Austerity Flashcards
How did austerity manifest at different scales?
- A global financial crisis which emerged in banks
- National debt created by bailouts
- Local consequences through debt downloaded onto council spending and household debt
What caused, in the simplest sense, the 2008 crisis?
Household debt rising with substantial optimism in markets
What is moral risk?
- When private debt and finance becomes public finance.
- The state always intervenes in markets to ensure that there is not a massive catastrophe
What was the philosophy behind the coalition government’s response to the financial crisis?
Individualism to “chip in to help out”
Some had to chip in much more than others
When was welfare reformed most extensively after the financial crash?
2012 welfare act
How did the 2012 welfare act introduce more discipline?
More conditions, stigmatised benefits and created a new poor law to try and “fix” people in a less clear way to the workhouse
Why did austerity hit urban and peripheral areas more?
- More poor people to begin with, and larger populations
- Less revenue from council tax
- Higher pre-existing expenditure
(opposite for the home counties
When was universal credit introduced?
2014
Why is universal credit dangerous?
It has precarity built in before you get the first cheque
Because it assesses incomes with one single, one-time metric each month which might not be representative of actual average incomes…
What local safety nets were cut during austerity? What’s the issue?
- Sure start centres
- Basic services
- Youth centres
GENERATIONAL EFFECTS
How did the government add insult to injury for local government cuts?
Local governments could not draw on emergency funds because no funds were ring-fenced after 2015
How did austerity have an aesthetic affect?
More betting shops etc
Discourages more affluent people from moving to areas worst effected
What is the implication of the state becoming a debt collector for the first time during austerity?
Uni Credit can be deducted from households because of gov debt
Were the effects of austerity all social and economic?
- No, also legal reforms
- Legal aid lost, so cannot contest state on matters so easily
What is the issue with austerity when it comes to asset based approaches?
Being poor is expensive, so cannot get assets
What is a good way of summarising the political economy of austerity?
- Built on debt downloaded to local areas
- Policies justified by debt
- “Solved” by increasing debt through loans
If you were poor going into austerity, you emerged poorer
Are the impacts of austerity cumulative?
No, the impacts intersect to amplify and aggravate impacts
What is the other dark side of austerity?
The wealth defence industry
Did taxes increase during austerity as one would anticipate?
No, actually decreased prior to and during austerity (2007-2013)
HM Treasury 2013
Is tax avoidance illegal?
No, it is technically legal, just immoral
Tax evasion (deliberately and knowingly failing to declare income) is illegal
How much of multinational profit is shifted to tax havens each year?
40% - amounts to 28% of UK corporation tax revenue
Torslov et al 2020
What are the implications of tax avoidance?
There is a lot of money just floating around (up to 1/3 of total capital in the world)
(Varoufakis 2021)
Who has highlighted the importance of higher levels of poverty in urban areas when concerning austerity?
Hastings et al 2017
How does Lefebvre view public space?
- As a space for leisure, for use value instead of exchange value
- Also about how public space is always political space
- Austerity as a means of extracting exchange value from spaces which used to be private
Zieleniec 2018
