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The Capital Order

How Economists Invented Austerity and Paved the Way to Fascism

A Financial Times Best Book of the Year
"A must-read, with key lessons for the future."—Thomas Piketty
A groundbreaking examination of austerity’s dark intellectual origins. 

For more than a century, governments facing financial crisis have resorted to the economic policies of austerity—cuts to wages, fiscal spending, and public benefits—as a path to solvency. While these policies have been successful in appeasing creditors, they’ve had devastating effects on social and economic welfare in countries all over the world. Today, as austerity remains a favored policy among troubled states, an important question remains: What if solvency was never really the goal? 

In The Capital Order, political economist Clara E. Mattei explores the intellectual origins of austerity to uncover its originating motives: the protection of capital—and indeed capitalism—in times of social upheaval from below. 

Mattei traces modern austerity to its origins in interwar Britain and Italy, revealing how the threat of working-class power in the years after World War I animated a set of top-down economic policies that elevated owners, smothered workers, and imposed a rigid economic hierarchy across their societies. Where these policies “succeeded,” relatively speaking, was in their enrichment of certain parties, including employers and foreign-trade interests, who accumulated power and capital at the expense of labor. Here, Mattei argues, is where the true value of austerity can be observed: its insulation of entrenched privilege and its elimination of all alternatives to capitalism. 

Drawing on newly uncovered archival material from Britain and Italy, much of it translated for the first time, The Capital Order offers a damning and essential new account of the rise of austerity—and of modern economics—at the levers of contemporary political power.

480 pages | 3 halftones, 8 line drawings, 3 tables | 6 x 9 | © 2022

Economics and Business: Economics--History, Economics--International and Comparative

History: European History, History of Ideas


"The Capital Order uses the historical record in Europe to argue that austerity—tightening the belt, cutting government programs—is less about budgets and debt and more about deliberately making the labor force feel insecure."

APM's Marketplace Morning Report

"Mattei reminds us that . . . austerity is a one-sided class war, conducted in numbers and defended by economists’ jargon.”

Aditya Chakrabortty | The Guardian

“Illuminating . . . Any reader of The Capital Order will be struck by the contemporary resonances.”

The New Statesman

"In our current moment, as policymakers are once again entertaining monetary tightening as a means to impose necessary hardship & discipline on working people, The Capital Order is a potent reminder of the cruel rationality of austerity."

Dissent Magazine

“[With The Capital Order], we can begin to see method in the madness: austerity is a vital bulwark in defense of the capitalist system.”

Business Recorder

“It’s often been pointed out that austerity just doesn’t achieve its stated aims of balancing the books and paying down public debt. [In Mattei’s] analysis the actual aim is not the stated one, it is to discipline the working population. Over the last century it would seem to have achieved that quite successfully.”

The National

“Shocking disparities underlie economist Clara Mattei’s topical study of austerity measures promoted over the past century. Focusing on 1920s liberal-democracy Britain and fascist Italy, she argues that the profitable application of austerity to these dissimilar nations licensed its use as a capitalist ‘tool of class control.”


“A serious economic history of the 1920s and its fiscal and credit policies, and you should not dismiss it.”

Tyler Cowen | Marginal Revolution

“Brilliantly provocative . . . powerfully argued. . . . With her history of the relationship between liberal economists and fascism, Mattei puts the skids under complacent champions of liberal democracy who today summon the fascist figure as a reassuring boogyman. . . . A round house critique of the role of liberal economics in general.”

Adam Tooze | Chartbook

"Through meticulously compiled archival material, Mattei explores austerity by studying economists in the 1920s from the birthplace of liberalism (Britain) and the birthplace of fascism (Italy) to draw a provocative conclusion about its nature: 'an anti-democratic reaction to threats from bottom-up social change.'”

Politics Today

“A powerful critique.”

Asiana Times

“She argues that forcing a recession or cutting social welfare is not really about budgets and debt. This so-called “economic pain” is inflicted deliberately to make the labour force feel insecure and to stop demanding better conditions.”

Irish Examiner

“A work with remarkable resonance for the moment we are living through. I found it impossible to put down.”

James K. Galbraith

“Clara Mattei shows how the supposedly apolitical science of economics has served, and continues to serve, as an ideology of class oppression. The chapters exploring the birth, in Britain and Italy in the 1920s, of what the author calls ‘the technocratic project’ of austerity, and its political and economic consequences, are particularly illuminating.”

Robert Skidelsky

“A decade after austerity tore British society apart, the UK government stands ready to do so again. Given that it didn’t work the first time around, one wonders why they want to try it again. This is where Mattei’s explanation illuminates brightly: if we think of austerity not as an economic policy, but as a form of capitalist crisis management for moments when the lower orders start to question the governing classes’ preferences, then its repeated dosage—despite its damages—makes much more sense.”

Mark Blyth

“Clara Mattei’s work is an important contribution to building a new economic narrative. At a time when inflation is up and governments feel inclined to once again ‘tighten their belts,’ this book is as relevant as ever.”

Mariana Mazzucato

“Austerity is not an innocent policy error, but a fallacy functional to dark interests. Mattei’s admirable new book exposes austerity’s hidden agenda.”

Yanis Varoufakis

“A fascinating history of the rise of austerity policies in post–World War I Europe and how it paved the way for fascism—along with many of the economic policies of today. A must-read, with key lessons for the future. Historical political economy at its best.”

Thomas Piketty

“There is a long history of efforts to separate the political from the economic domain. . . . One very impressive recent study, by Clara Mattei, argues persuasively that this dichotomy, typically taking the form of austerity programs, has been a major instrument of class war for a century, paving the way to fascism, which was indeed welcomed by Western elite opinion.”—Noam Chomsky 

Truth Out

A 2022 Best Book in Economics

Financial Times

Fall 2022 Book Recommendation (General Interest)

Sean Guynes

“[A] message for our time.”

Brazzil Magazine

Table of Contents


Part I: War and Crisis
1 The Great War and the Economy
2 “A Wholly New School of Thought”
3 The Struggle for Economic Democracy
4 The New Order

Part II: The Meaning of Austerity
5 International Technocrats and the Making of Austerity
6 Austerity, a British Story
7 Austerity, an Italian Story
8 Italian Austerity and Fascism through British Eyes
9 Austerity and Its “Successes”
10 Austerity Forever

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