Review: The Rotten State of Britain


by Chris Dillow    
2:34 pm - March 24th 2009

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51ewZzZQz7L._SL500_AA240_Eamonn Butler’s The Rotten State of Britain aspires to be The State We’re In for the 00s. It’s not – and not just because it is a much easier read than Hutton’s tome.

Whereas his was a narrative about our economy and society, most of The Rotten State of Britain is a series of attacks upon New Labour’s failures, with chapters such as ‘spin’, ‘snoopers’ and ‘nannies’. Naturally, some of these hit their targets better than others.

Butler is good on civil liberties and the absurdities of red tape. And I think he‘s wise to not pin the blame for the banking crisis (which he scarcely mentions) upon the government. However, his whinges about ‘multicultralism’ and ‘Winterval’ suggest he’s overdosed on the Daily Mail.

There are, however, a couple of problems here.

First, Butler gives the impression that New Labour is an alien government imposed upon us from outside. The common theme uniting Butler’s complaints about the government is its top-down centralizing managerialism, though he doesn’t use that word.  As he says:

[New Labour] seem to believe that their own narrow wisdom is better than that of millions  of individuals whose ideas and values and conventions are tested every day.

But what he doesn’t ask is: if Labour’s so bad, why did millions of these individuals vote for it in three elections? What is the appeal of illiberal centralism? Why is that the alternative narrative – of liberty, self-determination and the wisdom of crowds – has not won much public support?

What Butler misses here is that the ideology of centralism is not confined to New Labour, but is in fact wired into companies and the media. Butler complains:

Everyone is expected to fit in, to conform, and to rejoice in their conformity. Those who do not conform are thought immoral, scorned and vilified.

But government on its own does not have the power to do this. Pressures to conform come also from HR departments and from the media. It’s here too that we find the ideology of hierarchy, centralism and distrust of true diversity.
And yet Butler pretends that this ideology is New Labour’s alone. He never asks: where did New Labour get it from?

I fear this mistake is not a mere intellectual error on Butler’s part, but rather the natural result of that vulgar libertarianism which sees only government as the enemy of freedom, whilst failing to see that its enemies can also exist in the private sector.
My second problem is that Butler is too sketchy about remedies. He calls for a flat tax and for education vouchers, but provides next to no evidence for their effectiveness. And he says:

Until we replace our rotten, means-tested, rights-driven welfare system, we will never stop the steady growth of social dysfunction.

This fails to address Joseph Schumpeter’s famous quip – that if a man has been run over by a bus, you do not restore him to health merely by reversing the bus.

Granted, institutions determine character in the long-run. But it is surely just wishful thinking to suppose they do so quickly. The idea that reform of the welfare state will swiftly abolish the underclass and create a society of imaginative self-reliant hard workers is surely doubtful – and Butler gives us no reason not to doubt it.

Again, I fear this is not his error alone. Free marketeers often pay too much attention to comparative statics, and not enough to dynamics – to the difficulties of getting from one equilibrium to another.

And herein lies a paradox. Butler and New Labour have something in common. Both are optimists. It’s just that New Labour is optimistic about centralized control, and Butler optimistic about decentralization.

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About the author
Chris Dillow is a regular contributor and former City economist, now an economics writer. He is also the author of The End of Politics: New Labour and the Folly of Managerialism. Also at: Stumbling and Mumbling
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Reader comments


Dear heaven, he’s written a whole bloody book? Did you read him in CiF on inheritance tax the other day? The man’s an imbecile.

Good to see book reviews on LC.

3. Alisdair Cameron

What Butler misses here is that the ideology of centralism is not confined to New Labour, but is in fact wired into companies and the media. Butler complains:

Everyone is expected to fit in, to conform, and to rejoice in their conformity. Those who do not conform are thought immoral, scorned and vilified

You’re both right: Butler for pointing the finger at New Lab and you for pointing out that they haven’t done it alone. However, I feel you don’t accord Lab enough blame for succumbing to (or perhaps even pushing) the corporatist, consumerist state ideology. It’s a bit chicken and egg, but without approving Govt noises, some of the worst company practices may not have been attempted, while the mirage of corporate success (now shown to be sham in oh-so-many cases) was uncritically accepted by the Govt. Both sides were complicit.. Before any dives in, the Tories might have been worse, but that should not excuse Lab.

4. Tom Miller

This book just sounds like a boring collection of Daily Mail orthodoxies, I’m afraid…

I feel you don’t accord Lab enough blame for succumbing to (or perhaps even pushing) the corporatist, consumerist state ideology.

Were the Tories any different beforehand?

6. Andrew Adams

No, but surely we expect Labour to be better.

He calls for a flat tax and for education vouchers, but provides next to no evidence for their effectiveness.

Yep, the same old right-of-centre answers as before. I suppose he could have cited one of the Baltic states a evidence of a flat tax regime, but that might not look too clever these days.

8. Mike Killingworth

Free marketeers often pay too much attention to comparative statics, and not enough to dynamics – to the difficulties of getting from one equilibrium to another.

Indeed they do. They are sadly not alone.

9. Conor Foley

Read Paul Krugman’s The Conscience of a Liberal instead. It’s great.

I don’t think the bus anology is appropriate, its more a case of “when in a hole, stop digging”.

Its true that reforming the welfare state will not fix things over night but to keep going with a plan that has been shown to be counterproductive is foolish.

As to where Labour got their centralizing ideas from; the Labour party used to be Socialist, centralization is a key tennet of that philosophy.

Finally, even a “vulgar Libertarian”, (thank you so much), such as myself recognises that organisations out side the government can have influences on our Liberty. However, the private sector has no where near the power of government on this front and companies cannot implement restrictions without the conivance of government.

fear this mistake is not a mere intellectual error on Butler’s part, but rather the natural result of that vulgar libertarianism which sees only government as the enemy of freedom, whilst failing to see that its enemies can also exist in the private sector.

Vulgar is it , tell em then you elegant courtier , which private company is it that can lock you up , shoot you , cart your children off and remove half of your earnings under threat of imprisonment ?
Thts right none . Do stop repeating this childish rubbish if you want to be taken seriously . Otherwise this was very good and you are consistently interesting and balanced

Look up “vulgar libertarian” on Google to find out the context in which it’s being used.

“which private company is it that can lock you up”

GSL, Serco, Kalyx & G4S Justice Services.

Vulgar is it , tell em then you elegant courtier , which private company is it that can lock you up , shoot you , cart your children off and remove half of your earnings under threat of imprisonment ?

Rio Tinto.

Well, provided you live in Namibia.

Of course, if we’re going to name a historical private company which could do all that and more we have to go for the Belgian Free State which managed to do mutilations and genocide on top of that too.

If you’re dissatisfied with the state’s monopoly on legitimate violence (assuming you don’t want to explain your disagreements with Max Weber’s theory of state) I recommend you try a nation state where the state does not maintain such a monopoly. I hear Somalia is excellent this time of year.

Ahh, the subtle joys of badmouthing Libertarianism from a position of ignorance or fact blinding hatred. “Look, those crazy Libertarians want us all to live in Somalia!!!!!”

By all means have a go at anarchic systems, they’re never going to work. It is however, mind numbingly stupid to conflate minarchy and anarchy.

As for : ‘“which private company is it that can lock you up”

GSL, Serco, Kalyx & G4S Justice Services.’

Hate to point out the unbloodybelievably obvious but this is true only at the governments behest.

Asquith – on the “Vulgar Libertarian” thing; it seems to be a combination of railing against corporatism and just disliking Libertarian views. I was particularly struck by this gem from the mutualist blog, (first link on google):

“workers were forced to sell their labor in a buyer’s market on terms set by the owning classes, and thus pay tribute (in the form of a wage less than their labor-product)”

Why on earth would anyone take the risk of setting up and investing in a company when even if things work out, there is no economic upside for the investor in employing anyone?

16. Mike Killingworth

[15] So you agree with Marx that in a capitalist system workers are ripped off, then?

“Hate to point out the unbloodybelievably obvious but this is true only at the governments behest.”

And the government held a gun to the shareholder’s heads and forced them to take the contract, I guess?

18. Alisdair Cameron

@ Neil (17) Err, just when did shareholders (the small ones at least) have much of a say (y’know a real say) as to what contracts ‘their’ firm enters into? Senior management at such firms do (or at least until recently have done) pretty much whatever they like in pursuit of money, throwing principles aside. Corporate ethics is chiefly whitewash, lip-service to assuage the technical owners that the de facto controllers of the firm aren’t the utter bastards that too many sadly are, having signed up to the whole corporatist sociopathic mindset, which New Labour also bought into.

@18 – It’s also worth remembering that those poor, innocent companies (they only lock people up because the bigger boy, sorry, the government told them too!) more than likely lobbied the government for the privilege of locking people up in return for a profit.

20. Alisdair Cameron

Don’t disagree with you there one iota, Neil: was simply pointing out that the (technical) owners of corporations ain’t the ones who dictate what contracts are lobbied and bid for. They shareholders are at worst culpable of turning a blind eye to unprincipled or unethical pursuit of profits at the expense of the long-term, but even if dead against such managerial corporatism (yup, the Tories would back this, but why did New lab feel so obliged to?) there’s little shareholders can effectively do…I’d blame the managerialist, corporatist classes and compliant politicians ahead of shareholders

I recommend you try a nation state where the state does not maintain such a monopoly. I hear Somalia is excellent this time of year.

OHOC -I am not unhappy with the monopoly just the amount .I was pointing out that the extent to which Google , Pepsi and Marks and Spencers are able to impose their will is of a somewhat different order and private companies working for the State are the State . It takes a tragically desperate loon to pretend this is not bleeding obvious

Funny how you didn’t mention Coca Cola there…

Neil, that’s a daft argument you’ve got yourself into. If there was no government requirement for people to be locked up etc, there wouldn’t be companies tendering to do it.

Alix, as OHOC has already pointed out that is not necessarily true.

OHOC’s comment about how other states operate is irrelevant to my point.

Newmania asked:
“which private company is it that can lock you up , shoot you , cart your children off and remove half of your earnings under threat of imprisonment ?”

You replied:
“GSL, Serco, Kalyx & G4S Justice Services”

At this point, every comment in the thread had been about Britain. Unsurprising because the post was about a book on Britain. All the companies you cite above operate in Britain, amongst other places.

There would not be security companies providing security solutions in this country if there were not governments hiring them to do it. That is a simple statement of fact.

GSL, Serco, Kalyx & G4S Justice Services are private companies providing ‘security solutions’ (nice euphemism!) in this country. I answered the question with a simple statement of fact.

Now tell me, how exactly did the government compel these companies to provide those services?

Er. They hired them.

Can someone help me out here and tell me what it is Neil isn’t getting, or I’m not getting?

Basically, my point is it’s a nonsense for you to site those companies as evidence that it’s evil private corporations who have driven Labour into this abyss of managerialism, because those companies wouldn’t exist to do the work they do without the Labour government, among others, finding that its policy objectives can be met by hiring them to do it. Your argument is circular.

I’m not trying to sugar-sweeten what these people do in the name of our government by calling them security solutions, by the way – that’s what they call themselves. You need to stop jumping at shadows.

30. Andrew Adams

While I am strongly against such contracts being given to private companies there is a difference between a company being contracted to use force against individuals on behalf of the state (where it would be legitimate for the state itself to use such force) and it being able to use force in its own interests.

Hire != compel, Alix.

@30 – yes, I agree, there is a difference.

It’s a good job we have laws that prevent that kind of thing happening…

Sorry, I still don’t get it. You’re saying the government doesn’t force the private contractor to take its contract for locking people up, therefore it is the private contractor who is really responsible for people being locked up?

But that’s… nuts. And flies in the face of, well, the reality that it’s the government that makes the policy that requires that particular end of locking people up etc to be met.

Do you understand this?

Ah, hold on, I think I get it. To you it’s the private company’s fault for lobbying the government to do the job cheaper and better than they can, right? And it’s got nothing to do with the fact that the government has decided to adopt a PPI contract model, yes?

PPI contract model, or full contracting out, whichever it happens to be.

Alix, I’m going to duck out before you force me into Godwin territory.

37. Joe Otten

Comment on blog != force, Neil.

s/force/bore/

there, fixed.

39. Lee Griffin

Can’t say I understand Neil’s argument either. The government can’t stand away from culpability, as some of us have stated on other threads….our government has the ultimate say, the ultimate power (elections aside) and being “lobbied” or “persuaded” or “asked” or any other weasel word you wish to use does not absolve them of the fact they said yes.

And Nazis bear on this in what way exactly? Seriously, mate, if I’ve missed something, just explain it. But I don’t think I have. I think you’re just opening mouth without engaging brain.

Excuse me for being a vulgar libertarian, but there is some evidence that suggests that the Somalians have actually been rather better off stateless: http://www.peterleeson.com/Better_Off_Stateless.pdf

So who knows, how many other states contribute a net disadvantage to their people? (I am not saying states are entirely useless, they have clearly emerged for a reason even if they are incredibly violent)

I can’t think why Butler wouldn’t reference a couple of ASI reports when talking about education but school choice/education vouchers/tax credits now have a pretty solid amont of evidence in their support. I can recommend this overview: http://www.catostore.org/index.asp?fa=ProductDetails&method=&pid=1441361

But there is a lot free material available as well.

In general, however, I agree with the thrust of Chris’s argument. I happen to think of corporations as creatures of the state (as they are granted license by the state in the first place) but I understand it is a bit of a chicken and egg situation, with corporations constituting new centres of power that in turn influence the government, all leading a vast complex of regulatory institutions. I know libertarians err towards criticising governments without looking at the conditions that make such governments possible.


Reactions: Twitter, blogs
  1. Liberal Conspiracy

    New post: Review: The Rotten State of Britain http://tinyurl.com/cquz3t

  2. Ryan

    Broken Britain!!!1 http://tinyurl.com/cquz3t

  3. Liberal Conspiracy

    New post: Review: The Rotten State of Britain http://tinyurl.com/cquz3t





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