Mendoza's Scriptonite Daily blog posts were collated, revised and expanded to form her first and so far only book, with the simple title 'Austerity' and the rather overlong and clunky subtitle 'The Demolition of the Welfare State and the Rise of the Zombie Economy'.
In the age of COVID and Brexit, it's a bit of an odd experience to return to a polemic criticising the austerity policies of the Cameron government. I had vague recollections of reading the blog versions of some of the chapters, and found myself in a sort of dialogue with my younger, only-just-starting-to-be-politically-engaged self.
The book is divided into three parts: the first two ('The Demolition' and 'Austerity and Democracy') are Mendoza's; part three ('10 Economic Myths') was written by two other authors and was added as extra material to this edition. This third part is only twenty pages and effectively debunks some economics myths which might be made of straw.
Mendoza is strongest where she is criticising a specific policy, describing the harm it is causing - for example the bedroom tax, benefits cuts, and Michael Gove's education reforms. The best chapters are therefore in the first half of the book.
The book's origin as a series of blog posts hampers the flow between chapters. Despite Mendoza's attempt to add a frame narrative, there is no real sense of a narrative building across the chapters: they work as standalone pandemics about certain subjects, but are not linked very convincingly into a wider arc. I felt very little impetus to read more than one chapter at a time.
What's more, some of the chapters cover quite a range of topics, but only cursorily. For example, in Chapter 10, 'Outsourcing the justice system', Mendoza gives two pages on the growth of G4S, 2 pages of G4S failures, 3 pages about how awful the American justice system is, and 2 pages on Legal Aid cuts. These are all important topics, and none of them are covered adequately. Without the added material, the book comes to less than 200 pages: there was plenty of room for further expansion.
The frame narrative is the 'Rise of the Zombie Economy' part of the overlong subtitle. This is where the book starts to come apart, degenerating towards incoherence and conspiracism. It contains by far the worst parts of the book.
The story begins with the Bretton Woods conference in 1944, where the post-war economic order was established, and organisations such as the IMF and World Bank were founded: this 'set the roadmap for domestic and international economic policy to this day... they have overseen the transfer of power from the State to private institutions and corporations. This is the endgame of the neoliberal project - whether the key players know and intend it or not.'
It was somewhat surprising to encounter Bretton Woods presented as the beginning of Neoliberalism; most leftwing narratives date it to the late 70s with the elections of Thatcher and Reagan and the increasing influence of Milton Friedman. Neoliberalism is an imprecise and not entirely useful term, since you can stretch it to encompass quite a wide range of views; hence it becoming ubiquitous and almost meaningless in some online discourse these days.
Despite dedicating Chapter 2 to explaining the 'Zombie Economy', Mendoza never really makes clear what it is, only using vague comparisons to a 'real economy'.
It is 'a night-of-the-living dead economy that consumes value and defecates debt'.
So the Zombie Economy is about destroying value and creating debt, got it.
'The Zombie Economy exists to overcome the barriers to capital growth. It creates financial instruments that increase the paper value of an asset by financialising it.'
Ah, so the Zombie Economy is about using debt and finance to increase value, got it.
'The purpose of... the Zombie Economy is for creditors, investment banks and investors to make maximum profits from lending... The purpose is to move people away from making money by producing things, towards making money from money.'
OK, I think I get it: the Zombie Economy is about restructuring the economy away from physical industries such as manufacturing towards the financial services industry.
'It's priority is rather to transfer public spending from the real economy, where things are made and people are supported, to the Zombie Economy, where profits are made and people are abandoned.'
What? Are you saying that profits are not made in the 'real economy'? What does this even mean?
Chapter 2 begins with a section titled 'Understanding Value', where Mendoza explains that value is:
'A Good Idea + Skill + Usefulness = Added Value'
That is certainly an idea of value.
Mendoza does not explain the difference between 'Value in use' and 'Value in exchange': utility versus price. Mendoza does not talk about the price mechanism or of "value being in the eye of the beholder".
Indeed, her presentation of the Zombie Economy seems to rest on the belief that 'Value in use' is the correct, good, proper, real, value, the one used in her so-called real economy, whereas 'Value in exchange' is the evil, false value used in the 'Zombie Economy'.
After giving her definition of value, Mendoza then complains that 'the problem is, this has ceased to be the way our economy has actually worked for some considerable time (if it ever was)… The way most wealth is accumulated today is not based on this simple premise of adding value by creating something useful and being rewarded for that contribution.' Sounds like there might be something missing from this analysis.
There are many things missing from her analysis.
I expected the topic of 'Zombie Banks' to come up at some point in a book about a 'Zombie Economy'. Nope. I would expect a book about Austerity to talk about the international bond market and bond yields. Nope. The famous, and famously debunked, paper 'Growth in a Time of Debt' gets a brief mention in explaining the turn towards austerity, but there is no real attempt to understand the motives behind those implementing austerity: they may as well be cartoon villains.
In her overall conclusion, Mendoza returns to her frame narrative to talk about 'The endgame of Austerity':
'The inevitable endgame of neoliberalism is corporate fascism, and the de-civilisation of our world. The only way out is to abandon capitalism in all its forms... French poet Charles Baudelaire once wrote 'the devil's finest trick is to persuade you that he does not exist.' This is the trick pulled by the neoliberal project. Convince billions of people that there is no plan'
We've reached the part of the book about sinister plots to take over the world and destroy civilisation.
And the only way out is to reject all forms of capitalism - unfortunately she does not explain this solution in detail, as 'the purpose of this book is not to present solutions in detail.' She teases a future book that will explore this, but it hasn't come out yet.
There are good things in this book - the polemics against specific policies are well done - but the whole is ultimately frustrating and unsatisfying. There are better books out there which feel like complete, properly structured books, with a proper narrative and consistent argument.
'Stolen: How to Save the World from Financialization' by Grace Blakeley covers what I think Mendoza was trying to say with her 'Zombie Economy' stuff, but with coherence and an actual narrative arc.
'Austerity: The History of a Dangerous Idea' by Mark Blyth gives a thorough rundown of the theoretical underpinnings of austerity and the effects it has had when variously implemented across the world.
