I've been reading a lot about the Third Way recently. For those of you who aren't familiar with the term, the Third Way is the name for the sort of nominally (but maybe not really) left-wing policies pursued in the UK or here. It represents an attempt to reconcile social democracy (the first way) with neo-liberalism (the second) in order to produce a more centrist ideology which remains true to social democratic values while being relevant to a world in which class is dead and markets are triumphant.
At first glance, this doesn't sound too bad. After all, markets are a tool, just like government; does it matter so much which tools we use in pursuit of our goals? Unfortunately, the theory of the Third Way - as espoused by Anthony Giddens in his book The Third Way: The Renewal of Social Democracy - goes a little further than that. He lays out a list of "Third Way values":
- Protection of the vulnerable
- Freedom as autonomy
- No rights without responsibilities
- No authority without democracy
- Cosmopolitan pluralism
- Philosophic conservatism
...except that they don't realy mean what they seem to mean. "Protection of the vulnerable" turns out to mean "tough on crime", "no rights without responsibilities" means workfare, and "freedom as autonomy" is not about personal liberty but about obligations to the community. As for equality, it is first recast as a neutered equality of opportunity with a slight mention of redistribution, and then (in his later book The Third Way and its Critics) weakened still further: having noted that "equality of opportunity typically creates higher rather than lower inequalities of outcome", Giddens goes on to say that social democrats should accept this outcome; his comments on redistribution later in the same section are little different from those seen from neo-liberals.
And in terms of concrete policy specifications, a joint pamphlet by Tony Blair and Gerhard Schroder The Third Way / Die Neue Mitte advocates the usual neo-liberal recipe of price stability, tax cuts, shrinking government and tough welfare policies.
So looking at the theory, the Third Way seems to be nothing more than neo-liberalism cloaked in Orwellian newspeak.
What about the practice? Here we run into another problem: the Third Way is a broad path (so broad that one critic has compared it to a carpark), and there are many different variants. Blair's version seems to be little more than Thatcher in drag; while he has made important moves on child poverty, the rest of his program seems distressingly familiar to those who voted against neo-liberalism in 1997 (which is why they stayed away in droves at the last British election). In other words, his Third Way is just an attempt to disguise a continuation of neo-liberal policies from the left. But in New Zealand, it seems that the opposite is the case - our Third Way is far lefter than Blair's, and the label seems more an attempt to hide a (gradual) return to social democracy from the local right!
While the Clark government has left the underlying neo-liberal foundations mostly intact, it has not abandoned its commitment to equality of outcome. Neither has it abandoned low-income workers in favour of flexible labour markets, or government provision of core services in favour of the market. And so we've seen the renationalisation of ACC, the Employment Relations Act, and, in Working for Families, the first serious expansion of the welfare state in over twenty years. I guess the strategy of subterfuge works both ways.
As for how we have this seemingly ridiculous situation of an ideological platform which is objectionable in theory but (at least sometimes) acceptable in practice, I think the answer lies in its origins. The Third Way was conceived and propagated as an electoral strategy, a grab-bag of disparate positions chosen to appeal to the supporters of neo-liberalism, by disillusioned social democrats who seem to have taken Francis Fukuyama's "end of history" far too seriously. They didn't believe social democratic values could be defended any more, and so sacrificed them. However, as the Clark government - and the poor reaction to Blair - shows, that isn't really the case. And it shows the way forward for the Third Way: not by abandoning social democratic values such as liberty and equality, but by re-confirming them. Buried under the Third Way's hype is something that can be defended: an attempt to update social democracy for an era where class isn't so relevant, and where the old tools seem less effective. But it cannot be defended if that "update" involves sacrificing the core values which made social democracy worth pursuing in the first place.