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DOI: 10.1080/09672567.2024.2363142
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The Capital Order: How Economists invented Austerity and Paved the Way to Fascism,
by Clara E. Mattei. The University of Chicago Press, Chicago, 2022, 480 pp., £22,
ISBN 978-0226818399
The title of Clara Mattei’s book enthralls the reader from the start: not only she aims to
rethink some well-established themes in contemporary political economy, i.e. austerity
measures and the functioning of capitalism, but does so by placing them in a very
specific—and provocative—historical context, that of Fascist Italy. In a nutshell, the book
examines the close relationship between capitalism, austerity and the heritage of fascism.
According to Mattei, austerity as we know it today emerged in the early 1920s in
defence of capitalism at a time when the system came under attack. The austerity
discourse was meant to preserve the bedrock of the capital order, e.g. the social relation
of capital, by silencing and supressing worker’s aspirations to break away from it. In the
(class) struggle that took place in post-war Italy between workers’ movements for a new
emancipatory order and the economic experts who called for disciplining the workers by
forcing them to make sacrifices, it was the arrival of fascism that allowed the second to
completely overtake the first. In short, fascists and liberals rallied under the banner of
austerity to save the crumbling bourgeois order.
While the central narrative of The Capital Order is based on the Italian case (on
which this review will mainly focus), the book also takes a comparative view by using
Britain as a mirror. National comparisons show that the austerity project conveys the same
mechanisms with the same ends, regardless of the political system: liberal democrat vs.
fascist. Mattei claims, somewhat provocatively, that in terms of socio-political outcomes,
“the structural violence of macroeconomics policy” employed by the Treasury and the
Bank of England “could do the same as the physical violence of Fascist militias” in Italy
(16).
DOI: 10.1080/09672567.2024.2363142
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Contemporary politics is very much in Mattei’s crosshairs, and the introduction of
the book navigates back and forth between “then and now” (7, 10, 13, 17). In documenting
the emergence of austerity in the aftermath of World War I, Mattei traces recent austerity
measures back to their authoritarian origins. In her own words, austerity was in essence a
“state-led, technocratic project in a moment of unprecedent political enfranchisement of
citizens” and fundamentally an “anti-democratic reaction to threats of bottom-up social
change” (7).
The ten chapters of the book are divided into two parts. In order to explain the
conservative and “insidious counterrevolution” (11) empowered by the austerity
discourse, Mattei first explains how the emancipatory revolutionary movement emerged
from the Great War. Accordingly, the first part of the book “War and Crisis”, which
consists of four chapters, deals with the formidable wave of social experiments aimed at
exiting capitalism. Powerful wartime state regulation and the post-war financial crisis had
taught labour movements to disregard the so-called natural law of the market and to act
for a “re-politicization of private property and wage relations” (54). Workers put pressure
on the state to provide welfare measures, which took the form of social policies such as
compulsory unemployment insurance and extensive redistribution.
Most of these social conquests were carried out by reformers acting from within
governments. However, more radical expressions in favour of pure economic democracy
are also given pride of place in the book. Nationwide strikes and factory occupations (in
1920) were the occasion for the labour movement to structure itself around islands of self-
government (neither state- nor market-), which, in some cases, took “direct control of
production in its entirety” (119). Mattei concludes the first part with a very nice chapter
(4) dedicated to the Ordinovista movement, embodied by the young Marxists Antonio
DOI: 10.1080/09672567.2024.2363142
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Gramsci and Palmiro Togliatti, who fought for the abolition of hierarchical relations in
both knowledge production and economic production.
Whether in its reformist or revolutionary form, the social benefits provisions gained
by the working class and the social creativity it demonstrated terrified the bourgeoisie. At
this point, in 1922, “‘austere’ fascism”, as Mattei calls it, emerged as the champion of the
“anti-socialist bloc” (126). The instrumental role of economists in this context is
addressed in the second part of the book (“The Meaning of Austerity”), which is divided
into six chapters. Austerity, summed up in the essential formula “work more, consume
less” (127), is analysed as a threefold phenomenon: the more familiar form of “fiscal”
(welfare cuts) and “monetary” austerity (dear money) are completed by “industrial”
austerity, defined as the efforts made to enforce unchallenged hierarchical relations of
production. A conceptual contribution of the book is to outline this “austerity trinity” and
to describe precisely the “mechanics of coercion” consisting of mutually reinforcing
effects from one form to the other (127-9).
Mattei traces the invention of modern austerity to the international conferences of
Brussels in 1920 and Genoa in 1922. There, experts and technocrats, including economics
professors, emerged as “the new protectors of capitalism” (137). They installed the idea
that European populations, and behind them states, had lived beyond their means, on
credit, to the detriment of the smooth running of the economy (in truth, of capitalist
accumulation). To discipline the workers, the technocrats adopted a dual strategy of
“consensus” if possible and “coercion” whenever necessary (147). When it became clear
to economic experts that their so-called scientific truths would not suffice to “re-educate”
the workers to effort and sacrifice, they had to find an institutional vehicle to impose
austerity.
DOI: 10.1080/09672567.2024.2363142
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Chapter 7 “Austerity, an Italian Story” emphasises how much “austerity required
Fascism” and its strong state. Conversely, “Fascism required austerity to solidify its rule”
and its credibility both nationally and internationally (especially in the eyes of the Anglo-
Americans). Mattei identifies four main economists who embodied the austerity
discourse: Alberto De Stefani and Maffeo Pantaleoni, on the one hand, and more
unexcepted figures such as Umberto Ricci and Luigi Einaudi, on the other. These
economists had diverse degrees of involvement in shaping economic policy—De Stefani
was Minister of treasury (1922-1925), while Einaudi remained far from government.
However, Mattei argues that their opposed political commitments (the first were fascists,
the second liberals) in the end did not matter in comparison to the essential feature they
shared, namely their defence of pure economics, the theoretical underpinnings justifying
austerity. Mattei points to Einaudi’s “fervent support of Fascist economic policy
throughout the 1920s” (211) to show how easily liberals could support authoritarian rule
when it came to defending the market mechanism and maintaining class hierarchies.
It is more than fair to base a narrative on four main economists (most books would
often do with one or two). However, more information on the rest of the Italian economist
community would have been welcome, especially regarding their support for pure
economics and/or fascism, as the book often draws conclusions for “the” (neoclassical)
economists as if they were a coherent whole, which is rather unlikely.
The last two chapters of the book differ in tone from the narrative offered so far. In
Chapter 9 “Austerity and its “Successes’”, Mattei puts on her glasses of economic
historian by using data to support her qualitative investigation. Graphs covering a period
from 1913 to 1930 document the evolution of strikes and union membership, of wages
and profit rates. All this, Mattei argues, shows the way in which austerity worked “to
restore the optimal conditions for capital accumulation” (256). Finally, Chapter 10
DOI: 10.1080/09672567.2024.2363142
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“Austerity Forever” fills in some of the gaps between the 1920s and our own time, and
highlights how little the mechanics of austerity have changed. I am not sure, however,
that the state plans implemented during the COVID crisis qualify as austerity measures,
as Mattei claims (303). And in fact, some on the Left have taken EU emergency plans,
e.g. Macron’s “whatever it costs” motto, as evidence of a collective capacity to manage
the economy in a very different way from the capitalist one—much like the consciousness
generated by the war experience so vividly described in the book.
One of the strengths of The Capital Order is clearly the way in which it crosses
many disciplinary approaches and seeks to “depart from entrenched scholarly
conversations” (307). Scholars might feel less disconcerted in their efforts to situate the
book’s many contributions if they read the “Afterword” that comes at the end of the book,
immediately after the general introduction. In these six pages, Mattei restates her main
contribution to three strands of scholarship on Keynesian economics, neoliberalism and
fascism.
This book contains a strong indictment of Keynes and the Keynesians, who are
accused of failing to see the true nature of austerity because, in the final analysis, they
would be not so different from their neoliberal counterparts in preserving the existing
system. The charge on Keynes, essentially blaming him for not being a Marxist, is rather
unconvincing to this reader. The association of Keynes with “his fellow austere British
experts” (308) and with the austerity project because he believed in the expertise of
economists and wanted to preserve a form of liberal society may seem a bit of a stretch.
In any case, it is an easy shortcut that bypasses the heated debates about the revolutionary
nature of Keynes’ ideas (this rich literature is not mentioned at all by the author, who
relies only on Geoff Mann’s recent book). Moreover, does holding an elitist view of
DOI: 10.1080/09672567.2024.2363142
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public affairs management make one ipso facto a fervent defender of the status quo? The
history of most avant-garde movements would suggest otherwise.
Much more convincing is the way Mattei situates her story within—and indeed
upstream from—the birth and rise of neoliberalism. In a sense, the kind of austerity
thought collective identified in the book preceded the neoliberal one. And the former,
perhaps even more than the latter, may stand as the true core political technology in the
service of maintaining the existing socio-political order to the exclusion of any
alternative.
Finally, Mattei’s story challenges the usual division of Fascism into a first—laissez-
faire—phase until 1925 and a second—corporatist—phase. On the contrary, re-reading
the history of Fascism through the prism of austerity reveals a strong continuity
throughout its entire existence. The interpretative and factual elements put forward in
support of this analysis are convincing, although the book focuses essentially on the
period from 1922 to 1930, leaving the period up to 1945 largely out of the picture.
It is no small merit of The Capital Order that it tells this story in a very lively and
personal way. Mattei writes in a distinctive voice that makes for a consistently enjoyable
and engaging read. At times, her resolutely committed approach may frustrate some
readers (and I have no doubt that it is very much her intention), but the book undoubtedly
contains enough new material, daring reflections and challenging claims to engage
virtually any type of reader interested not only in recent economic though, but also in
European history more generally.
Raphaël Fèvre
Université Côte d’Azur, Nice, France
raphael.fevre@univ-cotedazur.fr