrative is broken down into blocks of a few pages each; thus, Austerity is a book that can be read in stages, and the overall weight of information and financial/political jargon never overwhelms.

If you ever doubted the base connection between politicians and money-makers, you should read Austerity. Because, as Blyth argues by way of showing how we're doomed to further (potentially more ruinous) recessions, the drip-erosion of supply side economics and its infection of mainstream political rhetoric, is one huge justification for a system which is, in basic terms, as assured as the Emperor's New Clothes. For, as Austerity proves along the way, the financial services, in their race to conjure profits out of little more than zeroes and ones, have erected a system so atomically complex, nobody - not the people who use it, nor, more worryingly, politicians -- can ever be expected to understand the whole picture at any one time.

Thus, avoiding icebergs can only ever be a case of luck rather than political judgement. (Hence the recurring recessions we now experience every decade.) And if the financial industry is granted, via free market ideology, absolute freedom in return for only ever telling politicians what they want to hear, the true depth of potential for crises is a problem we're destined to keep experiencing over and over again.

Read this and weep - for it actually happened, and on the strength of Blyth's argument, it'll happen again... and again... and again.

Highly recommended for anyone with more than a passing interest in our 21st century state.
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on 16 March 2017
A good over view of Austerity
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on 9 July 2017
The narrative voice was a bit of a shock to start with because professor Mark Blyth is from Glasgow but the narrator has one of those ubiquitous USA accents. I got used to it, after being a bit annoyed that as always the voice is of the USA. I know before the moaners start, that professor Blyth works in the USA, but it would be nice if a like voice could be used. Enough of this. The content of the book is interesting. It cracks on at a real, fast pace. It is hard to keep up with the flow of it sometimes and I have had to go over it a time or two. I have heard professor Blyth speaking and he does rattle along, so it is true to his style. As for the validity of what is says, he is the professor and I am the reader, so I trust his work is valid and peer reviewed. It is as with all these things a point of view and I will read other works. This work I think give a casual reader a place to start but they do have to stick with a very rapid pace. That is why I only gave four stars.
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on 16 January 2015
Hug.
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on 30 May 2013
Mark Blyth delivers a masterful, blistering, devastating, and totally convincing critique of austerity. It's impossible to read this book and still believe that austerity is the right policy. Blyth writes engaging, powerful economic history of economies applying austerity, including the US, UK, Sweden, Germany, Japan and France in the 1920s and 1930s, Denmark and Ireland in the 1980s, and the Baltic states in 2008, demonstrating in each case that austerity does not work. It does not generate growth or reduce debt. He shows that the current hot spot crises in Greece, Spain, Ireland, Portugal and Italy are not due to profligate government expenditure, but to more differentiated specific factors. He makes the point that other economies cannot follow the German example of high savings and high exports, as the UK and EU seem to expect, since the whole world cannot be a net exporter.

He sets out the intellectual claim for austerity argued by the Bocconi University of Milan economists Alberto Alesina and Francesco Ardanga. Their core argument is that `when spending cuts are perceived as permanent, consumers anticipate a reduction in the tax burden and a permanent increase in their lifetime disposable income' (p172). Alesina delivered this diagnostic to the ECOFIN meeting in Madrid in 2010, labelled by Bloomberg as `Alesina's Hour'. The claim is very weak theoretically, and Blyth shows that the country economy data Alesina and Ardanga quote rejects rather than confirms their austerity hypothesis. So far, so good, in fact very good, and therefore 5 stars.

Blyth's weakness is that his diagnostic does not go far enough. He is content to prove that austerity doesn't work and then rather lamely propose forced government bonds and high tax as the alternative remedy. He places partial blame for the crisis on the Euro, which makes little sense, since the US and UK economies with sovereign currencies experienced exactly the same crisis. Beyond this he blames the banks, and claims that the taxpayer is paying for their errors. This is the well rehearsed standard view and is where Blyth needs to go further and dig deeper.

The missing diagnostic which he hints at, but doesn't develop, is that the crisis was caused by demand deficiency. In the UK economy between 2001 and 2007, real GDP grew by 19.5% but real disposable consumer income by only 11.5%. This is the gap that led to unsustainable consumer credit and government deficit. We need to ask why this gap arose, and what better remedy can apply. Rising productivity is bound to reduce the income element of output, reducing demand for the output supply. The only effective solution is a citizen income. Allied to this, a new understanding of money is needed. Blyth follows financial orthodoxy in insisting that money issued by government either has to be supported by gold, or if not, has to be matched by a debt incurred as a government bond sold to the market. Neither is true. Money is entirely virtual. To secure its value, it has to match output GDP, and that alone. The crisis has been funded by such virtual money and has not at all been charged to the taxpayer - the amounts involved render this impossible. Until we face the intellectual challenge of a virtual theory of money which delinks money from the issue of government bonds, we will be faced by the unsolvable crisis of insufficient demand which we regard as unfundable. As Blyth writes `postwar economics never put all that much thought into money' (p145). It's time to correct that oversight, because herein lies our mistake, and it's one which Blyth ultimately perpetuates.

Geoff Crocker
Author `A Managerial Philosophy of Technology' (Palgrave Macmillan 2012)
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