LONDON — “The Third Way” has become the height of intellectual fashion. But what on earth is it?
The answer is far from simple and far from agreed. But putting it in its broadest terms the proposition is that all our societies, as they struggle to adapt to global forces and the electronic age, can somehow find a middle or third (and better) way forward, midway between the full-blooded market economy on the one hand and old-fashioned collectivism on the other.
The idea that one can have reform and restructuring without too much pain is undoubtedly attractive — Thatcherism without the prickles, it has been called in the British context.
But is any of the new thinking really new at all? When one comes to the detailed policy ideas of the Third Way enthusiasts, it all begins to sound very familiar. For example, one central proposition of Third Way thinking is that the state is neither too small (old socialism) nor too large (old liberalism), but somehow needs “reconstructing.”
Another “insight” is that free markets are not so bad after all and have to be tolerated, although alongside a strong and guiding state. Even privatization is now grudgingly awarded a place in the Third Way scheme of things.
A third central proposition is that welfare should not, after all, flow from the state. On the contrary, voluntarism, localism and responsible social entrepreneurship should be encouraged as the best means of repairing civil society.
Yet it has to be asked whether these issues are very different from the ones raised by the free marketeers and liberal economists over 30 years ago, when the long reign of state domination and collectivism, which had lasted since the beginning of the 20th century, began to be radically challenged.
The unavoidable impression is that today’s exponents of the allegedly “new” Third Way have been Rip van Winkles during the 1970s, ’80s and early ’90s. The more one reads about their ideas the clearer it is that they have simply slept through the maelstrom of new thinking about government and the way things work that has been going on for three decades and has transformed the political landscape across almost the entire planet.
How could they have missed so much, especially when for most of those years they had the luxury of political opposition — all those seminars and weekend discussion groups?
Could it have been that the gurus of the center-left, although well aware that not all was well with socialism, still thought they already had an “answer” in the mixed economy formula?
After all, the great revisionist socialist Anthony Crosland told them way back in the 1950s that even without full-blooded nationalization, mixed economies could be made to work. Ownership did not really matter. Nor really did free markets; and privatization (although it was not called that in those days) was not on the map at all. The big state could still deliver growth, social justice, welfare, jobs and so on.
For those who saw the final socialist collapse coming over three decades ago these questions have long since been posed — and to some extent answered as well. Over 25 years ago, exactly the same questions were being asked that are now presented as so blindingly new, viz: If socialism has collapsed, what will now bind our society together? What is the nonsocialist bond that will glue the social order together amid the centrifugal forces that are tearing it apart? How will a privatized world behave differently from the past? What happens to national economies as wider global forces grow?
And these were just some elements of a wider and vigorous debate as to how capitalism and a market-based order, could fill the gap. How, given the demise of socialistic idealism, a free and open society could be helped and encouraged by wise authority and intelligent government policies, into a system in which everyone could participate with dignity, in which properly working markets prospered and the state domain was vastly and healthily curtailed. There were many other profound and constructive contributions.
Take the work of Professor Ronald Dore, who has been telling us for years past that the secret of Japanese “coherence” and enormous prosperity (despite the present travails), is the sense of mutual obligation that pervades all relationships, including business ones, in the Japanese culture. Only the most blinkered statists and corporatists, who thought the lessons from Japan were all about state guidance, could have missed this vital insight.
At a more humdrum level the people in the village in which I live (in Hampshire, Britain) find it odd to be lectured about responsible community citizenship, about obligations and networking, when residents have been practicing this sort of thing since time immemorial. That every human being in the village, very young, very old, capable, incapable, should be looked after and found a place in the matrix of village existence was always and remains the natural pattern of things. It needed no sociologist or new-age thinker to tell the villagers what they already knew as second nature.
To listen to the new Third Way hymnal one would never guess that three-quarters of the population of Britain give regularly to charity, that 2 million people and a vast and dense network of voluntary and caring institutions and associations lace our society together, have done so for years and are growing in their strength and effectiveness, when not frustrated by the state.
But let bygones be bygones. The Third Way people, ex-egalitarians, ex-social-justice afficionados, ex-mixed economy enthusiasts, ex-national planners, have at last struggled back into the camp of reality about the way the world now works and must carry on working under pervasive new global influences. That must be a bonus of a sort for political debate and understanding everywhere.
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