John Milios & George Economakis
Austerity constitutes the cornerstone of neoliberal policies. On the surface, itworks as a strategy of reducing entrepreneurial cost. Austerity reduces labour costs ofthe private sector, increases profit per (labour) unit cost and thereon boosts the profitrate. It is complemented by economy in the use of “material capital” (alas, anotherdemand curtailing strategy!) and by institutional changes that on the one handenhance capital mobility and competition and on the other strengthen the power ofmanagers in the enterprise and share- and bondholders in society. As regards fiscalconsolidation, austerity gives priority to budget cuts over public revenue, reducingtaxes on capital and high incomes, and downsizing the welfare state.