Austerity Economics: Tied Up in Knots?

A core element of neoclassical economics was to emphasize transactions rather than work, workers, or working conditions.  The idea was that the justification of the system was the utility enjoyed by consumers.  All considerations of work, workers or working conditions were to be swept aside.  Production is relevant only insofar as serves to satisfy consumer needs.


Macroeconomics was expected to depend upon this neoclassical micro foundation.  Nonetheless, macroeconomics centered on demand is rejected by all good austerians.  Instead, the current fad is to emphasize supply-side economics.  Trading the social safety net encourages hard work.  Tax cuts ensure more employment.


Over and above the self-destructive consequences of austerity, the recent wave of austerian nonsense has the unintended consequence of contradicting the intellectual foundation of neoliberal economics.

3 comments so far

  1. mark hansen on

    i guess it is “Voodoo Economics” ( or is that DooDoo?) after all.
    “I got your Laffer curve right here.”

  2. John Crawford on

    On the contrary, the front line foreman or engineer ordering, commanding people about (even today with our pop tarts homicidal grimaces) is only concerned with one thing: subservience, obedience, following orders. Regardless of how the supply and demand curves cross, the time cycle of any transaction can be stretched or contracted relative to the psychological needs of the person in the high ceiling position. Power when exercised is concerned with the primary thing of: Visibility. Most economists, even on the left are not giving the full story.

  3. mperelman on

    DooDoo is funny. John. I agree with your message. In fact, what you write is exactly what I was trying to do in my book, The Invisible Handcuffs.

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