Austerianism: An theory of economics that advocates slashing government spending and cutting deficits during a time of economic weakness or recession.
Austerianism was coined from “austerity” with a possible hint of “hysteria” and a linguistic wink to the Austrian School of economics, whose 19th-century founders—notably Carl Menger and Ludwig von Mises—were born in the Habsburg Empire. The Austrians’ theories about the subjective nature of economic value and diminishing marginal utility were further developed in the 20th century, notably by Friedrich Hayek, who, together with the Swedish economist Gunnar Myrdal, was awarded the 1974 Nobel Prize in economics. Austrian economics also holds that business cycles are “caused by distortion in interest rates due to the government's attempt to control money.” (Source: Investopedia.) Today, followers of the Austrian School are often associated with libertarian political philosophies.
Credit for coining Austeria and Austerian has been claimed by Rob Parenteau, who blogs about economics at Naked Capitalism and edits the monthly Richebächer Letter. (Kurt Richebächer was a member of the Austrian School.) Parenteau used Austeria in a June 10, 2010, interview with Business News Network (Canada). “I think they’ve renamed the Eurozone to Austeria now,” Parenteau quipped (at 3:17). He used Austeria and Austerian economics the following day in a Richebächer Letter article (link unavailable).
The New York Times columnist Paul Krugman (himself a Nobelist in economics—and an anti-Austrian who advocated strongly for a much larger economic stimulus than the Obama government delivered) began using Austerian in his blog, Conscience of a Liberal, in August 2010. In an August 3 post he imagined a dialogue between an Austerian and a Stimulist. More recently he’s called Austerianism “a failed doctrine.” On July 7, 2011, in a post titled “More Anti-Austerianism,” he cited a report about “four famous alleged cases of expansionary austerity”:
The expansionary austerity thing has, in short, been about as thoroughly refuted as one could imagine. Naturally, then, the Obama administration has taken to full-fledged embrace of the confidence fairy.
I found an earlier use of austerianism with a more microeconomic meaning, something close to plain old “thriftiness.” Shlomo Maital, a senior research fellow at Israel’s Technion Institute of Management, wrote in March 2008 about the resurgence of fixed-gear bicycles in cities from Dubai to San Francisco:
Fixed-gear 60’s bikes are part of what is known as the ‘austerian’ movement – austere is good, less is more, and do with cheap and simple rather than expensive, showy and conspicuous. Austerianism, in turn, is part of the new pro-environment green movement.