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Archive by tag: Will HuttonReturn
May 01, 2022

Oded Galor’s attempt to unify economic theory is impressive and insightful, even as it overreaches

It is the social scientist’s dream: to outdo Adam Smith, Max Weber and Karl Marx and come up with a unifying theory of why society has developed as it has, where it is going next and how its wrongs can be righted. At times, reading Oded Galor’s upbeat book I thought he had cracked it, taken aback by his imagination and verve. For example, it is obvious once pointed out that agricultural economies reliant on the plough necessarily diminish women’s role in wider economic and social life because ploughs need male muscle, which leads to women taking over household duties rather than sharing duties in fields where soil is easier to work. What Galor shows is that this gendered division of labour persists over generations, even in countries to which plough-using peoples migrate. He is nothing if not original.

But ultimately, achieving the dream of explaining everything is too big an ask, even for an economist of Galor’s range. He is so devoted to the hidden long-run pulses that determine our destinies – geography, climate, diversity, the capacity to be future-oriented, the role of education, the rights and wrongs of Malthusian economics – that he neglects what is in full view. An account that purports to describe humanity’s journey without getting to grips with why some innovations – such as the three-masted sailing ship, printing press or computer – change civilisation while others are more ordinary, can only be incomplete. These “general-purpose technologies” not only have diverse origins, as he argues, but also require an extraordinary interplay between state funding, large markets, cultural readiness and capitalist organisation to get off the ground. The printing press was not only the result of Gutenberg living on the Rhine, where trade routes from various regions brought invention and ideas: it also needed Protestant princes to fund the prototypes and buy the presses, and then an exploding, religiously driven appetite for published bibles, hymns and sermons in Reformation Europe.

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Mar 21, 2021

This weighty assault on the modern free market by the former governor of the Bank of England is a landmark achievement

If 25 years ago anyone had suggested that one of the world’s most prominent ex-central bankers would launch an intellectual broadside at free market fundamentalism for shredding the values on which good societies and functioning markets are based, I would have been amazed. If, in addition, it was suggested he would go on to argue that stakeholder capitalism, socially motivated investing and business putting purpose before profit were the best ways to put matters right, I would have considered it a fairy story. Although writing in this vein in the mid-1990s made my book The State We’re In one of the past century’s political bestsellers, the newly elected Labour government was terrified of going near most of it for fear of being cast as anti-business and interventionist. Now Mark Carney, governor of the Bank of England until this time last year, has turned his hand to driving ideas once considered eccentric into the mainstream.

In a mix of rich analysis mixed with pages that read like a dry Bank of England minute, he blames the three great crises of our times – the financial crash, the pandemic and the climate emergency (he is the UN’s special envoy on climate action and finance) – on twisted economics, an accompanying amoral culture, and degraded institutions whose lack of accountability and integrity accelerate the system’s dysfunction. Thus banks lost control of reality in a fantasy world in which balance sheets could grow exponentially without risk – another market would handle that – indulged by governments and regulators who believed that markets were always right. Then came the Covid pandemic, for which western governments were singularly unready, relying on dubious cost-benefit analysis rather than valuing what we as humans tend to – our lives and looking out for one another. The same mistake is being made with climate change.

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Dec 27, 2020

Alex Brummer’s timely book about our future correctly argues the UK must change, but for the wrong reasons

The paradox of Brexit is that, if this ultra-free market project incubated by the hard right is to have any chance of success, it must trigger an unprecedented wave of economic and social activism, mobilisation and intervention. A project conceived by Thatcherite ultras who wanted to throw off the regulatory “yoke” of Brussels and sclerotic Europe can only deliver to the disillusioned, left-behind people who correctly wanted a dramatic change in the status quo by a massive state-led restructuring of the way Britain works. They did not vote Leave for an intensification of free-market globalisation and more libertarian carelessness about the condition of the country beyond London. To make a success of Brexit, Britain has to become more European.

This book, arguing that Brexit requires and will cause a great, state-directed, British reboot, exemplifies the paradox. For large parts I was cheering the author along with his searing account of how Britain has decadently sold so many of its strategic assets overseas, while offering a rollicking (and highly readable) account of Britain’s remaining and undersung strengths in high technology, financial services, universities, pharmaceuticals and the creative industries. What we have to do, declares this convert to Brexit, is to abandon free-market decadence and instead demand the public and private sectors seriously get behind our economic strengths as they never have before. And that must be accompanied by federalising the country, renewing our shot-through social contract with, for example, an innovative social insurance scheme for social care, giving local government the autonomy to tax and borrow, supporting key institutions such as the BBC as key underpinnings of the creative industries and overhauling everything from how companies are governed and owned to how we organise training.

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Aug 10, 2020

Clive Hamilton and Mareike Ohlberg’s startling book about how the Chinese Communist party has spread its tentacles throughout the world is vital reading

This is a remarkable book with a chilling message. The Chinese Communist party, for which dominating rural China in order to encircle its cities and win the civil war is part of its historic backstory, is now intent on doing the same internationally. Using whatever lever comes to hand – generously financing a thinktank in Washington, owning a part-share of Rotterdam port, encouraging “friendship” clubs like Britain’s 48 Group Club – it is aiming to create an international soft “discourse” and hard infrastructure that so encircles western power centres that the dominance of the party at home and abroad becomes unchallengeable.

China, we know, has very different definitions of terrorism, human rights, security and even multilateralism to those accepted internationally. The book spells them out and shows how intent the party is on winning international acceptance for them as vital buttresses to its power. Acts of terrorism include not eating pork or speaking out against one-party “democracy”, as the Uighurs and denizens of Hong Kong are learning. Human rights should be understood as the people’s collective right for Chinese-style economic and social development. Multilateralism means states acting in harmony with China and its view that economic development is the alpha and omega of all international purpose – the vision set out in the Belt and Road Initiative (BRI).

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