AUSTERITY, THE HISTORY OF A DANGEROUS IDEA

Mark Blyth
Eastman Professor of Political Economy; Professor of Political Science and International and Public Affairs

Mark Blyth argues that economic ideas are powerful political tools as used by domestic groups in order to effect change since whoever defines what the economy is, what is wrong with it, and what would improve it, has a profound political resource in their possession. Blyth analyses the 1930s and 1970s, two periods of deep-seated institutional change that characterised the twentieth century. Viewing both periods of change as part of the same dynamic, Blyth argues that the 1930s labour reacted against the exigencies of the market and demanded state action to mitigate the market's effects by "embedding liberalism" and the 1970s, those who benefited least from such "embedding" institutions, namely business, reacted against these constraints and sought to overturn that institutional order. In Great Transformations, Blyth demonstrates the critical role economic ideas played in making institutional change possible and he rethinks the relationship between uncertainty, ideas, and interests on how, and under what conditions, institutional change takes place.

Moderation: Robert Misik, author