THE BOOK REVIEW: THE STATE WE'RE IN Will Hutton Cape £16.99

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The Independent Online
For over 20 years the Left in Britain and the United States has been a defeated army. Occasionally its retreat has been slow, characterised by house-to-house fighting from issue to issue. More often, it has been a headlong rout. In 1995, in the US at least, the initiative is still with the Right. The citizens' revolt against the legacy of the New Deal and big government was foreshadowed by Ross Perot and has been brought to a head under Newt Gingrich. After two decades of being Thatchered, the Le ft is in danger of being Newtered.

Here in Britain, the popular distaste for a clapped-out and power-corrupted administration looks likely to allow Tony Blair to become prime minister at the next election. But if this triumph is not to become a Clinton blip, Labour needs to understand andpre-empt the next stages of the revolution. Predictably, it is struggling for the ideas and direction it needs to accomplish this. Will Hutton's book is an intelligent and well-timed attempt to provide both.

As with Corelli Barnett's similarly compendious Audit of War, most of the early chapters constitute a prolonged and heart-felt whinge about the mess we're in. Whereas Barnett concentrated his fire on the bureaucratisation of Britain that followed the war, Hutton trains his guns on the twin targets of the City and the marketisation of everyday life. Much of the Left, devoid of self-confidence, loathes the City and its mores. But over time the financial markets and institutions have begun to seem like forces of nature, similar to earthquakes or volcanic eruptions; hateful, but impossible to change. Hutton is not afraid. He castigates the impact that the demand for ever higher rates of return has had on investment in British industry, and shows how other successful economies - notably Germany and Japan - have devised institutions for mitigating this short-termism. It is a valuable corrective to the dismal determinism of the City's defenders.

The book's weakness, though, lies in Hutton's analysis of the recent past. Nothing that has happened since 1979 has been good. "Altruism and the civilising values of an inclusive society have been sacrificed on the altar of self-interest, of choice, of opting out and of individualism," he declares. Marketisation has brought about the collapse of social cohesion.

There is an element of truth in this, but unqualified it becomes nostalgia masquerading as history. The That-cherite picture of Seventies Britain as a place of class division, deference and union jobsworths had a resonance with voters Hutton almost completely ignores. Similarly, the experiences of privatisation, self-management and increased competition have not benefited fat cats only. For the citizen as consumer much of the past 20 years has been a success. He is undoubtedly right to highlight the atomisation, anxiety and insecurity that we experience in the Nineties, but his argument risks defending the indefensible: fusty and inefficient organisations and practices.

And here is the paradox. Were Hutton to follow through the logic of the book's critique, then you might expect prescriptions that seek to defend what is left of the status quo and attempt to return to the post-war consensus. But his path somehow leads elsewhere. Indeed, he breaks free of the past, and in the last three chapters, which alone are worth the purchase price, he lays out a genuine anti-statist manifesto for the Left.

Under the umbrella of a modernised Parliament and a written constitution, he favours the devolution of powers to a "web of associations ... cities, regulatory authorities and a host of other institutions", like Housing Associations and Training and Enterprise Councils, because "the state can no longer be the vehicle for top-down implementation". There is no call for re-nationalisation. Rather he advocates an independent but accountable central bank, proper auditing and powerful regulators.

You will not find a trace of knee-jerk leftism in Hutton's call for a revolution in British unionism, or his suggestion that a return of grammar schools is needed to entice the middle classes back into state education. Perhaps that's why he insists on the need for political pluralism, calling on Labour to set aside its "tribal identity" and embracing a partnership with other political forces. This openness makes for a good and different manifesto. On balance, if Will Hutton was a political party, I would vote for him.

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