Published on openDemocracy Economy, by William Davies, November 3, 2010.
Will Hutton’s latest book on British political economy is uncannily of its time. In arguing that ‘fairness’ should be the measure of all political and economic relations, writes William Davies, he has performed a crucial service in erecting some principles by which the ‘fairness’ of coalition policies might be judged. (Will Hutton, Them and Us: Changing Britain – Why We Need a Fair Society, Littlebrown, £20).
Every orthodox economics education begins with a lie. This is that, in the vernacular of neo-classical economics, we can and must split questions of ‘equity’ from those of ‘efficiency’. To put this another way, economics begins by ignoring moral philosophy, arguing that it is still possible to analyse, model and criticise social and economic relations without resorting to the language of values or justice.
There are various responses to the Lie. The brighter and cockier members of the classroom gobble it up, internalise its implications and run off to make vast amounts of money in financial services. Let’s, for the sake of argument, call them ‘Them’. The more thoughtful and impassioned ones taste it, spit it out in disgust, and go on to write books like Them and Us. Let’s call them ‘Us’.
Will Hutton’s new book is angry, unashamedly moralistic and demanding in its policy implications. Yet again he has produced a book that is uncannily of its time. It is also his first book to address directly the UK’s domestic political economy since his 1995 landmark The State We’re In, thereby creating a neat symmetry of works either side of the New Labour regime … //
… In among the dozens of intellectual traditions and sources cited in Them and Us, it struck me that there is one philosophical origin that Hutton does not acknowledge, yet which he is curiously close to – 1930s Vienna. He would no doubt be proud to be associated with the work of Schumpeter. And given the book’s running theme around ‘open-access societies’, one imagines that he would be equally happy to carry the flame of Karl Popper, author of The Open Society and Its Enemies.
But there is a third Viennese comparison, that would no doubt cause Hutton’s Keynesian stomach to turn: Friedrich Von Hayek. It was Hayek, after all, who wanted to restore the Victorian alliance of capitalism and liberalism. It was Hayek who argued that an aggressive regime of competition policy could achieve this. And it was Hayek who promoted justified inequality in society as the ethical alternative to bland egalitarianism and/or bureaucratic oppression. Replace Hayek’s loathed over-bearing planners with Hutton’s loathed over-bearing bankers, and you have a very similar project: the resuscitation of liberalism via a reformed market economy.
The common historical thread would be the postwar design of the German ‘social market’ economy, which combined free market principles of competition and tight money supply with co-operative industrial relations. Yet the question still has to be asked – is Will Hutton a neo-liberal, in the original, moralised meaning of the term?
When he wrote this book, Hutton cannot have known that the word ‘fairness’ would, in the mouths of Britain’s coalition government, attain the same anti-logic of the words ‘I’m like whatever’ in the mouth of a stroppy teenager. It certainly isn’t his fault. If anything, Them and Us performs a crucial service in erecting some principles by which the ‘fairness’ of coalition policies might be judged. Let’s hope David Cameron, George Osborne and Nick Clegg read it. Whether any of the millionaire CEOs, hedge fund managers and the rest of ‘Them’ will read it, who knows? It would be a shame if lines such as ‘bankers are exceptionally greedy with over-inflated opinions of their talents pegged to an exaggerated sense of their importance in the economic scheme of things’ were wasted only on ‘Us’. Most importantly, the book should be read by anyone about to step into an economics classroom for the first time, so that they are never duped into believing the guiding methodological Lie that got us into our current predicament in the first place. (full long text).