I think that valuable direction can be given to this debate by analysing
the aims of any 'third-way' economics.
Can I propose ( tentatively) the following principles behind any
economics of the third-way:
1) Sustainability:
- Sustainable productivity
- Environmental sustainability
- Political sustainability
2) Equity
Obviously, this list is not exhaustive but any list of aims should be as
short as possible for the sake of clarity.
As I understand the 'third-way' and in terms of my own beliefs about
what the 'third-way' should mean, we should take the values of the left
and embed them within the political and socio-economic environment in
which we have to operate in.
When analysed against the above list both classical and keynesian
economic models fail IN THE PRESENT SOCIAL ENVIRONMENT OF BRITAIN/
EUROPE/ THE GLOBE in the 1990s.
Keynesian economics as epitomised in the Keynesian welfare state
(1944-1976) matched the above aims ideologically. However, it was
seriously deficient in terms of sustainability which affected its
ability to provide equity in the long-term.
Classical economics has no theory of distribution and, therefore, must
be challenged on the basis of equity. Also, it proved to lack
sustainability- politically unfeasible for more than a decade, and there
is no necessary reason for it to prove to be sustainable in terms of
productivity and the environment ( in fact, it is very unlikely that it
will prove to be so.)
Therefore, the 'third-way' cannot be some sort of messy compromise
between two failed means of organising ( or not as the case may be) our
political economy. Personally, I believe that a strategy which attempts
to improve competitiveness through investment in human and
infrastructure investment should be the main focus of the sustainability
element of the 'third-way.' International cooperation and the further
strengthening of our democratic structures will provide the foundation
for a more rational debate on income and opportunity re-distribution.
Just as a quick post-script, I think the idea for a grand empirical
project was interesting but I think that any project which is the beyond
the practical and intellectual limits of the entire economics profession
is a little beyond the possibilities of this debate. Therefore, I'm
afraid that we may have to rely on 'arm-chair theorising'!
Anthony Painter.
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