Road to Damascus: What Is the Third Way? And What Were the First Two?

Listener 4 December, 1999.

Keywords: History of Ideas, Methodology & Philosophy; Political Economy & History;

At the University of Sussex, where I taught in the 1960s, we talked about “the social control of industry, rather than social ownership.” This was a response to an ongoing debate in the British Labour Party, which had nationalised various industries in the 1940s, was nationalising more in the 1960s, and still had Clause Four in its objectives: “the social ownership of the means of production, distribution, and finance.” The point of the Sussex phrase was that ownership is a means to an end, and that there are other ways of pursuing it. In many industries, market competition will give society the outcomes it wants, far better than nationalisation and monopoly.

Another thing I learned at Sussex, if I had not already done so in New Zealand, was the differences within the political Left. We had a dozen marxist parties on campus alone (each claiming to be holier than the others). That applies to the political Right too. Sometimes the only commonality of the New Right (in all its variants) and the traditional Conservative Right is their pursuit of power. (Left factions will often ignore power, favouring holiness.)

These stirrings of the 1960s have considerable relevance for the development of the “Third Way” popularly espoused by Bill Clinton of the US, Tony Blair of Britain, and other European “socialists”. Apparently the phrase goes back to nineteenth century Pope Leo XIII who wanted a “third way between socialism and capitalism”. Today’s socialism and today’s capitalism are very different from that of a century ago. Indeed many of Pius’s ambitions have been attained as each has adopted elements of the other. But the terms are treacherous. When I mentioned “socialism” did you think I was referring to the “communism” of the Soviet Union (or China or North Korea) or did you think of democratic socialism, which “owes more to Methodism than Marxism”?

Much of the Left got stuck in a rut in the 1980s and the 1990s where the means of the past became the ends. Under the onslaught of the New Right, the Left found itself defending institutions and ideas of its past, rather than evaluating the ongoing transformation of economy and society. The Labour Government elected in 1984 found itself torn between its radical traditions and its now conservative leftish ones, and lurched into a set of New Right policies, which the advocates have still not been able to explain in left wing terms. The problem is “modernization”. How does one maintain fundemental values, in the face of new circumstances? Presumably the superstructure of policies must change. But are the values the same or are they changing? Between the values and policies there is an analysis, a theory of society and the economy. How does that change? The same principles applied differently, or new principles?

The chief spokesperson for the Third Way is the director of the London School of Economics, Anthony Giddens, who seems to have Blair’s ear. I first came across Giddens as a “critical analysis” sociologist, much influenced by Marxism (but not Leninism and all). His 1973 book The Class Structure of the Advanced Societies refers to Marx or Marxism on about half of its pages. Yet his 1998 The Third Way has only a handful of references to Marxism or class. I do not know his road to Damascus, although I suspect it involves a lot of latent Methodism – non-conformist Christianity. But a key factor has been the changing class structures and other social and international conditions. He writes that the “class relations that use to underlie voting and political affiliation have shifted dramatically, owing to the steep decline of the blue-collar working class [and] the entry of women into the workforce.” My impression is that New Zealand classes have always been more politically fluid than the British ones, but a similar situation applies here, although the best single indicator of voting behaviour remains income adjusted for the life-cycle.

So in order to support his government, Blair has had to create a coalition rather different from the traditional Labour classes (who feel miffed they are no longer as predominant as they were once). Of course the drover’s dog could have won the last British election providing it was anti-Tory, but Blair is concerned with the future elections. (He wants to ensure no future PM ever has the overwhelming power of Margaret Thatcher. To understand a new government, see what they saw while they were in opposition.) Giddens characterizes the new vision by: equality as inclusion; limited meritocracy; renewal of public space/civic liberalism; the beyond work society; positive welfare; and the social investment state. (I am surprised he does not also include cultural pluralism, which he also discusses). We may well expect these issues to appear in the New Zealand political debate too: with what effect is another matter.

In a slick phrase typical of his style, Blair describes the Third Way as being between the Old Left and the New Right. That overlooks the fact that there was never only two ways.


Footnote for Listener 18 July 1998


There has always been ways of organizing nations other than the extremes of the raw capitalism of the US and the suffocating communism of the USSR. But “third ways” are very much in vogue at the moment. They usually reflect democratic socialist aspirations grappling with the new world of a globalized economy and the collapse of communism. They need not be solely economic but address wider issues as in this list proposed by sociologist Anthony Giddens, director of the London School of Economics, and adviser to the British prime minister Tony Blair. Giddens’ “third way”.

1. has politics based on new coalitions, which cannot be easily categorized as classes of the left or right.

2. seeks to restructure government at all levels, to promote subsidiarity and address the “democratic deficit”, including constitutional reform, greater democracy, and more local democracy.

3. values civil society and human rights, but sees the state as having a valid role in promoting them.

4. endorses a “cosmopolitan nation”. While recognizing that nations are still important, it also appreciated the complexity of the modern nation and the distinction between the nation and the state, embracing “fuzzy nationalism” and “multiple sovereignty”.

5. favours a “new mixed economy” where the emphasis is not on ownership but on competition and regulation.

6. aims to reform the welfare state into a “social investment state” which shifts spending from money on benefits towards investment in human capital.

7. recognizes that we no longer live in a bi-polar world, and realises that states no longer face enemies, only dangers.