Edited by David Halpern, with David Mikosz
"Political economy for the twenty-first century must combine dynamism and equity, defining a Third Way between old Left and New Right. I welcome and encourage this timely NEXUS-hosted discussion."
David Miliband, Director of Policy, Downing Street Policy Unit.
Contents of this Summary Paper
The Term "Third Way": history, alternatives, and clashes over terminology
- History of the term
- Beyond left and right? Clashes over the term "third way"
- Is the world a changed place? Skirmishes over globalisation
A Practical Approach: distinctive applied aspects of the Third Way
- A practical approach: inferring principles from policies
- The public-private divide: markets, quasi-markets, and state as guarantor
- Employment-centred social policy
- Re-inventing governance: Devolution, social democracy and civil society
- Summary of the practical approach
A Principled Approach: the relationship between principles and practice
- Possible candidates for structuring principles and objectives
- Quality of life
- Democratic values and accountability
- Social Inclusion
The idea of holding an on line debate emerged after a meeting at the beginning of the year between David Halpern, a NEXUS Co-founder and Cambridge academic, and David Miliband, Director of the Downing Street Policy Unit.
Rather than run a conventional briefing, it was decided to use an Internet mailing list run by NEXUS to bring together academics and other interested parties to discuss the nature of the Third Way.
Renewed attention has been drawn to the Third Way by the recent exchange of ideas between Bill Clinton and Tony Blair, first at Chequers and more recently at the White House. As Clinton himself said, "We have moved past the sterile debate between those who say Government is the enemy and those who say Government is the answer. My fellow Americans, we have found a Third Way".
In some respects the Third Way debate is just another aspect of the development of "electronic democracy", a term which has been in use for several years. Simple on line consultation is not itself new. But there has never been an attempt to use the tools of electronic democracy at the highest levels of policy making, nor to reach out to such a concentrated collection of geographically distributed expertise.
It would have been impossible to get all of the contributors to the Third Way debate together in one place at one time, or to allow sufficient time for all the contributions to be made. But an e-mail list allows for distributed participation, thoughtful reflection and extended debate, characteristics which most policy seminars do not share.
The debate began with several articles at the NEXUS web site including pieces by John Plender of The Financial Times (which was originally published in Prospect magazine), and a specially written piece by Stuart White of the Department of Political Philosophy, Massachusetts Institute of Technology, and Co-editor of Options for Britain: a strategic policy review. Each began by giving a perspective on the utility of the Third Way.
NEXUS subscribers were notified about the discussion via the NEXUS-announce e-mail list, and invited to join the NEXUS UK-policy discussion list where the debate would be taking place. Around 300 people signed on.
The discussion was "seeded" by around fifteen individuals who were specifically asked to contribute short pieces or comments to the discussion over the two week period.
These individuals included
The debate ran from Sunday 25 January to Thursday 12 February 1998. More than 140 postings were made by over 45 contributors.
This briefing paper has been produced to communicate some of the important ideas that arose in the debate to the Downing Street Policy Unit and to the Prime Minister. Given that over five hundred pages of text were produced over the two week period, this summary cannot cover all the ideas that were raised.
Readers wishing to examine the discussions or papers in more detail are warmly encouraged to visit the NEXUS web site and library where this and other NEXUS debates and papers are held. NEXUS, a relatively new addition to the world of think tanks, was delighted to be given the opportunity to run such a prestigious debate and to have the active participation of the Downing Street Policy Unit.
Special thanks go to Scott Aikens and Bill Thompson who moderated the discussion and whose technical and conceptual skills lie behind the NEXUS web site and discussion forums. We also wish to thank Bernard Jaurengui and Beyond 2000 for hosting the NEXUS server and Sarah Atkin for her help in preparing this text for publication.
Finally, we are extremely grateful to those who "seeded" the debate and to all the other contributors to the discussion. The range of contributors has been impressive and the discussion that ensued was both exciting and provocative. It was the time spent by all involved and the quality of the contributions that made this a unique experiment and event.
David Halpern & David Mikosz
May 1998.
{this message was posted to the uk-policy mailing list at the start of the debate}
The Third Way implies a political philosophy and economy that is distinctive but is defined by its relationship to the alternative models. So to understand what the Third Way is, we must understand the alternatives that it challenges...
One question that will arise concerns the real scope of choice in political economy, not least in the face of global economic forces. How far can a Third Way combine dynamism and equity in the political economy of the 21st century? A number of scholars have concluded that there is little room for manoeuvre between a North American-type free economy, with low unemployment but high inequality, and a traditional European economy, with low inequality but high unemployment. Robert Haveman's influential work for the OECD suggests that the best that we can do is to adopt the American model but soften it with in-work benefits. John Plender's very recent Prospect article on the Third Way... is perhaps even more cautious in its analysis of our room for manoeuvre.
If the alternative political philosophies are those of old Left and Right, what is that of the Third Way? One suggestion has been that the Third Way must be based on a principle of 'partitioned responsibility' This view of the Third Way may prove to be shared by some contributors. Others may wish to take a different position.
But what the Third Way comes to be will also depend on politics. And will people vote for it? We can already see the outline of rival interpretations of what the Third Way should be. Perhaps we shall glimpse something of this battle in the contributions...
Let discussion begin!
David Halpern, Cambridge University and NEXUS Co-Director
The term "Third Way" has been around at least since Pope Pius XII called for a third way between socialism and capitalism at the end of the nineteenth century [John Browning, The Economist]. Since then, it has also reappeared in other contexts, several contributors noting the term's similarity to Harold Macmillan's "Middle Way".
Recently, the term has been used extensively by Tony Blair. It was Blair's use of the term that provoked the NEXUS debate.
The term "Third Way" has also been used by Bill Clinton in the USA, notably in the President's State of the Union speech: "We have moved past the sterile debate between those who say Government is the enemy and those who say Government is the answer. My fellow Americans, we have found a Third Way. We have the smallest Government in 35 years, but a more progressive one. We have a smaller Government, but a stronger nation. [Bill Clinton; quoted by David Mikosz]
This contribution brought out the question of where the ideas behind the Third Way were to be drawn from - Europe or the USA. In general, contributors had a clear view on this point. David Marquand, for example, wrote, "If only they would forget about America and look across the Channel!" Others expressed similar concerns that the term's recent history suggested an American-orientated approach, and that this was to be resisted.
...the expression "Third Way" is, in terms of political rhetoric, probably not understood as suggesting that its message has much in common with J.Delors; it rather suggests some affinity with the social policies of President Clinton. Nevertheless, I believe the British Centre-Left has, for a number of reasons, much more to learn from the Centre-Left on the European continent, than from Clinton. [Frank Vandenbroucke, former Leader of the Belgium SP, currently of Oxford University]
We are much more European than American and need to build on and redevelop our European institutions and culture not attempt to copy a very shaky US one. [Alan Finlayson, Dept. of Politics, Queen's University of Belfast]
Some gave a more sympathetic reading of transatlantic relations. Scott Aikens, an American academic based in Cambridge, suggested that a British interpretation of the third way could influence positively political developments in North America:
...with the way things are developing here, the progressive UK model of the new politics could be very influential in Washington. [Scott Aikens, Cambridge]
The real focus of the discussion, however, concerned what the term would come to mean, not what its history had been, and it is to this we now turn.
The concept of a third way serves a useful purpose if it focuses attention on the best way forward regardless of which end of the political spectrum ideas are coming from (although I suspect that most of the better ideas will be from the Left). [Stanr]
As academics are the first to acknowledge, one only needs to bring together two academics to know that, at some point, an intense discussion of terminology will follow. The NEXUS discussion was no exception, and some very intense discussion occurred over the use of the term "the Third Way". Much of the early discussion expressed cautious reservations over the use of the term.
Wendy Wheeler called the Third Way "vaguely mystical". Stewart Wood (Fellow in Politics, Magdalen College, Oxford) observed that at present it represented "a form of political product differentiation without really knowing what the product is".
Summarising the general clashes over the term, Andrew Gamble and Gavin Kelly (Political Economy Research Centre, University of Sheffield) offered three alternative general views of what the Third Way might be:
1. The Third Way could be a middle way between two viable alternatives - for example, between systems of economic and social organisation (capitalism and socialism); principles of resource allocation (market and state); models of capitalism (US vs Europe); or ideologies (old Left and New Right).
2. The third way could be nothing more than a revised social democracy, which offers a clear alternative to the neo-liberal project of the 1980's through a fresh application of the principles of social democracy to current circumstances (Marquand).
3. The Third Way could signal the creation of a new and heterodox alignment of ideas (which some are bundling together under the rubric of the radical centre), which recognise that there has been a sharp break in political continuity which may render many former political certainties obsolete. [Andrew Gamble and Gavin Kelly (Political Economy Research Centre, University of Sheffield)]
The early part of the discussion was focused on the first of these alternative views. The Third Way, many argued, by its very name presupposes two previous or alternative ways. A frequent starting assumption of participants was to see the two previous alternatives as social democracy and neo-liberal economics. This assumption, and its unspoken implications led to a strong reaction on the part of some participants. Michael Jacobs, for example, cautioned against the attempt to rewrite "intellectual and political history by lumping all "Old Left" ideas together and consigning them to a "pre-modern" dustbin. Others expressed stronger views still.
I can't help recalling J K Galbraith's reply when he was asked what he thought about the middle way. 'Do you mean the middle way between right and wrong? What exactly are the first and second ways the third way is supposed to be transcending or getting away from? The terminology smacks to me of spin-doctor hype. [David Marquand, Principal, Mansfield College, Oxford]
Several contributors agreed with these concerns, such as Iain McLean (Professor of Politics, Oxford) who remarked:
I think that David Marquand is absolutely right. To say that there is a Third Way, which you stipulatively define as everything you want to do, and stipulatively consign everything that you don't want to do into the first or the second way, is at best lazy and at worst dangerous rhetoric. [Iain McLean, Professor of Politics, Oxford]
A related concern, was that the Third Way might be viewed as something similar to Clinton's strategy of "triangulation"- merely the averaging of two extremes. The danger in this route, it was argued, was that it left the Third Way not as a distinctive way forward for the Centre and Left, but as reluctant retreat - and as one too accepting of the recent status quo.
One 'solution' is to accept the inevitability of free market capitalism and ask whether and how a shrunken state should use its residual powers to ameliorate the worst effects of that system. Some - notably the right-wing think tanks - do interpret the Blair government's mission as being exactly that. [Gerald Holtham, Director, Institute for Public Policy Research]
Others pointed more neutrally to the ambiguities in the present understanding of the term. Julian Le Grand (LSE) warned of many competing versions of the Third Way, hinting at the danger that this could lead to people discussing the term at cross-purposes. Gavin Kelly noted:
A third way does imply the existence of a first and second way - old Left and New Right (Miliband). But that still leaves unresolved whether these three ways are alternative political projects which it is possible to choose between or whether the third way has evolved from the others and now replaces them.
This line of argument ultimately led some contributors to wonder whether the term "Stakeholding" should be favoured on the basis of its relative clarity and apparent focus. In a later comment, Stuart White (MIT) noted, perhaps "the "stakeholder society" ... carried much less risk of exaggerating discontinuities with the social democratic tradition."
There was extensive discussion on whether the dualism's of the past were still applicable. Some argued that the familiar dichotomies of previous policy debates - right versus left; collective versus individual; or private versus public - and the ways of viewing the world that they implied had lost their relevance in political debates of today. Instead, new ways of characterising key political and policy choices were required.
The task is more radical than it already appears and it is as much a task of philosophical and cultural effort as it is one of re-thinking economics. Rather than ponder what the state should spend, how much or how little intervention it should undertake and so forth, the crucial underpinning question to be addressed is 'what is a state for?" [Alan Finlayson, Queen's University, Belfast]
In as far as such scepticism was based on a more general concern that the term "Third Way" was being used in a "political" manner, this scepticism came under heavy fire from other contributors.
I find it astonishing that when faced with an opportunity for influence on, and direct contact with the Government, so many can use the undoubted existence of weak ideas and flawed practices to conclude that the intelligensia should opt out of the process. ...in my view it is not all hype. Something is going on, part potentially good, part dubious. ...it is one of Blair's great strengths that he knows that a political coalition has to be created first at the level of ideas. That has succeeded at a very general level. Aided by the ubiquitous focus group, a different party has been fashioned which is more in tune with people's aspirations and concerns. But given that New Labour has primarily been about product differentiation from the past, there is still no core narrative for the future. It is in this gap that the Third Way is being inserted. [Paul Thompson]
But expressions of scepticism also brought forth original thinking on the range of philosophical, political and policy issues confronting the Government. These ideas were developed by many who expressed scepticism about the Third Way. Many emphasised the opportunities that the term - and the current debate - created for thinking through the overall framework within which government was to work.
Too much of the debate has been negative and despairing, as though everything has been decided already, instead of there still being everything to play for. The Third Way is only useful as a term if it encourages new thoughts about what (New) Labour's project might be, and how it can be carried through. [Andrew Gamble, Sheffield University]
Ultimately, even those who expressed concerns about the term itself tended to agree with this viewpoint - it was the content that mattered, not the term itself.
I would prefer to have the substantive content of this debate do its bit of influencing than to have it dismissed on the grounds that we don't share the particular rhetoric in which it was originally couched. What really matters is the content of the left-of-centre politics which Labour is and should be pursuing. [Michael Jacobs, General Secretary, The Fabian Society]
Part of the discussion over the Third Way focused on whether, and in what ways, the world had changed. For Michael Jacobs, for example, the Third Way is part of an effort "to find a new interpretation of social democracy relevant to today's society"
...society has been changing in important ways and that traditional Left-of-Centre values must be re-expressed to meet the new circumstances. In my longer contribution ... I set out what I thought these changes / trends were: individualisation, inequality and social fragmentation, lack of trust in government, economic internationalisation, environmental degradation. The analysis here seems largely shared by other participants in the debate. [Michael Jacobs]
A list of how the world, and the context for policy, had changed was also offered by Anthony Painter of Trinity College, Cambridge:
a) The economic and social evolution of the values and practices that underpin the market economy to a transnational level. While not deterministic this severely has and will continue to narrow the parameters of government freedom for manoeuvre.
b) The progressive weakening of the intermediate institutions between government and civil society that underpinned social democracy. The growing individualisation of values and risk.
c) The growing inflexibilities and dependencies within the welfare state. The breakdown of traditional values leading to crime and anti-social behaviour. The weakening of the family. [Anthony Painter, Trinity College, Cambridge]
John Browning (The Economist) offered the view that the "real problem" for the Centre and Left was that: ....the changes that make for new everything are precisely those which cripple the Government to deliver realised good intentions, and the left has always relied upon using the power of government to deliver its promises. What if it just doesn't work anymore?
Nonetheless, there was a general consensus that "globalisation" - the first of Painter's changes, and the often talked about motor behind political and policy change - was not as serious a constraint as some policymakers believed. Stewart Wood observed:
The search for a third way is also premised on unquestioned assumptions about globalisation. We are told that the age of active government is over. That policy options are radically circumscribed by developments in world markets. That if we raise taxes we will see both capital flight and voter flight. That comprehensive welfare states are no longer sustainable in their post-war incarnations. ...But there are a host of academic researchers who question whether these assertions are really true. Andrew Dilnot (Institute for Fiscal Studies) has written and talked extensively on the myth that taxes could not be raised without some sort of cataclysmic reaction, for example. Poll and voting evidence suggests that people do not have highly elastic tax-sensitive voting functions. And there are numerous researchers in Europe and the USA disputing the idea that trade interdependence and increased capital mobility automatically result in convergence on a single model of market capitalism in which the State's policy autonomy is radically curtailed. [Stewart Wood, Magdalen College, Oxford]
Others agreed with this analysis:
Globalisation and all that. I think there are a lot of muddles about this, and basically my position is very close to Stewart Wood's. The globalisation thesis is only relevant politically, it seems to me, if it shows this there are things governments used to be able to do which - because of globalisation - they now cannot do. To the extent that is the claim of the globalisation theorists, the claim is - at best - exaggerated. [David Marquand, Mansfield College, Oxford]
[There is the belief] that owing to 'globalisation' our basic political unit, the Nation State, is now impotent to order economic activity or to affect income distribution at all, without grave risk to general prosperity. There is no point in discussing something that cannot be helped so Left-Right issues are irrelevant. That view, while fashionable, is just plain wrong. There is a growing literature about its errors and limitations. [Gerald Holtham, IPPR]
Anthony Painter disagreed, arguing that globalisation was much more than just the "old politics", and that globalisation was changing personal preferences:
However, this is a very limited conception of globalisation. It is more to do with cumulative effects and processes that are pan-frontier. The globalised (for want of a better term) portion of the world is an area of common experience and common culture. Increasingly tastes, preferences, and attitudes that are being formed in this global space impinge upon and limit the freedom of governments. ...examples include risk calculations (just look at the recent turmoil in Asia and tell me there is no such thing as globalisation!!) by investment banks, movies that people watch, clothes people wear etc. Decisions taken in the Budweiser brewery in Manitowoc, USA affect tastes and preferences as well as the competitive responses of UK firms. This doesn't necessarily show up in international trade or investment flows.
In response, David Marquand expressed doubts with regard to Painter's description:
...to the view that we now have - in a sense which has never been true before - a global culture: I'm not sure how far this is true anyhow. Fashions have never been great respecters of national frontiers. Lancashire cotton goods swept the clothing markets of the world back in the 1820s. The silk trade with China caused a structural balance of payments deficit in ancient Rome. But even if it were true, what then? ...Governments have never been very good at changing cultural preferences, whether the preferences are globally or nationally generated. The global culture thesis would be politically significant only if it could be shown that globally generated tastes were, for some reason, harder to gainsay than nationally generated ones. I doubt very much if this is true.
In sum, while the discussion pointed to some significant changes in the context within which policy was formulated, the view was also generally expressed that the particular importance of "globalisation" had been overstated in many political analyses. This conclusion echoed that reached by the NEXUS Globalisation group in an earlier discussion. It was additionally noted that even in as far as globalisation had occurred, it offered policy opportunities as well as constraints. The implication of the discussion was that changing political ideas, aspirations and experience were a more important force behind the development of the Third Way than globalisation per se.
... it [is] preferable to start with practices rather than principles because high levels of abstraction frequently lead to utopian or overly simplistic formulations, as a number of contributions to this debate demonstrate. [Paul Thompson, Edinburgh University, and Editor of Renewal]
Two ways emerged of how to take forward the discussion on the Third Way. The first might be described as a "bottom-up" or "practical" approach -start with the "keynote" policies and then work out the overall frame work.
This approach is the focus of the current section. The second approach could be described as "top-down", or what we have termed the "principled" or "values" approach - start with values, priorities and objectives and then work back to policy. This is the focus of the next section.
Policies can be identified as keynote not just because of their likely effects, but also because of their symbolism. As one contributor noted of Thatcher's populist policies:
Thatcherism was much more than monetarism, as an earlier contributor said. The appeal of council house sales was so strong not because it meant an economically better deal for people (it didn't always) but because it represented a path to independence, social worth and self-improvement. The symbolism of that path far outweighed any equivalent monetary value that could have been offered in lower taxation or greater benefits. [Melissa Lane, King's College, Cambridge]
As we shall see, there are limitations to both approaches, though much can be learnt from both. Ultimately we shall argue that the Third Way can only be understood by looking at both these approaches in tandem, together with a recognition of the real world constraints on today's policy makers.
Before the advent of the term "Third Way", the policy approach of the incoming Labour government was often described as "non-ideological" both by commentators and politicians. It was instead often described, and justified, in terms of being pragmatic. This meant focusing first on the detail of "what works" rather than trying to impose overarching ideologies that did not attend to the constraints of empirical and political realities. Ideology too easily became inflexible dogmatism - for example, as manifested in the previous administrations stubborn attachment to monetarism.
...we have a Government which is prepared to look beyond ideology or dogmatism ... a Government looking not at the in-clique of political activism, but at the real world consequences of what it does. [John Courouble, Oxford University]
One view of the Third Way, therefore, is that it has at its heart "pragmatism" - a technical and hands-on orientation to what actually works. In this respect, the Third Way could be seen as an emerging paradigm: its principles are emerging out of the keynote policies of the new administration, and of similar governments across the world.
This was the approach taken by contributors such as Julian Le Grand (LSE), a scholar with a background in both the detail of policy and theory. He noted that:
Tony Wright has suggested that the current Government is one of practice without theory. This suggests that, as an alternative, it might be fruitful to examine what the Government is actually doing to see if there is an underlying consistency - an implicit pattern that could perhaps be described as the Third Way. [Julian Le Grand, LSE]
Le Grand, after going through this exercise, felt that principles could indeed be identified in this way (and his conclusions are summarised at the end of this section).
Stuart White (MIT) offered a similar bottom-up analysis in his paper for the NEXUS discussion. In it he suggested five keynote policies that appear to characterise Third Way thinking:
Perhaps the first thing to say here is that there is almost certainly no single 'Big Idea'. Rather, there seems to be a steady accumulation of small to medium-sized ideas which together could perhaps add up to something big. Here I shall simply list and describe, in no particular order, what I take to be the most important ideas or sets of ideas:
(1) The State should be seen as the guarantor, but not necessarily as the direct provider, of opportunity goods. (2) A receptivity to forms of 'mutualism' as a way of achieving Left goals. (3) New thinking about public finance in connection with the State's role as guarantor of opportunity goods. (4) Employment-centered social policy. (5) 'Asset-based egalitarianism'.
Another contributor who favoured a practical, emergent approach based on an understanding of "practices" rather than just abstract principles was Paul Thompson (Edinburgh University, and Editor of Renewal).
In my view a third way comprises a distinctive set of interlocking practices in the economic, political and social spheres that govern the core processes of wealth generation and resource allocation; notably in labour markets, workplace and welfare state. It is important that this does not include `everything' (eg. sense of national identity, foreign policy etc. as suggested by some contributors). This is not a question of hierarchy of importance, but of being able to set boundaries that enable us to distinguish a core project that can be identified across societies in varied forms, from the full locally-specific programmes pursued by particular parties. Market versus State is a key, but not exclusive issue in respect of such practices. There are also questions about levels of democratic governance and accountability, as well as agencies, interests and alliances.
Given these views, there was inevitably considerable discussion about the merits of particular keynote policies, their relative importance, and their implications about the overall objectives and principles of the Centre-Left today.
The central policy idea here is that the State has the responsibility of guaranteeing access to certain goods but the State need not directly provide these goods. This has become a fairly familiar idea (cf. Clause 4). It is also a site of intense policy innovation.
Both Stuart White and Anthony Painter pointed to examples such as 'Individual Learning Accounts', where the State underwrites, but does not necessarily provide, education and training itself as examples. White also mentioned policies to secure the 'right to work', where the State does not employ the long-term unemployed itself, but helps secure the right by offering subsidies to attract private employers.
Another application of this policy approach is the open-minded use of 'quasi-markets' based on a pragmatic analysis of their potential. This was an idea picked up by Julian Le Grand:
... quasi-markets in education and health (where the State retains control over finance, but allows provision to be undertaken by independent providers) seem a good way of simultaneously promoting efficiency - through competition between the providing agencies - and equity - through the State's control of finance. Similarly in public transport, independent providers, free of Treasury control over their investment decisions, coupled with state regulation, and where appropriate State subsidy, seems likely eventually to generate a more effective outcome than a perpetually under-funded publicly owned system. In the specific case of the London Underground, I would recommend privatising each line separately, but retaining one of them under public control so that the regulator has ready access to cost and other information. [Julian Le Grand]
Anthony Heath, well known for his work on the British Election and British Social Attitude surveys, agreed with Le Grand's analysis and pursued it further.
The exact form that the intervention should take then becomes the really important intellectual puzzle... what I have in mind is very different from the kind of regulation that Oflot and so on engage in. I think there is a fundamental difference between regulating a monopoly and trying to control monopoly rents from dealing with market failure and externalities. My own view is that... monopolies should be split up and forced to compete, rather than regulated. The problem with a lot of Thatcher's privatisations was that the crucial role of competition was neglected. Equally, we should not try to regulate where we simply do not like the outcome of the market - Nozick's argument that Wilt Chamberlain should be allowed to keep his massive earnings because they are what the public freely chose to give him seems to be persuasive, and public opinion also favours it. What public opinion does not like are 'fat cats' who earn monopoly rents. [Anthony Heath, Nuffield College, Oxford]
White pointed out that `the State need not necessarily even be the primary financier of social provision, but may confine itself to erecting a regulatory framework ".
... A pertinent example [is] a system of universal compulsory second pensions....the State simply requires the individual, or more usually third parties, to undertake actions which ensure that he/she subsequently has access to important goods. Other examples include: minimum wage legislation; child support legislation; and school-parent contracts. Legal welfarism clearly coheres with the normative emphasis on civic responsibility in third way thinking. [Stuart White]
The Government's policies on "Best Value" also seem to exemplify th is open-minded, pragmatic approach.
Additionally, there were areas flagged up in the debate that previous administrations have been too ready to regard as adequately handled by private markets, notably environmental issues.
It is legitimate, not to mention necessary for government to preserve a pleasant environment for people. Damage to the environment is not accounted for by markets and it is legitimate for the State to take them into account. This is particularly relevant with the threat of global warming. [Andrew Smith]
Environmental or "green" taxes were therefore mentioned by a number of contributors as being illustrative keynote policies to be identified with the Third Way.
...the set of ideas and firm proposals that have grown up around the principle of sustainable development give some cause for optimism. In particular, ecological tax reform (without hypothecation, or perhaps with 10% of the receipts reserved for 'feel-good' environmental projects), and an integrated transport policy (with disincentives to car use and enhanced support for cycling and public transport) show some promise for addressing the difficulties of living in a finite world whilst at the same time tackling some of the major inequalities and inefficiencies of late th century Britain, at low or zero net cost. [Chris Hope]
It was suggested that employment-centred social policy (a term borrowed from Robert Haveman) was a central keynote policy of the Third Way. Its aim was:
...to enable citizens to achieve a decent standard of living through employment, and, since employment is becoming increasingly knowledge-based, this must be based on encouraging the ongoing acquisition of skills... Consequent policy proposals focus on (a) enhancing the capabilities of disadvantaged workers (through increased access to education and training and child care), and (b) increasing the work incentives of disadvantaged workers (through some combination of a minimum wage and new or reformed 'in-work benefits'. This general approach may be contrasted with a 'passive' benefits policy, on the one hand, and with a free-market approach to the problem which is almost certainly a recipe for social disaster (see Freeman, 1996). At the normative level, employment-centred social policy can be seen - and is certainly always presented - as a prime example of the dual, mutually reinforcing commitment to real opportunity and civic responsibility. [Stuart White]
White went on to argue that the introduction of a minimum wage and the Government's new welfare-to-work programme had wider implications than some commentators had realised. He argued that "the inspiration for these arguably have less to do with American-style workfare and more to do with Swedish-style active labour market policy". For White this further implied "a partial repudiation of neo-liberalism (minimum wage, state as employer of last resort) and a partial reorientation to a more left-wing form of neo-liberalism (for example, combining deregulation with universal access to things like "Individual Learning Accounts" so that otherwise vulnerable people can enter the labour market with better skills)."
The idea of citizen's income was raised by one or two contributors, but received little support. The unconditionality of citizen's income sits uneasily with the thinking behind employment-centred social policy, and attention was also drawn to the huge financial cost of such a policy leading, some describing it as "economically unfeasible". A more subtle, and perhaps telling, point against a citizen's income and in favour of the type of employment-centred policy that is seen as characterising the Third Way was that:
-- the need to earn a living is one of the strongest ties binding many people into society. Until there are schools that teach literacy for its own sake -- families and communities that can inculcate manners and civic virtues just because they make life better -- work is what socialises. Take away the need to work, and many of those most in need of what work teaches just wouldn't learn, and that would be catastrophic. [John Browning]
There was also a passionate but constructive exchange between some contributors over the details of potential policies that would widen employment opportunities. For example, Geoff Beacon observed that :
Kim Swales and myself have done some work for DG5 to investigate the effectiveness of general labour subsidies in tackling the problem of employment and inequality. We found that governments can influence long-r un employment levels by introducing an appropriate tax and subsidy system. The specific policy package which we considered involves the introduction of a fixed per capita labour subsidy, financed by an increase in VAT. The tax/subsidy scheme works by allowing for some substitution of capital for labour, but more generally by pricing workers into jobs through subsidisation and increasing the incentive to work, especially amongst lower paid workers. The type of subsidy and tax plan that we outlined could be operated as an integrated tax scheme in which the change in the firm's tax bill is calculated as the net difference between the additional VAT and the per capita subsidy. In so far as the scheme increases total employment, and thereby reduces payments of unemployment benefit, it would be associated with a reduction in the overall tax rate. That is to say, the introduction of a new tax scheme would simultaneously increase employment and reduce taxation. [Geoff Beacon]
Geoff Beacon noted that the proposals have had some acceptance in the European Union, quoting the Extraordinary European Council Meeting on Employment in November: - examine, without obligation, the advisability of reducing the rate of VAT on labour-intensive services not exposed to cross-border competition."
Two alternative detailed polices were offered by David Chapman along a similar theme. One was a "Work-Spreading Tax" which provided incentives for employers to employ more workers. The other was:
...a new form of Earned Income Tax Credit [EITC], referred to as the Conditional Benefit scheme, which enables the low-paid to obtain a certain guaranteed minimum income per week, and a certain guaranteed minimum income per hour, but without creating an unemployment trap or poverty trap...the difference [from a standard EITC] is that the lower is the hourly wage, the lower is the withdrawal rate. Thus with a very low hourly wage, there is no withdrawal at all, and the person keeps their benefit and the whole of any extra earnings which they make, above 20 hours of work. [David Chapman]
Readers interested in the detail of Chapman's and other proposals can read them in full in the archives at the NEXUS web site.
Perhaps the Third Way is as much to do with how decisions are going to be made as it is with what decisions finally emerge from that process? [John Courouble, Keeble College, Oxford]
One very active area of policy innovation highlighted by a number of contributors is various types of democratic reform. While some commentators and contributors have tended to think of the Third Way primarily in terms of combining certain social and economic objectives - "how best to combine equity and efficiency in a modern economy" - democratic reform was also argued to be of central importance.
Clearly, the nation-state can't any longer deliver social-democratic outcomes in the way that post-war social democrats thought it could. (As a matter of fact, I doubt if they were right even then : but that's a different story), but that's been a clich E9 for the last 25 years at least. What we have to do is to devolve upwards to Europe and downward to regions. The single currency is a massive step towards the former - it will transform the relationship between the member-states and the EU - and Scottish devolution is a massive step towards the latter. [David Marquand]
Some contributors went beyond the standard set of policies associated with devolution and the "re-inventing of government" to suggest new and innovative policies that might be used to enhance the vibrant working of democracy. One such idea was that existing National Lottery machines could be used to conduct referendums of various types, at very low cost and high accessibility.
Picking up on an earlier NEXUS discussion and paper by David Halpern, the idea of innovative consultation procedures over tax were also mentioned. Politicians could constructively escape from some self-imposed limitations over tax-spending by employing representative deliberative democratic mechanisms to consult with the electorate directly over tax-spending trade-offs. This would simultaneously imply both greater political opportunities and responsibilities for the electorate.
Politicians have a duty to reconnect with the people. More democracy may not be the solution unless dealt with in a very particular way. Consultation (real consultation) is the key...Political and social reconnection are the keystones of the approach. Without these what exactly is the Centre-Left for? [Anthony Painter]
...we must seek to engage the majority of citizens and we must dispel the cynicism that is diminishing our political culture and bringing the legitimacy of our government structures, at all levels, into doubt. Easily said but, I admit, not so easily done. However, the important thing is that we try - and not in a tokenistic, all-style-and-no-substance sort of a way, but with real commitment.... Technology will play its part, a part only limited by our imaginations, but the means are not enough - it is creating the motivation to make use of the technology that will be the real challenge. [Moira Scobbie]
Scott Aikens and others mentioned the potential of interactive technologies to develop new consultative procedures within the policy-making process, as well as between policy-makers, opinion leaders and citizens. John Browning suggested that the NEXUS consultation was itself an example of the former, "an encouraging sprout in the new governance".
Aikens pointed to Minnesota E-Democracy and the UK Citizens Online Democracy consultation on the Freedom of Information White Paper as examples of the latter.
There appeared to be wide agreement that devolution up, down, and sideways to an active citizenry should be encouraged. Institutional reform, and devolution in particular, was additionally seen as important because it created spaces within which policy innovation could occur, with communities taking responsibility for themselves.
... we can illustrate a (if not the) 'Third Way' through various community regeneration strategies that have developed in recent years up and down the UK as alternatives to the market and the state. ...The combination of unemployment, privatisation and the contraction of the welfare state has forced communities in many parts of the UK to use whatever means possible to deal with their own urgent problems... Funding has been cobbled together from Europe, successive otherwise largely useless area regeneration strategies from central government, local area health authorities, charities, churches, the private sector and, increasingly, through income from community enterprises. Services are provided directly in response to local need... [Angus Cameron]
John Browning echoed this, adding that new technology, as mentioned above, could help to facilitate this growth in civil society.
There's widespread excitement about the energy and thought being put into social experiments. If we believe any of this stuff about new politics, it's probably too early to judge which of these -- social entrepreneurs, union activism, corporate community building, whatever -- will work. But that makes it all the more important to a) help the experiments happen and b) disseminate news and results of what's actually happening. That's where I think the Internet can have a huge impact. It might not create a "Third Way" by fostering such discussions, but it has created a "third place" where new ways can evolve more rapidly -- not to mention a new realm of shared experience. Perhaps a sort of "Learning Grid" for society -- not just for schools -- could help.
It was this type of "micro-democracy" that Stuart White appeared to have in mind when talking about the new emphasis on mutualism in policy. He suggested that examples of this included proposals that the state should help and encourage Friendly Societies; local Credit Unions to provide financial services to vulnerable, low income families; and new forms of association, such as the 'employee mutual', to provide protection for individuals in the labour market. The latter, proposed by Tom Bentley and Geoff Mulgan (both of Demos), would be owned by their members, and would organise training for their members and would negotiate the sale of their members' services to employers.
White also supported the encouragement of independent social movements. These were considered important in the nurturing of civil society independent of both state and market, and would act as an ongoing support for progressive reform.
I do think Dr Reicher is absolutely right to stress the importance of social movements in progressive politics. One of the big strategic mistakes of Clintonite politics lies in thinking that all you need to do to get progressive reform is to elect/appoint clever people of good will to positions of high office. This may be necessary, but it is often not sufficient.
For once in office progressives will frequently find themselves assailed by powerful vested interests (as Clinton did over health-care reform, for example). In the face of these interests, even clever people of goodwill are likely to buckle and bend unless there are strong social movements in the background to offer/exert countervailing support and pressure. [Stuart White]
In as far as there was a counter-argument to seeing devolution or community driven innovation as central to the Third Way project, it was because it did not bear directly on the central defining features of a political economy.
...I am not convinced that David Marquand's suggested revisions quite hit the central point. I agree that constitutional questions are important - and I personally favour the kind of devolution upwards to Brussels and down to regions that he recommends. But surely the key - still unresolved - question for social democrats is how far to let the market rip and where the State (at whatever level) should intervene. Should we have markets or quasi-markets in welfare services such as health or education? Should pensions be privatised? Should the Tube be privatised? Should the labour market be (even more) deregulated? And so on. [Julian Le Grand, LSE]
But as Paul Thompson noted, a broader notion of the Third Way could encompass both viewpoints, helping us to "re-invent active governance, re-cast the relationship between the State, markets and citizens, and explore the extent and nature of the spaces available within." One of the characteristics of the emerging Third Way was a sensitivity to the importance of intermediate institutions, a deepening of democracy and a reconstruction of civil society as a part of the "new politics ". Differentiating between inequalities: "asset-based egalitarianism"
One of the policy developments pointed to by Stuart White is that of 'asset-based egalitarianism', a concept discussed by thinkers such as Freeman and Rogers. As White explained:
The basic idea is that the Left's traditional distributive objectives should not only be pursued through income redistribution, or solidaristic wage policy, but by more concerted action to change the initial distribution of assets and productive endowments, e.g., skills, which people bring to the market in the first place .... Employment-centred social policy can be seen as one application of this general idea. Other possible applications would include structuring tax policy to encourage saving by poor households; or, more radically, instituting a system of basic capital grants. Under a system of basic capital grants each individual would receive, on maturity, a grant which he/she would be free to use for approved activities such as education and training or setting up a new business. In the long-run, a Community Fund ... might offer one way of financing a generous system of basic capital grants. [Stuart White]
The issue of inequality is one that was raised by many contributors in one way or another. It was unclear to many contributors as to what level of emphasis the current conception of the Third Way placed on reducing inequality, and this led some contributors to qualify their support for the term. This is also a concern that has been picked up on and expressed in some of the press coverage and articles that have followed the NEXUS debate.
To most contributors, a response to inequality was very much a matter of principle, and is therefore returned to in the next section.
In his summary of what we have termed the "practical" or "bottom-up" approach, Julian Le Grand suggested that an analysis of the keynote policies of the new administration revealed four underlying principles. These were "community, responsibility and accountability" and, he later added, opportunity.
So there it is: not `liberty, equality, fraternity', but `community, accountability and responsibility'. Although there are some tensions between these values (especially between encouraging freedom of action by communities and the centralisation that may result from vigorously holding them to account) there is, I think, a fundamental consistency here. And, if so, it really does represent a `third way' that is rather different from neo-liberalism and social democracy. Unlike neo-liberalism, it is not libertarian; indeed, if anything, some parts of it have a rather authoritarian flavour. And, unlike social democracy it is not egalitarian; there is undoubtedly a commitment to social justice within the Government, but it is the kind of social justice that relies on ensuring minimum standards and equality of opportunity rather than in redistribution and equality of outcome. [Julian Le Grand]
The other "principle" that might also have been derived from this analysis is that of "pragmatism", and of "bottom-up" policy development.
I think the Government is rather pragmatic about means: the best method is that which is most likely to promote the values of community, accountability and responsibility. Again this is somewhat different from the other `ways'. Unlike neo-liberalism, there is not a prior commitment to the market; unlike socialism, there is no commitment to the State; unlike social democracy, there is no automatic commitment even to the mixed economy. What's best is what works. [Julian Le Grand]
These ideas can be seen running through the policy discussions summarised in the sections above. The public private divide was no longer one of principle, but of pragmatism - efficiency with accountability - though as Gavin Kelly and Andrew Gamble emphasised, this divide continued to offer opportunity for further policy innovation. Anthony Heath, of Nuffield College, Oxford, agreed with Le Grand's conclusions.
... one approach would be to say that the Third Way encourages the free market as much as possible (since it is by far the best system for conveying information about consumer preferences), but not to let it rip entirely because of the problem of externalities and market failures. Surely the key role of Government is to deal with these problems of market failure and to intervene where there are basically goods issues at stake. [Anthony Heath, Nuffield College, Oxford]
Employment policy was designed to create real opportunities for all, but it came with a hard edge of some ultimate personal responsibility for life choices. Devolution, and the re-invigoration of active political involvement - what some termed "new politics" - is driven by the desire to re-revitalize community and civic life, bringing political opportunity, responsibility and accountability back to communities and citizens themselves. The latter, it is also believed, will lead to better policy as empowered communities, motivated by a new sense of ownership, innovate policies better tailored to their own needs and contexts.
Towards the end of the debate, several contributors highlighted the extent to which the policies of the Third Way could be seen as a "stakeholder" approach too. Social, labour market and institutional policies could all be seen as attempts to give citizens, workers and electors a greater stake in their respective interests.
It seems to me that we have a developing practice without a theory. Isn't the "Third Way" about remedying this deficiency? If not, what? [Tony Wright MP]
... we need to address, as I believe this discussion set out to do judging by the suggested themes, the philosophical (political and ethical) basis to thinking about state and society in the present moment. [Alan Finlayson, Queen's University]
The main disadvantage to the bottom-up or practical approach is that it begs the question of what leads to a given set of keynote policies in the first place. The alternative to a bottom-up approach is the "principled" or "top-down" approach. In other words, we can start with a set of general principles and then seek to identify what types of policies and implications will follow from them.
Jonathan Ainger of the Vauxhall CLP suggested that something akin to the debate over Clause IV was needed. Ainger described the Clause IV debate as "perhaps the first effort within the Labour Party to tell us what Blair was about other than reforming the party and winning elections". Ainger was somewhat alone in believing that such principles do not matter to the voters but are of fundamental importance to activists - most contributors felt that it was very important to involve people outside of traditional politics in the debate over principles.
While pragmatism might be an important part of the thinking behind the keynote policies of the Third Way, pragmatism alone cannot define a policy programme. Objectives must still be set and choices made. As one contributor noted of the policy-driven strands to the NEXUS debate:
As to this debate I worry that it is focusing on the technical tools of government power -- ...they are of course just tools -- when the underlying issues are really more about the M word, morality. [John Browning]
Browning then went on to compare the values of a third way to the moral values mentioned in John Paul II's recent update of Pope Leo XIII's encyclical Rerum Novarum. While not suggesting that as the model, it did highlight the importance of values in the determination of the Third Way.
David Marquand suggested that there were four essential concepts or principles that should guide policy. These were: well-being, solidarity, justice and freedom. There was some discussion about how these concepts conflict.
One view was that a resolution of Marquand's partly competing principles was to elevate the relative status of "well-being".
Would solidarity, justice or freedom have meant anything to Adam or to Robinson Crusoe before he met Friday? Not in the terms we mean, yet well-being is exactly what would, through a process of trial and error, have guided their actions. And well-being or happiness is a psychological concept that can now be very acceptably measured. Measuring it supports the precedence of others and our relationships with them over money that Sebastian Kraemer describes. Let us agree to see individual and collective long-term potential well-being (solidarity means they move in parallel) as the measure of the success or otherwise of all our actions, not just national economic policy. All of David Marquand's suggestions are likely to pass this test. [Diarmid J G Weir]
Such a resolution is curiously "third way" in its pragmatic orientation, but appears to relate closely to the first of several themes identified by the principled approach, quality of life.
A number of contributors suggested that the fundamental objective of policy was to improve "quality of life". They argued that the Third Way needed to be driven by this objective and that goals such as economic growth should explicitly be seen as secondary tools to this objective. The argument was expressed in three different forms: the valuing of subjective well-being; the need to protect the environment; and the need to create a less dehumanised society.
One of the guiding principles of the new society should be the use of the State to promote the all-round quality of life of its citizens. The present Blair project seems to be dominated by economic imperatives with social policy designed simply to keep people in good working and consuming order. Too much emphasis on productionism and the work ethic can be counterproductive to our personal, social, and environmental well-being. Thus welfare-to-work can go wrong if it forces people into soul or planet destroying jobs or induces them to work long hours leaving little time for proper parenting, caring for dependents, communal ties and other activities which are the hallmark of a civilised society. A quality of life guiding principle would enable economic activity to be assessed against these wider considerations. Such analysis might conclude, for example, that it is better for society if job opportunities were created by reducing working time and sharing out the decent work (as the French and Italians are planning to do). Or that it is better for everyone if single parents were paid to look after their own children rather than someone else's.
The social costs thereby saved could well outweigh any public subventions required to implement quality of life policies. [Stan Rosenthal]
Dr Steven Reicher, a social psychologist at St. Andrews University, made the point that well-being was not just a private matter but had a social and political dimension too. He, along with others such as Ruth Levitas and Wendy Wheeler, suggested that both the current political models of well-being and of the person were too limited. Sebastian Kraemer, of the Tavistock Clinic, noted the relationship between individual and community well-being as a developmental process:
Communities begin with infants and a third way would have to include a developmental view of human relations. Trust and generosity, perhaps the chief ingredients of community, depend on good care (both attentive and firm) from the very beginning. Respect generates respectfulness. This is a political, not a domestic, matter. [Sebastian Kraemer, Tavistock Clinic]
The importance of the environment - a collective good that affected the well-being of all of us - was emphasised by many contributors.
I had been following this debate with interest, but with a growing sense that it was ignoring many of the issues that seem to me to be both important and a possible way of carving out a distinctive position. But the recent posts of Stan Rosenthal, who mentioned environmental well-being, and Geoff Beacon, who would like to see our affluent polluting behaviour taxed, gave me fresh heart. It is not necessary to be an out and out green to feel that maybe we in the UK have for a long time been using more than our fair share of the Earth's free environmental support systems. Many of the social justice arguments that have been presented so eloquently in this debate apply a fortiori when we consider how this might be redressed in the future. [Chris Hope]
... environmental issues are absolutely fundamental to whatever way we go. They have been ignored and fudged and paid lip-service to for far too long and must now be placed at the centre of our considerations and I have a feeling that, if that happens, 'letting the market rip' will cease to be an option. [Moira Scobbie]
Using the principle of quality of life as a starting point, practical suggestions for policy indicators were suggested.
If natural resources are finite any individual decision about their use or abuse affects others and therefore has implications for justice and freedom. The most widely used alternative to GDP, Daly and Cobb's Index of Social and Economic Welfare, recognises this. [Diarmid J G Weir]
Finally, some contributors expressed their hope that the Third Way would bring with it values and policies for a more "human" world.
As far as philosophy is concerned, I hope somebody up there in the places of power is thinking about what a modernisation which wasn't a form of dehumanisation and alienation might possibly look like. [Wendy Wheeler]
The importance of a truly participatory politics, both downwards at a local level, upwards to non-nation-state institutions and sideways to an active and participatory citizenry, and into the workplace, were emphasised by many contributors.
Within participatory politics some also emphasised that Government needs to consult both individuals and organisations outside of the traditional constitutional framework.
As we saw in the previous section, policies to implement formal devolution were seen by many (but not all) as being a central keynote policy of the Third Way. Some pointed to the underlying principle of the political empowerment of citizens and communities and argued that ultimately the government should be prepared to go further still.
I can't help thinking that discussions about devolution upwards and downwards are ignoring the fundamental flaws that exist in both directions. The current powerlessness felt by many who believed the rhetoric of the Labour Party prior to the election, and are now deeply hurt by the reality, belies either representation or accountability. Once in power, governments at any level have a long leash and can cover a great deal of ground before the test comes up four or five years down the line. Therefore, for me, the crucial question is how to ensure not just accountability after the fact, but a stronger contract beforehand between parties and citizens. [Moira Scobbie]
Other contributors similarly tried to project forward from this principle of radical democratisation into its ultimate policy implications.
....authority exists in a number of layers, each having areas of sovereignty, none having the illusion of complete sovereignty. Many decisions will be delegated to individual taxpayers. The learning curve needed to make this work can start at a very small scale and people can learn about the effects of how they divide their taxes using the smaller currencies before politicians progressively delegate authority for this in respect of larger currencies. Perhaps the best way to sum up the philosophy behind this is "small is beautiful". [Richard Kay]
To some degree, we all seem to favour the communal, the collective, the relational. ...at the same time, many contributors still see a tension between the communal and the individual ... I am not so pessimistic. I don't see that collectivity need threaten individuality, indeed individuals may often define themselves at a collective level and take collective benefit as individual benefit even if they personally do not gain. ... any communitarian project must be expressed in the form as well as the content of politics. There is much talk of community but increasingly, communal forms of participation are excluded from our politics and our social life. These forms are important not only in developing the very social forms which we wish to generalise, but in order to push the project through against inevitable opposition. Obviously our politics will meet entrenched opposition. Who will we have on our side? Clearly we must not forget traditional forces such as trades unions, but we must also develop new forms and forces of collective action. [Dr Steven Reicher]
It is also clear that not all would agree with this viewpoint. Stuart White identifies this area - communitarianism - as one where the Centre-Left, and the Third Way, has yet to settle on a clear view and potential tensions exist. Responsibility versus brute luck
One of the principles that appears to underlie Third Way thinking is a notion of personal responsibility. This emphasis on personal responsibility is seen by many to be one of the distinguishing aspects of Third Way thinking compared with that of the traditional Left and was an obvious theme of the keynote policies described in the previous section. However, this conception of personal responsibility differs radically from that of the New Right's ethic of "self-reliance ":
To be sure, when people discharge responsibilities... - to work, to nurture and provide for their children, and so on - many of them will thereby attain a state of economic self-reliance. By the same token, a failure of self-reliance will sometimes be symptomatic of a failure to carry out these basic responsibilities. But it does not follow that the ethic of civic responsibility amounts to, or is coterminous with, universal self-reliance. For people can obviously suffer great misfortunes - unemployment, ill-health, etc. through no fault of their own, and they will then have a legitimate claim to assistance which in no way impugns their status as responsible individuals or citizens ... To deny this and to insist that people always "stand on their own two feet "would be to renege on the commitment to guarantee real opportunity for all. [Stuart White]
The concept of "partitioned responsibility "attracted some attention in the discussion. The concept, proposed in a recent paper by David Halpern and Stuart White (see NEXUS library), is that in as far as events are the result of choice, then they should be borne by the agents, but in as far as they are the result of brute luck then the community or state should seek to attenuate their effects. The discussion revealed that the "partitioned responsibility "concept bore many similarities to a principle independently proposed by Julian Le Grand in his earlier work.
Some saw partitioned responsibility as an attractive organising principle, particularly for the welfare state, that appealed to an intuitive sense of natural justice.
A disabled friend who is professionally employed and a relatively high earner asked me recently: should she still receive a subsidised specially built car? On the one hand, it's not economically necessary or efficient to subsidise people like her who could pay for their own special cars. On the other hand, the subsidy is a symbol that she should not be unfairly burdened by the bad luck of having become disabled. It's important that t he Halpern/White criterion of partitioned responsibility would (I think) support the subsidy, since it corrects for the effects of 'brute bad luck'. But it's equally important to recognise that (a) economic efficiency and social justice may come apart in this example, and (b) that the symbolic dimension is crucial in justifying the State's concern to rectify brute bad luck at all. [Melissa Lane]
However, some were concerned that, although this principle was attractive, it did not in itself set limits to how widely it should be applied. This meant that one still had to consider the issue of rights.
The spirit of the concept of 'partitioned responsibility' lacks any realisation of the importance of RIGHTS. In this sense it is a reaction to the abuse of certain social rights without a means of reassessing what those rights should be. ... Who decides what the State's and the individual's 'responsibilities' are? Democracy will be a poor judge unless the concept of 'a Third Way' contains the language and concepts of rights. [Anthony Painter]
One response to this view is that partitioned responsibility should be applied as widely as is practically possibly, and that the issue of rights only arises where we wish to limit its applicability for other political reasons. One such controversial area is the issue of poverty and inequality. The application of the principle implies that in as far as poverty is the result of brute luck, such as circumstances of birth, the State should seek to reduce it. This is discussed below.
Social inclusion, and the issue of poverty, was flagged up in the section on the practical approach as an issue to which the response depends significantly on principle. The Third Way appears to be a significant development in that its keynote policies recognise that exclusion is not simply a matter of economic exclusion. This is partly indicated by the desire for the radical spreading of power through devolution.
Without discounting the importance of the debates about economic policy which have been developing on the list, I think we need to recognise the extent to which economic issues don't always correlate neatly with emotional and cultural symbolism. Inclusion/exclusion depend on more than a monetary bottom line can reveal. [Melissa Lane, King's College, Cambridge]
A communitarian project must have two axes. The first is inclusion and involvement. Any form of community which is exclusive necessarily exacerbates conflict and division. Hence the project must have as its priority the involvement of those who are marginalised at present - not because they are more important than others but because they are the test of a successful policy. Moreover, formal inclusion is not sufficient. Any policy must make people active participants who feel they have a say in decisions. Forced community discredits the whole idea of community. Secondly, the project must operate at all levels of social activity. At the economic of course, but equally at the cultural. [Dr Steven Reicher]
This was an area identified by Stuart White as open to debate inside the space described as the Third Way - how far should the State intervene to reduce baseline inequalities? This issue was taken up at some length in the submission by Gerald Holtham, Director of the Institute for Public Policy Research, along with the related issue of universalism. He juxtaposed two alternative visions of what the Third Way could become which he termed the "radical centre "versus the "centre-left". He defined the radical centre thus:
There is no advantage in emphasising any specifically left-wing elements in Labour's programme. Better to talk of the 'radical centre', an oxymoron certainly but some poetic license is permissible. This recognises the necessity of keeping a large part of the middle class within the coalition. Electoral success precludes any direct or obvious increase in the proportion of GDP that goes on taxation and government spending. The restriction on tax and spend necessarily restricts the redistributive ambitions that it is possible to maintain. (It is incompatible with Croslandite social democracy for that reason). The most just and humane response is to confine those ambitions to helping the very worst off people in society, those who risk being altogether 'excluded'. While many resources must be devoted if such people are to be helped, they are a small proportion of the population, fewer than 10 per cent, so the task is manageable. The excluded also account for a very high proportion of the most visible social problems, such as crime.
So if they can be helped, the pay-off in terms of social peace will be appreciable. While that will require resources it does not consist simply of bigger hand-outs but of helping many of the excluded to find work.
If the necessary resources are to be mobilised to help the excluded within existing taxation parameters, other aspects of the welfare state, notably middle-class benefits cannot be permitted to grow. As people's expectations rise, they must be encouraged to make more provision for themselves. This is not popular in itself but is thought to be more popular than the alternative of higher taxes. It is likely to lead to some increase in inequality of provision and the most adversely affected will be the fairly poor, those above the target 'excluded' group but near the bottom of the scale comprising everyone else. People from this group, for example, are the ones likely to be discouraged from going to university by the charging of fees. No-one applauds this; it just seems to many to be the least evil. These are the 'hard choices' often spoken of. [Gerald Holtham, IPPR]
Holtham juxtaposed this with the centre-left, defined thus:
A second school regards that agenda as erring in the direction of caution. It wants a modernised centre-left rather than a radical centre. It accept s tight restrictions on mobilising resources through the State but nonetheless wants to use the room for manoeuvre it believes exists. It notes that 'New Deal' for example is a classic case of 'tax and spend'. The cornerstone of Labour's programme, it would have been ruled out by strict application of the no-more-tax-and-spend principle. There is more scope for such judicious departures from orthodoxy.
The extra room they buy should be used to maintain the principle of universalism in welfare services. Universalism is desirable on several grounds. First, while apparently 'expensive' in requiring higher taxes or contributions, it may actually be efficient. The middle classes may get a good deal in that the extra taxes would still be less than the private charges that are the alternative. That would be true if universal schemes - such as insurance - enjoyed economies of scale or scope. Second, universalism is necessary to protect the position of the poor or nearly poor. The middle classes will not support a decent service if it is quite separate from the private provision they have to make on their own account. Thirdly, national welfare institutions are an important part of the psychological furniture; they contribute to a sense of shared destiny and hence shared citizenship. Fourthly, targeting, or safety net services create financial disincentives for those people on the fringes of qualifying. [Gerald Holtham]
A similar view was reached by Melissa Lane, but from a more philosophical line of argument:
The more general issue of the structure of the welfare state fits into these concerns. The recently floated Government idea of cutting back benefits to the middle classes in order to focus on the poor may make sense in terms of economic efficiency AND even social justice, if the latter is construed in narrow economistic terms. What it would almost certainly do is to ravage the social construct of solidarity which makes the middle classes believe that they have a stake in the welfare state - and so supports their willingness to pay for it and to engage in a common enterprise with the otherwise excluded.
This conclusion is impossible to reach within the narrow confines of economic rationality in which money dominates and is fungible with all other social measures. [Melissa Lane]
Stuart White, whose paper so helpfully opened up the early discussion, felt that Holtham's distinction crystallised a very important choice for the centre-left - and indeed for the nation. His conclusion was:
The lesson I draw for liberal-minded social democrats like myself, meanwhile, is this: it is essential for us to clarify the kind of Third Way we support, and to fight our corner (within both the Labour and Liberal Democrat parties) against those who will inevitably seek to "decontest" the idea of the Third Way in a less egalitarian and/or more socially conservative direction. [Stuart White]
The NEXUS discussion made clear that the term the "Third Way" does not yet have a universally accepted definition. For some, this lack of clarity was a source of concern. Unease was expressed by some that the term might become used, whether intentionally or otherwise, to "dump" much that was of value in older social democratic tradition into an implied second way that was then abandoned. For others, however, the use of the term offered an important opportunity to re-evaluate, and where necessary update, such tradition in the context of the challenges facing us today.
One strand of the discussion, which we have termed the "practical approach", involved examining the keynote policies that are becoming identified with the Third Way and inferring from these the objectives and principles of the Third Way. Such keynote policies were seen as being employment-centred social policy; the re-positioning of the State as a guarantor but not necessarily provider, of public services; a receptivity to new forms of mutualism; and a general deepening of democracy and accountability.
Julian Le Grand used this approach to conclude that the main ideas and values that lay behind the Third Way and the NEXUS debate were community, opportunity, responsibility and accountability. To this list we might add that the Third Way is itself strongly policy driven. It has a pragmatic, bottom-up orientation - "what's best is what works" [Julian Le Grand, LSE].
However, the "practical approach" or the pragmatic can only take us so far. Choices about policy also have to be made on the basis of values. This led to the second, or what we have termed, the "principled approach". This involves attempting to identify particular values and principles and then inferring the types of policies that would follow.
David Marquand suggested the basic principles are well-being, solidarity, justice and freedom. In general, the discussion focused on four slightly more applied principles or objectives: quality of life, rather than narrowly economic, objectives; the deeper valuing of democracy and accountability; the "partitioning of responsibility "between state, community and individuals including the attenuation of unchosen brute luck effects; and the desire for greater social inclusion. All four of these principles might be said to have a strong social justice dimension.
If these principles were fully implemented, they would be likely to throw up some policies that would currently be considered politically difficult. A simple example would be tax on domestic fuel - a quality of life approach, strongly influenced by a greater desire to protect the environment, together with a desire to increase personal responsibility for lifestyle choices, would seem to imply that domestic fuel should be more heavily taxed than at present (albeit twinned with more generous benefits for the elderly and disadvantaged and possibly with tax reductions in other areas). Similarly, the strong desire for greater social inclusion might imply more redistribution than is currently viewed as possible by policymakers.
The possibility of such conflicts throws up an important choice about what the Third Way is to mean. One option is that the Third Way can refer to a very broad political space that will offend few, but that will be of limited practical use to policy-makers confronted with real decisions.
...it is possible to discern, at the normative and policy levels, a space of 'third way thinking' that is distinct from the spaces occupied by 'old Left' and "New Right"... this remains a pretty large space in which t here is plenty of room for significant philosophical and (therefore) policy disagreement. [Stuart White]
This very broad consensus should not be dismissed as a political achievement. However, if policymakers are seeking from the Third Way something that will act as a practical guide to policy-making, then they will need to look for principles that are more tightly specified and that consequently have more substantial policy implications. This implies that some people will no longer agree with the specifics of the Third Way, though many others will welcome the stronger statement of principles.
Whatever the Third Way becomes, it can't be held hostage to the hope th at everyone will agree, or it will lack any determinate content at all. [Melissa Lane]
Inside the broad envelope of the Third Way that the debate has thrown up, there are two unresolved dimensions of disagreement that can be anticipated and that are likely to predict future political battles.
There is, firstly, an important and potentially fractious division between 'leftists' and centrists' over the commitment to real opportunity: a philosophical division over exactly what this is a commitment to, and, derivatively, a division over exactly what policies are needed to satisfy it. [Stuart White]
The obvious issue here concerns potential conflicts between egalitarians and meritocrats over redistribution. This conflict was captured in the choice Gerald Holtham presented between the radical centre and a modernised centre-left, along with the related choice universalism and residual social policy. The second likely area of conflict is: ...between 'liberals' and 'communitarians' over the commitment to civic responsibility - more specifically, over the precise range of behaviours for which individuals are appropriately seen as responsible to the community and which the state may therefore legitimately seek to regulate. [ibid.]
Related to this conflict between personal freedom and civic responsibility is the issue of potential conflicts thrown up by a move towards greater emphasis on the community.
Stronger and more autonomous communities may offer many advantages, but they may also sometimes act in ways that bring them into conflict both with minorities inside the community and with the wider community outside.
A final note. I've enjoyed and learned from this debate. For me, the sheer fact that it happened is a small but encouraging demonstration that the world is indeed becoming a new place, and a better one. Hopefully in some form it will continue...[John Browning, The Economist]
The NEXUS discussion has examined the concept and practice of the Third Way from various angles. A broad political space was identified both by its keynote policies and pragmatic orientation, and by the objectives and principles associated with it. This space has significant points of difference with an "old Left" or "Right" position. It also appears to have considerable points of overlap with previous, particularly European, social democratic thinking and with the "stakeholder" concept. The extent and specificity of this overlap will depend on how the Third Way is ultimately defined. However, if the principles of the Third Way are to prove of practical use to policymakers, they will need to be stated in greater detail. This is important as the project cannot be defined solely by pragmatism and the real world constraints.
The resolution of this detail, as this debate has illustrated, will be a source of continuing discussion.
The NEXUS Third Way debate generated a huge volume of contributions. It is remarkable that so many busy and eminent individuals made the time to participate at such an intense level. It hints at the potential of the electronic media to reinvigorate political debate in the future.