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Economic Culture in the Public Sphere
Before the election of 1932 [...] there was a majority in the Riksdag consisting of conservatives, liberals, and members of the farmer party, convinced that the budget should be balanced according to the traditional method and that for this reason the plans of the labor party for large public works, financed by borrowing, should be defeated. [...] The labor party instead wanted an expansion of public capital investments, in the hope or expectation of creating a substitute for stagnating private enterprise.
Ernst Wigforss, Sweden's Social Democratic Minister of Finance, 1938.
I'm convinced that we need at the national level, in many of our countries, some sort of grand coalition. I would have never been able in Italy to have a very thorough pension reform, the introduction of property taxes and the big steps against tax evasion if I didn't have at the same time the support of the right and of the left.
Mario Monti, former Italian Prime Minister, 2013.
The dominance of budgetary austerity, the programmatic ambiguity and electoral weakness of left parties, the dubiously democratic processes by which widely unpopular reforms have been imposed, and voters' growing attraction to extreme parties have been among the more striking features of European politics since the financial crisis of 2007-2008. In some ways, Europe's present situation is eerily similar to the crisis years of the interwar period. With the euro now substituting for the gold standard, it would seem that Karl Polanyi's (1944 [2001]) unstable world of the double movement, in which national politics sits uncomfortably at the crux of a deepening tension between a liberal-utopian self-regulating international market order and protection-seeking human societies, is back.
And yet, of course, the institutional landscape that inspired Polanyi's analysis is not the same. Western Europe has recently emerged from neither a Great War nor dramatic episodes of runaway inflation; gold standard capitalism was not the deeply financialized capitalism of the present.1The financial architecture formed by the International Monetary Fund (imf) and other international financial institutions (ifis), among them the European Union's (eu) main financial agencies--ecofin, the Eurogroup, and the European Central Bank (ecb)--is also distinct.2Meanwhile, thanks to Europe's singularly aggressive liberalization of...