The crisis next time: the GFC and the continuing fragility of capitalism

This collection of original essays explores the myriad expressions of austerity since the 2008 financial crisis. Case studies drawn from Canada, Australia and the European Union provide extensive comparative analysis of fiscal consolidation and the varied political responses against austerity. Contributions examine such themes as privatization, class mobilization and resistance, the crisis of liberal democracy and the rise of the far right. The potential impact of the COVID-19 pandemic in shaping future austerity and alternatives is signalled. Given the rapidly shifting terrain, this comprehensive handbook provides important insights into a complex and fast-changing period of politics and policy. Experts from around the world review the complex and rapidly changing politics and policies of austerity in this comprehensive collection of essays. The book details the many different means and expressions of austerity since the financial crisis of 2008, as well as backlashes and emerging political alternatives. Capitalism shows an innate tendency to repeated cycles of boom and bust. Many factors can serve as the proximate cause of these cyclical fluctuations: including supply shocks in production of key resources and other inputs, fluctuations in the sentiment and confidence of business leaders and consumers, volatility in the supply of credit (which fuels spending and expansion) or changes in macroeconomic policy (such as interest rates or government spending). Whatever the immediate cause of each cycle, inherent cyclical instability reflects common features embedded within capitalism, including: Growth and development are led, first and foremost, by profit-seeking capital investments made by private businesses. If they stop investing, output and employment stop growing or start to shrink. But those individual decisions to invest are independent, uncoordinated and subject to volatile shifts in sentiment and expectations. This decentralization facilitates coordination failures, whereby individual investors make seemingly rational decisions that damage the whole economy (and hence the collective of businesses). Inter-sectoral and international flows of production, trade and investment can spread the effects of any initial sectoral downturn into the broader economy – again facilitated by the lack of coordination of the system. Personal consumption is the largest component of total output and spending, but it generally follows economic cycles (rather than leading them) since it depends on the prior existence of employment and labour income. If investment and employment decline, consumer spending also declines – magnifying the resulting shock to total output and employment.