In the days of Trump and Brexit, it could be time for those who want a society based on openness, knowledge and new opportunities to revisit an out-of-fashion idea

Since US president Bill Clinton and Prime Minister Tony Blair departed government, the Third Way political agenda has fallen on hard times.

For a while, the Third Way was seen by a good proportion of progressives as having the potential to reshape the political world of the 21st century. Not only Clinton and Blair but also Scandinavian governments, Germany’s Gerhard Schroeder, France’s Lionel Jospin and US Presidential hopeful Al Gore embraced the possibilities of a model that promised a new way forward.

Instead it earned a reputation, largely because of Clinton and Blair, as a softer version of the market based society championed by Ronald Reagan and Margaret Thatcher.

In government between 1999 and 2008, I was seen as an advocate of a Third Way. It would not be accurate to label that government as Third Way because neither the term nor the approach was adopted by the full caucus, but it is interesting that at least some international commentators (for example, John Ralston Saul) suggested that the New Zealand version looked more like the real thing than the “triangulation” of Clinton and the “tiny symbolic gestures” of Blair.  

Since leaving politics I've followed developments with a great deal of interest both in New Zealand and internationally. It's clear progressives are in trouble. Out of office, out of ideas and scrambling for support, an enormous amount of time and energy is going into getting agreement on what to do next. No luck so far.

Yet it is a matter of some urgency that a way forward is found. The rejection of globalisation (open) in favour of nationalism (closed) has seen the rise of radical populist parties peddling simplistic and dangerous policies across the currently democratic world. Enough voters have already been attracted by the populist message to take Britain out of the European Union, elect President Donald Trump and breath life into hitherto marginal politicians like Le Pen in France and Wilders in the Netherlands.

Meanwhile, unsure of what to do, progressives have been dredging up policies from the heady days of the welfare state (see Jeremy Corbyn in Britain and Bernie Sanders in the United States) or find themselves defending the status quo against people who used to be called conservatives.   

Reconsidering the Third way

All of this has made me wonder if some of the thinking which led to the Third Way emerging in the 1980s might be worth reconsidering.

The Third Way came from a sense that the world was changing fundamentally. Globalisation and the knowledge economy had made it difficult for governments to manage their economies and provide ever more social benefits.

The New Times project, populated by leading British intellectuals, argued that advanced capitalist societies were increasingly characterised by diversity, differentiation and fragmentation as opposed to the homogeneity, standardisation and economies of scale of a previous era. They encouraged new thinking about the economy, the environment, inequality, identity, globalisation and localisation, the state, science and technology and the roles of men and women among many other topics.

The Third Way can be seen as an attempt to create a political response to these new times. According to Anthony Giddens (who has given up on talking about the Third Way on the basis it's the ideas not the label that matters) a new progressive approach was based on equal opportunities, personal responsibility and the mobilisation of citizens and communities. It encouraged people to do more to take care of themselves because the welfare state could no longer deliver on the social contract as it done in the past.  

Public policy should focus on wealth creation instead of wealth redistribution. Instead of subsidising business, government should encourage innovation and greater efficiency.

Governments should practice fiscal discipline, reform health care, invest heavily in education, training and culture, enable people to move from welfare to work, take a hard line of crime, support families, encourage active communities, lead on climate change and be active on the international scene.

Realising the limits of the state, government should “steer more and row less”. The quality of public services was to be improved and a positive environment for entrepreneurialism created.

This was an agenda that sought to combine the ethic of community with a dynamic appropriately regulated market economy and, somewhat belatedly, with environmental sustainability. Elements of Third Way thinking have been seen in the platforms of centrist governments across the globe.  

They seem sensible policies. A reasonable response to the new times that demand we do things differently.

But something went wrong because we see everywhere what can only be described as a revolt against the future. While the reasons for revolt are readily understood, it has to be said that the changes we face are a mix of the inevitable, the desirable and neither. If we are to create a better future in these circumstances, we must work with the grain of new times and look for a progressive way forward.

Perhaps this is the Third Way (we do need a new label), although it is clear that if a future government  chooses to travel this road it will have to do the job of implementation better.

What needs to be done

It could begin by realising there is a growing constituency that would support their agenda. Brexit and Trump have brought into view the large and growing sector of society that wants to live in an open world, driven by knowledge and full of new opportunity. These people need to be aware of each other and able to understand for themselves what can be done to build a new society and economy.

Attention must be paid to the genuine concerns of people who have grown ever more fearful of change. For them change has meant pain and they have had enough. The cause of the pain is obvious. People who are not part of the global knowledge economy have suffered economically and feel that they are at the mercy of forces way beyond their control. The solution is equally obvious. Governments need to invest in these people so they can join the future and the rewards of globalisation need to be shared via better wages and investment in better services.  

This is far from simple to do because it requires money that can only be raised through borrowing or taxes. Borrowing is a possibility but a commitment to fiscal discipline means there are limits. Taxes, then, are the most likely way forward.

Tax will be the central question for any future Third Way style government. Only if there is more funding available will it be possible to construct a new social contract between those who have been gaining and those who have not. We can have an open society only if we do everything we can to ensure no one is left behind.

We can learn from the nationalist movements around the world. These movements have reasserted the importance of identity and solidarity but their narrow fearful vision of the world is far from being the only way to interpret these words. There is a progressive interpretation as Robert Reich has argued, “A nation is more than a flag and an anthem; it is a collection of people who, because they are linked by culture and belief, are willing to pool certain of their resources so that all of their members have a fair chance of succeeding”.

There may be people who do not accept Reich’s argument. But as they look out of their windows at the rising tide of anger, they might see value in acknowledging that they have something in common with their neighbours and be prepared to work together – before it is too late.


Comments (7)

by Antoine on February 13, 2017

Isn't a third way government pretty much what we've got?


by Katharine Moody on February 14, 2017
Katharine Moody

I've always followed Manfred Steger in respect of established and evolving political ideologies - with the ideology of globalisation being at the core of current left and right centrist policy, as per his discussion here;

Later that year (2005) he published this further comment - distinguishing market globalism v imperial globalism (the two centrist version of globalist ideology);

Now looking at that in hindsight, this passage lends even greater credibility to his insights:

"On the other hand, it is crucial to bear in mind that neoliberalism and neoconservativism in the United States are not ideological opposites. In fact, they represent variations on the same liberal theme, and their similarities often outweigh their differences... Overall, then, my argument in favor of considerable ideological continuity between 1990s market globalism and 2000s imperial globalism leaves room for the dangerous possibility of an ideological turn toward US nationalism and right-wing militarism."

Whether Trump is that ideological turn remains to be seen.

I think that NZ political ideology needs to move its thinking beyond globalism (both variants). To my mind Trump has done NZ a favour in this respect by canning the TPPA (an instrument in market globalism) and perhaps now we need to think on exiting from the Five Eyes agreement (an instrument in imperial globalism).  I think we need to reject that sixth core claim of globalisation described by Steger (Globalization Requires a War on Terror) and have no part in its political legitimation.

I like Labour's 'Future of work' initiative and perhaps that needs to integrate with a kind of post-globalism scenario development. For example, Trump when speaking with big pharma in the US is reported to have said this:

"We're going to be ending global freeloading. Foreign price controls reduce the resources of American drug companies to finance drug and R&D innovation. I think you people know very well, it's very unfair to this country."

"Our trade policy will prioritize that foreign countries pay their fair share for U.S.-manufactured drug, so our drug companies have greater financial resources to accelerate development of new cures, and I think that's so important," Trump said. "Right now it's very unfair what other countries are doing to us."

Surely that's a queue for NZ policy-makers to begin exploring what we don't have the manufacturing capability/infrastucture or the knowledge-base to produce locally that might be disrupted by this new phase of change that seems to be sweeping the globe.  


by Ross on February 15, 2017

Public policy should focus on wealth creation instead of wealth redistribution. Instead of subsidising business, government should encourage innovation and greater efficiency.

Public policy should focus on the goal of how to achieve full-employment. The reason that there is a focus on wealth distribution is because many people are unemployed or under-employed.

by Ross on February 15, 2017

Governments need to invest in these people so they can join the future and the rewards of globalisation need to be shared via better wages and investment in better services.  

I'm not sure why you can't acknowledge that these people need jobs or need to be better employed. The trouble is that controlling inflation is seen as the main priority and is done at the expense of creating jobs and giving workers a good standard of living. Former politicians, as well as current politicians, are responsible for that perverse situation.

by Katharine Moody on February 16, 2017
Katharine Moody

Interesting post by Winston Peters today on the Cadbury factory closure in Dunedin:

"Foreign owners have kicked New Zealanders in the teeth again with the closure of the Cadbury factory in Dunedin costing 350 workers their jobs.

This factory traces its origins back to 1868 and is an iconic part of Dunedin and Otago history. That has ended with the owners, American multinational, Mondelez International, deciding it can manufacture chocolate more cheaply in Australia.

Some big corporates have no concern for people, history or what country they operate in – all they want is profit and Cadbury’s closure is just another example of this.

Many NZers will now feel more inclined to buy Whittaker’s chocolate and other Kiwi produced chocolate knowing they are eating a product that is keeping NZers in jobs."

I find it interesting that so far, he seems to be the only politician prepared to comment on this - no one else wants to touch any of these issues regarding the negative effects of globalisation. We simply can't bury our heads in the sand anymore - localism (which is encapsulated in his above post) is something I think that needs to come out of the shadows.  

I don't think it's a revolt against the future, but rather a frustration by the general population with the status quo - and globalist ideologies are that status quo. 

by Katharine Moody on February 16, 2017
Katharine Moody
by Katharine Moody on February 24, 2017
Katharine Moody

An interesting view on Third Way politics (and technocratic liberalism);


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