ARTS ETC: BOOKS: What Happens When You Side with a Bully ; the World We're in by Will Hutton LITTLE, BROWN Pounds 17.99; Anti- Americanism Is the Rocket Fuel That Powers This Book, but William Sutcliffe Argues That Emotions Tie Us to Our Big Brother

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The idea of a treatise on economics taking hold in the bestseller lists seemed as likely as porcine aviation until the publication seven years ago of Will Hutton's The State We're In. Ian McEwan was quoted on the cover, saying the book "breathes human sense back into economics and eloquently embodies the spirit of a new political optimism".

Yes, that really did say "political optimism". 1995 was a long time ago. With the Tory government in its final self-mutilating death throes and a Labour government-in-waiting playing its policy cards close to the chest, The State We're In promised a glimpse of all the radical yet market- friendly innovations it seemed reasonable to expect of an incoming New Labour government.

Hutton's calls for a written constitution, his claim that "it seems unlikely that the monarchy can survive unchanged into the next century", and his belief that an incoming Labour regime could revive the "economic and social reshaping of British capitalism by the 1945- 51 Labour government" now seem almost blackly humorous in their misplaced optimism.

The State We're In is perhaps an even more important book now than it was then, in that it reminds us how high our hopes of Blair were, and demonstrates that seven years of New Labour has rendered hopefulness of radical social or political change laughably out of date.

If The State We're In triumphed by capturing a "new political optimism", its equally bestselling sequel has already been published. Naomi Klein's No Logo has sold by the thousand because, above all, she explains and encapsulates a new political disillusionment. Hutton seems significantly less optimistic now than he was seven years ago, but The World We're In is written from a very different generational standpoint to Naomi Klein's book. However disillusioned he may be, he still, unlike Klein, is confident that government policy is the means by which society's ills should be addressed.

The World We're In, like its predecessor, is a timely and forward- looking book, this time anticipating the critical decision on Euro membership that will soon dominate British political debate. The book ranges widely over a thorough analysis of the contemporary global economic situation, but the argument gradually homes in on a plea for Britain to turn its back on the shareholder-value-obsessed American economic model and adopt the less short-term financial systems in place in continental Europe.

Psychologically, this country exists in the mid-Atlantic. For the British, 11 September felt like our big brother being beaten up; for the French, it was taken more as the neighbourhood bully getting a brutal but deserved kicking. Hutton points out that the coming debate on Euro membership won't be about genuine autonomous sovereignty. We know we are a medium-sized ball on the pool table of global economics. The real question is a choice of whose wing we wish to crouch under: America's or Europe's. The decision on the new currency will ask fundamental questions about who we want to be. It presents not a choice between independence and subservience, but a choice of whom we want to be dependent upon.

Hutton's powerful and flawlessly argued assertion is that to opt for dependence upon America is madness. …