Third Way

• When was the 'third way' developed

  The late 1990's
• Who developed the 'third way'

  Anthony Giddens
• What is the 'third way'

  An updated version of the revisionism advanced by social democrats in the 1950s.
• Gidden's book


  (1998) 'the third way: the renewal of social democracy
• Gidden's work influenced which politicians

  - 'new labour' governments of Tony Blair and Gordon Brown (1997-2010)

  - Gerhard Schröder's social democratic government in Germany ( 1998-2005)
• Similarities between social democracy and the third way

  - Both advocated a form of non-revolutionary socialism.

  - Both sought to harness capitalism to the quest for greater equality.

  - Both agreed that the future of socialism involved more public spending rather than more public ownership.

  - Both believed that Clause IV of Labour's 1918 constitution (committing the party to common ownership) was obsolete. Indeed, one of the defining moments of New Labour came in 1995, when Blair persuaded his party to formally abandon Clause IV - thus succeeding where Crosland had failed 36 years earlier.
• Difference between social democracy and third way which is caused in the political climate during the late 20th century.

  Following the collapse of the Soviet Union, western capitalism was no longer threatened by communism. The resulting spread of market forces and a new economic phenomenon - globalisation, where capitalist economies are both more numerous and interconnected. This made it harder for national governments to 'manage' their economies in the manner prescribed by Keynes.
• Difference between social democracy and third way which is caused in the political climate during the late 20th century.

  The lasting impact of 'New Right' governments in the 1980s -notably those of Margaret Thatcher and Ronald Reagan as well as Labour's repeated electoral defeats, raise doubts about social democratic relevance to modern democratic politics.
• Difference between social democracy and third way which is caused in the political climate during the late 20th century.

  The decline of the traditional, industrial working class. Society was said to be increasingly defined by an enlarged yet diverse service class and a growing middle class- a process Giddens termed

  embourgeoisement. As he noted: 'By 1995, more people in the UK had mortgage accounts than trade union membership cards.' Ordinary people now owned capital and had asset wealth and did not see

  themselves as part of an oppressed, exploited class of workers.
• Anthony Giddens' book


  (1994) 'beyond left and right
• What is Giddens' known as

  A socialist sympathiser
• Giddens' on capitalism


  believed that capitalism and individualism can be 'corrosive' upon the community when left unchecked. But also believed that capitalism and individualism are irreversible and any future project towards greater equality would have to take this into account
• Capitalism is good for socialist goals- Giddens

  -the survival of social democracy required a recognition that free-market capitalism had an unmatched capacity to empower individuals. Socialists must acknowledge that capitalism can be a good thing when applied properly and voters enjoy the wealth and choice that it provides.

  -Ultimately, the aim of socialist should be to allow more people to enjoy the benefits that capitalism provides rather than seek to overturn or significantly restrain capitalism.

  -Social democrats in the past had seen capitalism as something that could be used but humanised, where as Giddens believed that socialists should champion free market endeavours and not oppose them ideologically.
• Capitalism with strong social cohesion

  - capitalism functions best when there is a strong sense on social cohesion= the New-Right seemed to overlook this due to its focus on individualism

  - socialists must aim to be a 'triangulate' or reconcile neo-liberalism's view of capitalism with social democracy's view of society.= needed to make centre-left politics relevant in the 21st century
• Keynesian economics can't create the wealth needed

  for a fairer society - only free market capitalism can

  do that

  • Giddens suggested that conventional Keynesian economics was obsolete now and that socialism needed to accept a more free- market brand of capitalism.

  • He argued that if the free market were to generate the sort of wealth needed to fund modern public services, greater inequality of incomes might be inevitable.
• What did Giddens' ideas on Keynesian economics influence ?

  These ideas had a deep and controversial influence upon the New Labour governments of 1997-2010 who in many ways became the most pro-capitalist Labour governments ever.
• Globalisation- Giddens'


  • The growth of a global market meant that national governments could no longer effectively manage their economies as Kenyes had thought.

  • Echoing the free-market principles of neo-liberalism, Giddens therefore argued that the Third Way should distinguish itself from social democracy by extending capitalism and by exploiting the new opportunities for economic growth provided by globalisation.
• Encourage market competition but make it accountable to government- Third Way approaches to encouraging capitalism involved:

  • Deregulating financial services and Big City finance

  • Enlarging the role of the private sector via 'public-private partnerships' in health care and education (as later pursued by New Labour governments after 1997).

  • Far from simply upholding the sort of 'mixed economy' favoured by Anthony Crosland, the Third Way would endorse a 'remixed economy', with a growing role for the (capitalist) private sector.
• Privatisation leads to competition which leads to taxes which leads to public spending.

  For Giddens, encouraging private enterprise and competition was likely to produce 'higher profits, higher earnings and higher tax yields for higher public spending'.
• As Peter Mandelson, a prominent New Labour

  minister, famously informed a group of Silicon Valley executives in 1999:

  'We (the Labour Government) are intensely relaxed about people getting filthy rich ... as long as they pay their taxes
• According to Giddens what had led to fragmented working class communities, an 'atomised' modern workforce and individuals feeling alienated from one another

  The post-industrialisation of the late twentieth and early twenty-first centuries
• Giddens on post-industrial capitalism

  Post-industrial capitalism is liberating for people- they were now freer than ever to 'self-actualise' and carve out individual identities for themselves. However, when stripped of the communities that once gave people identity and confidence, working class individuals were likely to be less sure-footed and more influenced by both economic and cultural elites.
• Giddens and the irony of post-industrial capitalism

  With Giddens, the great irony was that the individualisation of society might result in less individual freedom for people themselves.
• What equality did the third way place an emphasis on

  Cultural equality- reflecting Giddens' observation that modern society was 'more diverse, multi-racial and cosmopolitan' than in the 1950s
• New labour and equality

  introduced various laws promoting racial, gender and

  sexual equality- such as allowing same-sex couples to adopt children - which were eventually underlined the Equality Act 2010.
• New labour did not necessarily endorse multiculturalism

  New Labour did not necessarily endorse multiculturalism (an ideology which involves the state actively promoting minority cultures). But New Labour were certainly enthusiastic about a multicultural society, where minority cultures were recognised and

  respected.
• communitarianism


  -the main aim was to repair divisions within society and to ensure that society was not damaged by racial and cultural tensions.

  - Giddens sought to distinguish himself from modern liberals by stressing the importance of social cohesion and communal solidarity. Individual freedom was vital, stated Giddens, but it was impossible without a stable, harmonious society. Governments should seek to promote social cohesion and cultural identities.
• Task of the third way

  • The task of the Third Way is to offset the consequences of neo-liberal capitalism and the increasing diversity of society, by creating greater opportunities for community.

  • New labour would pour billions of pounds of public money into funding national and local culture programs, festivals, arts centres, rebuilding libraries.
• Welfare to work and early years support as well as 'education, education, education' ...

  True to the aims of the Third Way, the New Labour government reformed welfare as a 'hand up not a hand out'. The principle being that welfare funding should be used to help the unemployed into work and training.
• The 'New Deal' program

  introduced by Gordon Brown. Under this welfare reform, the unemployed were offered welfare support if they were undertaking training or specific college courses
• Sure Start program


  involved opening centres in disadvantaged areas that could offer specialist support for young parents and their children, as well as health support, playgroups, and learning through play.
• Youth centres


  opened and funded in order to give teenagers

  and young people a safe place to go, to receive counselling services, education, and entertainment/life experiences, in order to help them develop, build confidence and protect them from gangs and social deprivation.
• Devolution: redistribution of power

  With its stress on 'diversity' and 'inclusion', and co-

  operation between various centre-left parties, Third

  Way socialism was more willing to countenance the

  'sharing' of political power.
• New labour on devolution

  New Labour therefore promoted reforms like

  devolution for Scotland and Wales, regional

  governance in England and elective city mayors.

  Through the idea of elections for the House of Lords,

  and a reformed electoral system for the House of

  Commons, Giddens was also keen to spread power

  within the UK Parliament.
• Social democrats and democratic socialists on devolution

  Social democrats and democratic socialists were

  generally content with an increasingly centralised

  state: it would ensure, they assumed, a uniform

  provision of services across society.
• Is third way socialism or liberalism: socialism

  - The Third Way is still attuned to socialist

  principles

  - It allowed the Labour Government to fund an 8% increase in public spending and fund new collectivist ideas like 'Sure Start' services (for economically disadvantaged families) as well as promote what Blair termed 'renewed equality of opportunity'.
• Is third way socialism or liberalism: liberalism

  - Third Way economics produced a widening inequality of wealth between the richest and poorest sections of society (socialists have historically argued that equality of opportunity is fictional without greater

  equality of outcome).

  - Blair became cautious of invoking the mantra of 'equal opportunities', preferring terms like 'better opportunities for all'.

  - If opportunities were to be financed by extra tax revenue, it might be necessary for the higher paid to acquire even higher earnings, thus increasing inequality of outcome.

  - The word 'socialism' did not even appear in New Labour's 1997 election manifesto.
• Similarities between Giddens and Rawls

  - endorse capitalism

  - support high public spending

  - promote a tolerant and diverse society
• Differences between Giddens and Rawls

  - Giddens= communities are essential to individual security and fulfilment

  - Rawls= communities can restrict individualism.