Let’s do This: A guide to the Third Way. The Giddens Project Part 4

It has been fashionable for some years to depict the Third Way as little more than a cynical mix of policies taken from the left and right, irrelevant, all ‘spin’ and no substance; a ‘smokescreen’ for a more traditional agenda or worse yet – a soft version of the right-wing market agenda.

No surprise then that during the New Zealand Labour Party leadership contest in 2013, each of the three candidates made it very clear they were not to be associated with the Third Way. 

I wrote a column for the National Business Review (1) at the time suggesting that there was nothing sacrosanct about the term Third Way – Giddens used it as the title of his 1995 book to make it more likely to capture attention (it worked). He could have just as easily have used new social democracy, the radical centre, the active middle, new progressivism, the stakeholder society (2) or any one of the other terms being used to indicate the need for social democracy to renew itself.

The term did not matter – but the substance did. The challenge for the leadership candidates was, if the Third Way was not to their liking, to articulate a compelling statement of what they stood for both ideologically and practically.

That proved to be quite a challenge until the surprise elevation of Jacinda Ardern to the Labour leadership in 2016. Ardern spoke of the failings of financial capitalism, climate change as the nuclear moment of a new generation and the wellbeing of children as the measure of a successful society, but, with only seven weeks to go before an election, there was not much time for deep philosophical discussions. The 2016 Labour campaign slogan “Let’s do this” was retail politics, a call to action rather than an expression of what the party stood for.

Two years into the term of a complex, busy, coalition government, it is fair to say that the party has yet to match the kind of distinctive political project offered by Giddens. He argued that social democrats must move onto the ground of modernity – economic and cultural globalisation, the knowledge economy, the declining role of class politics and the expansion of individual choice in consumption, lifestyle and sexuality. Margaret Thatcher had already made the shift (as had Roger Douglas) but her politics inflected towards greater inequality, deregulation and fragmentation. Giddens wanted to a left-wing response consistent with greater equality, more social intervention and enhanced social solidarity (3).    

In more settled times, the lack of such a project might not be a problem.  But, in the midst of the fundamental shift represented by New Times, it is vital to have a sense of the ‘big picture’ and the specific policies that are needed.  

Which is why, despite appropriate misgivings about the way the Third Way was handled by politicians, it is worth engaging with Giddens – even if just to find a reason to disagree.

The starting point is the question of whether it is necessary to move beyond the traditional left position that encompasses the role of the state, Keynesian demand management and the working class as the base of support. For Giddens the answer is yes because we have entered a new era marked by the dramatic shifts mentioned above.

These changes have important implications not just for the left but for all politics and policies. To demonstrate how fundamental these shifts are, let’s look briefly at three of them.  

Globalisation. In a world where everything can influence everything else (because of economic integration, instantaneous communication and mass transport), governments have struggled to control what happens within their borders, divisions between those who maintain strong local identities and those who adopt a global, cosmopolitan outlook’ have appeared, and there have been challenges to traditional patterns of behaviour as people become aware of alternatives.  

In short, globalisation changes the rules of the traditional political game. It is important to say that these changes do not include national governments believing there is nothing they can do but go with the flow. In reality, a global world makes national governments even more important. But they can no longer focus on protection, now they need to support the people they represent to thrive in an open world. And they spend more time managing an uncertainty and risk that world brings

The knowledge economy. A knowledge economy is enabled by the staggering advances in information and communications technology. They have led to an unprecedented expansion of higher education and an empowerment of women – two ‘shifts’ that have transformed the political landscape. The importance of the highly diverse groupings of ‘knowledge workers’ rises along with that of women while the traditional male working-class base shrinks.

Individualisation. Social democratic politics has traditionally focused on emancipation – increasing people’s life chances. Along with individualisation has come an increasing focus on what Giddens calls life-style politics – disputes and struggles about how (as individuals and collective humanity) we should live when we have more choice about what we consume, how we live and our sexuality. Such disputes and struggles – often referred to as identity politics – now dominate much of the political agenda.

In the wake of these changes, it has to be argued that politics as usual is not an option. Yet, having acknowledged the magnitude of change, the tendency to fall back on old ways of doing things seems too hard to resist.

United States Presidential hopeful Bernie Sanders and British Prime Ministerial hopeful Jeremy Corbyn are but two examples. Both talk in terms that draw heavily on the past. Their overriding concern is with “the collective provision of goods and services to counter the inequalities and instabilities produced by markets. Capitalism is the problem, and the aim of the left should be to beef up the state and its tax revenues in order to control it and its agents provocateurs, the large corporations” (4)

In other words, yes, change is real, but we can respond much as we did in the past. It was this kind of thinking that created the space for the right (Margaret Thatcher being the prime example) to successfully argue that they understood the modern world and should be the ones to shape it. Since the Global Financial Crisis of 2008, that claim has a hollow ring to it.  The right has had to admit that they may be part of the problem.

But this has not resulted in social democratic parties settling on a new progressive project. Instead politics is dominated by right and left forms of populism while many social democratic parties have been annihilated (see Poland), are in retreat (see France) or managing to remain relevant only by borrowing some of the populists’ language (see the recently elected Danish Social Democratic Party).

This sorry state of affairs will continue until social democrats “are prepared to revise their pre-existing views more thoroughly than most have done so far” (5). Giddens wrote those words in 1995!

As I have mentioned before, Giddens uses a lot of jargon that can get in the way of a clear understanding of what he has to say. He is also a sociologist (one of the leading and most cited in the world) so he writes mainly for an academic audience – and this shows even in his more accessible books. Apparently, his preferred way of writing is to dictate and have his words transcribed.

In an effort to make things as clear as possible, I am going to draw on a range of his publications and outline his ideas as if they were being used as the basis of a social democratic party’s policy agenda (6).

The economy

The aim of economic policy is to support the development of an advanced capitalist (or knowledge based) economy. Macro-economic policy should aim for stable growth with low inflation and low debt.

The economy should be open and flexible. The minimum wage should steadily rise and sit along side active labour market policies that ensure easy as possible movement of workers from job to job (protect the worker not the job). Heavy investment in skills, education, research and technology is needed to ensure better productivity.

Encourage a business-friendly wealth creating environment. Foster innovation and the ability to flourish in a global economy. Use regulation but where possible base it on incentives not restrictions.

The constituency

In any advanced capitalist society, there are two key constituencies a social democratic party should address itself to.

The first is what might be called the future oriented voting bloc made up of skilled/highly skilled workers and those who aspire to belong to these groups (this includes parents/grandparents who want the best for their off-spring). These people tend to support governments that look like they know what they are doing, a modern thriving open knowledge based  economy, great schools, higher education, investment in research, science and technology, public goods such as libraries, parks, neighbourhood development, secure places to live, play and work, strong social services, opportunities to form social networks, conservation, policies to combat climate change, a clean green environment, animal welfare, immigration (as long as it is controlled), attractive environments, ethnic, sexual and cultural diversity, a cosmopolitan ‘global’ outlook, international aid, lack of conformity and diversity.

The second group is comprised of those people who might be thought of as the traditional social democratic base. They have fewer skills or skills that are more aligned with the old economy. They also tend to work in areas that result in lower financial returns. It is vital to put in place policies that ensure these people share in any gains (minimum wage, tax credits, redistribution of wealth, access to public services) and are able to become part of the knowledge-based economy should they choose to through training, education and access to support for new business.

The state

Giddens has used terms like the ‘social investment state’ (not to be confused with the Bill English social investment policy) and the ‘ensuring state’ to capture what he sees as the role of an active intelligent state.

The British Report of the Commission on Social Justice (Giddens was a contributor) outlined what an investor state would look like. “Investors combine the ethics of community with the dynamics of a market economy. They believe that the extension of economic opportunity is not only the source of economic opportunity but also the basis of social justice. This demands strong social institutions, strong families and strong communities which enable people and companies to grow, adapt and succeed.  Investment in people is the top priority. Investors see security, not fear, as the basis for renewal. As the terms investment and ensuring imply, security is the essential foundation for enabling people to cope with change” (7).  

There can be no return to top down bureaucratic solutions. Both commercial and community organisations can have a role in delivering public goals.

Of critical importance is what Giddens refers to as a new social contract that makes it clear that with rights comes responsibilities.


The problem with democracy is that there is not enough of it. Greater transparency of government would help as would more opportunities to make a meaningful contribution to decisions (eg. deliberative assemblies, citizens juries, genuine consultation).

Outside the public sphere, greater democracy should play a part in community and family relationship.

On a global scale there are many issues – climate change, conflict, regulation of international capital – that require more democratic decision making between nations. There needs to be fora where these discussions can take place in a rules-based environment.

Devolution (or subsidiarity) is another important dimension of improving democracy. In key areas like local government, health and education real power should be the hands of those impacted by decisions.  

Climate change

Achieving a carbon zero future has must become integral to the daily lives of all people and organisations. The context for change starts at the international level but public policy needs to offer a positive pathway forward through a mix of support for innovation, market mechanisms, tax concessions and regulation.

It’s crucial to note that little will be achieved by the kind of nightmare scenarios currently used to change behaviour. If there is to be change, it will come from positive realistic model of a low-carbon future (8).


Without adequate levels of taxation building a better society is impossible. But if the wider community, especially those who find the cost of living a challenge, are to be supportive it is vital that the taxes are seen as necessary, fair, acceptable, clear and levied on as broad a base as possible.

They must improve economic performance and employment, enhance  individual autonomy and be readily understood. In a globalising world, the system needs to account for both what happens national and internationally.

More prominence could be given to environmental taxes and tax incentives. Hypothecated taxes could have a more prominent role. Taxes can be used to stimulate healthier lifestyles, deal with environmental pollution and energy efficiency while taking the pressure off employment.  


Any social democratic party must do everything it can to reduce inequality and poverty, both of which have risen dramatically in recent decades because of a failure of public policy.

In a globalising economy, some parts of the workforce have benefitted disproportionately to others. Rather than address the growing gap, governments have opted to do nothing or too little.

There is research evidence to show that globalisation has seen a decline in support for traditional redistribution policies (the Working for Families package introduced in the early 2000s was the first major redistribution policy in New Zealand for 30 years) and a decline in support for those less well-off. Parties seeking to be elected have found little enthusiasm for increasing taxes to pay for policies that might more adequately address inequality and poverty. But this should not be used as an excuse for inaction – the consequences are now too obvious to ignore.


The current government has made children and the reduction of child poverty a major policy emphasis. Giddens would agree with this priority. All children should enjoy a good start to life and not experience poverty. If there is one measure of a successful society, it would have to be the wellbeing of children who are, after all, the future of any society.

Strong, stable families are essential if children are to get what they need at the start of their lives. This does not require the promotion of one kind of family, but instead any form of family where there is consistent love and nurture, support and discipline.


Advancing the interests of women is critical – and this must involve men. In particular, it is essential that men and women be able to balance out work and family responsibilities. This means: breaking down the division between ‘men’s and women’s jobs; promoting family-friendly workplaces for men and women; encouraging a reduction and/or flexibility in working hours; and addressing discrimination and promoting equal opportunities.

Education and Health

For a social democratic party any policy agenda will have at its heart ‘education, education, education’ and ‘health, health, health’ (to anticipate Tony Blair). Education is the road into participating in the knowledge economy and being equipped for a more open, democratic world. It must be life-long and of the best quality.

Access to affordable health care is fundamental to enabling social participation. Health care must be understood as much more than doctors and hospitals. The promotion of healthy lifestyles and healthy environments is necessary should be part of any modern agenda.

Both education and health are traditionally seen by social democrats as best operated by the state. It is time to consider how the community might be given greater control. 


A modern nation is open, cosmopolitan and with a sense of national identity that is comfortable in a global world.  

This world view links to the way a nation handles its ethnic diversity. Giddens encouraged a strong commitment to multiculturalism by which he meant achieving the difficult balance between a set of shared values, building ties between different groups and the confidence for different ethnicities to debate each other.


Social democrats have found it difficult to campaign on crime because it is seen as an issue for the right of politics. Giddens argued that the left should not cede any issue to the right and in the case of crime it should be clear that people (especially the most vulnerable) want to see crime reduced. ‘Tough on crime and tough on the causes of crime’ was a phrase coined by the Clinton administration, and it neatly captures the approach Giddens suggests as most useful for progressives.

A Rules Based World

Taking globalisation seriously is at the core of any modern outward looking social democratic agenda. This means having a strong, activist international agenda and being directly involved in the kinds of fora that will bring about joint action on joint problems. A rules-based order is essential as are trade agreements and efforts to define what capital can and cannot do.

Such a brief outline of what some of a Giddens third way agenda might look like is bound to be open to debate at every step. Perhaps I might, therefore, encourage anyone reading this to focus on the ‘spirit’ of what I have written as opposed to squabbling over the detail. If there is disagreement, the question is – ‘What would you do?’ In later blogs my aim is to return to some of these topics to discuss them in greater depth.

I should note again that I am writing about his agenda. I agree with some of it, would like update other areas and disagree with some of what he had to say.

Also, Giddens writes a lot of theory to underpin the policies he advances (something most of the people who dismiss his approach fail to do). I have not tried to cover this here – but I would encourage anyone interested to put some time aside to get into the issues in more depth (I listed some useful books in the previous blog).

On its own such a programme would not guarantee a political party electoral success. That would require leadership, organisation, moral and ethical direction and that intangible dimension of being in tune with the electorate. This can be a matter of timing or something that a party sets out to create (as the Conservatives did in Britain in the 1970s or the populist right have been attempting to do in the USA for many years). Followers of Gramsci would recognise this as the process of gaining intellectual and moral leadership prior to becoming the government. A long road. But more of this later.

Next blog. So, what went wrong? 


1.    Maharey S. (2013) ‘Which ‘Way for Labour?’ National Business Review 26 October.  Available on-line.

2.    Another effort to renew social democracy came from Will Hutton in a series of books that used the ‘stakeholder society’ as its theme. Them and Us: Changing Britain- Why we need a fair society is a good place to start. The stakeholder phrase was used by Blair for a while but dropped in favour of the Third Way.

3.    The focus on wellbeing in Labour policy has promise. But we have yet to see if wellbeing is a comprehensive response to modernity or a set of policies (to put it crudely) designed to clean up the mess made by right-wing governments.

4.    Giddens, A. (2000) The Third Way and Its Critics Polity. Cambridge. p28.

5.    Giddens, A (1995) The Third Way. Polity. Cambridge p.vii.

6.    Giddens tried to provide such an agenda in Over to you, Mr Brown (2007), Polity, London. This was when Tony Blair was stepping down as leader of the British Labour Party and Gordon Brown was taking over. Brown went on to lose the 2008 election.

7.    Giddens, A. (2009) The Politics of Climate Change Polity. London.

8.    The Report of the Commission on Social Justice (1994) Social Justice:

            Strategies for National Renewal Vintage: London