My review of the Capital Order
Clara Mattei, the author of the Capital Order, studies the relation between economic theories and policy making at the New School for Social Research. She argues that austerity is not just an economic policy but an essential tool for entrenching fascism. Indeed, her explanation of how it leads to fascism seems interesting. However, I find it more intriguing how this book views austerity.
Many books criticizing austerity tend to state that it is an economic policy to avoid especially when a country is suffering from a recession and that despite this, many misunderstand austerity should be adopted to achieve a balanced budget and secure solvency. Those books also point out this erroneous economic policy making results from the incorrect monetary theory, the Commodity Theory of Money. In other words, such books emphasize the reason the inaccurate economic policy, austerity, has been implemented is that those involved in economic policy making lack the knowledge about the correct monetary theory, that is, the Credit Theory of Money. Thus, those books suggest people should know the correct monetary theory and make efforts to make the majority of people accept it as a general truth like when the heliocentric theory was accepted instead of the geocentric theory.
On the other hand, the Capital Order insists that the goal of austerity is not to achieve a balanced budget or secure solvency but to maintain capitalism, which the author believes is a system in which capitalists can hold power and capital. According to this book, after WWⅠ, the working class began to gain power and capitalists felt this social movement as a threat to the capitalist-friendly system, namely, capitalism. Therefore, they exerted pressure on politicians and economists to adopt austerity in the way the working class would be weakened, but, of course, politicians and economists could not announce this true goal of austerity. As a result, instead, they started to emphasize the importance of a balanced budget and solvency to justify austerity. So, this book suggests that we should first know the structure where capitalists control the world, while other books mentioned above urge us to know the correct monetary theory. This is one of the main differences between them.
To sum up, this book is distinctive in pointing out that austerity is not a tool for accomplishing a balanced budget or securing solvency but for maintaining the system from which capitalists can gain benefits. Even after reading this book, the significance of learning about the correct monetary theory should not be ignored, but the Capital Order doubtlessly shows us how we should stop austerity in another way.