What is austerity?

There is nothing new about austerity, an idea and set of policies that have come to define government approaches to public and social policies over the past decade. Austerity is first a descriptor for an ‘essential’ but temporary adjustment in welfare spending, and second, more importantly, a political project aimed at transforming the welfare state and realizing ambitions with much longer roots. Twenty-first century austerity – or neo-austerity - represents the latest iteration of the ongoing struggle between politics and markets. Austerity is also a slippery idea, reflecting and shaping approaches to the economy, public finance and public services so that welfare states no longer appear tenable. Austerity is also about power and how it is wielded by powerful individuals, national and international institutions and governments. Thus, while it is often portrayed as simply describing spending cuts, it is far more complex and impactful in reality. Much of the debate about austerity therefore reflects disagreement about what it is, how the concept (or conceptions) of austerity can be defined and how it can then be identified, measured, compared and evaluated. This chapter explores these issues and presents the argument that austerity has delegitimised the welfare state and undermined its positive economic effects and will leave societal scars that will last even if public spending commitments are restored.