Austerity Does Not Work

Explains why repeated austerity programs since 2009 have failes, and why a new one by Reeves will fail.

[@dziadsmolarz8574]

Austerity didn't fail, it achieved what was planned to achieve precisely increasing income of the 1%

[@kobemop]

Indeed. The bourgeoisie promote (through institutions and universities) false economic practices to benefit themselves.

[@Praisethesunson]

Exactly. Thanks to gutted public housing my landlord can up my rent every year without fear I might move into spooky government housing.

[@randomchannel-px6ho]

More accurately supressing the wealth of the working class

[@Misuci]

The problem with your logic is that you also know that more austerity will no longer increase the income of the 1 %... There is no significant money / asset under the control of the 99 % which would be a good target to take over... by the 1 %. The 1 % asset is at the optimum level when it comes to asset performance under control. More assets in the hands of the 1% will only decrease the value of all assets .... in other words billionairs must kill other billionairs..soon... unless the aging population is being replaced almost instantly by youth...

[@gregtiwald]

POSIWID

[@corpse6193]

Audio quality is great, but sound could be a fair bit louder

[@chujiwu68]

Yes, please. I would say that a minimum increase in volume 2 to 3 times louder than that of this video would be a BIG improvement. It would really help listeners stuck with crappy laptop speakers or people listening from their smart phones over the sound of a running shower head.

[@LongDefiant]

Sounds loud enough in earbuds

[@larsutnevaage6592]

FIrst impressions: the audio seems to be much better!

[@Skeleman]

sectoral balances is what first broke me out of neoclassical economics. excited to see it in a lecture! :D

[@Misuci]

See more similar Publications by L. Randall Wray.... I love Paul's take on many social issues... Wray is a bit dry...

[@Skeleman]

@@Misuci Wray's primer on MMT was the first thing to do it for me actually! He was also nice enough to respond to an email I sent him as a confused undergraduate when reading his book haha.

[@Mc11Cheese]

Part of me thinks austerity politics isn't about the economy/budget but rather a way for politicians to feel like the "grown ups" making "hard" decisions. Cutting budgets as a way to legitimise their government to themselves

[@Misuci]

Pretty good idea. The negative of it is this: If the austerity works, then the government wich does the tightening of belt/budget, is going to handover a gift to the next government. The next government can be generous again..

[@helloInternets]

Clara Mattei's book "The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism" is a fantastic genealogy of austerity. Mark Blyth's "Austerity: The history of a dangerous idea" similarly is a robust study on the Janus faced purpose of austerity in crushing labour.

[@Skeleman]

Audio is crisp and clear and always excited to see that you've uploaded. Are you planning on doing videos covering topics from your upcoming book?

[@cempoyrazozbay3693]

I’d love that we need more materialist philosophy around here

[@Skeleman]

@@cempoyrazozbay3693 Paul's videos on materialism were like putting on glasses for me haha.

[@Skeleman]

@@novinceinhosic3531 mechanist? as is mechanical materialism? diamat is imo a holdover of a more idealist or dualist influence on materialism. if one takes dialectics serious as a language for creating models, then it's fine. but often people seem to believe dialectics are real thins.

[@Skeleman]

@@novinceinhosic3531 In good faith, you can tell me how you define dialectics. Maybe I'm mistaken and have only gotten my information from people with a misunderstanding. Prof Cockshott has many videos where he discusses dialectics along with information theory, cybernetics, mathematics, etc. If you wanna reference any of them feel free. I assume we've both seen them so it's a bit of a shared knowledge base.

[@Skeleman]

@@novinceinhosic3531 The last thing I'm going to do in my life is read Hegel. I'm glad you had fun reading him but I would literally rather do anything else in my entire life. Everyone who talks about Hegel and dialectics seems to be religious about it and I left all that in my teenage years. They quote long dead men at length and discuss the fundamental truths and doctrine via revealed wisdom. It's literally like having a front row seat to what I imagine the Council of Nicea would have been like. If a truth is only available from the person who originally said it it's not a truth.

[@tasfa10]

You really could remake some of your older videos with better audio. Some of them are hard for non-native speakers like me.

[@Misuci]

Or like me.. Cheers from Hungary

[@youtubedlaccount9331]

Cockshott with adequate audio quality? A blasphemy! Where are the motors running in the background? I see rapid change and I stand frozen in fear!

[@NathanWHill]

This presentation is so clear. It is wonderful!

[@cyberpunkalphamale]

It's good when Gary Stevenson and Paul Cockshott make videos on alternating weeks. John Harvey has some great stuff on exchange rate economics.

[@dempa3]

Basic question, why is it important to reduce national debt? It seems that some states just accumulate more and more debt, but they are still running. Is there a threshold? If so, what happens if it is passed?

[@mehmeh1999]

At the extreme end it would lead to people losing confidence in a currency. That would lead to an economic death spiral.

[@JaydedWun]

The countries that usually run a huge deficit require first a financialised center, whereby other (usually smaller) economies are interdependent on paying them interest or using their currency. So America, Germany, France can do this, while Greece and Italy for example could not.

[@emiliopenayo4738]

delightful audio quality at last!!!

[@ristekostadinov2820]

The UK post war period were Hoxhaist hahaha. I'm joking obviously but especially after their fallout with China, they were focusing on minimal import to keep the economy functioning and exporting whatever they can for foreign currency (they obviously had to follow certain 5 year plans, or at least try to). In terms of austerity there are plenty of studies even by liberal economist that use Italy as case study, how their insane austerity post 2008 decreased their growth, comparing to countries who didn't went with their level of austerity. and exporting whatever they can for foreign currency.

[@animalfarm7467]

When the corporate government transfers most of the taxpayer wealth to the very few, austerity is required to ensure the debt doesn't grow too fast. Otherwise the house of cards will prematurely collapse.

[@magnusmauritz8191]

I appreciate that you made Rachel Reeves look like a goblin.

[@Smittumi]

Very quiet audio!

[@kosmosfaber6534]

Turn up

[@sandwormleto3358]

new mic is great 👍🏾

[@alexalke1417]

Your content always is very interesting but i wish sound wasn't always that low.

[@Misuci]

The sound quality is good. It is a bit too soft. Try the normalization function... " KZbin Audio Normalization - Target Audio Levels Explained"

[@xtopia9758]

Might night to increase the sound, good video

[@T_Dot94]

Audio quality is much better. Your voice is more softer and less scratchy now.

[@frankcastle_1984]

Paul are you a MMT advocate?

[@edithcarpeaux5142]

I can't speak for him, but I'd be surprised if he or any Marxist were. It might look like that because he mentions the UK government can print pounds for its internal expenses, but then he couples that with the discussion that the trade deficit must be solved and that can only be done by increasing production to reduce imports and boost exports. That leads to the standard Marxist conclusion when he mentions China's state capitalism (whether this is an apt description is debatable): the solution is to circumvent the private sector and for the state to direct investment in the productive sector. This is not what an MMTer would say.

[@Misuci]

MMT is not something that you advocate... MMT is the real frame of reference, how money works... If money works differently then MMT will be the place to see the change in the relevant interpretation... MMT is not a political or ideological club...

[@0MVR_0]

do you expect a plant to go by depriving it of water? to think that the flower will rapidly adapt to dry soil and thrive? this is austerity.

[@robdegoyim4023]

Taxing work is perverse

[@Misuci]

It is.... and as Gary Stevenson suggested many times ,... the UK situation is ripe to introduce taxation that is not perverse, and not taxing teh creative, the productive, the youth, the active... and that is the taxation of assets.... A nice progressive taxation of assets is unavoidable...

[@nuggetmite7494]

Cancel the debts!

[@triadgaming3323]

Audio Quality is good but sound/Volume should be way more

[@AndrewManook]

I recommend testing your new equipment first before recording, the volume is way too low. Excellent analysis however.

[@CEOofCulturalMarxism]

If reduced state expenditure would actually reduce private consumption of low income people, even though morally questionable, wouldn’t that pay back the deficit?

[@Misuci]

No.... ''We've yet to adjust to the government's new role as the economy's scorekeeper, with money as nothing more than the points. Deficits are the motivators, the incentives for the youth to do good and not bad... More deficit is needed.. Deficit is not a thing that you pay back... Deficit is how power is handed over from one generation to the next... A lucky nation has sufficient offspring who take over assets and the living space of the old generation...and the unlucky nation must import that generation...(-Joscha Bach)

[@AndrewManook]

Yes but it has marginal returns especially in a state where the gap between the rich and the poor is huge, like britain. Eventually you will destroy your own consumer base which massively reduces economic growth.

[@emrebennett2857]

Can anyone explain to me why Paul said taxing the poor won't ever contribute to reducing the poor? While not very efficient - can't the government use the money it gets from taxing the poor and use it to pay back the bonds that the rich hold?

[@jertin2]

Quoted from another comment with much the same question: "No, because taxing those with no surplus reduces expenditure on which taxes are collected, so the government looses other tax revenues. It was an old principle of the classical political economists like Ricardo that tax revenues could only effectively be levied on those with surplus revenue - in those days the landlord class." The way I understand it: If you tax the income of someone who would otherwise spend all of their money, you are reducing the taxable profits that would be generated from that person's spending. In the real world, "double dipping" exists as the poor take on debt and use credit, but then that debt ultimately manifests later in the same effect of reduced spending, or- when the debtor defaults, a loss of profit for the creditor.

[@emrebennett7572]

Thank you for going out of you way answering this! I have been thinking about it myself and was trying to come up with the answer but your response fills it in for me! Have a good day!

[@NotKnafo]

10:24 isnt 2 and 4 are the same?

[@spyrouszerveas9707]

Pardon me for what may seem a silly question. What does floating the Pound mean exactly?

[@paulussturm6572]

To float a currency means to remove its value from any fixed store of it. Instead its value fluctuates according to the laws of capitalist exchange.

[@Misuci]

It means that the Pound has no sat price (by the government) compared to gold / corn... and so on... Like the Hungarian Forint, the FX largly determine the price, as long as the Hungarian government does not take action ... Cheers from Hungary

[@user-xp5id1kh4r]

Audio is NOT loud enough

[@TankieVN]

How is your work on a book about economic planning going ?

[@Isvakk]

Wouldn't any and all taxation work to pay off government debt? It doesn't matter from whom the tax revenue is collected, as long as it is paid to the holder of the bonds.

[@paulcockshott8733]

No, because taxing those with no surplus reduces expenditure on which taxes are collected, so the government looses other tax revenues. It was an old principle of the classical political economists like Ricardo that tax revenues could only effectively be levied on those with surplus revenue - in those days the landlord class.

[@Isvakk]

@@paulcockshott8733 "expenditures on which taxes are collected". What does this refer to concretely?

[@rsavage-r2v]

@@IsvakkDo we mean that taxing the working class suppresses consumption? I believe Adam Smith advocates progressive tax on the basis that workers spend their wages on "necessaries".

[@kiri101]

@@Isvakk Reducing the tax free threshold would mean I can no longer afford to even go to the cinema. The cinema generates less taxable revenue, employs less workers and uses less subcontractor services etc.

[@Misuci]

NO. The government is the source of currency... Without the government issuing currency there is no debt in currency...no bonds denominated in currency... Ther is no chance to collact tax either in currency before the government issues the currency...

[@kiri101]

Enthused to listen but the audio levels are awfully low. I'm afraid a quirk of the upload format means KZbin won't transcode this video to VP9 (I'm being presented it in classic AVC1) and as such the video is not eligible to enable the beta 'Stable volume' feature which does some sort of compression and level adjustment. edit: an illuminating listen. While the audio levels are still low (check out the concept of LUFS) the quality is indeed improved over older recordings.

[@Misuci]

KZbin Audio Normalization - Target Audio Levels Explained Wikipedia: " Audio normalization is the application of a constant amount of gain to an audio recording to bring the amplitude to a target level (the norm). Because the same amount of gain is applied across the entire recording, the signal-to-noise ratio and relative dynamics are unchanged. Normalization is one of the functions commonly provided by a digital audio workstation. Two principal types of audio normalization exist. Peak normalization adjusts the recording based on the highest signal level present in the recording. Loudness normalization adjusts the recording based on perceived loudness. Normalization differs from dynamic range compression, which applies varying levels of gain over a recording to fit the level within a minimum and maximum range. Normalization adjusts the gain by a constant value across the entire recording. "

[@kiri101]

@@Misuci I know what normalisation is, thank you

[@browncow7113]

The value of the pound is gradually falling, against both the dollar and the euro, over the decades. So, maybe manufacturing will revive and the UK can actually start making things again.

[@someguy79]

louder next time plz comrade and thank you

[@Misuci]

Sir, I think you have to reconsider the parts of your presentation where you stated the current chancellor gives billions to Zelensky. I love your work, but I hate similar mistakes.... First off all, Russia constantly financed ethnic Russian politicians in Ukraine, and thus constantly and actively financed ethnic divisions, just like my PM Viktor ORBÁN... Second, Zelensky needs assistance and military goods and not money to protect Ukraine, its institutions, its population, and its public services... Clearly Ukraine did much better than any one of us in the west imagined. " The Prime Minister will travel to Poland today [Tuesday 23 April] to announce a massive uplift in military support for Ukraine, including £500 million in additional military funding and our largest-ever delivery of vital equipment. " delivery of vital equipment.delivery of vital equipment.delivery of vital equipment.delivery of vital equipment. In reality the UK is lucky,... it is able to export its own arms, and outdated equipment..... The United States has provided about $10 billion of equipment from stocks,... " The US will transfer thousands of seized Iranian weapons and rounds of ammunition to Ukraine, in a move that could help to alleviate some of the critical .... " The Pentagon is tapping into a vast but little-known stockpile of American ammunition in Israel to help meet Ukraine's dire need for artillery shells. " The US Army has warehouses packed with weapons its soldiers no longer need. "Please adjust your valued presentation accordingly..

[@AndrewManook]

lol

[@michaelbraeutigam4086]

i don't actually understand why balancing the budget (with a mix of general tax increases and spending decreases, which counts as austerity) would not work. The video seems to say that austerity is insincere or not honestly pursued, just used rhetorically (which seems to be true). If you genuinely forced true austerity the trade deficit would disappear.

[@michaelbraeutigam4086]

the fake left raise taxes and spending, the fake right lower spending and taxes. The deficit is eternal. True austerity would balance the budget, one way or another.

[@Misuci]

Unfortunately Paul Cockshott not always as clear as for example Warren Mosler in his presentation.... about deficit, the yearly defficit of the government and its cummullative version which is the government (national debt).... Here you stated " i don't actually understand why balancing the budget would not work. " It would not work to eliminate the too much debt, and related intrest payment.... Here is the foggy answer to you by Paul Cockshott... " about the austerity program of the British government but much of it probably applies to issues about the national debt in the United States as well ...." I hope this helps you understand that a balanced budget will only retain the status quo...which is -as I hear it- not good in the UK too. Cheers from Hungary.

[@michaelbraeutigam4086]

@@novinceinhosic3531 yeah thats all very complicated but the accounting identity seems simple enough.