Does austerity promote economic growth? In his classic Fable of the Bees: or, Private Vices, Publick Benefits (1724), Bernard Mandeville, the Dutch-born British philosopher and satirist, described - in verse - a prosperous society (of bees) that suddenly chose to make a virtue of austerity, dropping all excess expenditure and extravagant consumption. What then happened? The Price of Land and Houses falls;Mirac’lous Palaces, whose Walls,Like those of Thebes, were rais’d by PlayAre to be let; …The building Trade is quite destroy’dArtificers are not employ’d; …Those, that remain’d, grown temp’rate striveNot how to spend, but how to live … That sounds a lot like what many advanced countries have been going through, after financial-crisis-induced austerity plans were launched, doesn’t it? Is Mandeville a genuine prophet for our times? Read more

Does austerity promote economic growth?

In his classic Fable of the Bees: or, Private Vices, Publick Benefits (1724), Bernard Mandeville, the Dutch-born British philosopher and satirist, described - in verse - a prosperous society (of bees) that suddenly chose to make a virtue of austerity, dropping all excess expenditure and extravagant consumption. What then happened?

The Price of Land and Houses falls;

Mirac’lous Palaces, whose Walls,

Like those of Thebes, were rais’d by Play

Are to be let; …

The building Trade is quite destroy’d

Artificers are not employ’d; …

Those, that remain’d, grown temp’rate strive

Not how to spend, but how to live …

That sounds a lot like what many advanced countries have been going through, after financial-crisis-induced austerity plans were launched, doesn’t it? Is Mandeville a genuine prophet for our times?

Read more

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