Strategic Management (Jan 2016)
Savings, but not as a strategy
Abstract
Our starting point is the diagnosis that the instrumentation of savings (austerity) in the current economic and political constellation is the dominant form of the involvement of different countries in global flows. In this sense of the word, savings refer to a certain context determined by deflation, which is realized through a reduction in rents, public expenditures. Such a type of savings is promoted in order to boost competitiveness and establish stability. Consequently, the center of the economic policy today is not the fiscal stimulants but rather on the savings in the sense described. Savings cannot be understood only as instrument of the ruling economic policy, but it is obvious that it also represents a certain ideological orientation that conceptualizes the way to economize on. Thus, savings in this conceptual-ideological sense is at least characterized by: a) a view of the position of the state in relation to economic flows, b) the treatment of demand. The paper criticizes reliance on savings as a policy that manages both stabilization and channels integration in globalization processes. First, we consider the promotion of savings as a guiding light for the economic policy to be hiding a logical error, namely, the replacement of a part for the whole. Because there is no doubt that in a thematized meaning savings are a rational economic instrument, but only in certain strategic frameworks, as a subordinated segment dosed economic rationalization. Therefore, savings cannot take the place of the economic strategy. Second, savings address not ultimate causes of a crisis but rather and only certain forms of manifestation, i.e. only symptoms. Third, savings as a strategy do not contribute to the overcoming of asymmetric processes of globalization, just as it does not contribute to convergence processes, either, i.e. leaves peripheral countries in peripheral trajectories. Fourth, in the ideological sense, savings suggest an image of the state which per se is a burden for economizing, i.e. the government expenditures are assumed to automatically squeeze out private investments. Our claim is supported by empirical data. Fifth, expansive savings with a focus on short-term fiscal consolidation has a contraction effect compared to aggregate demand. Pursuant to that, it does not create conditions for the dynamization of investments and the nominal GDP. Only the criticism of savings as a strategy can a more dynamic growth of peripheral countries be planned.
