Economic Theory

Review of ‘More Human’ by Steve Hilton

We live in a world where big ideas are disdained. The term ‘ideologue’ is hurled as abuse, and mainstream politicians embrace ‘pragmatism’ and tell us they are not interested in theories or concepts but ‘what works’. Conservatives especially see themselves as being above the naive thinking that significant changes to governmental structures can fundamentally better the world. In that they are Burkean, seeking to deal with ‘what is’, not ‘what should be’.

Steve Hilton is not a Burkean conservative. In fact, in many respects he is barely a conservative at all. In this wide-ranging volume, Cameron’s colourful t-shirt wearing former aide has produced a radical manifesto of revolutionary ideas which would see fundamental changes to everything from the structure of government, to the delivery of health and education services, to government policy towards business, poverty, inequality, childhood and nature.

It would be wrong to say these ideas are a coherent ideology. In many ways, the policies he offers are deeply contradictory if viewed through the prisms of established political philosophies. Yet his overriding charge is that in many aspects of our lives we have become less ‘human’. Vast bureaucracies (whether public or private sector) treat us as numbers and ignore the personal touch which can enhance our lives. He rails against vested interests across the board, often based on his own subjective values of what enhances human well-being. The result is a set of policy proposals from which everyone from Hayekian liberals to hard-line Malthusian green activists can hold up support for their ideas. Whilst he places far too much faith in the effect getting the ‘right people’ into politics could have, he’s surely right that the ideas emanating from mainstream politicians are small in comparison to the huge challenges we face.

Without ever mentioning Hayek, Hilton’s blistering attack on our current system of government is distinctly classically liberal. Government should merely exist to facilitate the ability for individuals to lead decent lives, he claims. There is no reason why key services such as health, education and welfare should be provided by bureaucratic state monopolies. He may as well have come and said ‘government can’t love you’ – because he details through case studies the inhumanity through which hugely centralised state provision can create structures which ignore our basic human instincts and desires. Quite simply, a system designed in Whitehall cannot understand the circumstances which lead a family into poverty or the dignified way through which an elderly hospital patient might want to see out the end of their lives.

He therefore advocates a smashing open of many of these public services. Using examples of innovative solutions coming from the market sector, he calls for a complete opening of school provision – including for-profit schools – and essentially a voucher system of school choice. He identifies the huge challenge coming from technological change, and the need for life-long learning. He rightly shows how we should learn from international examples in healthcare delivery, and focus more on the underlying causes of poverty rather than treatment of symptoms. To help deliver this, he wants radical decentralisation of power (though he mentions little about tax-raising power) to localities. Central government should be limited to defence, foreign affairs etc. Experimentation and the ‘post-code’ lottery is good, he shows. What we really need is to allow the discovery process which markets provide to operate within these services.

Importantly for someone involved in politics, Hilton makes the human case for these reforms. Often those in favour of major changes get bogged down in economic theory, but Hilton provides specific examples of government folly – scarred by his experiences in No. 10. The laughable example of the government-appointed Loyd Grossman recommending schools should serve a ‘three-cheese’ macaroni is one of the highlights of this sort of government overreach.

Yet the problems with this book lie primarily in its contradictions. As an example, Hilton uses the well-worn straw man argument of claiming governments are obsessed with GDP as an exemplar of a non-human approach, claiming other measures of human well-being are important. But then he cheerleads for the ‘happiness’ indicators now delivered by the ONS. Hayek would be spinning in his grave at the idea that asking people whether they are happy could be aggregated and, worse, used as a guide for policy in any meaningful way. This is a classic example of dispersed information that, when aggregated, ignores individual circumstances and aspirations to the point of being meaningless.

Likewise, having talked about how government disempowers families through bureaucratic systems, Hilton places huge faith in the state to undertake so-called ‘targeted interventions’ on problem families and wishes it to institute an authoritarian ban on smartphones for under-16s.

It’s perhaps in the sections on business though where this book seems to stray most from the insights about the futility of central planning. These sections have received the most press coverage, likely because of the ‘Nixon goes to China effect’ of a Conservative slamming business.

Hilton believes many (particularly large) companies are guilty of the same bureaucratic, rent-seeking activities that he laments through government. They are short-termist, overpay bosses, underpay staff, engage in sales tricks, and don’t allow us to speak to humans on customer service lines. These need to become human too, he claims. But how?

In competitive markets if we were not satisfied with our service, we’d vote with our wallets. But, Hilton claims, many of these large firms erect barriers to entry that distort this process. That’s why we need emboldened regulators and competition authorities. Yet Hilton never really convinces as to whether many of the markets he laments – supermarkets, for example – are truly oligopolistic. Worse, his solutions place more faith in central planners – demanding a more forceful interventions to stop unfair practices. It is precisely this sort of policy that the recent CMA report acknowledged actually worsened outcomes for consumers in the energy market.

The huge blind spot in Hilton’s analysis is to ignore the role of government in cronyism and to assume away government failures to correct perceived market imperfections. Undoubtedly, some markets in the UK are uncompetitive, with significant government privilege. But if government does so much, then the pay-offs for lobbying activities increase. In many areas existing policies hurt consumers too, with companies then getting the blame.

Hilton says that high prices in UK supermarkets prove that the market is not competitive, for example. But this completely ignores the role of land use planning laws, the Common Agricultural Policy and biofuels policies in structurally higher prices. He blames pub chains for declines in local pubs, ignoring the smoking ban and high sin taxes. In other areas he undermines his own arguments that industries are closed off to newcomers by citing examples of firms doing things differently to those he dislikes. If consumers genuinely prefer these alternatives, they should flourish.

Worryingly, from a political perspective, Hilton’s slap-dash economic analysis – which owes a lot to his own preferences for local, small-scale providers – appears to have an audience in government. In George Osborne’s recent Budget, the Chancellor roughly adopted Hilton’s recommendation for the introduction of some form of statutory Living Wage (in the form of a new band for the National Minimum Wage for over-25s). Hilton writes with great gusto that “if you work full-time, you should be paid enough to live on – end of story”. That maybe so, but the question is “by whom”? If an individual’s skill or experience level is such that their productivity is low, why should businesses be forced to pay to compensate employees for high rents and energy prices driven up by government policies? In many cases they simply won’t do so.

In the OBR’s documents accompanying the Budget, it was estimated that 60,000 fewer people would be able to find work as a result of this policy. The ease with which George Osborne glossed over this loss of opportunity for many of the most low-skilled and vulnerable participants in the labour market was frightening. It remains unclear to me how this fits into Hilton’s aspiration for a ‘human’ approach which values each individual.

This seems to me the big disappointment of this book. Hilton identifies many of the big challenges of our age. His critique of centralised government provision is exciting and bold. But in seeking to apply the same principles to business, he paradoxically implies a range of interventions that are in some cases themselves ‘inhuman’ and often unnecessary. Rather than creating a framework to allow our inherent individualities to flourish, at times this book reads more like a call for the world to simply be shaped according to the prejudices of a wise philosopher king. In this case, Steve Hilton.

Head of Public Policy and Director, Paragon Initiative

Ryan Bourne is Head of Public Policy at the IEA and Director of The Paragon Initiative. Ryan was educated at Magdalene College, Cambridge where he achieved a double-first in Economics at undergraduate level and later an MPhil qualification. Prior to joining the IEA, Ryan worked for a year at the economic consultancy firm Frontier Economics on competition and public policy issues. After leaving Frontier in 2010, Ryan joined the Centre for Policy Studies think tank in Westminster, first as an Economics Researcher and subsequently as Head of Economic Research. There, he was responsible for writing, editing and commissioning economic reports across a broad range of areas, as well as organisation of economic-themed events and roundtables. Ryan appears regularly in the national media, including writing for The Times, the Daily Telegraph, ConservativeHome and Spectator Coffee House, and appearing on broadcast, including BBC News, Newsnight, Sky News, Jeff Randall Live, Reuters and LBC radio. He is currently a weekly columnist for CityAM.

1 thought on “Review of ‘More Human’ by Steve Hilton”

  1. Posted 28/08/2015 at 18:36 | Permalink

    In his well-known essay on ‘The End of Laissez-Faire, Keynes wrote: “The important thing for government is not to do things which individuals are doing already, and to do them a little better or a little worse, but to do those things which at present are not done at all.” I interpret this as meaning, inter alia, that governments should be prepared to let the market work, wherever it can do so moderately well, and not always be seeking to interfere. In modern conditions governments have got far too big — and they need to work much harder to find areas (not just economic) from which they can and should withdraw. To that extent I feel that Steve Hilton was probably a very healthy member of the No 10 Policy Unit and I was sorry when he left. But I certainly wouldn’t nominate him (or, of course, anyone else!) for the role of economic dictator.

Comments are closed.