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From: blp Category: Books Date: 05 December 2006 Time: 08:03 AM Review: The Observer's chief economic writer in the full flush of his fame during the nineties. For some reason he was mistaken for a New Labour type at the time and this was seen as a kind of unofficial manifesto - despite its withering contempt for the kind of Toryish, privatising bullcrap to which Blair and Brown soon showed themselves to be dimwit devotees. Perhaps the confusion comes from the fact that it does describe a kind of third way - a much more genuine one than Blair's ascending curve of bare- arsed, shit-smeared shame describes. Hutton's a Keynesian to the bone (there's a chapter here called, bluntly, Why Keynesian Economics is Best), which means he's neither fiscally conservative nor socialist and he believes firmly in a managed economy, in maintaining full or near full employment and trying, as much as possible, to flatten incomes among other things - things that, as he says himself, have never been allowed a proper go here in UK plc because of all the puffed up twats who immediately dismiss them as 'socialist'. This is the great revelation of the book for me. Even as the left-liberal that I am, I'd bought the idea that Keynesianism had been tried in the post-war Attlee Welfare State and finally been shown, under Wilson and Callaghan, not to work. Hutton's view is that it was never fully implemented here - and with more of the withering contempt that seems to burst through all of this almost inadvertently, explains why. In a large measure, the book's an attack on Thatcherism - which thrived, after all, on the story that Keynesianism had failed, but Hutton goes a lot further back to explain why Thatcherism took root. Put simply, his idea is that Britain's class system created an ideal of wealth based on little effort. Unfortunately, not everyone could be part of the landed gentry or a direct beneficiary of colonialism, so an unregulated financial market that rarely muddied its hands with industry was the next best thing and the gentleman capitalist was born. Thatcher's Hayekian idea that the market was a sort of god that would always do things right if left to its own devices played right into this mentality - and chimed perfectly with an environment in which there were already far fewer safeguards for the health of industry than in almost any other leading economy. Thus, whereas if a car company looks like going under in Japan, the bank that finances it will, because of the structures by which it does so, feel compelled to step in and save it and even build it into a worldclass brand, in the UK the company's failure is seen as a result of natural or divine forces that can't be contested and it will be left to shrivel up and die. Takeovers and asset stripping are rampant in the wild west environment of UK capitalism and investment and innovation are almost completely neglected in the pursuit of short-term gain for the key driver of it all: shareholder fucking value. Hutton is clear: Japan and Germany, both of which were forced by their benighted circumstances after WWII to adopt decisive measures for managing their economies, are proof that none of the rubbish that happens in the UK is as inevitable as its beneficiaries insist. Even America, which embraced a lot of the core monetarist ideas that underpinned Thatcherism and, notoriously, has appallingly meagre protections in place for its poor, is more co-operative and less short-termist in business. It would be interesting to know what Hutton's view is now. I suspect it hasn't changed much - but I'd like to know what he thinks about the shift to the right in German politics and the recent economic tribulations of Japan. He gives detailed prescriptions - somewhat beyond my ken - for what needs to be done here, but is ultimatley pessimistic since history has shown that it always takes a serious crisis - WWII, the depression in America - to force governments to take a serious look at how they manage their economies. There's a lot of withering contempt here as I've said. The stuff he's talking about, for all its sometimes daunting complexity, is mainly ballast for an attack on a problem that is primarily cultural and based on prejudice and impatient avarice. As such, it's a one of the better explanations for why, in the words of the band Selfish Cunt, 'Britain is Shit.'