What is Austerity?

Defined as “the quality or state of being austere” and “enforced or extreme economy,” set off enough searches that Merriam-Webster named it as its Word of the Year for 2010. After initially experimenting with stimulus policies as a response to the global economic crisis, international organizations like the Organization for Economic Co-operation and Development (OECD), World Bank, and the International Monetary Fund (IMF) have all called for austerity, with the IMF predicting that two decades of ‘fiscal consolidation’ may be necessary.

British Prime Minister Cameron proclaimed an age of austerity, and a correspondent in the New Statesman declared that “Austerity is the new normal. It is not a temporary phenomenon. It will become permanent. Fiscal conservatism is the order of the day.” Of course, predictions of permanent austerity may prove unfounded. However, there is little doubt that the politics and policy of austerity is likely to be a feature of global and Canadian political economy and society for the foreseeable future.

Austerity begins at the government level with a focus on cost-reduction and off-loading of responsibilities to sub-national jurisdictions and, through privatization, to individual citizens. Much of budgetary burden of austerity is likely to be found in the social policy portfolios, broadly defined, which means that the direct impact of austerity measures will first be felt by beneficiaries of such programs. However, it is likely that austerity will have an impact, probably corrosive, on social cohesion , social relations more generally, on political practices. The impact and consequences of the drive to austerity thus requires a multidimensional and multidisciplinary analysis.

The implications of austerity go far beyond the politics of balanced budgets, tax reductions and their negative social consequences. Democratic and public life is being diminished, public spaces eroded, and people conditioned not only to expect less in material terms but to count less, and participate less as citizens. Society and the sense of community, of belonging to a collective enterprise are being hollowed out and replaced by individualism and fragmentation in the face of crisis. In this context austerity is a means of conditioning people to live more limited and restricted lives.