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The last post on Hutt

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Just when you thought it was never going to end! This is last extract from the paper on Hutt and the mythology of the trade union movement.

The career of William Harold Hutt

Bill Hutt’s father was a skilled tradesman, a compositor and a reluctant trade unionist with W H Smith and Son. Hutt completed high school during World War I and trained as a pilot but the war finished before he gained his “wings”. He recalled that he could take off quite well but he had some problems with landing which prompted his wing commander to complain that Hutt was inflicting more damage on the RAF than the Germans could manage at that late stage of the war.

He took a commerce degree from the University of London and from 1924 until 1928 he worked as a personal assistant with the publisher Sir Ernest Benn. He wrote his first paper in 1925 to describe how the enduring mythology of the evils of industrialisation and especially the cotton mills can be traced to the fraudulent “Sadler Committee” report of 1832.

In 1928 Hutt left England to take up a post as senior lecturer at the University of Cape Town. He later became the Dean of Commerce and pursued a highly productive career with some scores of articles and ten books. He spent the years of his active retirement as a visiting professor at various US universities.


The Theory of Collective Bargaining, 1930

Economists and the Public, 1936

The Theory of Idle Resources, 1939

Plan for Reconstruction,1944

Keynesianism – Retrospect and Prospect, 1963

The Economics of the Colour Bar, 1964

Politically Impossible…?, 1971

The Strike-Threat System, 1973

A Rehabilitation of Say’s Law, 1975

The Keynesian Episode, 1979

His three main areas of interest were labour economics, public choice theory and monetary theory, although as a political economist in the great tradition he always had the bigger picture in mind as the addressed particular problems and issues.

Labour economics

His first book, The Theory of Collective Bargaining was subtitled A critique of the argument that trade unions neutralise labour’s ‘disadvantage’ in bargaining and enhance wage-rates by the use, or threat, of strikes. He returned to this theme many years later with The Strike Threat System: The economic consequences of collective bargaining. In between he wrote a major work on unemployment, The Theory of Idle Resources to provide an alternative explanation to that of Keynes and the Keynesians.

Public choice theory

Hutt’s work on the economic impact of the labour unions in the nineteenth century drew his attention to the rise of the vote-buying motive in politics as the working classes gained the franchise. This led him to some insights about politics and the behaviour of politicians that have become known as ‘public choice theory’ from the work of Schumpater and later Tulloch and Buchanan. The Australian historian Keith Hancock was also a pioneer in this field. In his book Australia (1930) he described how the major parties were forced to compete for the votes of minority interests in marginal electorates where the major players are evenly matched.

The same necessity which moderates the zeal of Labour politicians moderates the ardour of their opponents. They, too, must go scouting from their base of class interest and instinct and theory far out into the electoral no-man’s land, where free companies and guerrilla mercenaries wander irresolutely between the two armies which chaffer for their support. The free companies are sometimes ridiculously small but their adherence to one side or the other is decisive of electoral battles. Their numbers may be contemptible but their price is high. (p. 189).

Hutt’s second book, Economists and the Public appeared in 1936, He wrote in the Preface “The present book has arisen out of what I originally intended to be an important side-issue in a study of a certain equalitarian and democratic ideal, namely, the competitive system. But further reflection caused the problems here dealt with to acquire major importance and demand separate treatment”.

The “side-issue” that he felt obliged to address was the overwhelming opposition to free enterprise capitalism and free markets among intellectuals, politicians and other people of influence. Hutt’s deliberations on the anti-free trade mentality drove him to a major survey of the nature of the social sciences and their relationship to public opinion and politics. The book appeared in the same year as the blockbusting General Theory from Keynes and Hutt’s book made no noticeable impression although it still speaks to our condition.

The Failure of Debate

Hutt wrote two books on Keynes and the general theory. In the Prologue to the second book he noted the general failure of Keynesians to come to grips with (a) the U-turn to “classical” thinking and policy prescriptions in the later essays of Keynes (including posthumous essays which were almost suppressed) and (b) the possibility of scholarly and carefully considered criticism of the doctrines and methods of The General Theory.


As a long term resident in South Africa, Hutt was well placed to chronicle the steady escalation of racial discrimination that ended up with apartheid, a process that resembled a boa constrictor, slowly crushing the life out of the economy. Written with malice towards none, The Economics of the Colour Bar sketched the disastrous outcome of a combination of racial prejudice on the part of the Africaaners, unprincipled electioneering in Britain, white trade union exclusionism and socialist central planning on the part of various South African governments.

Hutt’s outspoken views on these matters aroused official alarm as early as the 1930s when he warned that clauses in the constitution, originally designed by the British administration after the Boer War to entrench the voting rights of coloured people, were under threat. In 1955 his passport was withdrawn by the Department of the Interior but it was returned after the matter was raised in Parliament. In 1961, as South Africa was seceding from the commonwealth, he suggested in The Times that all South African citizens, regardless of race and colour, should be offered British citizenship.

The colour bar was a crippling impediment to the functioning of the private sector and the economic growth of the nation. As Hutt pointed out, it was always in the interests of the owners to liberate non-White labour but it took a long time before there were significant numbers of Africaaners among the owners.

Hutt resources on line

The Factory System. Hutt’s 1925 paper, reprinted in Capitalism and the Historians (ed Hayek)

Chapter 3 “Labor’s Bitter Struggle” from The Strike Threat System.

Some critical comments on labor’s disadvantage from The Theory of Collective Bargaining.

The Economics of the Colour Bar. Extracts and extended commentary on the origins of apartheid.

A paper by Peter Lewin describing Hutt’s study of apartheid in South Africa.

The Mises Institute Tribute to Hutt.

Richard Ebeling’s tribute to Hutt.


Written by Admin

June 22, 2006 at 10:58 am

Posted in Uncategorized

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