04.07.1996

‘Huttonomics’ and the ‘Blair Revolution’

Richard James reviews The state we’re in by W Hutton (1995, pp352) and The Blair revolution - can New Labour deliver? by P Mandelson and R Liddle (1996, pp274)

Will Hutton, editor of The Observer and author of The state we’re in, remains in the headlines. Recent hour-long programmes on Channel Four have given him an even wider audience.

The Weekly Worker carried an article (June 6) examining ‘stakeholding’ in the context of the wider movement of ideas in the communitarianism of Etzioni and the sweeping generalisations of Francis Fukuyama. This response attempts to look at Hutton’s arguments more closely in terms of their impact and significance. Huttonomics are after all more a phenomenon than a significant body of ideas.

Hutton’s book begins with a suggestive title, The state we’re in. This is no accident. Hutton’s project is an advanced liberalism, arguing that economic decline can only be corrected by political reform. His political radicalism stands in marked contrast to the conservatism of New Labour.

This can be illustrated by the contents of the authorised manual of New Labour politics, written by Peter Mandelson and Roger Liddle, The Blair revolution. Despite the radical tone of the title, a swift look at the contents reveals a singular lack of genuine radicalism.

The Hutton book argues a case for a political response to economic decline. It is summed up in the concluding chapters as ‘The republican opportunity’. By way of a contrast Mandelson and Liddle respond to ‘Divided Britain’ with ‘A reunited kingdom’ (sic). Hutton is an example of bourgeois radicalism that stands beyond the acceptable limits of New Labour politics.

It is not only the ideologues of New Labour that are outflanked by Hutton’s brand of reform. The writers of The Economist, the weekly journal of liberal capitalist opinion, are equally perplexed. “It is all very odd. Mr Hutton did not invent the stakeholder idea: it goes way back. He did not even rediscover it: the idea had never faded away. Oddest of all, given Mr Hutton’s supposedly inspirational role, he and Mr Blair disagree about nearly everything” (The Economist April 6). The key difference for The Economist is that Mr Blair “has avoided suggesting he wants to reform the basic workings of the economy. But that is precisely what Mr Hutton advocates.” Will Hutton is then a dangerous radical, a political and economic reformer. And this is what is interesting. He is read by thousands, not because of his precise conclusions, but because he diagnoses the problems of modern capitalism and proposes an alternative, any alternative.

In this regard Will Hutton is a modern Henry George, whose book Progress and Poverty sold hundreds of thousands of copies in the late 19th century. Henry George was no socialist, arguing for a land tax as a solution to inequality. What he did call for were increased wages, abolition of poverty and an end to pauperism. Henry George, whilst not a socialist, had a profound impact on the socialist movement. Keir Hardie credited George with leading him into communism. There is little doubt that George’s writings influenced Hardie towards socialist ideas at a time before the formation of the Social Democratic Federation, an event itself helped by Henry George’s speaking tour in 1882.

Will Hutton directs attention to the systematic reconstruction of the UK state and capital under the Conservative governments since 1979. He blames political action for people’s misfortunes. Hutton identifies policies that have led to the decline perceived in public services. This is why he is popular not only amongst Guardian readers but among thoughtful workers who may or may not be Guardian readers. While Labour policy tails the Conservatives, Will Hutton pinpoints people’s concerns and offers a coherent alternative.

Much of the early part of Hutton’s book and his current Channel Four series is taken up with a systematic exposure of the effects of monetarist-influenced market economics. In his television series Hutton details the insane costs of Bradford council having to prepare tenders for housing management, a service for which there were no other bidders. He interviews managers and public in Manchester about the decimation of the bus service by deregulation.

Hutton catches the popular mood of rejection, not only of isolated incidents, but of the complete package of ‘free market’ reforms that have dominated British policies and are the foundation of the ‘New World Order’. The detailed criticism of economic irrationality is accompanied by allocation of responsibility. This new economic order is no natural phenomenon. It is caused by someone. “For the market economy is not an act of nature. It is socially produced and politically governed” (The state we’re in p285).

Hutton allocates blame.

Thatcher is identified, as are the quangocracy and the whole economic class of new managers developed by the market system. Beyond them Hutton identifies a political and social culture that has defied reform. Hutton steps beyond criticism of the recent changes and argues for a restructuring of capital and the state.

For all that Will Hutton addresses the problems many people face, the paucity of his solutions is striking. The ‘republican opportunity’ rapidly descends into a republican myth. No sooner has Hutton called for a republican attitude than he retracts:

“To argue for a republican approach is not the same thing as calling for the abolition of the monarchy, although implanting a republican tradition and institutional structure will mean stripping away prerogative powers and the hereditary principle, which are both aspects of the continuing royal influence on the constitution” (Ibid 287).

I feel like asking Will to run that past me again: republicanism without abolition of the monarchy; an end to the hereditary principle while the monarchy remains. What possible reason could Hutton have for this? Only a few lines later he comments: “Too many generations have fought and died for King and Country for this unifying symbol to be thrown aside lightly” (Ibid). This comment is very revealing, as in this Hutton is more reactionary than either The Economist or The Independent, which have both taken a genuinely republican stand. Hutton is hiding his own need for stability and a protection from radical reforms behind popular sentiment. This contradicts the whole thrust of the book, which is to focus widely felt sentiments on a rational programme of change.

The failure of political radicalism to survive the transition from critic to reformer is paralleled by his economic stance. Huttonomics are the Keynesian approaches of the past rehashed in the language of stakeholding and the stakeholder society.

It should be noted that this former stockbroker centres his critique on the form of capital in Britain, not capital itself. The alternative in Hutton’s book is not socialism or any alternative society. It is another form of capitalism: stakeholder capitalism. The exemplars of this are in Germany and Japan: capital with a ‘social content’, as contrasted with the UK and US, characterised elsewhere as shareholder capitalism.

It is the fundamental weakness of this position that The Economist repeatedly attacks. For example, in January it comments on Blair’s adoption of the stakeholder slogan: “But this is an awkward time to make the comparison. Unemployment in Germany is rising sharply and is already higher than in Britain; Japanese companies having struggled through a long recession and are busy shipping jobs overseas” (The Economist January 13). In February the magazine ran a leader praising ‘shareholder values’ with a detailed critique of stakeholder capitalism’ in a following article. Hutton is situated in terms of economic arguments squarely within a debate among capitalists about how best to proceed. This debate is unlikely to satisfy those of his followers attracted by talk of republicanism and revolution.

Socialists and communists do not have to follow either argument. The long-termism of Japanese and German capital has problems and so does the short-termism of the UK and US varieties. Despite the assorted types we are offered as alternatives, it is capital that is the problem. Hutton, when dealing with the specific problems of the UK, restores the idea of public goods and social expenditure. He writes: “A prosperous market economy is not simply the product of atomistic individuals and firms competing fiercely in competitive markets with no state intervention. This is an intellectual and practical chimera.

“The urgent necessity is to construct an interdependent institutional structure in Britain that will permit commitment and cooperation in the context of a competitive market. And that, as we shall see, implies nothing less than a British revolution” (The state we’re in p236).

This radicalism couched in terms of ‘revolution’ attracts popular support but contradicts the essentials of Hutton’s economics, which rest full square on the idea of private ownership.

Timidity and hot air may repel seasoned political observers from the left of UK politics, but we should beware. The thousands who read Will Hutton often read the critique rather than the solutions he offers. There is much that is positive in this. Hutton’s influence is to lead readers to an overall assessment of the system, not a piecemeal response. The state we’re in is a political economy, the idea that political and social action can influence the apparently natural forces of the economy. The emphasis on choice, on the availability of alternatives, should be welcome. A warning late in Hutton’s book should be music to our ears: “No state in the 20th century has ever been able to recast its economy, political structures and society to the extent that Britain must do, without suffering defeat in war, economic collapse or revolution” (Ibid p315).

We agree. Attempts to reform capital will lead to instability. Our task is to prepare an organised minority within the working class, capable of taking maximum advantage.

Richard James, Revolutionary Democratic Group