I’ve written earlier that austerity does not appear to materially benefit anyone really. This was meant to raise a challenge to the claims of some that austerity is being pushed by a class of people who stand to benefit from it. Emails and comments and various other methods of communication flooded in, but a persuasive case for who austerity materially benefits still eludes.
Krugman today summarizes an argument that Noah Smith put out a short while ago:
Elites, he argues, see economic distress as an opportunity to push through “reforms” — which basically means changes they want, which may or may not actually serve the interest of promoting economic growth — and oppose any policies that might mitigate crisis without the need for these changes
Let’s be clear on what this theory is and is not saying. It is not saying that “elites” (whoever they are) materially benefit from austerity. If this is your theory, you should be entirely clear in dismissing the hand-waiving conspiracies that when austerity happens, some set of high-placed people are making out big. Or if you think that is also true, then point out who those people are and explain how, something I’ve not yet seen anyone do persuasively.
It is also not saying that “elites” are simply mistaken about what will and wont bring the economy back to capacity. So as we move deeper into the discussion, don’t slip back into saying that someone supports austerity because they don’t believe it will have the impact it will. Some people surely do actually believe, wrongly I think, that austerity will be fine and not have any negative impacts. So they are not the “elites” we are talking about.
It is saying that there are “elites” who — despite fully knowing austerity’s harms to others and even themselves — want to inflict it to create an environment that makes it possible for political changes they want to happen.
This speculation is as good as the next I guess, although I wonder even among the ill-defined class known as “elites”, how many actually fall into this camp, as opposed to those who stupidly believe austerity wont cause problems (or will actually help things). Given what we know about motivated cognition, it would be strange indeed if someone who wanted to reach the austerity conclusion had not managed to convince themselves that austerity was good in itself. But perhaps this small subset of the “elites” are psychologically strong enough to avoid this cognitive bias.
Beyond that, we are still left open to the question of why the “elites” actually support it? They want political changes, but why? Is it because they think it will materially benefit them in the long run? Or is it because they just have political ideas that they think are awesome and should be how the world works? It is fashionable to imagine that everyone who has these right-wing views are secretly in conspiracy of some sort for their own gain, but I suspect a healthy number of them are just political people. If I had Koch brother type money, I’d probably pour it into left-wing causes for instance. The Koch’s are an interesting case because one of them actually ran for vice president for the libertarian party. That is not something likely to pay a lot of financial dividends. He is almost certainly just an ideologue.
Anyways, the point here is that it would be nice to flesh this theory out and explain whether this long-game approach of self-harming to achieve political changes is meant to deliver material wins or just ideological ones? Flesh it out. It’s too vague as it stands.
Finally, and perhaps most importantly, how does this strategy actually seem to be working? On the federal level, government agencies took a hair cut, presumably a score for the kinds of “elites” who are playing this complicated chess game. Military spending took a much larger cut though, presumably not a score for some of the “elites” who make their money on military contracting, the ominous military-industrial complex profiteers who I guess are powerless in this game? Oh and the rich got a tax hike.
If this is the game this subset of “elites” are playing, they aren’t doing very well.