How AUSTERITY POLITICS Launched A One-Sided CLASS WAR On World's Poor: Clara Mattei

Summary

In an interview with Clara Mattei, author of *The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism*, Mattei discusses the economic roots of fascism, highlighting how austerity measures, such as wage cuts, privatization, and reduced public spending, were central to Mussolini's regime. Mattei argues that austerity helped suppress workers' movements and solidify authoritarian power. She contrasts these policies with democratic alternatives that emerged post-WWI, such as workers' councils and cooperatives, which challenged capitalist structures but were ultimately undermined by authoritarian regimes.

Takeaways

• 📚 The book 'The Capital Order' by Clara Matte explores the historical connection between austerity measures and the rise of fascism.
• 💡 Austerity policies, including budget cuts, privatization, wage suppression, and interest rate hikes, have been implemented globally with severe consequences.
• 🔍 Mussolini's Italy is highlighted as an early example of a fascist regime that applied harsh austerity measures, contrary to the popular myth of state control and corporatism.
• 🤔 The script challenges the common understanding of fascism as purely state-driven, suggesting austerity was a precursor to the state interventions of the 1930s.
• 🌐 The discussion points out the international liberal establishment's initial support for Mussolini's policies, indicating a parallel between liberal democracies and authoritarian states.
• 🏛 The book argues that austerity policies are not neutral economic measures but are politically charged choices that suppress democratic participation and alternatives to capitalism.
• 🛑 Austerity's role is to maintain the status quo of capitalism by keeping the working class in check and accepting their exploited conditions.
• 🤝 The conversation emphasizes the need for the left to differentiate between worker ownership and state ownership, which can also be exploitative.
• 🌱 The script mentions alternative economic systems that emerged post-World War I, such as workers' councils, guild socialism, and cooperative movements, which aimed for democratic control over production and distribution.
• 🌟 The book 'The Capital Order' received recognition from Martin Wolf of the Financial Times, who noted the difficulty in imagining alternatives to capitalism that avoid dictatorship.
• 🌍 The discussion calls for a reevaluation of historical narratives and the recognition of existing alternatives to capitalism, which are often overlooked due to dominant ideologies.

Q & A

What is the main argument of Clara Matte's book 'The Capital Order'?

Clara Matte's book argues that austerity measures, such as cuts to wages, fiscal spending, and public benefits, have paved the way to Fascism and have had devastating effects worldwide.

How does Clara Matte define the economic underpinnings of Fascism?

Matte defines the economic underpinnings of Fascism as a combination of corporatism and state power, where austerity policies are used to suppress alternative economic systems and force the majority to accept conditions of exploitation.

What policies did Mussolini implement that Matte identifies as austerity?

Mussolini implemented policies such as budget cuts, privatization, cuts in wages, and interest rate hikes, which Matte sees as austerity measures that suppressed any alternative economic system.

How does Matte's view of Fascism differ from the popular myth?

Matte challenges the popular myth that Fascism is associated with laissez-faire market policies, instead arguing that Mussolini's Fascism involved harsh austerity policies that favored the elite at the expense of the working class.

What is Matte's perspective on the role of state intervention in the economy during Mussolini's regime?

Matte suggests that state intervention during Mussolini's regime was not in opposition to austerity but was a continuation of it, aimed at supporting the investing elite and subjugating the working classes.

What alternative economic systems were emerging in Italy and elsewhere during the early 20th century, according to Matte?

Matte discusses alternatives such as workers' councils, guild socialism, and cooperative movements that aimed to organize production and distribution democratically, giving workers more agency in decision-making.

How does Matte challenge the dominant narrative about the impossibility of alternatives to capitalism?

Matte criticizes the dominant narrative that posits capitalism as the end of history and the best of all possible worlds, arguing that this restricts our imagination for alternatives and dismisses the potential of democratic, worker-led systems.

What is the significance of the 'red viennium' mentioned by Matte in the context of Fascism and austerity?

The 'red viennium' refers to the period of 1918-1919, which saw significant demands for economic democracy and class struggles. Matte suggests that the success of austerity in pacifying the population allowed for the entrenchment of the Fascist regime.

How does Matte view the relationship between economic policies and democratic participation?

Matte argues that austerity policies are not neutral but are political choices that preclude democratic participation in economic management and foreclose alternatives to capitalism.

What is Matte's stance on the idea of state ownership of businesses as an alternative to private ownership?

Matte advocates for worker ownership as an alternative to both state and private ownership, suggesting that corporatized state ownership can be as coercive and exploitative as private ownership.

What role does Matte believe the international liberal establishment played in the acceptance of Mussolini's policies?

Matte claims that the international liberal establishment applauded Mussolini's austerity policies, which helped to solidify the Fascist regime and suppress alternative economic systems.

Outlines

00:00

📚 Economic Austerity and the Rise of Fascism

In this segment, the discussion revolves around the connection between economic austerity measures and the emergence of fascism, as detailed in Clara Matte's new book. Matte, a professor of Economics, argues that austerity policies such as wage cuts, fiscal spending reductions, and public benefit cuts have had profound negative impacts globally. She emphasizes the historical example of Benito Mussolini's Italy, where such policies were implemented to suppress alternative economic systems and force the majority into accepting low-wage, precarious work conditions. The conversation also touches on the contemporary relevance of these policies and their role in shaping cultural and political landscapes, suggesting that austerity is not a neutral economic policy but a political choice with classist implications.

05:01

🛠️ Historical Narratives and the Continuity of Austerity

This paragraph delves deeper into the historical narrative of fascism, challenging the common perception that it is synonymous with state control of the economy. Instead, Matte highlights that austerity policies were central to Mussolini's regime and were instrumental in pacifying the population and suppressing class struggles. She argues that the state intervention that occurred later was not in opposition to austerity but was a continuation of it, aimed at supporting the elite at the expense of the working class. The discussion also addresses the public's misconception about state ownership of businesses and the need for the left to advocate for worker ownership and democratic alternatives to capitalism, which were prevalent in the aftermath of World War I but are often overlooked in dominant historical narratives.

10:04

🌐 Alternatives to Austerity and Capitalism

The final paragraph of the script focuses on the alternatives to austerity and capitalism that were explored in the past, particularly after World War I, and their relevance to present-day practices. Matte discusses the worker council movements and the idea of organizing production democratically to overcome class differences. She mentions the guild socialists in Britain, who aimed to produce for use rather than profit, and the cooperative movement, which was widespread at the time. These alternatives emphasized worker participation in decision-making and offered a vision of a society that was not dominated by the state or the capitalist market. The conversation concludes with a call to explore these alternatives further and to challenge the dominant ideology that presents capitalism as the only viable economic system.

Keywords

💡Austerity

Austerity refers to policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both. In the video's context, austerity is discussed as a precursor to fascism, with Clara Mate arguing that such policies were central to Mussolini's regime and have had a devastating impact on the working class by suppressing wages and public benefits, thus paving the way for authoritarian control.

💡Fascism

Fascism is a form of far-right, authoritarian ultranationalism characterized by dictatorial power, forcible suppression of opposition, and strong regimentation of society and of the economy. The video discusses the economic underpinnings of fascism, highlighting how economic policies like austerity can lead to a fascist state, as seen in Mussolini's Italy, where such policies were used to control and subjugate the population.

💡Corporatism

Corporatism is a system where the economy is organized into corporate groups representing various interests, such as agriculture, industry, and labor, with the state exercising control over these groups. In the script, corporatism is mentioned as a merging with state power, which is a characteristic of fascism, and is contrasted with the laissez-faire market policies.

💡Economic Underpinnings

Economic underpinnings refer to the foundational economic principles or policies that support a political or social system. The video emphasizes the importance of examining the economic factors that contribute to the rise of fascism, such as austerity measures, which are often overlooked in favor of cultural or authoritarian explanations.

💡Class Struggles

Class struggles refer to the conflicts between different socio-economic classes, typically between the working class and the capitalist class. In the video, Mate discusses how austerity policies were used to quell class struggles, effectively suppressing the demands for economic democracy and maintaining the status quo of capitalist exploitation.

💡State Interventionism

State interventionism is the policy of a state exerting significant control over the economy, often through regulation and public ownership. The script contrasts this with austerity, arguing that Mussolini's later state intervention was not in opposition to austerity but rather a continuation of it, aimed at supporting the elite at the expense of the working class.

💡Democratic Alternatives

Democratic alternatives refer to non-state, non-capitalist economic and social systems that emphasize worker participation and decision-making. The video discusses various historical examples, such as workers' councils and cooperative movements, which emerged after World War I as alternatives to both state control and capitalist exploitation.

💡Red Vienna

Red Vienna refers to the period of social democratic municipal government in Vienna from 1918 to 1934, known for its extensive program of public works, healthcare, and social reform. The script mentions the 'red viennium' as a time of significant experimentation with democratic alternatives that opposed both state and capitalist exploitation.

💡Guild Socialism

Guild socialism is a political and economic system that advocates the organization of society into self-governing guilds, both for production and distribution. In the script, guild socialism is mentioned as one of the democratic alternatives that emerged in Britain, focusing on production for use rather than profit and aiming to abolish wage relations.

💡Cooperative Movement

The cooperative movement refers to the organization of people into cooperatives, which are enterprises owned and operated by the people who use their services or work within them. The video mentions the cooperative movement as a widespread democratic alternative that aimed to give workers central agency in decision-making processes.

💡Economic Democracy

Economic democracy is a system where the workforce has a significant degree of control over the organization and decision-making processes of an economy. The script discusses the demands for economic democracy during the red viennium and how austerity policies were used to suppress these demands, preventing the establishment of a more democratic economic system.

Highlights

Clara Matte, a professor of Economics, discusses the connection between austerity measures and the rise of Fascism in her new book.

Austerity policies, including budget cuts, privatization, and wage suppression, have global devastating effects.

Benito Mussolini's regime implemented harsh austerity measures contrary to the popular myth of state control in Fascism.

Austerity policies are not neutral; they are political choices that favor the elite and suppress democratic participation.

The book 'The Capital Order' presents a provocative thesis on the parallels between liberal democracies and authoritarian states.

Economic policies like austerity are often justified as realism or prudence, but they have violent effects on society.

Mussolini's acceptance as the head of Italian government was due to his promises of austerity, similar to current policies.

Austerity policies were central to the entrenchment of the Fascist regime and the suppression of class struggles.

State intervention in the economy, as seen in the late 1930s, was possible due to austerity's pacifying effects.

The book challenges the dominant narrative that there is no alternative to capitalism, suggesting otherwise.

After World War I, there was significant experimentation with democratic alternatives from the bottom up.

Worker Council movements and guild socialism were examples of alternatives that emphasized worker participation.

Cooperative movements were widespread, advocating for worker centrality in decision-making.

The book suggests that alternatives to capitalism exist but are often overlooked due to dominant ideologies.

The discussion highlights the importance of worker ownership as opposed to state or corporate ownership.

Clara Matte emphasizes the need for the left to better articulate the benefits of worker ownership and participation.

The interview concludes by encouraging readers to explore the topic further through Clara Matte's book and related discussions.

Transcripts

[Music]

in a new book the capital order how

economists invented austerity and paved

the way to Fascism professor of

Economics at the new school for social

research Clara mate details how cuts to

wages fiscal spending and public

benefits have had devastating effects

across the world she joins us now to

discuss the book Clara welcome

thank you so much for having me

so Clara we talk about fascism a lot

especially in the Trump era and the

post-trump era and much of the

conversation has to do with kind of our

cultural instincts about what fascism

feels like and looks like from a kind of

specific kind of authoritarian lens but

very rarely is there a more robust

conversation about the economic

underpinnings of fascism this kind of

definition that talks about the the

merging between corporatism and state

power tell us why we should be looking

at austerity particularly in particular

as something that's a crucial Factor on

the road to fascism

thank you so much so um it's very

important to when speaking about fascism

to also look at what the actual uh first

originator of the fascist regime Benito

Mussolini did historically and what you

see is that unlike the popular myth

Mussolini applied harsh austerity

policies exactly the type of policies

the American citizens are seeing

implemented their own country for the

past 50 years budget cuts privatization

Cuts in wages and what we see now which

are interest rate hikes all these bundle

policies that had the structural effect

of suppressing any alternative economic

system and forcing the majority to

accept their condition of wage workers

that are forced to go work for a very

low wage in precarious conditions thus

Fascism and austerity are a very

powerful combination that was

experimented for the first time under

Mussolini's regime in 1922 onwards in

Italy and this raised the Acclaim and

the Applause of the whole International

liberal establishment so the capital

order has a very provocative thesis of

trying to show the parallelism between

supposed liberal democracies and what

happens in authoritarian fascists

States and show that ultimately the

violence of economic policies such as

austerity policies and by now austerity

are synonymous with

realism Prudence just economic policies

in general these type of policies are

not neutral they're not necessary but

there is specific classist political

choices that have the effect of

precluding democratic participation in

the economic management and especially

foreclosing any alternative to

capitalism and keeping the population in

check and accepting their condition as

exploited precarious workers

my understanding of uh Italy under

Mussolini's government is not that it

went an austerity router at least it

involves significant government control

of the economy

um the the state government came to own

the majority of businesses I know price

controls were implemented it was a

tightly centralized managed government

managed by the economy characteristic

right not of a government that kind of

pulls back and leaves everyone to defend

for themselves which is what I would

associate with austerity so I I guess

I would like to probe you further on on

that claim

yes thank you yes so this is very

important because historical narrative

are crucial to justify the present a

Bourgeois historical Narrative of

fascism has clearly tried to see fascism

with associate fascism with the word

corporatism and understand fascism as

the actual exact opposite of

laissez-faire Market policies actually

what you see is that this might be true

for the 30s even if we would need to

qualify that as well but certainly for

the years that were crucial for the

entrenchment and the just

justification of the fascist regime

austerity policies were Central so

Mussolini became accepted as a um

at the head of Italian government

exactly because he was able to promise

still what we see today again

privatization cuts and wages cuts and

social expanded spending and raises an

interest rate so I think it is important

to actually go back and look

historically at what was fascism was

about and it was not about State

intervention or better the type of State

intervention That Was Then happened in

the late 30s was possible because

austerity quelled the class struggles

the demands for economic democracy of

the 1918-1919 red viennium so once

austerity was successful in pacifying

the population in subjugating the

majority to the capital order then

Mussolini could also undertake some form

of statist interventionism but this

stated interventionism and this is one

of the claims of the capital order was

never really in opposition was austerity

it was in continued it was in continuity

because it was always about

incentivizing and supporting the few the

saving investing Elite to the detriment

of the working classes and this is

what's true also for the 30s and this is

such an important point because I think

so often in the public imagination we're

talking about State ownership of

businesses it is it is conceited in this

kind of authoritarian context and a lot

of people think well how what guarantee

do I have that the kind of

nationalization that sometimes

socialists Democratic socialists United

States will talk about is actually going

to yield benefits for the workers

instead of Simply concentrating power in

the hands of corporate Elites and I

think that's where I think the left

needs to do a better job of talking

about worker ownership as opposed to

um you know kind of as kind of a

corporatized state ownership that can be

just as coercive uh and exploitative as

private ownership so can you help us

understand what the kind of Alternatives

um to kind of austerity were emerging in

Italy and perhaps in other places around

the world that fascist authoritarians

were trying to undermine so that the

workers didn't have as much autonomy and

control to push back against these

authoritarian regimes

thank you yes first of all I really want

to stress what you just said which is

the fact that it's the dominant

narrative tries to show that the the

alternative to capitalism was a

non-alternative I was just mentioned by

Martin wolf as one of the best books in

2022 on the financial times and what you

see is that he ends by saying yes but

the idea that there can be an

alternative fascism that sorry an

alternative to capitalism that doesn't

end up in dictatorship and stagnation is

an impossibility so the idea of the end

of History the idea that we are in the

best of possible world is clearly

something that restricts our imagination

for the possible and of course calling

current the current Chinese government

communist remembering the USSR as the

Communist alternative this all helps

create the understanding that there is

nothing better that we can do except for

um current uh status quo capitalism so

actually what you see if you look at um

you look at what was happening on what

was happening historically after the

first world war so 1919 1920 were years

of great experimentation with Democratic

alternative that were actually coming

from below that were non-state that were

actually opposed to the state just as

much as to the capitalist Market because

the idea was that under capitalism the

state is how the British shop stewards

put it a servile State and helps

actually exploit the population so after

the first world war a variety of

Alternatives emerged which the capital

order describes in the first part of the

book and the intention of describing

these Alternatives is to give in

insights for present practices one of

the important ones were for example the

workers Council movements the idea that

in order to become all collectively

producers and go beyond the class

differences in society we had to

organize production democratically

through councils through assemblies and

also distribution this was true not only

in Industries but also in the

countryside where peasants actually

occupied land and decided to manage them

collectively then we had the case of the

guild socialist in Britain that were

very successful in producing for

um

views rather than profit and uh an

abolishing wage relations and also the

Cooperative movement was quite

widespread so all Alternatives that are

claiming the central agency of workers

and participation in decision making and

of course today given the heterogeneity

of the working classes we would have to

think about of councils that could be

also neighborhood councils something

that by the way is happening for example

in Chile in other places of the world

alternatives to capitalism are present

they are they're they're just never

spoken of because in a way they go

against

what is

um fruitful for the the dominant

ideology Clara I could talk to you about

this for an hour and I have on my own

podcast so people should go listen to

that if they want to know more about

this and of course to to read your book

but thank you so much for introducing us

to this topic and joining us today

thank you so much it's great

all right that's the capital order how

economists invented austerity and paved

the way to Fascism we'll have more

Rising for you right after this