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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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