On “Spiked” (a must-read on line magazine), Brendan O’Neill has written a powerful and most courageous article on the word “austerity” and how it creates confusion (for an egregious example, see Mark Blyth’s book on the subject).
O’Neill points out an “irony” in the contemporary anti-“austeritarian” rants:

the observers rashly describing a few Tory cuts as ‘austerity’ are the ones who really want to impose austerity. Real austerity. In fact, before they developed their newfound emotional attachment to describing everything they don’t like as ‘austerity’, they were openly calling for austerity. George Monbiot is one of the Guardian’s chief complainers about Tory austerity — the same George Monbiot who in 2006 proudly described environmentalism as a ‘campaign not for abundance but for austerity’ and who inspired the radical group Riot 4 Austerity.

Indeed, austerity once was a word that belonged to the vocabulary of the left, with positive undertones. “Austerity” was a flag always waved with pride by Enrico Berlinguer, the Secretary of the Italian Communist Party in the 1970s. Confronted with the “austerity” to which Italian consumption was forced by the oil crisis, Berlinguer argued it could actually be the occasion for a palingenesis. For Berlinguer, the oil crisis forced the West to “shelve the delusion that we can preserve a development model based on a fabricated expansion of individual consumption, which is a source of waste, parasitism, privilege, resource depletion, and financial disarray” (this is from a 1977 speech). So, austerity was good insofar as it was a portent of end of a phase in which people consumed too much (as they were brainwashed by advertising etc.).

Chris Trotter, a former editor of the “New Zealand Political Review”, has an interesting piece in which he, like O’Neill, remembers that the word “austerity” experienced a shift in its meaning. In fact, he gets close to reclaiming the word “austerity” for the left:

The original Age of Austerity was a time of enforced social equality, Osborne’s austerity was an exercise in looking after the interests of the well-to-do at the expense of the poor. Unlike Labour’s post-war Britain, market forces were in no way restrained and all the advantages of wealth were taken by those fortunate enough to possess them.

O’Neill maintains that the word “austerity” came to be used by the Left as a scapegoat for any policy that threatens public spending because they equate, almost instinctively, a shrinking public sector with shrinking opportunities for the common people:

Left-wing observers’ rage against ‘austerity’ is not a reflection of anything happening in the real world. Rather, it reveals their weddedness to the state, their belief that ‘ordinary people’ could not survive without the public sector. In recent years, as its faith in working men and women waned, and eventually gave way to open contempt for these obese, anti-EU sections of society, the left has come to see the state as the key force for progress. It views the public sector not only as the provider of resources for the poor, but as a provider of therapy and health advice, parenting advice, racial-awareness lessons for employees and school kids alike. The state is seen as the solution to every economic and social ill. So any suggestion that the state and its army of employees should be cut back, or even rearranged, is met with angst, and concern about how the little people will cope without the monetary benefits and moral advice of the authorities. It isn’t ‘austerity’ the left is worried about (since there is none); it’s anything that chips away at the Byzantine modern state which they view as the saviour of society.

But Trotter argues somewhat differently. He appreciated the sobering effect of reigning in the market. The idea (very much like Berlinguer’s) is that social equality will go hand in hand with parsimonious living standards: better equal than plentiful. Nowadays, talking about austerity, and Greece in particular, left wing opinion makers are advocating many things: but certainly not parsimony.