May 17th 2003


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Articles from this issue:

COVER STORY: Ethanol - behind the disinformation

EDITORIAL: New situations demand new policies

CANBERRA OBSERVED: Government sets itself a trap on Medicare

Will South Australia Upper House hold the line on life issues?

STRAWS IN THE WIND: We get the rights / Rap festival / Bogus leftists, fairy luddites

QUEENSLAND: Beattie challenges Nationals over sugar deregulation

Iraq fallout may end multilateral trade deals

HEALTH: Stopping feeding and hydration is true euthanasia

EDUCATION: Surviving the latest classroom fads

LIFESTYLE: SARS, AIDS and public policy

FAMILY: Bush and Howard diverge on life and family

BOOK REVIEW: The World We're In, by Will Hutton

BOOK REVIEW: Growth Fetish, by Clive Hamilton

ARTS: Melbourne Comedy Festival: A comedy of political errors?

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BOOK REVIEW:
The World We're In, by Will Hutton




News Weekly, May 17, 2003

Reviewed by Adam Koch

Will Hutton's The World We're In examined the outcomes for different countries of the economic revolution of the past two decades. As Adam Koch explains, the results of this survey were somewhat surprising. The book, now in paperback, is available from News Weekly Books.

Books that portray their authors' view of the contemporary world and contain their evaluation of its various political, social and economic trends are many. All of them are necessarily reflective of their authors' ideological proclivities.

This is not only unavoidable but also desirable in that it serves the interests of well-informed dialogue between those representing various constituents of the world's political scene.

Hutton's commitment to liberal values manifests itself very clearly. Arguments with which he seeks to demonstrate the superiority of his proposed political, social and economic solutions are firmly embedded in the fundamental values of rationality and justice.

Aware, however, as he is, of different understanding of the term "liberal" in various countries and within various political traditions, he takes care to refer to it in his book as "the creed that advocates a rational, universal infrastructure of justice built on complex trade-offs between liberty, solidarity and equality". The reader will undoubtedly appreciate the clarity of Hutton's political stance throughout this book as it simplifies the task of interpreting and examining his ideas.

Special credit should go to Hutton for covering major political, social and economic trends all in one book and explaining historic background of some of these.

He argues that "in today's world it is impossible to conceive of a national economic, political and social program in isolation" (p. IX). Such a holistic perspective certainly holds great promise for future research, in theory formulation and in the implementation of policies by governments.

Yet, very few researchers and authors have so far attempted to bring all those things together as this kind of approach is seen by the orthodox, compartmentalised science as "unscientific".

Holistic approach remains a quite daunting option as there is not much by the way of theory or prior narrative to guide and support those who dare to go along this path.

Along with many other critics of various present United States policies, Hutton perceives the dominance by the latter of the global political scene, the extent of its control of the global mass media and of the world economy as not in the best interests of building better global relationships, a fairer and more cohesive society and an improved economy.

He is worried about the recent onset of US radical unilateralism, a development that has already contributed to a much more tense than before US-Europe relationship. The same development is also a severe constraint on the extent and intensity of the so much needed ongoing dialogue between the United States and the rest of the world.

Hutton points to certain discrepancies between the professed and practised US values and to certain major weaknesses in that country's society and economy. He considers the increasing incidence of buying of votes and office in the US an offence to its democratic tradition and ideals. He protests against rampant inequality there, against obscene wealth and "stratospheric incomes" being portrayed as "just reward for individual enterprise" and against the standpoint that the disadvantaged within US "deserve their status".

He points to the predominantly poor self-knowledge and poorly developed self-criticism of US citizens and their tendency to argue absolute supremacy of American ways in politics, as well as in building a better society and more efficient economy.

The new conservatism of the American breed, writes Hutton, refers to tax as "the confiscation of what is properly our own" and to the social, the collective and the public realm as the enemies of prosperity and individual autonomy as well as opposed to the "moral basis of society".

All this, writes Hutton, points to a ideological, political, social and economical crisis that poses the most serious challenge that the United States has ever faced. Deciding on changing this situation is not easy as its current financial elite has a massive self-interest in promoting their preferred style of capitalism.

Increasing protectionism and increasingly feral capitalism that concentrates on the maximisation of short-term profits that is easiest obtained through financial engineering have not helped the cause of productivity: in most US industries it is lower than in leading European and Asian countries.

Not only is American society "seriously disfigured" by the results of the way their country's economy is run but it will also have to adjust its needs and living standards to the performance of that economy. American capitalism is a great deal weaker than it likes to claim, contends Hutton.

In the international arena, the US has for some time been emasculating cooperation and multilateral endeavour. The IMF, for instance, is currently viewed by many as nothing more than an adjunct to the US Treasury. Insomuch as the US displays also a lax attitude to the regulation of international financial institutions, accounting standards and tax havens it gives a green light to feral capitalism, organised crime and international terrorism.

In recent years, whenever the US invited NATO countries to help the US in its military interventions such help could have only been on American terms. That seriously imperils NATO's future.

Contrasting EU ways with those of America, Hutton claims that the European society takes a more principled stance against corruption and better protects its democracy from deformation by the forces of "rapacious inequality". Hutton provides evidence that the European labour market performs better than its American counterpart.

Of all EU countries, UK social and economic policies and its respective performance receive by far the greatest amount of attention in this book. Hutton is critical of Great Britain's current US-inspired economic model for its past inability to build a social contract capable of producing outcomes similar to those implemented in mainland Europe, in particular when it comes to higher quality of public services, properly functioning public transport and decent social provision.

There are, however, signs of things on the mend in UK, and he mentions the new Companies Law requiring directors to acknowledge obligations to the whole organisations they serve, rather than just their shareholders; new regulations in respect of pension fund trustees designed to engender a longer-term view of the companies in which they invest; increased corporate social and environmental responsibility; EU information and consultation directive involving workers in the process of corporate decision making. He qualifies though that transformation has been occurring in a piecemeal and unsystematic fashion there, a signal of still strong reluctance and distrust of the EU-driven change.

Hutton posits that only when a growing, successful, politically accountable EU is achieved, and the reasons for its success are properly understood, will the Euroscepticism in UK and other European states be allayed. He argues that the UK is more similar to Europe than to the US and should therefore be looking more to Europe for solutions of its problems than across the Atlantic.

The European system brings higher productivity, quality workers, organisational creativity and high social protection. It is based on income redistribution, social insurance, means tested social benefits, provision of public health and education that requires higher taxes and social security contributions than in the US, and on a combination of employment protection, labour market regulation and higher trade union representation.

This model has not, he stresses, created higher unemployment as has been anticipated by some.

The current global system, argues Hutton, disallows government autonomy and gives the maximum freedom to business, whatever the irrationalities and extravagant waste. The object is not to promote notions of equity, the social contract, equality of opportunity or public realm. The object is to promote the autonomy of action of American transnationals in general, and American culture of the global financial and information technology in particular.

Decisive improvement of current economic and social models requires, that wealth creation is thought of as a social act. Any vision of a company's purpose, should go far beyond maximising their shareholders' immediate profits. For the workforce to be highly productive and similarly creative it has to be treated not as "economic chattels" but as a group of respected human beings. But, he remarks, this is largely absent from the American workplace. There, the "supremacy of market contract means that careers, living standards and relationships are in a permanent state of contingency".

A good business, he continues, is an organisation that functions best if those who work for it believe it has a purpose, a vision that will serve the society of which it is a part. Maximising profit is but one element; the central component, is a sense of purpose. He advises against the shareholder value and the pressure to lower business burdens being businesses' highest strategic priorities.

The world needs a different set of principles around which to organise and a leadership that is more generous and more respectful of diversity than that provided currently by the American right. Liberal values, he believes, can serve as an effective platform upon which to construct fairer, more just and more effective economic and social orders.

Europe will indeed come of age, says Hutton, by bringing in a settlement based on interdependence, reciprocity of obligation and the recognition that overriding global interests should be acknowledged as such and respected by all countries.

Globalisation on European terms and based on European values, rather than on American ones, should now be sought by the EU, Hutton argues. The advantages of Europe's distinctive attitudes on company law, financial regulation, workplace consultation, environmental standards, profit disclosure, transparency over accounts and taxation, as well as the EU's achievements in the management and nurturing interdependence should be expounded worldwide.

For the world economy to perform better and the global cooperation to improve, Hutton proposes introduction of a World Financial Authority to audit the balance sheets of international financial institutions, police tax havens and also set minimum accounting standards and of a World Competition Authority to police the immense concentrations of private corporate power. He also calls for a dramatic increase in the Third World health expenditure and for the international financial and trade systems to be reframed in the interest of the world's poorer populations.

The US and EU both stand before choices of tremendous significance for them. The US can choose between accepting interdependence or continuing its current unilateralist stance.

By remaining wedded to the exercise of autonomous power guaranteed by its military superiority as it currently is, and by retaining its current world outlook that is supported and entrenched by the vigorous conservative ideology that dominates its politics and economics, the US may make it considerably more difficult for the world to resolve its current tremendous political, social and economic problems, warns Hutton.

The fight for security, prosperity and justice can no longer be won on any one nation's ground. It is par excellence international. It requires agreement on values and is predicated on acknowledgment of interdependence.

While working on this most ambitious and challenging project, Hutton consulted a number of political, social and economic experts from several countries (notably the US, Germany and Italy) to avail himself of a broader array of views and experiences.

Commendable as his intentions were, his book does not proffer a truly "nation-neutral" perspective, a perspective that is, I believe, particularly valuable to all those whose work is to formulate and implement political, social and economic programmes.

For such a perspective to have been established, this book would have needed to be an intellectual product of at least several authors, each of them representing a distinctive major cultural and political tradition.

The reader is certain to be impressed with the amount, the range of and the detail of information obtained for Hutton by his research assistants.

On the other hand, this abundance of information does create certain problems for the reader as this book's structure has regrettably not been developed in a way that would fully match that information's diversity.

As a result, the task of ordering the information, interpreting it and hypothesising about the character of influence some factors may have on social or economic outcomes is quite often left to the reader.

Indeed, the very quantity of facts provided in the book has made it impossible for Hutton to always explicate, as required, their significance or the way in which they influence people's thinking as well as the respective society's and economy's performance.

In fairness, however, it will certainly take much more than one large research project to formulate an internally and externally valid new paradigm that could guide the future formulation of improved global political, social and economic policies.

Hutton's book is an important step towards formulation, and implementation, of a new and improved, global political, social and economic paradigm.

The plethora of information and insights that it provides is of great use to the discerning reader and will hopefully assist in further refinement of the respective theory and practice. For this we already are in debt to him.




























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