KEY POINTS:
Will Hutton is brimming. A man who can't sit still. He shifts position, takes his glasses off, puts them back on, rubs his head and waves his hands about to a gush of complicated terms: "Stakeholder capitalism ... financial engineering ... Leninist corporatism ... extraordinary inflationary pressure ...
economic pluralism ... " Hutton is possessed with ideas that must get out.
His message, largely repent and prepare the way, is sprinkled with dire warnings - in particular about China's growing and unsustainable foreign exchange reserves - at present US$1.25 trillion ($1.7 trillion) - and the failure of "Anglo Saxon" capitalism to temper its "short termism" with social responsibility.
Here last week for the Auckland Writers and Readers Festival to talk about his latest book, The Writing on the Wall: China and the West in the 21st Century, Hutton cheerfully gives up an hour. I suggest we begin with the state of journalism, a field where he has some impeccable credentials. A weekly columnist for the past 15 years, Hutton, a former stockbroker, joined the Guardian as economics editor in 1990, and then the Observer in 1996 for a four-year stint at the helm. In the 80s he was economics editor of BBC Newsnight and editor-in-chief of the satellite European Business Channel.
He seems a little worried. "There's such a panorama ... There's the book on China which is why I'm here ... there's New Labour ... there's globalisation ... bloody hell, I mean ... is your plan to cover the waterfront in the hour?"
Perhaps not the whole waterfront, but we'll try to take in the view. Which is the only prompt he needs to pour forth a steady stream of erudite words.
"Journalism is approaching, and maybe even in, a crisis across the West, and particularly in Anglo Saxon countries."
It's a profession under assault from multiple pressures. First there's the media owner's need for "sometimes absurd rates of return, leading to hollowed out news rooms". Then there's the multiplicity of choice so that everyone has to shout louder to get heard. Plus public taste that demands stories hold attention and please an audience within one or two minutes.
Topping it off is the requirement for overriding narratives that are unconcerned about getting in the way of the facts or traditional ideas of impartiality.
"The combination of these leads to a very substantial coarsening in journalism everywhere."
Hutton can quantify the change. In the American presidential elections in the 1960s he reckons a candidate had up to 30 seconds to express a point of view. In the upcoming elections he says they'll get less than 10 seconds. The result, he says, is far reaching. "People start to think in bumper sticker ways." And journalism, which has a civic responsibility to explain complexities, is unable to do its job, let alone fulfil its obligation to hold power to account in an era of celebrity.
In The Writing on the Wall, Hutton is damning of the American media: "This is not a media culture that empowers citizens to hold their rulers to account. Rather, it is a media culture that dis-empowers citizens and empowers the governors."
Much of the book gives America a serve. Which is surprising because Hutton contends China's "chronically dysfunctional economy and society" needs "enlightenment values" to pull through. Values encompassing the rule of law, independence for the judiciary, banking system and media, freedom of speech and association, representative accountable government, and so on, that Hutton argues oil the wheels of the market society.
Pluralism - creating private and public institutions that are alternatives to monopoly control - should be China's way forward. All of which sounds like "God bless America".
Hutton agrees America is a great enlightenment republic, but says it has currently lost its way - with its businesses blinded by maximising share prices and on a path of "destructive short-termism". But he's also optimistic it will come to its senses.
Oddly, The Writing on the Wall has a more aggressive subtitle for the American market: Why We Must Embrace China as a Partner or Face It as an Enemy. While the subtitle reflects Hutton's overall conclusion - that the West should resist protectionist calls and keep the doors to China open - Hutton says the title itself was more problematic.
"There were some real lemons." Such as? "The Elephant in the Pond and Rising Dragon, Falling Eagle." Hutton's laugh - a hahahahaha machine gun burst - is a welcome break to such serious concerns.
The book title finally came, just as it did for his 1995 best seller The State We're In, up against a deadline. Described as the New Testament for a nascent New Labour, The State We're In caught the mood in the dying years of Thatcherism and called for Britain to make good the ravages of that era by adopting the ethos and institutions of European "stakeholder" capitalism.
Britain didn't need to do capitalism Maggie's way. Proper social democratic companies could make a profit while having some regard for how these profits were made.
Pigs may fly. While disappointed with the efforts of Tony Blair's Government to realise the vision - especially in the reshaping of financial markets - Hutton is sticking to his guns. "I don't think stakeholder capitalism is a utopian dream."
He sees three types of capitalism in the world at present: the Chinese version - "Leninist corporatism", West European stakeholder capitalism and the American business model which unfortunately predominates in Anglo Saxon countries.
"The West European model of capitalism will, over a period of decades, continue to show that it throws up better economy, better society, better chances for people, more social mobility than what the Chinese and what the Americans are developing."
Some argue Hutton wears rose-tinted glasses, missing the obvious problems in Europe such as unemployment. Others point out that capitalism has in the past got by just fine without the democratic ideals of individualism, liberty and pluralism.
But in Hutton's world view, the Chinese Communist Party and people in Western investment banks aren't very different. "They see enterprise as generating a flow of cash. The job of the investment bank is to engineer the organisation so that flow of cash can become a maximum height of share price and personal enrichment for a small coterie of people. Chinese communism tries to manage that flow of cash to benefit the party."
He agrees stakeholder capitalism - where employees, suppliers, customers and the community at large all have stakes in any business comparable to the ownership rights of shareholders - is in retreat. "One day, surely, there'll be a collective coming to our senses. I'm going to keep saying it until they carry me out." Such is the lot of the liberal social democrat.
Today Hutton is chief executive of the Work Foundation, an economic think tank and consultancy which promotes the cause of good work and making workplaces more humane. It's here and at the Observer that Hutton came face to face with practising what he preaches. At both he made staff redundant - by some accounts with an element of ruthlessness. "Stakeholder capitalism isn't a soft option. It doesn't mean there is no change any more. I haven't become personally enriched in this. This has been about trying to make sure the organisations carry on in the 21st century."
Sometimes companies have to go through a process of "creative destruction" to survive. "So the Work Foundation and the Observer are here - growing, prospering. That's different from devastating something in the cause of short-term gain."
The distinction in Hutton's eyes is that "any fool" can raise the profits of an organisation by contracting out works and lowering the cost structure by 20-30 per cent.
"In year one and year two, you get a short-term increase in profit and the share price may actually move up. If the executives' remuneration is associated with the share price they will do very well. The question is what happens to the organisation over five, eight or 10 years."
For Hutton too many owners of enterprises take the myopic view. "We're wide open to behaving in this kind of venal piranha fish type way." The result, through private equity leveraged takeovers and mergers, is the evisceration of the British business and commercial base for little or no gains in productivity or inventiveness. "It's associated with not much taking place at all - except the vast enrichment of a tiny plutocracy of investment bankers and full partners in private equity firms who've managed this process."
Hutton says this is the golden thread of his career - a conviction about the dangers of "financial engineering" by investment bankers, takeover specialists and a rapacious CEOs. People who see corporations as little more than random bundles of activities and assets that can be split up, recombined, spun off, securitised, downsized and outsourced to release value and shed costs. Gone is the long-term view or the idea of companies as a network of human relationships organised to serve an overriding economic and social purpose.
"It's been my big thing. I've been saying it in different guises for 35 years. I think I'm right. But it hasn't made a damn difference to anybody."
So no one's listening? Maybe some. He's heartened by debate about the role of private equity and a growing number of CEOs in Britain who are beginning to have the confidence to speak out. But it's a lonely battle.
"Global capitalism has developed in an extraordinary way in the last 30 years and one writer or half a dozen of us [are] against this tsunami [burst of self-deprecating laughter] - yes, I'm still standing, but it's not a fair fight."
