In developing a Third Way Economics the key is find a methodology that is
more effective than laissez faire capitalism and the former state socialism
that so fossilized left wing debate in the 1970s and 1980s.
Both of those philosophies focus on systems. A modern democratic socialist
solution should focus instead on people. Surely this is the distinguishing
feature. The global financial crisis which is engulfing the world economy
is in part due to the failure of national legislators and international
institutions to consider fully the people involved in the developing
economies and the interactions within different cultures and societies.
This is not to suggest that protectionism is a solution, but merely that
laissez faire is only one sort of capitalism. Any reform of the global
financial order must begin by examining the effects of economic policies on
people
It may be true that an effective economic policy will choose bits from the
left wing and bits from the right, if those terms still apply. We still
need a framework from which to decide on the components that will make up
our policy. Certainly a key criterion is "what works". We still require a
methodology that will enable us to prioritise our aims and decide between a
range of effective economic strategies that may be on offer.
We should focus on people. Not simply "The People" but actually begin with
the individual as they exist and act in the community. The individual is
not separate from the community, but neither is he or she indistinguishable
from it. That, surely is where the Third Way must begin. In maximising
the welfare of the community, we must structure policies which enable
individual creativity and participation to flourish. Economic policy must
be tied to this aim, or it risks viewing people as mere economic actors.
By the community, I mean three main spheres: the family; the workplace; and
the wider community (local, national and international). The quality of
the relationships in these spheres is critically important (building, in
part, on the work by Schluter and Lee in "The R Factor", 1993). I covered
this in more detail in an essay for the Fabian Society in 1996, when the
stakeholder theory was popular. One of the reasons why the term
"stakeholder" caught the imagination of theorists and commentators, as well
as the wider public, was that it encapsulated the concept of participation.
The problem was that this was difficult to define with any degree of
precision. In addition, the policy aim appeared remote from reality. For
example, while greater participation of people in decision making that
relates to their local community is desirable, the low turnouts in local
elections are evidence of voter apathy.
Greater participation in the polity is essential for social and economic
cohesion. It binds us together and generates a consensus for political
action to assist the disadvantaged (including the unemployed).
I agree with much of what has been written about the value of education.
While improved education is important for a skilled workforce, the ultimate
aim of education should be the fulfillment of the person and the community.
In practical terms this means that we should teach each other to make wise
and considered decisions, to use our creative gifts (in whatever sphere),
and to value and use opportunities for participation in the society in
which we live. All this should run through a curriculum that would of
course be designed to employability and adaptability in today's changing
economic environment.
The macroeconomic framework is relatively inflexible. Not due to political
inertia, but because economies tend to work in certain ways: this is the
arena of economic science rather than economic theory. What matters is
what happens on the ground. What are the motivations and constraints
influencing the economic actors, the people?
Stephen Beer
Kennington
London.
Stephen.Beer@btinternet.com
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