Them and Us: Changing Britain – Why We Need a Fair Society

When "fairness" emerged as a defining slogan for New Labour, during the transition from Blair to Brown, it had the ring of a euphemism. As a guiding ideal, it has none of the emotive connotations that attach to such terms as "social justice", "redistribution" or "equality". Labour activists entered the 2010 election armed with the advice that they could beat the Conser­vatives on the "fairness agenda". But like that other Brown-era doctrine, "Britishness", it never caught fire. Now fairness has become the watchword of the Con-Lib coalition.

In Them and Us, Will Hutton sets out to ground our understanding of fairness in a more thorough philosophical and moral framework. In the process, he takes a swipe not just at the neoliberal right, but also at the left's obsession with equality. Although his policy proposals are boldly left-wing, this book, as a work of political philosophy, is a milestone on the Labour intelligentsia's journey to the right.

Hutton contends that "the liberal left's attempt to explain all outcomes through impersonal economic and social forces -- thereby excusing individuals from taking responsi­bility for their actions and circumstances -- is misconceived analytically and behaviourally". Drawing on psychology and anthropological research, he attempts to show that our notion of fairness is biologically grounded, if not innate. We have a tendency to accept the allocation of resources according to what is deserved and proportional. "Desert and proportionality," he writes, "are part of our warp and weft."

At the core of Hutton's critique of modern capitalism is the assertion that it allocates deserts unjustly. An elite group (the bankers, who else?) has been able to seize control of the process of allocation because democracy and press freedom have been compromised. This, in turn, threatens the whole dynamic of social progress, because entrepreneurship and technical innovation are possible only where they are fairly compensated: where they are not, ossification is the result.

By recalibrating the concept of social justice according to these principles, Hutton comes up with some conclusions that will shock his left-wing readership. For instance:

The rise of the BNP . . . has happened because too many immigrants have access to free prescriptions, medical care, schooling and housing, before they have made adequate contributions. It is unfair.

The solution, he argues, is to fight for a new and shared understanding of what is fair, in which the left gives up its obsession with equal outcomes and access, while the financial elite give up the idea that their riches - and growing social inequality - are acquired in accordance with natural law.

Hutton contends that the UK's financial system is led by "an entrenched elite capturing economic rent on a grand scale, resisting challenge and inspection of what it does". This is as dysfunctional (and as damaging to the whole economy) as were the parasitic despotisms that built Versailles and the Escorial, he argues - and the problem is, that elite managed to set the entire economic agenda of Labour in office.

A sub-chapter entitled "The Strange Story of Gordon Brown" recounts how the erstwhile Kirkcaldy socialist became enthralled by Alan Greenspan, erecting a plaque to the wizard of neoliberalism in the corridors of the Treasury. He quotes not only Brown's much-vaunted "golden age of British finance" speech, but Ed Balls, who declared his starting point as Treasury minister to be the following question: "What more can I do to support and enhance the critical role that the banking industry plays in our economy?"

“Taken together," the author concludes, "Balls's and Brown's speeches are among the most embarrassing, wholly wrong and misjudged economic statements by any ministers in recent times. Neither man had a clue about what was about to hit the British economy." That passage sums up the bitterness that seems destined to linger around the Brown administration among the generation of Labour intellectuals who had both backstage access and a ringside seat.

Hutton's remedies include breaking up the major banks, imposing tougher regulation on the derivatives markets, an overhaul of monetary policy and progressive taxation designed to arrest the growth of the financial system. His wider agenda, however, concerns the dysfunctions of British democracy. A long-time supporter of proportional representation, Hutton has been visibly energised and enthused by the formation of a coalition government, forced in the process to horse-trade publicly over its legislative agenda. In addition to voting reform, he wants a dilution of the presidential powers of Downing Street, a huge enhancement of local democracy and reform of the media.

Hutton was among those who dreamed of, and argued for, a coalition between Labour and the Liberal Democrats in the frenetic days following the election. It didn't happen, but this book creates the intellectual framework for such an alliance, should electoral reform or public opinion ever again place it on the agenda.

Them and Us: Changing Britain - Why We Need a Fair Society
Will Hutton
Little, Brown, 434pp, £20

Paul Mason's "Meltdown: the End of the Age of Greed" is published in a revised second edition on 5 October by Verso (£8.99)

This article first appeared in the 04 October 2010 issue of the New Statesman, Licence to cut