Will Hutton is passionate, diligent and humane. His ability to articulate contemporary anxieties borders on genius. Yet hardly anyone engaged in making policy takes him seriously. He is an intellectual celebrity crying in the wilderness.
Hutton's exaggerations as a polemicist have long undermined his credibility as an analyst. This book is no exception. But it does contain nuggets of truth. It is also well-timed. The bursting of the US stock market bubble should help his efforts to vindicate what he thinks of as European civilisation against its overweening American rival. It may even bring closer his goal of persuading his country that its destiny lies in the embrace of its European neighbours and the disavowal of its selfish American progeny.
The US, says Hutton, is in the grip of a malevolent creed that he calls conservatism. The heart of this creed is a belief-natural for immigrants in an almost empty continent-in the rights of private property. For Americans, "the purpose of society was to further the enjoyment of property and political power was only legitimate if it served this end."
Europe, in contrast, possesses very different values, that go back to the early church and feudalism. In this tradition, argues Hutton, property is not seen "as an absolute right, as it is by US conservatives. Rather, it is a privilege that confers reciprocal obligations." All important contrasts between the US and Europe derive, argues Hutton, from this difference in attitude to the relationship between the private and the public, the individual and society.
Contemporary Europeans, of left and right, believe in a social contract overseen by a benevolent state. Thus, "Europe has both an idea of the public realm that transcends the formal institutions of democracy, justice and government and a recognition that it is legitimate for the state to act purposively to shape economy and society." The contrast, rooted in divergent histories, has grown deeper, argues Hutton, as American liberalism has faded and conservatives have increased their grip on US politics and society.
The rise of the American right has, says Hutton, shaped the form of global economic integration. On the world stage, US conservatism is guided by three principles: unilateralism; an aggressive focus on promoting the interests of US sectors and companies; and an instinctive preference for "market solutions and remedies, both as a matter of intellectual conviction, and because over a period these render it more likely that US interests will prevail."
Yet, contrary to the propaganda, argues Hutton, US capitalism has not been more successful than European. Its dynamism in the second half of the 1990s reflects a stock-market bubble, an unsustainable increase in domestic and external indebtedness and a favourable external environment, particularly low oil prices. While a few have become scandalously rich, many Americans remain far poorer than their equivalents in Europe. Output per hour is lower than in several continental European countries. Since investment per worker is also lower, that disadvantage is more likely to grow than to shrink.
Britain, says Hutton, is a European nation. The values that underpin European capitalism are also embedded in Britain. So Britain must embrace its European destiny and help to create in the EU an effective alternative to the US's version of contemporary capitalism. "We need the better America back-the liberal, outward-looking and generous US that won the second world war and constructed a liberal world order that in many respects has sustained us to this day." But, at present, it does not exist. The EU must operate as a benevolent global leader, in its place.
Any response to these arguments must start by noting that much is missing. By Europe, Hutton means western Europe. Central and eastern Europe, including Russia, barely appear. The discussion of globalisation is shallow and, in important respects, mistaken. Hutton accepts, for example, the conventional-but almost certainly incorrect-view that global inequality has increased over the past two decades. The words "China" and "India" do not even appear in a book supposedly about the world.
Hutton manages to move from feudalism to the joys of contemporary European democracy via the briefest excursus into the enlightenment, two world wars, fascism and Nazism. Airbrushed out of his potted history are the inquisition, wars of religion, perpetual conflict among states, colonialism and imperialism, absolutism, racism, anti-semitism, the Holocaust, and the attachment of much of the intelligentsia to revolutionary Marxism. Nor is all this just an old story. Look at voting behaviour in recent elections in Austria, Denmark, the Netherlands and France.
Some American conservatives embrace a concept of realpolitik or raison d'etat. But these are European ideas, beloved by the European powers as long as they could get away with them. The constitutional values and practices of the US are equally rooted in the British and French enlightenment. John Locke, father of the American version of the social contract, was English. Adam Smith, whose ideas American conservatives love, was Scottish. Montesquieu, intellectual father of the American constitution, was French.
The US is a child of Europe, above all of Britain. Its civilisation is European. It rescued Europe from its twin barbarisms of National Socialism and communism. Yet Hutton wishes his country to disown its child. Maybe it should. But it is absurd to argue that Britain should do so because its civilisation is, and always has been, closer to that of, say, Germany than to the US.
Yet for all these errors, I would not throw this book away. Hutton's critique of contemporary America and his defence of Europe is powerful. This is the only part of the book that needs to be taken seriously. But it is also its kernel.
In important respects, contemporary US conservatism is rooted in the values and traditions of the south. Indeed, it is the shift of the south from Democrat to Republican that is the basis of the latter's resurgence. Many of the attitudes of the Republican south are profoundly unpleasant for any reasonably civilised person, including civilised Americans. Alas, the triumph of these ideas does not show that the US is undemocratic, but rather that popular prejudices have greater power than in more elitist European cultures.
In addition, as Hutton argues, much is wrong with the stockmarket-driven capitalism of the contemporary US. Top executives have effectively been stealing from their companies by granting themselves valuable stock options. Accounting has been subverted. The majority of mergers enrich shareholders of the acquired companies, managers of the acquiring companies and a coterie of overpaid advisers, but nobody else. The recent performance of the US economy has in part reflected a stockmarket bubble and ultimately unsustainable shifts in investment, consumption and the current account.
While the US economy remains dynamic, innovative and entrepreneurial and its companies correspondingly competitive, its ability to deliver benefits to the American people has not been particularly impressive. Employment is high, but the standard of living of the poor is below that of their equivalents in Europe. Social mobility is certainly no greater than in Europe and the long-term increase in productivity per hour has been mediocre. Between 1979 and 1999, output per hour grew at 1.5 per cent a year in the US, against 2.2 per cent in west Germany, 2.1 per cent in Britain and 2 per cent in France. Today, output per hour is above or close to US rates in Belgium, France, the Netherlands, Ireland, Austria, Denmark and Germany.
Moreover, the extent and durability of the acceleration in US productivity growth since 1995 is neither that impressive nor certain to continue. Between 1995 and 2001, US labour productivity growth rose to 2 per cent a year, against just 1.3 per cent in the EU. But six small European countries matched or exceeded US growth. Meanwhile, as Hutton says, the long-term performance of a number of European economies has been far from poor. Productivity levels are high and investment strong. The proportion of prime-aged men in employment compares well with the US. The big difference is among the young, the old and women. But some of this reflects different attitudes towards-and incentives for-female employment, as well as different pension arrangements.
European labour market policies can and must be improved. But employment grew faster in the EU than in the US between 1998 and 2001. Experience in small European economies and employment growth even in some of the larger countries shows that it is possible to combine a European approach to regulating labour markets with reasonably good performance.
Hutton believes that these facts are enough to persuade Britain to follow the European route. Yet it is not so simple. Britain, caught as it unavoidably is between the US and Europe, should pick those aspects of both that fit into its own national tradition. It certainly does not follow from the analysis in this book that Britain must, as Hutton suggests, rush into the euro. But Britain is a permanent member of the EU and, as such, needs to make the best of its membership.
The US's role in the world is nothing like as malevolent as this book assumes. In any case-notwithstanding the book's title- Hutton offers neither an analysis of the world nor a recipe for how it is to be managed. What is certain is that the EU cannot create a working global order without the US. It lacks the capacity and has never shown the required generosity and will.
The book does strip bare some of the weaknesses of the US model, and shows, too, that postwar Europe has done a great many things right. Europe should and, in any case, can only build on its own history. But this is true of Britain, too. It needs to become a confident member of the European family, neither aping the others nor pretending that it is a country altogether apart. Such things are worth saying. Hutton deserves credit for doing so.
The World we're in
Will Hutton
Little, Brown ?17
