Austerity v. Keynesianism — A Disputation from the Middle Ages?

“[Discussions between] central banks have begun to resemble [debates between] medieval philosophical faculties, with discussions addressing the issues underlying policy decisions, rather than just the policies themselves. In the ECB, for example, a debate is underway to determine under which conditions deriving from fiscal orthodoxy might be stabilizing in the long term. How that debate is resolved could lead to a new kind of international cooperation….

“But central banks’ new role as supreme arbiters of policy truth is fraught with hazard. Given that the solutions that emerge from their disputations and analyses will be the product of technocratic – not democratic – processes, they are likely to trigger populist backlashes.”

Source: Harold James, Professor of History and International Affairs, Princeton, in Tages-Anzeiger, Switzerland. October 13

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One response to “Austerity v. Keynesianism — A Disputation from the Middle Ages?

  1. ‘President Harry S Truman famously begged for a one-handed economist. He was tired of having his advisors always argue “on the one hand” and “on the other hand.” These days, there is no shortage of one-handed economists in Europe. Indeed, a veritable war of the economists is raging over the choice between austerity and deficits in Europe. Both sides — the Austerians and the Deficitarians — promote their recipes as the one and only way out of the crisis (and back to growth).
    The intellectual impasse is easily exploited politically. All over Europe, the political left and the unions have united under the banner of the Deficitarians, while parties on the right have fallen for the Austerians’.
    Source: Marc De Vos. The Globalist. March 20, 2026

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