Mattei - The Capital Order Notes

Mattei, C. (2022) - The Capital Order.pdf

Introduction

2019 Santiago protests - "in response to the cumulative public toll of fifty years of #privatization, wage repression, cuts in public services, and marginalization of organised labour that had fundamentally hollowed life and society for millions of Chileans." p.1 Allende, I. (1986) - House of The Spirits - historical background

gov response, #martial law, #authoritarian crackdowns.

#Greece - #referendum and #IMF

"it is a trope of twentieth- and twenty-first century life that governments faced with financial shortfalls look first to the services they provide their citizens when making cuts... When this happens, they produce highly predictable, uniformly devastating effects on societies. Call it the austerity effect: the inevitable public suffering that ensues when nations and states cut public benefits in the name of economic solvency and private industry." p.2

"Taken together, this suite of policies entrenches existing wealth and the primacy of the private sector, both of which tend to be held up as economic keys that will guide nations to better days" p.2

"Austerity is not new, nor is it a product of the so-called Neoliberal Era that began in the late 1970s. Outside, perhaps, of the less than three booming decades that followed World War II, austerity has been a mainstay of modern capitalism." p.2

Blyth, M. () - Austerity: The History of a Dangerous Idea - shows that despite failure to deliver it's promises of debt reduction/ economic growth, austerity keeps being used. Mattei argues that "If we view austerity in this books terms - as a response not just to economic crises (e.g., contraction of output and heightened inflation), but to crises of capitalism - we can begin to see method in the madness: austerity is a vital bulwark in defence of the capitalist system." p.3

"#Capitalism is in crisis when its core relationship (the sale of production for profit) and its two enabling pillars (private property in the means of production and wage relations between owners and workers) are contested by the public, in particular by the workers who make capitalism run." p.3

"policy levers to make all classes of society more invested in private, capitalist production, even when these changes amounted to profound (if also involuntary) personal sacrifices." p.4

"Of greater importance than austerity's purported economic efficacy was its ability to guard capitalist relations of production during a time of unprecedented social organizing and public agitation from the working classes." p.4

"The structural limitations it imposes on spending and wages ensure that, for the vast majority of those living in a society, "work hard, save hard" is more than just an expression of toughness; it's the only path to survival" p.4

The less you eat, drink, buy books, go to the theatre, go dancing, go drinking, think, love, theorize, sing, paint, fence, etc., the more you save and the greater will become that treasure which neither moths nor maggots can consume -- your capital. The less you are, the less you give expression to your life, the more you have, the greater is your alienated life and the more you store up of your estranged life. Everything which the political economist takes from you in terms of life and humanity, he restores to you in the form of money and wealth, and everything which you are unable to do, your money can do for you: it can eat, drink, go dancing, go to the theatre, it can appropriate art, learning, historical curiosities, political power, it can travel, it is capable of doing all those thing for you; it can buy everything it is genuine wealth, genuine ability. But for all that, it only likes to create itself, to buy itself, for after all everything else is its servant. And when I have the master I have the servant, and I have no need of his servant. So all passions and all activity are lost in greed. The worker is only permitted to have enough for him to live, and he is only permitted to live in order to have.
from Marx' Economic and Philosophical Manuscripts of 1844

Book charts how the above dynamics play out in austerity-fascism, looks at postwar economies of Britain and Italy where "For most people living in these countries during and after the war, whether they feared or hoped for it, the abolition of capitalism loomed as the imminent outcome of the wars devastations and its showcasing of economic planning" p.5

Luigi Einaudi (liberal economist): "it seemed that a shoulder shove would suffice to knock the so called capitalist regime to the ground... the reign of equality seemed close to ensue" p.5

The New Order - "represented a break from both #hierarchical relations of society and #top-down knowledge production==." p.5

"State interventionism not only allowed the Allies to win the war; it also made clear that wage relations and the #privatization of production—far from being “natural”—were political choices of a class-minded society" p. 6

"The extent of #politicization among large chunks of the population meant that their public opinion on economic questions could no longer be ignored." p.6

Keynes, J. M : "even if economists and technicians knew the secret remedy, they could not apply it until they had persuaded the politicians; and the politicians, who have ears but no eyes, will not attend to the persuasion until it reverberates back to them as an echo from the great public" quoted on p.6

"Economic experts had to wield their greatest weapons in order to preserve the world as they thought it should exist. Austerity was their most useful tool: it functioned—and still functions—to preserve the indisputability of capitalism" p.6

austerity does this by disempowering the working class majority: "Austerity shifted resources from the working majority to the saver/investor minority, and in so doing enforced a public acceptance of repressive conditions in economic production." p.6-7

These events of the early 1920s, including the widespread #bourgeois fear of the crumbling of capitalism, were a watershed moment. The antagonism of the political and economic establishment to the will of the public, and especially their interventions to quell such revolutionary sentiments, re-established capital order in Europe and ==ensured the trajectory of the political economy for the rest of the century, a trajectory that has continued to this day. ==p.7

Austerity, Then and Now

"Part of what makes austerity so effective as a set of policies is that it packages itself in the language of honest, hardscrabble economics. Vague sentiments such as “hard work” and “thrift” are hardly novel... maxims as the stuff of personal virtue and good policy"

As well as being entangled with those we are trying to influence, as we saw in the previous chapter, activists are entangled, too, in the culture that produces the problems we are trying to change. The actions of a manager at Amnesty who puts a fellow campaigner under intolerable pressure – and, too, the actions of a campaigner who works under such pressure – are guided by ==stories in our culture about sacrifice, about being a saviour or a hero, and about attaining status from work. ==They are guided by stories that encourage extraction of every last possible drop of the resource in question (in this case, energy for work and for a cause), and stories about individualism, how we are all alone and separate from everyone else, and so must shoulder our burdens ourselves.

Lawson, A. (2021) - The Entangled Activist - annotated ch5.pdf

Austerity as a twentieth-century phenomenon materialized as a ==state-led, technocratic project ==in a moment of ==unprecedented political enfranchisement of citizens ==(who had gained the right to vote for the first time) and mounting demands for economic democracy. In this way, austerity must be understood for what it is and remains: an anti-democratic reaction to threats of bottom-up social change.
p.7

The British workers had fueled the nation’s war effort, and in the course of the wartime mobilization became aware that socioeconomic relations were no natural givens and could be different. By imposing austerity measures after the war, the British government effectively told its working classes to return to the back of the line. p.8

"The newly enfranchised European “great public” was not simply going to accept austere policies, and the experts knew it. Thus, they devised austerity to conjoin two strategies: consensus and **coercion."** p.8

Consensus: "Consensus implied a conscious effort to “awaken” the public to the truth and necessity of reforms that favored economic stabilization, even when it might hurt." p.8

That the manufacture of consent is capable of great refinements no one, I think, denies. The process by which public opinions arise is certainly no less intricate than it has appeared in these pages, and the opportunities for manipulation open to anyone who understands the process are plain enough. . . . as a result of psychological research, coupled with the modern means of communication, the practice of democracy has turned a corner. A revolution is taking place, infinitely more significant than any shifting of economic power.... Under the impact of propaganda, not necessarily in the sinister meaning of the word alone, the old constants of our thinking have become variables. It is no longer possible, for example, to believe in the original dogma of democracy; that the knowledge needed for the management of human affairs comes up spontaneously from the human heart. Where we act on that theory we expose ourselves to self-deception, and to forms of persuasion that we cannot verify. ==It has been demonstrated that we cannot rely upon intuition, conscience, or the accidents of casual opinion if we are to deal with the world beyond our reach.

— Walter Lippmann, Public Opinion, Chapter XV (from Public Opinion (book)) - Lippmann was advocating for the use of mass media to manipulate the populace into accepting the relations of capitalism and a technocratic approach to "the management of human affairs".

"Recognizing that a restless public would be unlikely to make the “correct” decision regarding this greater good, experts complemented consensus with coercion... First... excluding the general public from economic decision-making and instead delegating such decisions to technocratic institutions... Second, coercion lay not only in who made economic decisions, but also in the outcome of those decisions—that is, in the very workings of austerity. " p.8

What Lippman was advocating for in Public Opinion

The three forms of austerity policies—fiscal, monetary, and industrial— worked in unison to exert a downward pressure on wages among the rest of society. Their aim was to shift national wealth and resources toward the upper classes, who, the economic experts insisted, were the ones capable of saving and investing.
p.8

This book will study these three forms of austerity—what I call the austerity trinity —and how they at once require and advance one another. This historical inquiry, examining a moment in which capitalism was very much on the ropes, enlightens many vital connections that economists overlook when discussing austerity today.
p.9

The connections:

"First, austerity policies cannot be reduced to mere fiscal or monetary policies from central government institutions" - Austerity includes "Industrial policies, public and private, that create favourable conditions for profit and discipline workers" - e.g. balanced #budgets as a reason to not increase workers wages.

"Second...austerity is more than just economic policy; it is an amalgamation of policy and theory. Austerity’s policies thrive because they sit atop a set of economic theories that inform and justify them." p.9

Technocracy and “Apolitical” Theory, Then and Now

opening:

Technocracy dominates governmental policy making on multiple fronts. One is the ==historical convention of economists advising people who govern. ==The other is #epistemic, a form whereby these economists frame economics— including the economic arguments they themselves posited—as having achieved a standpoint above class interests or partisanship. Economics, economists argue, constitutes value-free truths about capitalism— #natural facts of this world rather than #constructed (or at least political) positions.
p.10

Hypernormalisation (topic)

Italy 1922 - #Mussolini gave economists free reign over the economy to:

...explore the reaches of what they considered “pure economics,” a school of economics-as-natural-law that aligned with austerity. They enjoyed an unprecedented advantage in governance in that they could directly implement economic models without the encumbrance of democratic procedures—and sometimes, thanks to Mussolini, with the help of tools of political oppression. p.10

obvious parallels with #Trump and #doge - #elonmusk sweeping cuts to funding, appointing teenagers and college students to gut government services and infrastructure.

Book looks at Britain and Italy through "the writings and public comments" of their economists:

What their stories make clear, and what remains true today, is that in order to persist, austerity requires experts willing to speak to its virtues. That relationship remains true today, albeit with an ever-refreshed cast of technocratic figures.
p.11

In both cases, economists leaned heavily on the principles of what they thought of as “pure economics”—then an emerging paradigm, but one still foundational to today’s mainstream economics, or what we sometimes refer to as the #neoclassical tradition.
p.11

comes back to the "manufacture of consent" in Public Opinion (book) "allowing these relations of domination to masquerade instead as economic rationality." p.11

These economists’ “apolitical” theory was centered on an idealized caricature of an economic being: the rational saver. This broad-stroke characterization had a dual result: first, it created the illusion that any-one could be a rational saver, provided they worked hard enough and no matter their material conditions and endowments; and second, it discredited and devalued workers, who went from being understood as productive members of society to being seen as social liabilities based on their inability to practice virtuous economic behaviors.
p.11

Because through the economists’ #lens, the productive class in a society was not the working class, but the capitalist class—the people who could save, invest, and thus contribute to the private accumulation of capital. ==Economic theory ==was no longer a tool for critical thought and action; it ==was a mold for imposing passive consent and maintaining a top-down status quo. ==
p.12

Austerity’s capacity to divert attention from systemic problems also helped foster collective passivity. Economists attributed postwar economic crises to the excesses of citizens, who were thereby delegitimized in their #socioeconomic needs and expected to redeem themselves through economic sacrifices, restraint, hard work, and wage curtailment—all essential preconditions for capital accumulation and international economic competitiveness.
p.12

Austerity policies in the spirit of “pure economics” were a disaster for most people living in Britain and Italy in the 1920s. Thus, the book delves into the paradox of a doctrine that presents itself as apolitical but has as its central purpose the “taming of men,” ... bending the working classes to the wills and needs of the capital-owning classes for the enrichment of a small minority.
p.12

austerity as an "origin story" for Capitalism's economic dominance - the "There is No Alternative" line: "mainstream economic theory flourishes because our societies rely almost entirely on the coercion of people who have no alternative but to sell their labor power to the propertied few in order to survive." p.12

#Meritocracy - "a supposed harmony between individuals in which those at the top are seen as those who exhibit greater economic virtue and whose quest for profit is beneficial to all." p.13

naturalises capitalist relationships - Fukuyama "End of History"

2026-02-24-fukuyamabbmeme.png

we have internalized its teachings to the point that our values and beliefs are largely aligned with those that are functional to capital accumulation. It is all so embedded that today a majority of American workers can live paycheck to paycheck with little to no social insurance and still largely accept that their position is one they deserve;
p.13

connects to Yurchak A. - Everything Was Forever, Until It Was No More (2006)

"What tends to get lost in the binary accounts is the crucial and seemingly paradoxical fact that, for great numbers of Soviet citizens, many of the fundamental values, ideals, and realities of socialist life (such as #equality, #community, #selflessness, #altruism, #friendship, ethical relations, #safety, #education, #work, #creativity, and concern for the future) were of genuine importance, despite the fact that many of their everyday practices routinely transgressed, reinterpreted, or refused certain norms and rules represented in the official ideology of the socialist state. For many, “socialism” as a system of human values and as an everyday reality of “normal life” (normal’naia zhizn’) was not necessarily equivalent to “the state” or “ideology”; indeed, living socialism to them often meant something quite different from the official interpretations provided by state rhetoric" p.8

#Keynes as equally convinced of Capitalism's supremacy - "As the 1920s progressed, Keynes’s economic theory of how best to avoid crises did change; what did not change was his fundamental concern to preserve capital order" p.13

#Keynesianism as primarily concerned with this maintenance - give people schools and health and they won't dismantle the basic economic system. Same thing with Andy Burnham #Manchesterism

Liberalism and Fascism, Then and Now

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