Issue 208 of SOCIALIST REVIEW Published May 1997 Copyright Socialist Review

State of dreams a review of The State to Come,

by Will Hutton, Vintage 4.99

Alex Callinicos

The impact of Will Hutton's book The State We're In, established him as the most influential advocate of social democracy in contemporary Britain. In his new book, The State to Come, he restates his arguments.

Hutton is a social democrat in the tradition of the postwar Labour right. Like Tony Crosland in The Future of Socialism (1956) he doesn't want to get rid of capitalism. Rather, he believes that state intervention can produce a more benevolent capitalism. But he argues that the greater global integration of capital has made Keynesian methods obsolete. He proposes instead a combination of institutional changes and political reforms that can create a 'stakeholder society' where the worst excesses of uncontrolled capitalism are avoided, and the interests of workers and consumers, as well as investors and managers, are taken into account.

The strengths of The State To Come are twofold. First, Hutton offers a savage critique of the growth of economic inequality under the Tories. These social divisions, and not the decline of 'traditional values', he argues against Tory and New Labour authoritarians, are responsible for crime and social decay.

Secondly, Hutton demolishes the idea that 'contract capitalism' the unrestrained market is a self regulating system. Rather misleadingly, he tends to formulate the issue in terms of the concept of 'reflexivity', which he borrows from the fashionable sociologist Tony Giddens. But the basic point Hutton makes is sound. Markets don't tend to move towards a stable equilibrium. Rather they move in self reinforcing spirals that push economies upwards in a frenzy of speculation or downwards in a cycle of decline.

The weaknesses of The State To Come are also twofold. First, if capitalism is such an inherently unstable system, how can it be reformed to give the mass of people a share in democratic control of the economy? In his earlier book Hutton counterposed free market Anglo-American capitalism with the more regulated 'stakeholder capitalisms' of Japan and Germany. Here he doesn't address the profound difficulties both these economies have faced in recent years. And he doesn't face up to the fact that German big business is trying to restructure and deregulate their economy to make it much more 'Anglo-Saxon', in the process provoking the biggest social confrontations since the Second World War.

Secondly, and more immediately, Hutton is miles to the left of New Labour. He vigorously defends the necessity of progressive taxation and public expenditure as instruments for the redistribution of wealth from rich to poor. And he wants legal reforms to make British companies behave in a more 'stakeholder' way. Such ideas are anathema to Tony Blair and Gordon Brown.

Hutton does at points recognise the problem. He notes that 'the intellectual hegemony of Conservatism remains in place', and so 'the that New Labour will remain imprisoned by the ideas it has learned to ape, and will govern too much within the parameters laid down by its predecessors.' But instead of thinking through the implications of Blair's and Brown's conservatism, he resorts to wishful thinking. He brushes aside what he admits to be the huge problems involved in the drive towards a single European currency, and argues that it will generate 'a millennial boom'. And he argues that Labour's commitment to constitutional reform and co-operation with the Liberals and with pro-European bosses could create 'a progressive political coalition' that would last 'for decades, rather as it did in the 19th century'.

Here Hutton enters cloud cuckoo land. During the general election campaign Blair consistently retreated in the face of Tory fire. What reason is there for believing that he will behave any differently in office? The State To Come is the work of someone who passionately detests what the Tories have done to British society and who urgently desires real change. But it shows no understanding of what the change should be or of how it can be achieved.

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