In one sense there is always a third way, in that thesis and antithesis can
combine to produce a new insight, at a higher level. I would argue that the
"new economics" will show emergent properties [see "Emergence, from Chaos to
Order" John H. Holland, pub. Helix Books Reading, Mass. 1997] and that the
ideas of Brian Arthur [see "Increasing Returns & The Two Worlds of
Business", HBR April 1996] are one example of a new paradigm emerging in
economics. However to suggest that any politician, British or other, can
create a new third way in economics is frankly unbelievable. Politicians
survive [or not] by linking to the popular mind, to the perceived
understanding of citizens, to a degree it is possible to influence the views
of citizens, but this power is limited in relative to the degree of
democratic control exercised by the citizens [strong in Anglo Saxon
countries, weaker in Mediterranean countries]. It is arguable that Margaret
Thatcher's revolutionary approach to British politics was only possible
because of an instinctive wish by the electorate for real change, in the
face of a fundamental crisis in British politics, there is no equivalent
situation today, though such a crisis may emerge over constitutional change
where the electorate may force a fundamental rejection of the further
European integration required by Euro entry.
There is another argument and that is how new paradigms emerge [see Kuhn on
the nature of scientific revolutions]. For the Third Way to be real, and not
merely window-dressing it would need to be soundly-based on real world
changes. I see no sign of this in the published material. I also question
the understanding that any British politician has of real-World economic
change. [Though John Redwood may be the exemption to this rule]. For
example Tony Blair's statements about the Internet lack insight, it is
widely observed that he has no IT skills, there is no evidence that he
actually uses the Internet.
Politicians also have at least two different constituencies, the general
population and their own political activists, in practise there are other
divisions in the UK. In order to retain power [which is the ultimate goal
of all politicians] a politician must convince the population in his/her
competence and that the results of policy are generally in the interests of
the polis.
Labour has a fundamental problem with financial policy, its natural
supporters expect it to redistribute tax revenues to them and the
institutions they use and support [teachers, health workers, local
government, social workers and their clients], this has been the historic
role of Labour Governments since 1945. This has normally resulted in a
currency crisis and a devaluation of Sterling as the finances of the Country
prove inadequate to support such a policy. In order for Labour to win in
1997 it has been essential to win the support of middle-class voters in
England and this was done by successfully convincing the electorate that
Tory financial controls would remain and that "it is time for a change".
However this inevitably created tensions within the Labour movement, which
has given rise to disillusionment in those whose instincts are to "tax the
rich" and play Robin Hood with the revenues, the large decline in Labour
Party membership in the last twelve months is one indicator of the problem.
There has also been a hard fought debate between Blairites and Brownites
about financial policy and the the Third Way debate has signs that in
practice it is code for the attempt to produce an acceptable compromise
within the Labour Government. It would however appear that the Blairites
have, at least for the present, lost the debate that the Brownites are in
control. Blair's lack of genuine pleasure at Brown's announcement of
greatly increased Government expenditure signals the end of the Third Way.
If Labour lose the next election the blame will be hung round Gordon Brown's
neck. This week also probably marks the real turning point for Tory
fortunes.
In short the present debate appears to be an extension of the traditional
arguments about State Expenditures in the UK.
If the we are really interested in the future state of Government
expenditure in the UK we should in fact be looking outside the narrow
confines of the UK debate. A new paradigm in technology and economics is
emerging [keep looking for the e word], the emergence of the Internet, the
fall in World telecommunications costs, the globalization of the economy,
the loss of authority of Governments to international,organizations and the
increasing difficulty of imposing controls on economic and financial
activities [the rise of e-commence puts business into a virtual economy],
the increased difficulties of raising tax revenues, and the ease with which
business can relocate into other jurisdictions will mean that any State
which wishes to continue to offer economic growth to the majority of its
citizens will need to compete with low taxes, educated and few social
controls on the operation of business. The whole World is moving away from
the post-World European model of Social Welfare into a more individualistic
view of society.
Finally never forget that fables and children's stories often contain real
truths:
----------------------------------------------------------------------------
----
The Emperor's New Clothes
by Hans Christian Andersen
Once upon a time there lived a vain emperor whose only worry in life was to
dress in elegant clothes. He changed clothes almost every hour and loved to
show them off to his people.
Word of the Emperor's refined habits spread over his kingdom and beyond. Two
scoundrels who had heard of the Emperor's vanity decided to take advantage
of it. They introduced themselves at the gates of the palace with a scheme
in mind.
"We are two very good tailors and after many years of research we have
invented an extraordinary method to weave a cloth so light and fine that it
looks invisible. As a matter of fact it is invisible to anyone who is too
stupid and incompetent to appreciate its quality."
The chief of the guards heard the scoundrel's strange story and sent for the
court chamberlain. The chamberlain notified the prime minister, who ran to
the Emperor and disclosed the incredible news. The Emperor's curiosity got
the better of him and he decided to see the two scoundrels.
"Besides being invisible, your Highness, this cloth will be woven in colours
and patterns created especially for you." The emperor gave the two men a bag
of gold coins in exchange for their promise to begin working on the fabric
immediately.
"Just tell us what you need to get started and we'll give it to you." The
two scoundrels asked for a loom, silk, gold thread and then pretended to
begin working. The Emperor thought he had spent his money quite well; in
addition to getting a new extraordinary suit, he would discover which of his
subjects were ignorant and incompetent. A few days later, he called the old
and wise prime minister, who was considered by everyone as a man with common
sense.
"Go and see how the work is proceeding," the Emperor told him, "and come
back to let me know."
The prime minister was welcomed by the two scoundrels.
"We're almost finished, but we need a lot more gold thread. Here,
Excellency! Admire the colours, feel the softness!" The old man bent over
the loom and tried to see the fabric that was not there. He felt cold sweat
on his forehead.
"I can't see anything," he thought. "If I see nothing, that means I'm
stupid! Or, worse, incompetent!" If the prime minister admitted that he
didn't see anything, he would be discharged from his office.
"What a marvellous fabric, he said then. "I'll certainly tell the Emperor."
The two scoundrels rubbed their hands gleefully. They had almost made it.
More thread was requested to finish the work.
Finally, the Emperor received the announcement that the two tailors had come
to take all the measurements needed to sew his new suit.
"Come in," the Emperor ordered. Even as they bowed, the two scoundrels
pretended to be holding a large roll of fabric.
"Here it is your Highness, the result of our labour," the scoundrels said.
"We have worked night and day but, at last, the most beautiful fabric in the
world is ready for you. Look at the colours and feel how fine it is." Of
course the Emperor did not see any colours and could not feel any cloth
between his fingers. He panicked and felt like fainting. But luckily the
throne was right behind him and he sat down. But when he realized that no
one could know that he did not see the fabric, he felt better. Nobody could
find out he was stupid and incompetent. And the Emperor didn't know that
everybody else around him thought and did the very same thing.
The farce continued as the two scoundrels had foreseen it. Once they had
taken the measurements, the two began cutting the air with scissors while
sewing with their needles an invisible cloth.
"Your Highness, you'll have to take off your clothes to try on your new
ones." The two scoundrels draped the new clothes on him and then held up a
mirror. The Emperor was embarrassed but since none of his bystanders were,
he felt relieved.
"Yes, this is a beautiful suit and it looks very good on me," the Emperor
said trying to look comfortable. "You've done a fine job."
"Your Majesty," the prime minister said, "we have a request for you. The
people have found out about this extraordinary fabric and they are anxious
to see you in your new suit." The Emperor was doubtful about showing himself
naked to the people, but then he abandoned his fears. After all, no one
would know about it except the ignorant and the incompetent.
"All right," he said. "I will grant the people this privilege." He summoned
his carriage and the ceremonial parade was formed. A group of dignitaries
walked at the very front of the procession and anxiously scrutinized the
faces of the people in the street. All the people had gathered in the main
square, pushing and shoving to get a better look. An applause welcomed the
regal procession. Everyone wanted to know how stupid or incompetent his or
her neighbour was but, as the Emperor passed, a strange murmur rose from the
crowd.
Everyone said, loud enough for the others to hear: "Look at the Emperor's
new clothes. They're beautiful!"
"What a marvellous train!"
"And the colours! The colours of that beautiful fabric! I have never seen
anything like it in my life." They all tried to conceal their disappointment
at not being able to see the clothes, and since nobody was willing to admit
his own stupidity and incompetence, they all behaved as the two scoundrels
had predicted.
A child, however, who had no important job and could only see things as his
eyes showed them to him, went up to the carriage.
"The Emperor is naked," he said.
"Fool!" his father reprimanded, running after him. "Don't talk nonsense!" He
grabbed his child and took him away. But the boy's remark, which had been
heard by the bystanders, was repeated over and over again until everyone
cried:
"The boy is right! The Emperor is naked! It's true!"
The Emperor realized that the people were right but could not admit to that.
He thought it better to continue the procession under the illusion that
anyone who couldn't see his clothes was either stupid or incompetent. And he
stood stiffly on his carriage, while behind him a page held his imaginary
mantle.
----------------------------------------------------------------------------
----
-------------------------------------------------------------
Posted to 3way, a service of Nexus. http://www.netnexus.org/
Hosting and email provided by new media consultants On-Line Publishing