Will Hutton delivers Campaign for Social Science Annual SAGE Lecture 2021: It’s institutions stupid: The moralisation of capitalism

The Campaign for Social Science Annual SAGE Lecture with Will Hutton FAcSS, President of the Academy of Social Sciences, took place online on 7 December. In his lecture Will reflected on both the successes and failures of capitalism to date. He brought together theory and evidence from the social sciences, as well as citing examples in practice, to propose a new moralised form of capitalism for the future.

The lecture was presented to an online audience of several hundred academics, policymakers, and members of the wider public.

Will drew on his experience as a political economist, and as the founder of think tanks such as the Purposeful Company, to argue that we need a new approach to economics to underpin a fairer, moralised capitalism that respects society and nature alike and which can deliver sustainable growth. He also cited work by the likes of Adam Smith, Karl Polyani, JK Galbraith, JM Keynes and Richard Tawney to support his arguments.

The lecture began by exploring the criticisms of contemporary capitalism and its in-built contradictions. For example, it both creates and destroys. It creates value but also extracts it. Will examined the tension between the pursuit of self-interest and the desire to create societal good, describing this as the economics of ‘we’ versus the economics of ’I’. He suggested that we should “give capitalism a moral foundation, permitting individual liberty, while also acknowledging the importance of ‘we’.”

Will stressed the importance of reconstituting our public and private institutions and argued that “it’s more important than ever that we build institutions that write into their constitution their commitment to respecting the values we hold dear – like equality, fairness, universality, and sustainability.”

He was also keen to avoid “holding on to an unrealizable idea of utopia” and focus instead on what can be realistically achieved. His focus was on how we might recast economics and reset our institutions to moralise contemporary capitalism, supported by a fit for purpose social contract.

The lecture included an exploration of how we might translate insights from social science into policy and how we might use them to reshape economic and social institutions, including the capitalist firm. Will also argued that “unearned good and bad luck” should be designed out, as far as possible, of tax, welfare, and other societal constructs.

Baroness Minouche Shafik, Director of the London School for Economics and Political Science, provided a response to the lecture. She emphasised that there are many types of capitalism and different views on morality too, and that we must be mindful of this. She suggested that to change the nature of capitalism it is essential for social contracts to be carefully redefined and redesigned. Baroness Shafik argued that “markets are institutions, and the way they’re designed determines the type of capitalism we get.”

Baroness Shafik also suggested that enforcing legal changes and legal requirements, such as improved benefits for employees, could be a good way to create real change. She argued that it in some cases it might be more impactful to change the law rather than trying to change the purpose of organisations.

Professor Bobby Duffy, the Chair of our Campaign for Social Science, chaired the discussion between Will and Baroness Shafik, and he also brought in questions from the audience covering topics such as sustainability, the role of banks, the Levelling Up agenda, and other issues.

The lecture and subsequent discussion provided much food for thought, once again emphasising that social science can provide invaluable insights and demonstrating that it must have a major role to play if we are going to successfully create a new and more moral economic system.

Watch the video of the full event here