International Socialists

Brian Roper

The Labour Government claims that it is treading a middle path between the "big government" of the old Left and the free market agenda of the New Right. Its ideology is similar to that of the "Third Way" pursued by the Clinton Administration in the US during the 1990s and the Blair Labour Government in Britain.

It is difficult to summarise the ideas and policies of the Third Way briefly because these ideas are very vague. Third Way politicians frequently engage in dishonest double-speak. Their rhetorical commitment to an equal society is combined with real opposition to increasing welfare benefits or reversing tax cuts for the rich. In other words, to work out what the Third Way really is about it is important not to be baffled by the spin doctors' bullshit.

A Third Way?
Talking about the Third Way implies that there is both a First Way and a Second Way. So, according to UK sociologist and Third Way guru Anthony Giddens, there is a First Way of "old-style social democracy" which had excessive faith in the state, and neoliberalism or the New Right, which puts too much trust in the market. The Third Way lies between the Old Left and the New Right.

So British Prime Minister Tony Blair says, "We need neither the politics of old Labour nor the New Right but a new left-of-centre agenda for the future."

Rejecting socialism
Everyone who is even vaguely left of centre rejects the Right, so it is important to recognise the extent to which the Third Way assumes that socialism is out of date. Anthony Giddens argues that:

…as a theory of the managed economy, socialism barely exists any longer… countries that retain a nominal attachment to communism, most notably China, have abandoned the economic doctrines for which they once stood.

All the advocates of the Third Way assume that the collapse of East European Stalinism is the failure of socialism. The truth is that real socialism, as Marx understood it, centrally involving the working class majority democratically running society - is something that never happened under the Stalinist dictatorships of Eastern Europe. They also assume that the world has changed in ways that makes so-called "old-style social democracy" out of date.

Accepting features of the New Right
Third Way intellectuals and politicians are much more selective in their "rejection" of neoliberalism. They argue that it stimulated a broad range of positive changes in government policy, while simultaneously increasing economic instability, social inequality, and the destructive impact of market forces on the natural environment.
Anthony Giddens argues that there are three "transformations which are altering the landscape of politics" - globalisation, the emergence of the knowledge economy, and the "rise of individualism."

Globalisation is undermining the autonomy of individual nation states and has made obsolete the state-centred approach of the Old Left. Rather than attempt to resist globalisation, governments should embrace it through reducing trade protection for domestic industry and barriers to foreign investment, since globalisation is a process that, according to Tony Blair, "has brought us economic progress and material well-being."

The knowledge economy involves the growing significance of information technology. This means "the blue collar working class, the main focus of traditional leftist politics, is disappearing." The truth is that, far from disappearing, the working class is bigger now than it has ever been - according to a recent study of occupational census data, over 70 percent of New Zealanders are in the working class. Finally, proponents of the Third Way argue that the rise of individualism has been far more profound in nature than the old Left is prepared to admit. The truth is that public opinion surveys demonstrate the existence of a widespread commitment to egalitarian ideas and opposition to most major New Right policies.

The Third Way approach to policy-making
The supposed transformations in these three areas have prompted Third Way governments to initiate structural reform in a number of areas. I look at eight of these here:

1) Reforming the state to avoid "an overloaded, bureaucratic state [which] is not only unlikely to provide good public services, [but] is also dysfunctional for economic prosperity" and promote "state agencies [that are] transparent, customer oriented and quick on their feet."
(Truth behind the spin: maintain the existing business style organisation of the public service.)

2) Maintaining an effective market economy which is "the best way of promoting prosperity and economic efficiency and has other benefits too."
(Truth behind the spin: maintain the existing right-wing approach to managing the economy in which low inflation is given priority over everything else, such as reducing unemployment.)

3) Constructing "a new social contract linking rights to responsibilities" because, among other things, "allocating citizens rights of provision, especially welfare rights, without a spelling out of responsibilities, creates major problems of moral hazard in welfare systems."
(Truth behind the spin: maintain the same nasty approach to welfare beneficiaries that we have come to expect from the National Government, but disguise this with phrases like "empowering people to find work" or the "Jobs Jolt.")

4) Creating a dynamic full employment economy. In order to achieve this "Government must provide adequate macroeconomic steering and observe fiscal discipline. It must stimulate technological innovation and economic investment. Very substantial investment is required in education and skills training… Adaptation to technological change and job creation necessitates the cultivating of flexible labour markets, and here too government has a key part to play. Labour markets that are too rigid, with too high a benefit floor, have perverse effects. They inhibit the development of jobs…"
(Truth behind the spin: maintain New Right approach to managing the economy; maintain budget surpluses by keeping social expenditure on education, health, housing and welfare down; keep welfare benefits low enough to ensure that beneficiaries are living in poverty; keep unions weak.)

5) Integrating social and economic policy. In particular "The left must acknowledge that social justice isn't always best served by elevating taxes."
(Truth behind the spin: maintain low tax rates for the rich.)

6) Reforming the welfare state "which lock[s] people out of work when they could be in good jobs."
(Truth behind the spin: acceptance of the right-wing lie that the existence of the dole causes unemployment rather than the obvious fact that unemployment is structural and caused by capitalism.)

7) Getting tough on crime "in the here and now, as well as in the longer-term sense."
(Truth behind the spin: outflank the right-wing by being tough on "law and order" - build more prisons, longer sentences, etc.)

8) Responding more effectively to the environmental crisis with policies which recognise that "ecological sophistication, economic growth and job creation can go hand in hand."
(Truth behind the spin: address environmental problems but only in a 'business-friendly manner" that means in practice doing bugger all to fix them.)

I have taken all these quotes from Anthony Giddens' books The Global Third-Way Debate and The Third Way and its Critics.

What the Third Way is really doing…
If you are thinking that the above sounds like a load of jargon-ridden policy-speak bullshit, then you are absolutely correct! What the policies outlined above amount to is putting a spin on the New Right agenda that has made the top 10 percent of New Zealanders better off, and the working class majority worse off, since 1984.

The Labour Government are doing a great job of ruling for the rich because they are helping to entrench the core New Right framework including tax cuts for the rich, fees for students, anti-union legislation, high unemployment and continuing under-funding of health and education.

Labour is using the spin of the "Third Way" to provide a cover for its ongoing anti-worker policies. We need to be able to understand what lies behind these arguments the better to counter them.