Will Hutton, the British journalist and political writer, has written a well-timed book on Britain after Brexit. He finished writing it shortly before the July general election; he anticipated a Labour victory. His book was born out of his furious reaction to our exit from the EU and Boris Johnson’s misrule as prime minister, culminating in his loss of power in 2022.
The two halves of Hutton’s argument
Hutton devotes the first half to diagnosing Britain’s weak state and the historical reasons for it; the second half prescribes some possible solutions to our predicament. The first half is a lucid account of British and American economic and political developments in the past 200 years. It reads like a good PPE (philosophy, politics, economics) course at Oxford. The second half emphasises the need for a public philosophy marrying social democracy with progressive liberalism to protect society from right-wing populism. The argument of Hutton’s book is to find a philosophy allowing British capitalism to thrive and also promote fairness and social cohesion, which echoes Blairism.
Hutton identifies British ‘laissez-faire’ in the early 19th century as an economic and political policy which reflected the philosophy of John Stuart Mill’s definition of liberty. This said that a person should be allowed to do anything, so long as it does not harm others. The intervention of the state in the running of the economy should be minimal, as individuals pursuing their own interests would benefit society as a whole. The state’s monetary policy should shadow the Gold Standard and follow sound money.
Hutton praises what he calls “ethical liberalism” as part of the British progressive tradition. This includes the liberalism of Adam Smith, which enabled economic specialisation to grow and the resulting division of labour to produce greater wealth. However, the social results of early industrial capitalism were often inhumane, involving child labour, unhealthy housing and bad social conditions. Reactions to these included Robert Owen’s charitable industrial policies, which showed that if people were treated better at work society benefitted and greater wealth was created.
The growth of capitalism
However, by the 1840s the social ills created by capitalism had encouraged the growth of Chartism in Britain, which was the strongest political reaction to laissez-faire in Britain. At the same time, the writings of Marx and Engels promoted a more mechanistic and illiberal political response to society’s problems.
The growth of capitalism in Britain in the 19th century had been assisted by the vast increase in Britain’s world trade. The strength of Britain’s financial services increased and became relatively more important to the whole economy than in other countries. By the 1860s many of the political critics of the effects of British capitalism had joined with the Whigs to form the Liberal party.
However, for the next 80 years to 1939, the Liberal party failed to enact a significant programme of social and political reform (with the exception of the period 1906 to 1914). We continued to have an unreformed upper house in parliament and a first past the post electoral system (rather than proportional representation), both of which prevented radical political reform.
After the first world war our political strength appeared immense for a while, but we had to cope with serious commercial and social weaknesses. We did not have good nationwide secondary and university education for the population as a whole. These were developed after the second world war by the Labour government and by subsequent governments. By comparison with our main European competitors, these services were less available to society as a whole.
The lasting impact of Thatcherism
Meanwhile the crash of 1929 and the economic depression of the 1930s had hit the USA and Britain hard. Under Roosevelt’s New Deal the US government reshaped American capitalism to try to ensure that the common good was delivered. A number of institutions were created to regulate capitalism and to provide social security. Many politicians considered that American capitalism’s job was to serve the people.
In Britain the reforms of the governments in the 1930s were less profound than in the USA and British capitalism was less open than American to the wider needs of society. After the war the Labour government introduced a range of social reforms, which made business recognise that they had to accept wider responsibilities than they had previously thought appropriate.
When Thatcher became prime minister in 1979, she reacted against the neo-Liberal consensus which had developed in government. Aided by anti-collectivist economists (both European and American) she fashioned her policies celebrating the sovereignty of the individual. She sold off publicly owned businesses and rolled back the level of the state’s involvement in the economy.
This was continued by the Conservative governments from 2010 to 2024, which all became increasingly populist right wing. The global financial crisis in 2007/08 was brought about mainly by reckless bank lending and resulted in big reductions in social spending by the government. The areas which had experienced these reductions most voted strongly for Brexit in the 2016 referendum.
It is clear that the right-wing press in Britain (Telegraph, Sun, Express and Mail) before and during the referendum greatly assisted the Leavers’ campaign. They treated complex issues in a simplified and distorted way. Hutton strangely does not comment on the failure of the Electoral Commission to ban the false claims of the Leave campaign.
Hutton’s complacency
Furthermore the way the vote would be calculated was wrong for such a major constitutional issue, in my opinion. The legislation drawn up by Cameron and Osborne and passed by parliament should have required that the winning vote be calculated on the total electorate of the UK and not on the turnout of 72.1% at the referendum. The Leave campaign won only 34.7% of the votes of the Electorate. As a result, Britain left the EU on a minority vote. Any future referendum should avoid serious mistakes like these. Strangely Hutton does not mention this.
To achieve his aim of controlling capitalism in a more humane way, Hutton argues that British governments should spend a greater proportion of our national wealth on social services, education, health and retraining. He is understandably anxious that we redress the situation arising from our relative underspending in the past, particularly by Governmental investment in infrastructure. He is clear that the productivity of Britain must improve substantially if we are to reform our economy. We also need to spend more on adapting to climate change.
However he pays insufficient attention to the high level of indebtedness we have accumulated, which will severely restrict our ability to reform our financial position. Britain’s indebtedness has tripled in the past 20 years so that our debt is almost equal to our GDP. He makes no mention of the extra spending on defence needed as a result of the wars in Ukraine and the Middle East. Hutton is rather complacent in thinking we can spend so much more on public services, however urgent this is.
Adopting the appropriate policies
Hutton has written a thoughtful description of the process which led to us leaving the EU. He wants Britain to benefit from membership of the EU, which would reinvigorate us if politicians sincerely understand our problems and adopt the appropriate policies.
