Part 1 of a series on monopoly power and labour.

Overview

We will use an MMT lens, but being by sumamrising two important works on labour power and moniopoly capital opower, one from Haryy Braveramn, who was analyzing the conditions of labour in the middel Twentieth century, and then a more modern treatment by Clara Mattei, whoio takes an historical olook at how economic austerity was carefulyl deisned, no accident and a ppolitical weapon.

Hopefully no MMT critique is ever needed, but there is one important over-riding theme for me, which is that when we have government we should be thinking of them as our government not the capitalist’s. Hence when government is controlled by the capitalists it is illegitimate.

Mostly such illegitimate government will serve the interests of the rich, and crush the poorest, the exact opposite of the proper purpose of a wise and just government, making them doubly illegitimate.

How to get a wise and just government?

You have to first have a chance to vote for wise and kind people, and then win the vote. But first you need the chance, a vote alone will not suffice, especially if your vote is reduced to a choice between two right-wingers.

Right Wing to avoid a lot of nonsense, I define anyone who is right-wing to be merely someone favouring support of capitalists preferentially over labour.

Left Wing is the opposite spectrum.

So ultra-right is someone who seeks to reduce labour to slavery. Left-wing seeks to peacefully) eliminate the existence of capitalists as a separate class distinct from workers, and have workers own the means of production (not government). Left-wing is thus mostly anti-communists (communism is government owns the means of production).

Commmunists who say government should not own the means of production are basically anarchists.

I’m neither for nor against any of these positions, except for right-wing, I am bitterly opposed to right-wing framing since it is manifest injustice. I think we can toa=erate governement (colelctive) ownership oif many things, if that serves public purpose, liek the water system and electricity grid, Internet, home housing and a few other Basic essentials. But not food. For food I want full market choice thank you very much, but that cna be from worker copoeratives, hence extremely left-wing

Just my definitions ok? If you don’t like them then too bad.

Detailed Chapter-by-Chapter Summary of The Capital Order by Clara E. Mattei

Clara E. Mattei’s The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism (University of Chicago Press, 2022) is a historical and theoretical analysis of how post–World War I austerity programs in Britain and Italy reestablished capitalist control. The book argues that austerity was not merely an economic necessity but a political technology to preserve the dominance of capital, disciplining labor and curbing revolutionary movements inspired by socialist and workers’ councils. Mattei frames austerity as the moral and economic “order” that sustains capitalism’s social hierarchy.

Chapter 1 | Introduction – The Concept of the Capital Order

Mattei introduces the core thesis: austerity policies are not neutral fiscal measures but political instruments designed to reconstruct society in the image of capital. She defines the capital order as the social arrangement that ensures the continued subordination of labor to capital accumulation. The chapter situates the argument historically—amid the economic and political aftermath of World War I, when revolutionary movements threatened to upend capitalist relations.

Key themes include:

• Capital as social relation: The system where profit and accumulation take precedence over collective wellbeing.
• Austerity’s ideological role: It moralizes discipline, hierarchy, and sacrifice.
• Postwar crisis: The collapse of wartime economic controls and rise of worker councils in Europe led elites to see austerity as a stabilizing tool.

Chapter 2 | Historical and Theoretical Foundations of the Capital Order

This chapter traces the intellectual roots of austerity to classical economics and its revival in early 20th-century policy. Mattei explores how economists reinterpreted public finance after the war to justify wage suppression, tax retrenchment, and reduced public spending. Such policies, she argues, aimed to shift the burden of reconstruction onto workers.

Mattei connects these developments to broader capitalist imperatives of restoring profitability following the disruptions of war. The British Treasury and Italian Ministry of Finance, guided by technocrats, began to promote fiscal prudence as a moral imperative, institutionalizing what she calls “economic reason of state.”

Chapter 3 | Mechanisms of Control – Maintaining the Capital Order

Here, Mattei identifies the three main mechanisms through which austerity enforces social discipline:

1. Fiscal austerity – balanced budgets, reduced welfare spending, and regressive taxes justified as necessary for recovery.
2. Monetary austerity – the restoration of gold standards and anti-inflationary policies that prioritized creditors and punished labor.
3. Industrial policy and wage discipline – wage cuts and labor law reforms designed to weaken unions and secure “industrial peace.”

These tools worked together to transform class relations and secure capital accumulation. The chapter contends that austerity restructures everyday life—embedding capitalist control not only in economic institutions but in social behavior, ideology, and morality.

Chapter 4 | The Existential Crisis of Capitalism and the Italian Case

Focusing on Italy, Mattei examines how the post–World War I revolutionary movement—particularly Antonio Gramsci’s Ordine Nuovo group and the 1920 factory occupations in Turin—posed an existential threat to capitalism. Worker councils embodied democratic control over production, inspiring alternatives to capitalist ownership.

The response of the Italian state, backed by industrialists and economists, was to implement austerity measures that dismantled these experiments. Mattei analyzes how the disciplining rhetoric of economists prepared the ground for Mussolini’s Fascist regime, which fused austerity with authoritarian nationalism. Fascism, in her interpretation, did not reject capitalism but perfected its logic of control.

Chapter 5 | Britain’s Fiscal and Monetary Retrenchment

Mattei parallels the Italian experience with developments in Britain, where postwar economic chaos led to the 1920s return to austerity under financial orthodoxy. Central to this was the 1925 restoration of the gold standard at prewar parity—a policy that valued financial stability over employment and wages.

Economists such as Ralph Hawtrey and Treasury officials like Austen Chamberlain portrayed austerity as prudent statesmanship. Mattei argues this reestablished capitalist hierarchy by disciplining labor unions after wartime mobilization. Unemployment and wage deflation were seen as acceptable costs in restoring “normalcy.”

The British case illustrates her larger point: austerity was a deliberate strategic choice to restore the capital order, not a neutral response to inflation or debt.

Chapter 6 | Challenges to the Capital Order

This chapter turns to social resistance and intellectual challenges that confronted austerity. Mattei analyses movements such as workers’ strikes, socialist parties, and anti-austerity intellectuals who questioned the moral superiority of capitalism. Case studies show how organized labor and socialist theorists proposed alternative frameworks emphasizing collective welfare and industrial democracy.

However, these efforts were systematically undermined by state violence, propaganda, and legal reforms reinforcing “responsible government.” Austerity thus acted as counterrevolutionary governance, shaping not just economics but political imagination.

Chapter 7 | Alternatives to the Capital Order – Imagining New Economic Systems

Mattei widens her focus to examine potential alternatives beyond capitalism. She surveys socialist, communist, anarchist, and cooperative models that emphasize collective ownership, participatory democracy, and freedom from profit imperatives.

Examples include:

• Workers’ cooperatives, such as Spain’s Mondragon model, as real-world alternatives to capital hierarchy.
• Participatory budgeting as a democratic tool for local governance.
• The degrowth movement, which rejects the obsession with economic expansion.

These alternatives demonstrate that economies can function on principles other than profit and capital discipline. Still, Mattei acknowledges the difficulties of escaping entrenched capitalist structures.

Chapter 8 | Conclusion – Austerity as a Political Project

Mattei concludes by reaffirming that austerity is the enduring moral backbone of capitalism. Its rhetoric of discipline and sacrifice sustains inequality while being presented as rational and necessary. She argues that by unmasking austerity’s ideological nature, societies can begin to envision post-capitalist modes of organization.

The book closes with a call for intellectual and political reconstruction—an appeal to challenge the economic orthodoxies that justify social suffering in the name of “sound finance.”

Central Message

Mattei’s historical reconstruction of Britain and Italy between 1918 and 1925 reveals how economists became political actors shaping class power. Austerity was not a mistake; it was a strategy to preserve the capital order. Understanding this mechanism, she argues, is essential to dismantling its ongoing grip in contemporary neoliberalism.

If you’d like, I can next create a timeline or concept map summarizing how austerity evolves from postwar crisis management to present-day economic orthodoxy — would you like that? ^12345678910