El Podcast

E15: How Austerity Paved the Road to Fascism

Episode Summary

Economist Clara Mattei explains how austerity policies—like budget cuts and wage suppression—were historically used to keep working people in line and protect the wealthy. She compares modern democracies to early fascist regimes, arguing both use similar tactics to maintain capitalist control. Mattei also explores alternatives to our current system, including democratic ways to organize work and production.

Episode Notes

Clara Mattei, economist and author of The Capital Order, argues that austerity is not a neutral economic policy but a tool historically used to suppress working-class power and preserve capitalist order—even under fascism.

Guest Bio: Clara E. Mattei is an Assistant Professor of Economics at The New School for Social Research in New York City. She earned her PhD in Economics from the Sant’Anna School of Advanced Studies in Pisa, Italy, and is the author of The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism.

Topics Discussed:

• The historical origins of austerity in post-WWI Britain and Italy
• How austerity disciplines the working class and protects capital
• Parallels between Mussolini's fascist Italy and contemporary liberal democracies
• The illusion of economic neutrality in policymaking
• The possibility of non-market-based democratic economies
• The political function of inflation and interest rate hikes
• Alternatives to capitalist organization of production

3 Best Quotes:

• “Fascism was never fully expelled from capitalism. The suppression of the working class is foundational—not exceptional.”
• “Austerity is not about fiscal responsibility—it’s about disciplining labor and safeguarding profit.”
• “Planning doesn't have to mean authoritarianism. It can mean democratic control over what and how we produce.”

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