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Telling Us What We Already Know

Will Hutton’s case for ‘due desserts’

‘Western capitalist society has now learned what the primitives knew: if you don’t run an economy and society fairly, it quickly becomes dysfunctional.’ So writes Will Hutton in his latest tome. Reading this I wonder where this man, with all his learning and experience, has been all his life. As a sociologist, I could give you chapter and verse on how health and welfare in developed societies are tied in to equality and the relative differential between the wealthiest and the poorest in any particular country, and none of it is fair. The birth of modernity in the seventeenth century began the idea of equality in political and legal systems. However, Hutton argues, modernity ‘has gone too far in relegating due dessert to the moral graveyard’; he believes fairness in any system must have at least a shade of ‘due desserts’. How one distinguishes between a desire for fairness and retribution for perceived misdeeds is something he never comes to terms with. Yet if you ignore this claim (which does take up a fair deal of space in a large book) and squint your eyes as though you were looking into the sun, there is a wealth of information and argument here about the causes and effects of the Great Financial Crisis (GFC) in the United Kingdom that is rewarding—often infuriating, but rewarding.

Will Hutton’s book tries to do more than just analyse the GFC; it also presents possible remedies for the United Kingdom. It is a long and winding exegesis that’s difficult to know what to make of, particularly in its willingness to give the current British Coalition government the benefit of the doubt. There are resonances between Hutton’s belief in the hard-wiring of the importance of fairness into human brains (a statement he explicitly makes) and David Cameron’s restatement of the Third Way as ‘the Big Society’. For Cameron, the Big Society is really the tight local community, in which due desserts can be played out as if in an episode of Midsomer Murders.

Hutton likes to see himself as a social democrat, but he firmly believes in capitalism as an economic system, underpinned by a state dedicated to what he calls ‘fairness’ in all matters social and economic. ‘The state best serves society and the public when it actively facilitates open competition’, he writes. This ‘open competition’ should be based on encouragement of entrepreneurship, allowing the best and the brightest to flourish. He lionises the life work of individuals like James Dyson who invented the bagless vacuum cleaner and bet the company on its success. This twentieth-century inventor could be compared, according to Hutton, to the great Victorian-age inventors like Watt and Wedgwood who were non-conformists, outsiders in an ‘open-access system’. (What intrigues me is that Hutton also includes in this pantheon the man who pioneered modern mass tourism—the inventor of Easyjet. Having been a customer of Easyjet, I find it hard to consider its creator to be in the same category as Josiah Wedgwood or John Cadbury.) The problem in the late twentieth century, for Hutton, was the dearth of ‘real’ entrepreneurs and the plethora of rapacious money-men.

This huge book uses moral philosophy to argue that the British need a Truth and Reconciliation Commission to shame the bankers and their minions, including politicians like Tony Blair, into taking the blame for the GFC and its aftermath. ‘The Greeks were explicit. We should get what we deserve—in terms of both punishment and reward’, Hutton writes. At times he speaks in an almost archaic moral language: ‘Virtue, effort and contribution should and will be rewarded; malevolence, fecklessness and idleness must be punished’. He accuses bankers as well as dole recipients of malevolence and fecklessness. Each individual in our society should bear responsibility for their actions, while the state’s job is to indemnify individuals for bad luck and circumstances beyond their control. Hutton’s aim is to outline how this should be done.

British society has succumbed to the neo-liberal philosophies espoused and entrenched by the Thatcherites. Hutton comes very close to arguing a Marxist theory of class, but his dominant class consists not of the owners of the means of production, as Marx proposed; instead this ruling class is based in The City, as in the city of London—they may be employees of the huge financial conglomerates, but they reserve the right to act as if they owned them. At one point he suggests The City ‘bullied’ New Labour into deregulating the financial sector. Certainly the mining companies in Australia and their battle with the Labor government over the resources tax come uncomfortably to mind here. As in Britain, Australia’s Labor Party has been captured by the Harvard-educated technocrats and economists and bought the line of growth and free markets, hook, line and veritable sinker. This makes it highly susceptible to such ‘bullying’.

The global deregulation of the financial sector in the 1980s, coupled with new technologies that allowed new and mind-bogglingly complex financial instruments, not only helped separate fools from their money but also the highly intelligent from their commonsense. When these financial instruments are presented in all their complex glory, it becomes crystal-clear why they failed and why the world is in the mess that it is (at least financially). Orange County in California used municipal funds to bet on falling interest rates, and instead took a $US1.5 billion bath. Banks and financial institutions bought bundled-up Credit Default Swaps (CDS)—groups of sub-prime and legitimate mortgages insured by large insurance companies in case of failure—and then bet that they would fail, as they inevitably did. The holder of the CDS might take a bath, but the dealer who bet on their failure made a fortune. It’s these and other well-told stories—including some, on a smaller scale, concerning some municipalities in New South Wales—that at least make the book worth reading.

Hutton also presents a devastating analysis of the relationship between modern politics and the news cycle that is all too well-known in Australia. While his anger at the capitulation of the political classes to the incessant battering of the media is obvious, he valiantly tries to jettison postmodern cynicism to argue that the citizenry need to be reminded that politicians are human too. This is not enough to convince me that that he is actually producing a contemporary prescription for a new world order, as he claims.

Hutton believes Britain’s current demise is essentially the fault of two groups of elites, the inhabitants of The City and trade unions. Blaming the trade unions and the Left is a leitmotif of Third Wayers (although Hutton doesn’t use this term anywhere in the book), and comparing a group with the privilege of class to organisations whose membership has no privilege other than their will to band together is neither logical nor historically accurate.

Hutton argues fervently for a nationalised health system and a welfare system that the middle class has a full stake in, as way of legitimising fairness to all. Yet even while arguing for universal welfare systems, he plays into the perception the middle class have of welfare cheats, by arguing that ‘reflex egalitarianism is not necessarily fair’. ‘Due desserts’ mean that the person who gains some benefit from the public purse should pay this back in some way, but how this squares up with the need for universal welfare and middle-class support for the welfare system is just one of the inconsistencies that run through this book.

In Them and Us, Will Hutton has tried very hard to remake himself in the image of the new British government. (The book was written, or at least finished, just as the new government was settling in.) He has since headed the government’s Fair Pay Commission, and has recently released a report on public sector pay. In this report, rather than recommending, as he has in his book, that the cap on senior public servants’ pay be no more than a certain multiple of the lowest earner, he recommends that 10 per cent of a senior manager’s pay be kept back until certain agreed-upon objectives have been met. To show the fairness he is so enamoured of, Hutton also proposes that all senior public servant salaries be available online to the public. Huge bonuses should be out; fair pay for a fair day’s work should be in. Understandably, the private sector has laughed this off. It will be interesting to see how long Hutton lasts as a social democrat in these circumstances, and whether he agrees with his assessment that Britain is beginning to see a new—and improved—politics taking shape.

Grazyna Zajdow lectures in sociology at Deakin University and is an editor of Arena Magazine.

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