Third Way

This chapter examines the ‘Third Way’ in social policy. The term is generally associated with the British academic, Anthony Giddens, and the New Labour government in Britain from 1997 to 2010, especially with Labour Prime Minister between 1997 and 2007, Tony Blair. For Blair, the label of ‘modernisation’ pre-dated the Third Way, but their themes remained broadly similar (2008, p. 4). The Third Way label featured highly in the 1997 Labour Election manifesto and the government’s early policy documents – Blair (1998) wrote a pamphlet entitled ‘The Third Way’ (see Powell, 1999). However, the main point of reference is generally taken as Giddens’s (1998) text, The Third Way. Giddens (1998, p. vii) claims that the term ‘Third Way’ is of no particular significance in and of itself. Similar terms such as ‘progressive governance’, ‘modernizing social democracy’, and the ‘modernising left’ have been used. For example, ‘Progressive Governance’ conferences have been held since 1998 (www.policy-network.net; Giddens, 2007, xii). Powell (2004, p. 3) suggests ‘Tonyism’ – after Blair and Giddens. While the term was ubiquitous, at least in Britain, around the turn of the century, it has become less used in Britain, and was always less common elsewhere. Blair (2001) attempted to launch ‘Third Way, phase two’ (see Giddens 2002), but the term declined in use, especially with Gordon Brown replacing Blair as Prime Minister in 2007, and the replacement of New Labour with a Conservative-Liberal Democrat Coalition government in 2010. Many commentators regard the Third Way as an Anglo-Saxon construction, based on

Clinton’s New Democrats in the USA and Blair’s New Labour in the UK. For example, according to Pierson (2001, p. 129) the politics of the Third Way has a peculiarly Anglophone provenance. However, Giddens (1998, p. viii) writes that some policies such as active labour markets draw inspiration more from Scandinavia than from the USA. Moreover, Blair’s break with Old Labour was similar to those made by virtually all Continental social democratic parties, in what has been termed doing a ‘Bad Godesberg’ (where the German Social Democratic party renounced Marxist socialism). Indeed, ‘in many respects the debate in the UK needs to catch up with the more advanced sectors of Continental social democracy’. It has been noted that former Dutch Prime Minister Wim Kok is sometimes seen as the first real leader of the Third Way, and that some themes can be seen in the Australian Labour Party under Bob Hawke and Paul Keating in 1980s and 1990s (Pierson, 2001). According to Giddens (2002, pp. 3-4) the third way debate is a worldwide phenomenon, and

almost all centre-left parties have restructured their doctrines in respect to it. He cites Merkel’s

(2001) observation that ‘the debate about the third way has become the most important reform discourse in the European party landscape’. Merkel (2001) distinguishes four third ways among EU social democratic parties: the New Labour model, the ‘polder model’ in the Netherlands, the ‘reformed welfare state path’ in Sweden and the ‘statist path’ of the French socialists. Centre-left parties in other EU countries tend to approximate in their policies to one or other of these positions. However, very few social democratic parties explicitly associate with the third way label

(briefly Germany, Belgium and Italy) and even then it was favoured more by liberals than social democrats (Bonoli and Powell, 2004). Nevertheless, third way themes were found in countries such as the Netherlands, Belgium, France, Germany, Austria, Sweden, Portugal (Bonoli and Powell, 2004). Put another way, although labels may vary, contents – albeit spoken with different accents – are similar in a number of countries. In this sense, rather than the third way, there are third ways (Giddens, 1998; Bonoli and Powell, 2004). In its various guises (e.g. new social democracy; Die Neue Mitte, etc.), the Third Way was part of the ‘magical return of social democracy’ (Cuperus and Kandel, 1998) that broadly aimed to combine social solidarity with a dynamic economy. However, the magic began to wear off (Powell, 2004), with only Britain being governed by a centre/left party for much of the first decade of the twenty first century.

There remains much uncertainty about the precise nature of the ‘Third Way’. In historical terms, the phrase has been associated with movements as different as Swedish social democracy and Italian fascism. As Pierson (2001, p. 130) puts it, it has been hotly contested but consistently underspecified. For some it is a ‘middle way’ between market and state. For others, it transcends or goes beyond these terms. While many critics portray it as tending towards neo-liberalism or Christian Democracy (Powell, 2004, p. 4), its supporters such as Blair (1998), Blair and Schroder (1999), and Giddens (1998) regard it as a left of centre position, concerned with the renewal of social democracy. A number of tables indicating the main characteristics of the Third Way have been produced,

which broadly compare the Old Left, New Right, and Third Way (e.g. Giddens, 1998, p. 18; Powell, 1999; 2004). Similarly, new social democracy has been characterised by: rights and responsibilities; equity and efficiency; market and state failure; inclusion; positive welfare; minimum opportunities; employability; conditionality; civil society/market/state finance and delivery partnerships; flexicurity; networks; pragmatic tax to invest; high services and low benefits; high asset redistribution; pragmatic mix of universalism and electivity; national minimum Wage; and tax credits (Powell, 2004). However, it is important to differentiate discourse, values, policy goals, and policy means or mechanisms (see Powell, 2004). The Third Way generated a new discourse or a new political language. For example, Clinton

and Blair shared a number of key slogans or mantras such as being ‘tough on crime; tough on the causes of crime’; ‘a hand up, not a hand out’; ‘hard working families that play by the rules’; and ‘work is the best route out of poverty’. The Third Way was a political discourse built out of elements from other political discourses to form, in Blair’s term, political ‘cross-dressing’. The language of the Third Way was a rhetoric of reconciliation, such as ‘economic dynamism as well as social justice’, or ‘enterprise as well as fairness’. The Third Way was not deemed antagonistic: while neo-liberals pursued the former, and traditional social democrats pursued the latter, the third way claimed to deliver both. Some commentators suggested a number of core values for the Third Way. Blair (1998, p. 3)

writes that four values are essential to a just society: equal worth, opportunity for all, responsibility,

and community. These included CORA (community, opportunity, responsibility, and accountability) (Le Grand, 1998) and RIO (responsibility, inclusion, and opportunity) (Lister, 2001). However, the values of the Third Way remained problematic. This was mainly for two reasons. First, adequate understanding of values required more than one-word treatments. Terms such as ‘equality’ are essentially contestable concepts, meaning different things to different people (see below). Second, and linked, it is not clear whether the Third Way was concerned with ‘old’ values, ‘new’ values, or redefined meanings of ‘old’ or ‘new’ values. Blair claimed that policies flow from values. In this sense, goals or objectives may be seen as a

more specific operationalisation of values. For example, ‘equality’ may result in very different policy objectives such as equality of opportunity or equality of outcomes. New Labour probably set itself more targets than any previous British government. Critics who argue that all of New Labour’s aims are less radical than Old Labour were wide of the mark. Old Labour would be proud of the introduction of the national minimum wage, and of the child poverty and health inequality targets. However, the health inequality targets were not met, as inequalities increased rather than fell (Toynbee and Walker, 2010, p. 49). The commitment was to end child poverty by 2020, but there are significant doubts about whether it will be achieved. It was claimed that traditional values and goals must be achieved by new means. In some

ways this had parallels with ‘Croslandite revisionism’. ‘Third Wayers’ such as Blair and Giddens claimed that the ‘new times’ of the 1990s called for new policies, arguing that the world had changed and so the welfare state also had to change. New Labour insisted that the enduring values of 1945 were to be applied to the very different world of today, and that the policies of 1997 cannot be those of 1947 or 1967, but values remained the same. In his introduction to the 1997 manifesto, Tony Blair claimed that ‘In each area of policy a new and distinctive approach has been mapped out, one that differs from the Old Left and the Conservative right’ (in Powell, 1999, pp. 7, 13).