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If ever proof was required that the theory is selected to suit the politics, one need only consider the reaction politicians have to economists who dare suggest this moralistic framework is unnecessary; or that there might be solutions that don't involve widespread human suffering.

the vicious cycle of austerity. As a larger percentage of government spending has to be redirected to paying rising interest rates, budgets are slashed, workers fired, the economy shrinks, and so does the tax base, further reducing government revenues and further increasing the danger of default.

In the US, it began with the Emergency Economic Stabilisation Act, enacted on 8th October 2008. On the basis of this, the Troubled Asset Relief Programme was created. In the UK, there were two significant bank rescue packages in 2008 and 2009, totalling at least £550 billion. This did not represent a sudden mass conversion to Keynesianism among the world’s elites, but a panicked attempt to prevent a complete global meltdown. It is easy to forget in retrospect just how much panic there was about the coming disaster.

In April 2009, at the Conservative Party conference, the Tory leader David Cameron announced an ‘age of austerity’. He suggested: ‘Over the next few years, we will have to take some incredibly tough decisions on taxation, spending and borrowing – things that really affect people’s lives.’[3] Without being too specific, he tried to link the drive for ‘significant savings’ to a democratic desire for more transparent, honest government.

What Elliott reported as brute fact was, I would maintain, inescapably an ideological proposition. But the power of it as ideology was the fact that it appeared perfectly natural and inevitable.

what a senior civil servant thinks is in ‘the national interest’ is unlikely to be identical to what his driver or valet thinks is in ‘the national interest’. Thankfully, O’Donnell explained his motives very bluntly: a minority government ‘would not have had the strength in parliament to be able to pass the tough measures that would be needed to get us through this problem’.[10] This view was absolutely consistent with civil service orthodoxy – the unelected leaders of the British state, and this was particularly so of O’Donnell, are fully assimilated to the neoliberal orthodoxy that colonised that state during the 1980s.[11] So, for the civil service leadership, ‘the national interest’ meant a strong executive implementing austerity.

Far from austerity encouraging business to invest and generate a windfall of growth and good times, companies are sitting on a large quantity of cash – the proper collective noun is ‘shitload’[17] – which they refuse to invest due to there being a dearth of good profit-making opportunities. From this vantage point, it looks as though austerity in the narrow sense of immediate fiscal retrenchment is a losing bet.

However, as I’ve said, it is far more to the point, and far more interesting, to understand the rational core of this ideology, because that is what makes it resonant

The Treasury is stacked with eager experts, all more or less trained in the same neoclassical economic theory. It is part of a state dominated by a civil service elite that shares the broad precepts of this thinking. It is linked with a series of institutions, from academia to the City, which reinforce it. The Rogoff/Reinhart debacle does not significantly alter the balance of ideological forces within British elites. Short of a more severe crisis, a profound social disturbance, or a more concerted challenge from the political left and labour movement than has been seen since the poll tax, the most likely result is that the Treasury will prudently adapt its course in response to fluctuating events while remaining within the same broad paradigm.

The dominant ideology, the ideology of the ruling class, is not a malign conspiracy, but nor is it stupidity. The ruling class lives this ideology, because it resonates with its interests, its experience, and its accumulated expertise.