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The size and cost of US public higher education, funded largely by government, grew continuously for nearly twenty-five years after World War II. In the late 1960s, as the nation's economic growth slowed, the question of who should pay for higher education came under fresh political scrutiny. Decades-old no-tuition policies at the University of California and The City University of New York (CUNY) became targets of neoconservative critiques of the proper role of government support for public services. In California, this was done as Governor Ronald Reagan promoted a partisan austerity to win favor with business and other conservative elites. He justified cuts to higher education financing as a rebuke of protesting students and inept administrators and, later, as financially necessary given voters’ reluctance to pay more taxes. In contrast, federal and New York State politicians forced austerity on city leaders to satisfy bond holders during New York City's severe fiscal crisis. Reformers argued that CUNY's no-tuition policy was emblematic of the city's overindulgence of its residents. No-tuition policies became impossible to defend in the context of the stalled economy and growing conservative movement, whose members embraced government austerity.
The financialization of everyday life has received considerable attention since the 2008 global financial crisis. Financialization is thought to have created active financial subjects through the ability to participate in mainstream financial services. While the lived experience of these mainstream financial subjects has been the subject of close scrutiny, the experiences of financial subjects at the financial fringe have been rarely considered. In the UK, for example, the introduction of High-Cost, Short-Term Credit [HCSTC] or payday loan regulation was designed to protect vulnerable people from accessing unaffordable credit. Exploring the impact of HCSTC regulation is important due to the dramatic decline of the high-cost credit market which helped meet essential needs in an era of austerity. As such, the paper examines the impact of the HCSTC regulation on sixty-four financially marginalized individuals in the UK that are unable to access payday loans. First, we identify the range of socioeconomic strategies that individuals employ to manage their finances to create a typology of financial subjectivity at the financial fringe. Second, we demonstrate how the temporal and precarious nature of financial inclusion at the financial fringe adds nuance to existing debates of the everyday lived experience of financialization.
What are the political effects of fiscal consolidations? Theoretical considerations suggest that consolidations should reduce the public’s support for their governments, but empirical studies have found surprisingly small effects on government support. However, most of these studies analyze electoral outcomes, which are separated from the consolidation by a multi-link causal chain. We argue that more direct measures of government support, such as executive approval, show much stronger negative effects of consolidation, since they are less affected by the strategic timing of consolidations or the political alternatives on offer. We analyze a time series cross-sectional dataset of executive approval in 14 Organization for Economic Co-operation and Development (OECD) countries from 1978 to 2014, using the narrative approach to measure fiscal consolidations. We find that spending cuts decrease government approval, especially during economic downturns, but tax increases’ impact on approval remains minimal. Finally, left- and right-wing governments are equally likely to lose approval after implementing austerity.
The concept of intergenerational fairness has taken hold across Europe since the 2008 financial crisis. In the United Kingdom (UK), focus on intergenerational conflict has been further sharpened by the 2016 ‘Brexit’ vote to take the UK out of the European Union. However, current debates around intergenerational fairness are taking place among policy makers, the media and in think-tanks. In this way, they are conversations about, but not with, people. This article draws on qualitative interviews with 40 people aged 19–85 years and living in North-East England and Edinburgh, Scotland's capital city, to explore whether macro-level intergenerational equity discourses resonate in people's everyday lives. We find widespread pessimism around young people's prospects and evidence of a fracturing social contract, with little faith in the principles of intergenerational equity, equality and reciprocity upon which welfare states depend. Although often strong, the kin contract was not fully ameliorating resentment and frustration among participants observing societal-level intergenerational unfairness mirrored within families. However, blame for intergenerational inequity was placed on a remote state rather than on older generations. Despite the precariousness of the welfare state, participants of all ages strongly supported the principle of state support, rejecting a system based on family wealth and inherited privilege. Rather than increased individualism, participants desired strengthened communities that encouraged greater intergenerational mixing.
Chapter 5 examines the role of theatre in creating economic confidence during a time of austerity. It focuses on Isles of Wonder, the theatrical performance at the heart of the opening ceremony of the 2012 Olympics in London. Isles of Wonder was an astonishingly confident performance but, more importantly, it was an exhilarating show of confidence, at a time when the UK government was imposing a strict programme of economic austerity. But this show was as much an economic one as a theatrical one, and a deeply ambigous one politically. On the one hand, Isles of Wonder contained a stirring theatrical tribute to social welfare and appeared to be a theatrical metonym of Keynesian forms of public investment and productivity. On the other hand, Isles of Wonder successfully mobilised rentier forms of Olympic infrastructure that was a travesty of that Keynesianism. Isles of Wonder demonstrated the remarkable and disorienting ability of performance to refigure what might otherwise be political economic antagonisms into a theatrically and economically productive dialectic, if only for a short – but nonetheless spectacular – while.
During the Great Recession, governments across the continent implemented austerity policies. A large literature claims that such policies are surprisingly popular and have few electoral costs. This article revisits this question by studying the popularity of governments during the economic crisis. The authors assemble a pooled time-series data set for monthly support for ruling parties from fifteen European countries and treat austerity packages as intervention variables to the underlying popularity series. Using time-series analysis, this permits the careful tracking of the impact of austerity packages over time. The main empirical contributions are twofold. First, the study shows that, on average, austerity packages hurt incumbent parties in opinion polls. Secondly, it demonstrates that the magnitude of this electoral punishment is contingent on the economic and political context: in instances of rising unemployment, the involvement of external creditors and high protest intensity, the cumulative impact of austerity on government popularity becomes considerable.
In the wake of the financial, food and fuel crises, a fourth ‘F’ shockwave hit the global economy in 2010: fiscal adjustment. It would mark the onset of a prolonged period of budget cuts that is now projected to continue at least through 2020 in high-income and developing countries alike. This article: (i) examines International Monetary Fund (IMF) government spending projections for 187 countries from 2005 to 2020, indicating a decade of austerity from 2010 onwards; (ii) reviews 616 IMF country reports in 183 countries to identify the main adjustment measures; and (iii) discusses the negative impacts of austerity on jobs and welfare, pointing to alternative policies to identify fiscal space for equitable and sustainable development. Note that this analysis was done prior to COVID-19, and the estimates for 2019 and 2020 reflect pre-pandemic projections.
In considering the impact of austerity, much attention has been focused on the immediate effects of public spending cuts and on documenting the resulting increase in hardship and unmet needs. However, in calculating the consequences of austerity for the welfare state, it is its enduring legacy that is equally important. This article examines the proposition that the indirect effects of austerity on social, economic and political relations are as significant for the welfare of future generations as the ‘decade of austerity’ has been for contemporary welfare. The analysis draws on the approach adopted by Paul Wilding (1992) reflecting on the 1980s as the ‘decade of Thatcherism’. Wilding’s ten legacies are recategorised across four dimensions: normalising a non-commitment to welfare, societal scarring, refuelling the race to the bottom and diminishing the political capacity for change. The conclusions suggest that austerity will abide in the social and political relations of welfare long after austerity measures have ceased.
This article is an attempt to take stock and critically reflect on the UK’s decade of austerity and social policy hostility over the past decade. It distinguishes between economic and political austerity and digs deeper into the data on expenditure in order to examine the impact of austerity on British public expenditure and politics. It argues that the decade of austerity was a hostile one for British social policy which not only undermined the financial base of key parts of the welfare state, it reshaped it and redefined its priorities, setting in train a series of subsequent events that would further change, not just British social policies, but British economics, polity and politics. And, as subsequent crises – notably Brexit and the Covid-19 pandemic – testify, crisis events tend to be linked, and each one shapes and influences the ability of the state to respond to the next.
Radical transfeminism emerges out of the negation of a future based in limited forms of social inclusion and legal rights, which operate as a mode of encapsulation. Developing Marquis Bey’s and Susan Stryker’s conception of trans, the chapter articulates trans as the anti-static, indeterminate, claim to change that refuses stability, opening the possibility of trans action as a platform for futurity. Radical transfeminism is a materialist ethics rooted in poor and precarious transfeminine bodies, going beyond the limits of trans liberalism and homonormativity and the ascendency of neo-fascist politics across parts of the globe. The logics of neoliberal capitalist social inclusion, visibility and exploitation demand a clear identity; the anti-static trans becomes a refusal of the promise of exploitative inclusion and of the forms of captivity manifest in the borders, prisons, and workplaces that feed capitalist domination. Radical transfeminist futurity embraces emergent relations which hold the potential for transforming material conditions through supporting different lives.
This chapter examines the global political economy of access to drinking water, with particular attention to the implications for environmental and social justice. After reviewing theoretical approaches to the privatization and commodification of drinking water, the chapter examines the institutional and ideological drivers, dynamics, and effects of the enclosure of municipal (tap) water supplies, and the substantial countermovements it has generated, drawing on case studies from both the global South and the North. The chapter briefly reviews the present status of municipal water privatization, and then turns to another major modality of water commodification: bottled water. It explores the dramatic growth of this relatively new commodity, its environmental and social externalities, and the grassroots movements opposing water extraction by the global bottled water industry in specific localities. These countermovements have proven partially successful at reversing, slowing, or preventing privatization, and in posing obstacles to the further commodification of water through bottling. The concluding section discusses the linkages between these various modes of water commodification, and the implications for ensuring the human right to water.
While the financial crisis of 2007–8 has served to focus attention on the language of economics and the financial markets, discourse analysts have long been interested in the language of money. Indeed, because money is a social relation, the raw material available to analysts is almost too rich. I therefore draw attention to work that might not immediately look like “money talk.” I also describe the rich variety of work on metaphors of money, economics and finance of which there is an abundance. This research makes clear the ideological struggles around the representation of money and markets. In particular, it clearly shows the erasure of humans and human agency. These struggles are further illuminated by work informed by CDA and multimodal approaches, particularly in relation to the global financial crisis, austerity and poverty porn. It is important that the ideological baggage carried by contemporary understandings of money and debt are described. Research has gone further in its critique of the origins and effects of these ideologies. Finally, the contribution that applied linguists can make around money and debt is significant. However, in order to make positive interventions that emerge from considered critique, a clear set of values is required. Here, too, recent work in linguistics offers valuable perspectives as it focuses on real people in real pain.
This article maps important trends that mark a new stage in neoliberal capitalism since 2008, with a focus on class struggle and resistance in the advanced industrial democracies. New forms of collective action have arisen in response to austerity which has been imposed, in different forms, across most of the advanced industrial democracies, in a context in which established solidaristic institutions – trade unions, social democratic parties, welfare states – have already been eroded as a result of the preceding twenty five years of neoliberal reform. The article presents an overview of these trends, highlighting austerity policies and anti-austerity responses. The article accounts for the rise of new forms of resistance and collective action as they have emerged differently in different national contexts, focusing on developments in the UK, US, Spain, Japan and Germany.
In the Great Recession, sovereign bailouts were deemed necessary to alleviate the stress of indebted countries. These bailouts contained some of the most contentious policies, including austerity, structural reforms, and privatizations that triggered sharp bursts of protest during the Great Recession. In this chapter, we examine the impact of those particular political events on protest within this period, aiming to assess their impact and explore the mechanisms through which they operate on protest behavior. We observe that bailouts had a strong effect on protest, but in a mostly regional pattern, as they were accompanied by massive and frequent demonstrations only in southern Europe but not in eastern Europe. We also try to see whether the effect of bailouts can be explained by a deterioration of economic sentiment, but we find that their effect on protest remains even when accounting for such a decline in prospects. The chapter then shows that bailouts, ceteris paribus, were also much more contested than non-supranational austerity packages. Overall, bailouts have a strong effect on protest, but the regional pattern suggests that this is stronger where possibilities of alternative institutional political representation were available, as in the case of Greece which is examined more closely.
What are the effects of fiscal imbalances, and austerity, on regional-level spending? To answer this question, we examine an original dataset of yearly spending decisions of regional governments in Italy and Spain between 2003 and 2015. We find that the rise in regional deficits has an important negative effect on regional governments’ spending. The strength of this effect is, however, mitigated by the presence of a left-wing party in regional office. In addition, we uncover an important variation in the extent of cutbacks across policy sectors: regional governments tend to protect the health sector and focus their retrenchment efforts on social assistance and running of public institutions. Partisanship matters here too, as left-wing parties tend to protect healthcare more than their right-wing rivals. These findings bear relevance for understanding the role of partisanship and policy sector in the process of public retrenchment in multi-level states.
This chapter examines the law of extractive resources and money to clarify law’s constitutive role in political economy and, in particular, its implication in the expansion of exploitation. It also indicates how at various past junctures certain legal institutions have been chosen over possible alternatives. It, thus, draws attention to the “institutional toolbox” available for identifying ways in which law may re-configure and transform political economy. More specifically, the chapter explores the distributive effects that law generates - by allocating jurisdiction and exploitation rights, as well as by submitting distribution conflicts either to resolution through political procedures or market mechanisms. It explains how the principles of permanent sovereignty over natural resources and monetary sovereignty provide the basis not only for domestic, but also for international politics to be conducted in the legal framework of international organisations (international commodity agreements and the IMF). The chapter proceeds to trace how the assertion of government control over natural resources led to the expansion and proliferation of markets, not only because it prompted the emergence of a transnational economic law, but also as it contributed to the reverse integration of the industry and consequent changes in the structure of commodity trade. The chapter points to linkages between resource extraction and trade on the one hand and the demise of Bretton Woods and liberalisation of capital markets on the other hand with the effect of further reducing the scope for politics. Finally, it proposes to take a closer look at monetary design both as a driver of extraction and as a potential means to contain exploitation.
Following the inception of the economic adjustment programmes in the Eurozone, the EU has received much criticism for their handling of the social dimension of the crisis through their involvement in the Troika of European Commission, European Central Bank, and International Monetary Fund. One manifestation of this neglect of the social dimension can be found in the levels of economic inequality, particularly income inequality, in the countries that were part of the Troika programmes. Whilst the literature so far suggests that phases of fiscal consolidation correlate with increases in inequality levels, this chapter finds that this was not the case in the programme countries. The chapter undertakes a comparative case study between the Greek and Portuguese programmes in order to analyse the different effects of an expenditure-based programme with a revenue-based programme. It finds that relative inequality of disposable household incomes has stagnated rather than increased in most years throughout both programmes, with only minor upward fluctuations. In addition, a comparison with data on market income inequality in the same period shows that the redistributive efforts of the two countries have in fact increased, alleviating some of the recession-induced increases in market income inequality. Furthermore, simulating the distributive effects of a baseline scenario with unchanged tax-benefit policies from the year prior to the programme inception to its conclusion shows that in both cases, the reforms compressed the income distribution relative to the baseline scenario. In assessing the distributive effects of the fiscal consolidation measures, this chapter combines the use of real data (EU-SILC) and simulated data (based on tax-benefit microsimulation tool EUROMOD). Additionally, the chapter analyses the exact composition and compliance with the programmes. The combination of these approaches allows the conclusions that (1) the fiscal consolidation measures in the economic adjustment programmes had an inequality-reducing effect, which at times was sufficiently large to offset the inequality-increasing effects of the recessions in the programme countries, and that (2) this effect was larger when the Troika curtailed the discretion left to national governments in the development of suitable policy measures, and followed an approach of micro-management and close monitoring.
Austerity is frequently associated with crisis-enabled spending cuts. What happens when the crisis is over? This article’s original contribution lies in its in-depth exploration of one mechanism that help explain austerity’s endurance post-crisis, when state elites face increased popular resistance and pressure to reinstate social spending. This mechanism calls attention to the role of economists in Central Budgeting Offices as agents of technocratization and de-politicization within social policy domains. These economists may institute an austere spending mode by changing social spending’s norms and instruments. To demonstrate economists’ role in mediating macroeconomic fiscal goals and social policy design over time, the article examines the development of child welfare policy in Israel before, during and in the aftermath of economic crisis. In this case, austerity attained hegemony when economists were able to delegitimize and shelve an ‘irresponsible’ social spending proposal – and in response to post-crisis demands for compensation – introduce an austere policy instrument to cap social spending during a period of social policy expansion. This analysis suggests that scholars regard relations between austerity and social spending as dialectical.
Chapter 6 examines severe and protracted economic contractions following the Great Recession of 2008–09 in two countries on the European periphery: Latvia and Greece. It documents the evolution of main macroeconomic aggregates and social indicators in these two countries before, during, and after the 2008–09 crisis. The chapter also critically examines the role played by the International Monetary Fund (IMF) and other European institutions in the design and implementation of austerity in these economies, and draws lessons for other nations from these two experiences. The chapter also discusses the futility of democratic consultation (referendums) in Greece for the amelioration of conditionality and austerity.
This chapter focuses on the rise and fall of growth and the incidence of recessions in centrally planned socialist regimes in Central and Eastern Europe (CEE) and the former Soviet Union. It studies the period of rapid growth and socialist industrialization in the 1950s and 1960s, the socialist stagnation of the 1970s, and the terminal decade of the 1980s. It discusses the rapid accumulation of foreign debt in convertible currencies in some socialist countries as an attempt to revert symptoms of stagnation and the effect of the debt crises of the early 1980s, with responses ranging from full repayment under extreme self-imposed austerity (in Romania) and attempted rescheduling in other countries. It examines the causes for deep contractions in several CEE countries, Russia, and Ukraine in the early 1990s and the impact of the crisis of 2008–09.