Making Economic Sense
Making
Economic Sense
by Murray Rothbard
(Contents
by Publication Date)
Chapter 107
William Harold Hutt: 1899-1988
On June 19, William Harold Hutt, one of the most
productive and creative economists of
this century, died in Irving, Texas, at the age of 89. Born in London,
Hutt served in the Royal
Flying Corps in World War I, and then went to the London School of
Economics, where he
studied under the great free-market and hard-money economist Edwin
Cannan. Hutt was
graduated in 1924, and spent several years in publishing.
His first important scholarly publication remains
virtually unknown today: an excellent
and penetrating annotated bibliography, The Philosophy of
Individualism: A Bibliography, which
he wrote, aided by the eminent laissez- faire liberal Francis W. Hirst.
The book was published
anonymously by the Individualist Bookshop of London in 1927. The
Philosophy of Individualism
served, 30 years later, as the core of Henry Hazlitt's annotated
bibliography, The Free Man's
Library (Van Nostrand, 1956).
From 1928 to 1965, Hutt taught economics at the
University of Cape Town in South
Africa. In his mid-60s, he came to the United States, taught at several
universities, and then
settled at the University of Dallas in 1971, where he taught for ten
years, until the age of 82, an
inspiration to a legion of students and colleagues. He continued to be
an emeritus professor at
Dallas until his death.
The shameful neglect of Hutt's great contributions
can be attributed to two main factors:
(1) the fact that he taught in the intellectual backwater of South
Africa, far from the great
intellectual controversies
in the profession; and (2) that he stood like a rock against the
major fashions of our time, in particular interventionism,
Keynesianism, and the general
enthusiasm for labor unions.
Hutt's first great contribution to economics was
his concise and lucid The Theory of
Collective Bargaining (P.S. King, 1930), which remains to
this day the best book on the theory
of wage determination. In this book, Hutt criticized many of the
classical economists, and
showed conclusively that unions cannot increase general wage rates, and
that particular wage
increases can only come at the expense of a dislocation of labor and a
fall in wage rates of other
workers. Ludwig von Mises wrote in the preface to the first American
edition of Hutt's book:
"Professor Hutt's brilliant essay is not merely a contribution to the
history of economic thought.
It is rather a critical analysis of the arguments advanced by
economists from Adam Smith down
and by the spokesmen of the unions in favor of the thesis that unionism
can raise wage rates
above the market value without harm to anybody else than the
exploiters."
In addition to his notable work in the theory of
labor, Professor Hutt wrote two brilliant
works in applied labor economics, i.e. labor history. His was the
outstanding essay in the
remarkable volume edited by F.A. Hayek, Capitalism and the
Historians (University of Chicago,
1954). Here Hutt discussed the Factory Acts restricting child labor in
early 19th-century Britain,
demonstrating that these acts were based on mendacious testimony, and
that the condition of
children had been greatly improved by the Industrial Revolution.
In 1964, furthermore, the Institute of Economic
Affairs in London published Hutt's
innovative work, The Economics of the Colour Bar,
in which he demonstrated that, contrary to
myth, the South African system of apartheid was
originated not by rural Afrikaners, but by
Anglo unions, anxious to suppress the competition of Africans who were
rising into the ranks of
the foremen and skilled craftsmen. Indeed, he showed that industrial apartheid
was imposed by a
successful general strike in 1922 led by William H. Andrews, head of
the Communist Party of
South Africa under the slogan "Whites Unite and Fight for a Workers'
World"! For his
opposition to apartheid and advocacy of a free
labor market, Professor Hutt's South African
passport was withdrawn by the Department of Interior, in 1955, but was
returned after criticism
was raised in Parliament.
In his further scholarly work on trade unions after
World War II, Hutt emphasized the
crucial empirical fact about labor unions: that they rest on the use
and the threat of violence,
particularly against replacement workers during strikes (universally
smeared in the supposedly
objective news media as "scabs"). If Professor Hurt sometimes went too
far and advocated
outlawing unions as monopolistic per se, as well
as removing their enormous govern mental
privileges and licenses to commit violence, he was at least far closer
to the mark than the
Chicago School, who persist in regarding unions as legitimate if
sometimes inefficient
employment agencies hired by workers.
William Hutt's other notable area of contribution
was his defense of hard money and the
free market's tendency to full employment, and his brilliant and superb
critiques of Keynesian
economics. In particular, we might cite his noteworthy The
Theory of Idle Resources (Jonathan
Cape, 1939) where he showed that Keynesian idle resources--unemployment
and "excess
capacity"--were simply cases of capacity withheld from the market by
resource-owners, and not
the result of insufficient market demand. Capacity can be withheld,
furthermore, either because
of government restrictionism holding up prices or wage rates, or
because of expectations that
restrictionist or inflationist policies will soon raise market prices.
In 1963, Hutt published a comprehensive if
difficult critique of Keynesianism,
Keynesianism, Retrospect and Prospect
(Regnery, 1963), which, among other riches, contains the
best criticism of the spurious "accelerations principle" ever written.
A decade and a half later, a
revision entitled The Keynesian Episode, A Reassessment
(Liberty Press, 1979), which turned out
to be largely a new book, presented a more easily accessible and
updated critique of Keynesian
doctrine.
Finally, one of Hutt's great contributions to the
history and the clarity of economic
thought was his correctly titled A Rehabilitation of Say's
Law (University Press, 1974), which
rescued that great
critic of underspending notions from Keynes's deliberate
misrepresentation in The General Theory as well
as from Say's inconstant friends in the
economics profession.
While he was not a full-fledged Austrian, Professor
Hutt's methodology and analysis
were very close to the Austrians, and he rightly considered himself a
close sympathizer and
supporter of the modern Austrian revival. Certainly he was closer to
Misesian economics than the
nominally "Austrian" nihilism of the later Professor Lachmann and his
younger followers. But
above all, Bill Hutt shall be remembered and honored for the unflagging
kindliness and
cheerfulness of his personality. All who came into contact with Bill
Hutt admired and loved him,
and all of us are poorer for his passing.
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