Searching for “Solutions” to Crisis: A Critique of Urban Austerity and Keynesianism

Abstract

Based on reflections on how economic crises under capitalism have been typically “solved”, particularly by examining processes of creative destruction and spatial fixes, this paper argues for the need to rethink the duality between austerity, and Keynesian crisis management, given the nature of the current economic crisis. Austerity is a key policy instrument of neoliberalism. Keynesianism is regarded as neoliberalism's antithesis. Conventionally understood, continued austerity would mean more post-Fordist and neoliberal geographies, while a Keynesian approach would mean more demand management. This paper argues that such a conclusion is over-simplistic, indeed incorrect. Crisis management inspired by Keynes is less concerned with the destructive parts of crises and seldom challenges the power of capital. Therefore, Keynesian crisis management risks reproducing neoliberal spaces and neoliberal urban and regional policies. This paper questions whether Keynesian crisis management — i.e. boosting aggregate demand during slumps — is a “solution” to the current crisis. The paper questions Keynesianism in its belief, for example, that climate change can be stopped within a framework that still perpetuates, and advocates for, compound economic growth. The paper concludes by arguing for the need to see beyond Keynesianism, and explores what a Marxist approach to spatial fix and creative destruction might mean.