In his superb book, Mark Blyth asks a critical question about efforts to restore national economies in the wake of the global financial crisis of 2007 and 2008. How do we explain the global drive toward austerity in the face of historical and contemporary evidence of austerity’s repeated failures as an economic idea and policy solution? And how has this intellectually and empirically riddled economic idea persisted for so long as a solution for weak economies—despite centuries of evidence to the contrary?

Austerity provides an account—breezy at times, finely detailed at others—of the intellectual antecedents, historical development, and current applications of such a policy program. Blyth covers a remarkable swath of economic and political history to deliver a convincing account of the ways in which ideological convictions, political self-interest, and psychology intersect to keep the idea of expansionary austerity on the proverbial shelf as a neoliberal solution for generating growth during an economic morass. The author’s historical sweep is impressive. He ranges from discussions about the tethering of countries to the gold standard at the turn of the last century to accounts of the most recent adoption of austerity after a brief trial of Keynesian solutions in the aftermath of the global financial crisis. By writing the prehistory of contemporary austerity, he is able to shed new light on political, economic, and ideological forces that help to entrench austerity as an economic idea, even in light of its disastrous empirical track record over its long history.

At first blush, the book might seem more relevant today for the study of European than American politics, particularly as many European states remain addicted to austerity while its grip loosens in the United States. But I think Blyth raises two provocative arguments with important implications for students of American politics, particularly those interested in the relationship between democratic governance and economic stewardship.

First, Blyth appropriately notes the disjuncture between theories of central bank independence (CBI) and the history of monetary institutions, particularly the U.S. Federal Reserve (p. 157). CBI theories typically posit that politicians credibly commit to low and stable inflation by delegating control of monetary policy to independent, hawkish central bankers. Independent central banks, he argues, are critical to the logic of austerity: Defenders of austerity maintain that politicians are unlikely to pursue countercyclical fiscal policy because they know that any effort to juice the economy during a downturn would just be frustrated by tighter monetary policy.

Here is where theory and history diverge. Central banks have not historically been independent: “During the Keynesian era, central banks were almost everywhere dependent creatures” (p. 156). Moreover, Blyth reminds us, the Fed has a dual mandate from Congress to maximize both employment and price stability. His observations raise interesting questions about the origins of the Fed’s independence and the interdependence of fiscal and monetary authorities. If the Fed was born dependent, how did it accrue its autonomy and with what implications for the conduct of both monetary and fiscal policy over its history? These are questions ripe for investigation by students of American politics, given that the independence of fiscal and monetary authority is rarely questioned.

Second, Blyth questions whether enactment of the Troubled Asset Relief Program (TARP) in September of 2008 (otherwise known as the Wall Street bailout) was the right policy choice (p. 231). He suggests that bailing out the financial sector—to the benefit of Wall Street rather than Main Street—might not have been worth the costs that followed. Moreover, he points to the positive economic outcomes achieved by Iceland’s decision to let its biggest banks fail, compared to Ireland’s decision to bail them out (pp. 235–40). I think that many would question whether Iceland’s experience generalizes to the United States. And my sense is that there is more conditionality to Iceland’s economic success than meets the eye; after all, Iceland did not avoid austerity in the wake of its banks’ and currency’s collapse. (See, for example, Matt O’Brien, “The Miraculous Story of Iceland,” Washington Post, 17 June 2015).

Regardless of the details of the Icelandic example, Blyth’s discussion of TARP’s downsides raises a politically pertinent question for students of American politics. In the aftermath of the political blowback against the use of fiscal and monetary tools to save the financial system, there is certainly a new conventional wisdom that future bailouts of Wall Street will be politically impossible to enact. A Democratic Congress and president made a down payment toward such a future by clipping the emergency lending authority of the Fed in writing the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010. But financial bailouts are never popular. And yet, staring at financial apocalypse in September 2008, the parties collectively managed to save the banks (with little effort to address the accompanying housing foreclosure crisis). Why do bailouts seem at once inevitable and yet politically impossible? And why are so many seemingly sure that a future Congress will refuse to save the banking system? Blyth’s doubts about TARP raise these and other interesting questions about the political economy of future Keynesian responses to economic weakness in the United States.

As Mark Granovetter once advised, we can understand the contemporary state of systems only by interrogating their history (“Economic Institutions as Social Constructions: A Framework for Analysis,” Acta Sociologica 35 [1992]: 3–11). Blyth offers an invaluable contribution to our understanding of contemporary notions of expansionary austerity by looking backward to austerity’s roots and tracing its intellectual and empirical tracks. I might have wanted to learn more about the interplay of monetary and fiscal authorities in driving decisions to impose austerity as a solution in periods of economic decline. Blyth might also have considered, in more detail, variations in the political consequences of austerity. But these are minor quibbles compared to the contributions Blyth offers in his engaging and provocative book.