Consumers’ sovereignty and W. H. Hutt’s critique of the color bar

Humanomics recovers economics as a moral science involving morally and emotionally complex human beings. Tragically, people create and defend institutions that suppress economic and social opportunities forcibly based on arbitrary characteristics like race and nationality. W.H. Hutt contributed to humanomics by studying the origins and consequences of racist institutions, particularly the labor market regulations comprising South Africa’s color bar. White South Africans limited job opportunities for Black workers and these limitations became the basis for Apartheid in the second half of the twentieth century. Hutt did not shy away from analyzing the causes and consequences of people’s biases; rather, he sought to understand them and argued that consumers’ sovereignty was the cure. Furthermore, Hutt’s political economy recognized how economists needed to account for human sentiments—especially anger about past injustice—in considering how to design political rules in transitions toward a more open and equitable society. In short, Hutt recognized that people are moral and immoral and prone to biases based on social identity, and he used those insights to articulate a principled defense of markets. As such, Hutt was both a defender of individual choice and an economist who saw “economic agents” as human beings, flaws and all.