Mark Blyth

Published: 25 Aug 2025

Austerity: The History of a Dangerous Idea

Austerity: The History of a Dangerous Idea book cover

A highly-charged, angry polemic against austerity, written right in the heat of the moment of the post-2008 crash when austerity thinking and economics had swept the world over It attempts to be both comprehensive in its economic grounding but also comprehensible to the non-economic reader - and largely succeeds, no mean feat given that economics from experience is largely impenetrable. The book attempts to deconstruct Austerity on all fronts and at all levels, initially by giving his own explanation on why 2008 happened and eventually laying the blame solely on the then-deregulated private banking sector (the USA’s was “too big to fail”, the EU’s “too big to bail”), then by ripping apart the IMF’s academic papers and economic theory written to push austerity in response to 2008, and lastly demonstrating austerity’s failure throughout economic history - replete with storytelling of austerity as an economic theory from its genesis, coining one of the most notable lines from the book (The state: “can’t live with it, can’t live without it, don’t want to pay for it”, the austerity liberal dilemma) in the process, as well as recontextualizing the interwar period’s political instability through the lens of austerity economics (for example, the NSDAP’s popularity as the only “anti-austerity” party, amongst other countries) - to truly cement austerity as not just misguided, but truly ‘dangerous’.

There’s plenty other aspects to the book, including Blyth’s total disdain for the European project on an economic level (vs. the cultural and the diplomatic), insinuating that the modern day Euro is a glorified gold standard (when earlier stating that running a gold standard economy in a democracy was infeasible), the German predisposition to austerity, “Ordoliberalism” and the “Swabian Housewife” due to its success post-WW2, misapplied across a global scale (“Is everybody supposed to run current account surpluses? If so, with whom - Martians?”) and discussing economics’ “fallacy of composition”, as well as remarking on Iceland - the sole EU country not to bail out the banks (not that it tried), and contrasting its relative success with Ireland’s bailed-bank failure. There’s a lot, and a lot of it is written convincingly for what is an otherwise angry, polemical book - however what’s notable is the relative lack of solutions, there’s not much here that feels relatively actionable even on a nation-state level (crackdown on tax havens) or feel palatable to the average electorate (financial repression and increased taxation on the rich) - let alone enough to convince of a sufficient “antidote” to austerity thinking given how “save first, spend later” are ingrained in household expenditure (despite widespread proliferation of debt in the form of mortgages and now student loans) combined with the assumption that the economy runs in a similar fashion (a natural, easy, and wrong assumption to make). However, in the grand scheme of things this is a small quibble (this is a frequent complaint I have around books set out to “demonstrate a problem” - and economics feels scarcely equipped to explain the now, let alone the future), and the arguments presented in this book are well argued enough that its a useful tool in the arsenal when austerity inevitably rears its head once again.