Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society [Kindle Edition]

Will Hutton's book attempts a comprehensive analysis not just of the financial crisis but of British society as a whole. Along with the analysis, he puts forward a detailed list of possible remedies. He aims to be as non-partisan as possible. As he says:

"...the proposition in this book is that neither the force of the market nor the capitalists and entrepreneurs who powered it would have been possible without the new Enlightenment openness and a range of emergent Enlightenment public democratic institutions." (P 122)

He thus bases his arguments in theories of social justice and, above all, the idea of 'just deserts' - that people have an innate sense of justice and fairness that has been warped by the politics of the last thirty years or more.

In the first part of the book, he attempts to reach an 'Understanding [of] Fairness'. He considers the ideas of John Rawls which he believes typifies the thinking of those on the left of the political spectrum and the ideas of Robert Nozick for those on the right. Applying these, along with modern, more psychological theories of 'just deserts', he analyses what he considers to be the unbalanced economy of the UK with its dependence on financial services and abandonment of manufacturing and technological innovation and entrepreneurship.

In the second section, 'Fairness Under Siege', he provides a short introduction to the development of Western capitalism roughly from the Enlightenment up to the present crisis, whereupon his analysis becomes almost too comprehensive, becoming breathless in its speed and detail, but his frustration at what he considers to be the idiocy of the pursuit of short-term profit by bankers and politicians at the expense of the wider economy and society certainly shines through.

In the third and final section, he becomes more prescriptive. He pours out a huge number of suggestions for the 'Relaunch of Fairness', every page scattered with 'shoulds' and 'musts' to an almost dizzying extent. He not only puts forward ideas for financial and banking reform but political, media and social reform also. Many of his comments on the media echo the criticisms raised by writers such as Nick Davies in his excellent 'Flat Earth News', to which Hutton refers approvingly.

Again, Hutton tries to be as non-partisan as possible, both criticising and praising New Labour and the current coalition government, but some of his ideas strike me as, at best, ill thought-out. For example, on page 371, he suggests that 'charging could be introduced into the NHS for delivery of all but the most urgent of treatments - but for which poorer patients could be excused.' This implies introducing means testing for the NHS, plus the possibility that people suffering from relatively minor complaints may not present for treatment until their complaints are sufficiently serious to warrant 'free' care. It also ignores the growing popularity of medical insurance as an employment benefit in many companies, helping to create a 'two tier' health care system.

In all, then, although Hutton bravely attempts a comprehensive analysis of the current economic, social and political crises, his ideas do not, to my mind, have any consistent theoretical underpinning, except a rather nebulous belief in Enlightenment values. In economics, he draws on Keynes and Schumpeter; in politics he has high hopes for some form of PR; in the media, he wants to beef up the Press Complaints Commission, change the libel laws to prevent 'libel tourism', ensure the future of the BBC and promote alternative sources of news. All of this is certainly worthy, but none of it really addresses the fundamental flaws in the capitalist system - in the end, all he offers are palliatives.

Renowned commentator Will Hutton has written a brilliant book on Britain today. Wide-ranging, it covers the economic crisis, politics, society, education, and the ongoing technological revolution.

He denounces the destructive power of `the financial, media and bureaucratic elites' (a long-winded way of saying `ruling class'). He notes that the rich avoid £12.9 billion a year in tax and that a third of our top 700 companies pay no tax.

He points out that hedge funds buying credit default swaps [CDSs] in huge volumes triggered both the banking crisis and Europe's sovereign debt crisis. Their buying of CDSs on Greek government debt in April forced the huge IMF/EU bailout of Greece.

Debt and debt-related building and real estate services accounted for half Britain's growth between 1997 and 2007. Two-thirds of loans were house mortgages and a fifth was in commercial property, while manufacturing's share of output fell by two-fifths to 12 per cent, the world's fastest fall.

The crisis cost us 10 per cent of output, £1 trillion, smashing the myth of a golden age based on financial services, open markets and an endless credit and property boom. Then we gave the bankers £1.3 trillion, worldwide, £14 trillion.

Even the Bank of England says that another crunch is highly likely. £530 billion of corporate debt has to be refinanced by 2015 before any new money will be lent. Europe's private-equity firms have to repay £185 billion by 2016, yet in 2009 they paid back just £4 billion.

Hutton writes sensibly, "The rise of the BNP cannot be explained by saying that Britain is suddenly more racist than it used to be. It has happened because too many immigrants have access to free prescriptions, medical care, schooling and housing before they have made adequate contributions." The EU orders us to give new immigrants immediate access to benefits.

The USA invests 3 per cent of its GDP in universities; Europe's average is just 1.4 per cent. 73 per cent of the science papers cited in US industrial patents in 1993-94 came from public science sources. As Hutton notes, "the university remains the principal institution that creates the cumulative scientific and technological knowledge on which innovative ideas are built. ... It is a strong sector that should be guarded and nurtured; instead, it is being threatened by spending cuts."

Britain has 8 universities in the world's top 50, and 29 in the top 200. Our universities are great national resources, `fundamental sources of competitive strength'.

He points out that, for 200 years, countries with the highest social spending as a share of output have grown most. There is no link between high public debt and lower growth until debt reaches 90 per cent of GDP. Higher borrowing, if used to invest, can bring growth. Every extra one per cent of GNP borrowed cuts the recession by two and a half months (IMF figure); every extra one per cent of capital spending also boosts growth permanently by 0.3 per cent a year.

Hutton says we need `an economic development strategy', with a Knowledge Bank, a Life Sciences Bank and a National Infrastructure Bank. He asserts, "There has to be a willingness to spend, borrow, reshape finance and protect investment at all costs."

But now, as he laments, "the debt moralists are in control, denying the government essential flexibility and agility over borrowing. As a result, the next decade will be far more traumatic than it need be."

He warns us against accepting the government's spending cuts, which he says `threaten the very fabric of British society'. He says its programme is `the closest thing to an economic scorched-earth policy this country has ever seen'.

Yet in the same paragraph he writes of the government, "In the immediate short term this feels like a partial assertion of us over them, and welcome for it." In 1997 Hutton put his faith in Blair and in `stakeholder capitalism'; now he seems to believe in Cameron's `big society'.

Will Hutton has written an interesting book and lavishes a lot of detail (maybe too much) on the subject of the financial crash, its reasons and its aftermath and makes a strong point for a fairer, more balanced society. The underlying truisms such as banker greed, the role of the media and the inertia of politicians who can only manage now rather than apply any vision are all well analysed. But "fairness" is a word used ever more frequently by the media,politicians and business people and is beginning to have a hollow ring about it. Nevertheless the book is well worth the read and it provokes thought and not a little anger at times.