Austerity as Socio-Economic Anorexia

Economics is known as the dismal “science” because it lacks significant predictive value. The various schools of economics are closer to different flavors of solipsism than most people realize. Unfortunately, most people still like to base their world view around different schools of solipsism.. I mean economics. This post will explore the effect of one particularly insidious concept that is found in many schools of economic thinking- austerity.

Many others (do a google search) have previously written about the inherent irrationality, short sightedness and plain stupidity of austerity. However almost nobody seems to have written about the striking parallels between economic austerity and voluntary anorexia in women. Let me list the uncanny similarities between the two apparently diverse behaviors.

Austerity is a concept rooted in classical/ neo-classical economic worldviews and involves an attempt to move the system towards a more “ideal” form. Anorexia also starts with the goal of reshaping the body towards something closer to the “ideal” form. Note that the end goals of both austerity and anorexia are always poorly defined and constantly shifting. Similarly the purported benefits of austerity and anorexia are based in faith and belief, rather than objective reality.

Both austerity and anorexia try to justify themselves through vague rationalizations and strawman-type arguments which just don’t hold up to closer scrutiny. While austerity claims that cutting “spending” to match “income” results in a more “balanced” economy, it is suspiciously silent on how cutting spending in an economy improves its “balance” either in the short or medium term- let alone the long term. Proponents of austerity also prefer to avoid addressing issues relating to a persistent fall in tax revenues due to reduction in amount of economic activity throughout the system. They also avoid any discussion about the role of existing institutions, mores and laws in creating the problems in the first place.

Those who justify anorexic behavior also make vague claims about attractiveness, social pressures, rates of obesity and the deleterious effects of excessive food intake. They however have also have problems reconciling their beliefs with reality- as the attractiveness of females has a much better correlation with not being obese rather than being underweight. It is no coincidence that the women that men lust after are usually young, healthy, fit and non-obese rather than rail-thin malnourished hags. Which brings us to the next similarity between the two.

Austerity is starvation of the economy and anorexia is starvation of the body. They are not fine tools to carefully craft a desired end, but incredibly blunt instruments that cannot possibly do what they claim. Starvation of the economy does not improve its function any more than starvation of the body can improve its function. There is a huge difference between methodically altering the flow of money in a system to improve it and simply cutting in a politically expedient manner. Similarly a woman can lose excess weight and keep it of much better by cutting carbs, eating more protein and fat in addition to putting on a bit more muscle.

Austerity creates popular unrest, loss of social cohesion and a general, and often irreversible, breakdown of the system. Anorexia causes binge eating, secondary health problems and a general, and often irreversible, breakdown of the body. Ironically when either austerity and anorexia fail to deliver what they had promised, its proponents double down and call for more of the same rather than admit their failure.

What do you think? Comments?

  1. Webe
    May 15, 2012 at 3:30 am | #1

    Which economic school correlates with boulimia and gluttony ? Keynesianism would seem to correpond somewhat to the Joseph school (seven fat years and seven lean years).

    Some more economic wake-up questions:
    -If we have run out of money by spending too much, where is the money coming from that we are borrowing?
    -If we are stealing from our grand-children, to who will the debts go when they pay them back?
    -If everyobdy had bought gold instead of paying social security withholding (T$4,5 in trust fund), what would the price of gold be?
    -What would happen if everybody did actually save for retirement (as conservatives advocate) by sticking dollar bills in a matress, let’s say 8% of their earnings?
    -How can we borrow from the future? Will there be less grain, apples, and steel?

  2. Rum
    May 15, 2012 at 5:29 pm | #2

    Non-austerity always comes down to borrowing money, in one way or the other, that may or may not be repaid in equivalent value in the future. As long as counter-parties think they will be repaid fairly, the game can continue. As soon as they lose that belief, it is game over.
    Go ahead and print money if you want. The problem is, nowadays everyone will notice you doing it. Then try to trade that for stuff that is valued by its current owners. Welcome to Zimbabwe.
    Money is just another trade good. Trades only go thru when both parties are willing to show up for the deal. Or not.
    I am not saying austerity is always the answer. But I will say it is the only option remaining when trust has evaporated.

    • May 16, 2012 at 12:53 am | #3

      It makes far more sense to lower taxes drastically, instead of keeping taxes the same level or even increasing them, while preaching austerity. Lower taxes mean more growth.

      • Webe
        May 16, 2012 at 1:52 am | #4

        Lower taxes on what? Taxes change the relative price of things. Obviously lowering taxes on dividends, interest, economic rent and capital gains for the “job & wealth creators” and increasing the relative burden of sales tax, state income taxes, and user fees for everyone else has caused an economic renaissance in the USA, uh, I mean, China.

      • May 16, 2012 at 3:53 am | #5

        Yes, you shouldn’t increase other taxes. Yes, you should be critical of claims made by plutocrats.

    • Webe
      May 16, 2012 at 1:48 am | #6

      In austerity, production of goods and services goes down (Greek economy has shrunk 20%), increasing the relative debt burden. Austerity does not lead to repayment, it leads to shifting assets to creditors (or was that the purpose of the loans to begin with: false conveyance, a felony (in America)), lower income, and bankruptcy. Do you think a girl that cannot hike up a mountain pass with a 70 lb back pack will do better by going anorexic before she begins? Look at Greece: austerity, unemployment, less income and revenue, shrinking economy. And no, I don’t believe borrowing more will help: The debt should have been written off two years ago.

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