Woolfson - The Contradictions of Austerity

The Contradictions of Austerity

The great financial crisis of 2008 and the ensuing global economic and financial turmoil have launched a search for models for recovery. The advocates of austerity present the Baltic states as countries that, through discipline and sacrifice, showed the way out of crisis. They have proposed the Baltic model of radical public sector cuts, wage reductions, labor market reforms and reductions in living standards for other troubled eurozone countries to emulate. Yet, the reality of the Baltic austerity fix has been neither fully accepted by its peoples, nor is it fully a success. This book explains why and what are the real social and economic costs of the Baltic austerity model.

We examine each of the Baltic states by connecting national-level studies within a European and global political economy, thereby delivering comparative breadth that supersedes localized understandings of the crisis. Thus, for each of the three Baltic states, individual chapters explore the different economic and social dimensions of neoliberal post-communism, and the subsequent wider global economic and financial crisis in which these new open-market economies have found themselves especially vulnerable. The austerity model adopted by Baltic national governments in response to the crisis reveals the profound vulnerabilities created by their unwavering commitment to free market solutions, not least in terms of the significant exit of their labor forces.

Today recovery appears to be on the horizon. We look beyond basic financial metrics claiming a success story for the Baltic austerity model to reveal the damaging economic and social consequences, first of neoliberal policies adopted during transition, and latterly of austerity measures based on internal devaluation. Combined, these policies undermine the possibility of longer-term recovery, and even social and economic sustainability, not to mention successful integration in the now-faltering wider European project.

Jeffrey Sommers is Associate Professor of Political Economy and Public Policy in Global Studies and Africology, and Senior Fellow of the Institute of World Affairs at the University of WisconsinMilwaukee.

Charles Woolfson is Professor of Labor Studies at the Institute for Research on Migration, Ethnicity, and Society (REMESO), Linkping University, Sweden.

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2 Work and Employment in Europe

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3 Trans-European Telecommunication Networks

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4 European Union European Industrial Relations?

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5 Governance, Industry and Labour Markets in Britain and France

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6 Labour Market Efficiency in the European Union

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7 The Enlargement of the European Union

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9 Fiscal Federalism in the European Union

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11 Integration and Transition in Europe

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12 SMEs and European Integration

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13 Fiscal Federalism and European Economic Integration

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14 Financial Markets in Central and Eastern Europe

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16 The Impact of European Integration on Regional Structural Change and Cohesion

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17 Macroeconomic Policy in the European Monetary Union

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18 Economic Policy Proposals for Germany and Europe

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21 Beyond Market Access for Economic Development

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23 Economic Governance in the EU

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24 Financial Integration in the European Union

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25 Europe and the Mediterranean Economy

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26 The Political Economy of the European Social Model

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27 Gender and the European Labour Market

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28 The Economic Crisis and Governance in the European Union

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29 Competitiveness in the European Economy

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30 The Contradictions of Austerity

The socio-economic costs of the neoliberal Baltic model

Edited by Jeffrey Sommers and Charles Woolfson

The Contradictions of Austerity

The socio-economic costs of the neoliberal Baltic model

Edited by Jeffrey Sommers and Charles Woolfson

First published 2014

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2014 selection and editorial material, Jeffrey Sommers and Charles Woolfson; individual chapters, the contributors

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