Third Way is Kaput

Third Way

In the 1980s, Neoliberalism dogma was still underway, but according to author Stuart Hall, another movement was being created, it was “New Times”.

The “New Times” that would become one of the causes of the Third Way, consisted in the transition from industrialized economies to tertiary and IT-oriented economies. In addition to economic changes, these “new times” also reflected the decline of the political class, the expansion of people’s individual choices in terms of consumption and lifestyles, as well as the beginning of the debate on the issue of sexuality that began to emerge as a “hot” topic at the time.

On November 5, 1998 Bill Clinton and Tony Blair convened a meeting in Washington D.C. to discuss and renew the democratic left. This meeting marked the birth of Third Way as a global political movement. Although political scientists cannot reach a consensus, the Third Way, or as it is often called Radical Centrism, can be seen as a centrist approach of Social Democracy. This political current aims to conciliate Left and Right policies to achieve a greater good, having that way a more pragmatic view of politics being often characterized with the motto “Idealism without illusions.”

This new political movement gave Social-Democracy a new outfit, defending the existence of the state as necessary, not too interventionist as in Socialism but at the same time more interventionist than that advocated by classic Liberals. As a result, we have a society based on a market economy, where social problems find their answer in the market itself and the State is an agent of supervision and regulation for the defense of public interest.

On one hand we have the adoption of so-called progressive policies such as the defense of a universal education and health system along with social freedoms regarding women’s abortion rights and LGBT rights. On the other hand there is a turning to the right, in terms of economic and fiscal policies. Many parties that were Marxist in the beginning now have in their electoral programs measures such as the privatization of sectors historically monopolized by the state, such as national mail companies or transports. Picking up the French example in which the current socialist government, headed by President François Hollande, opted for a more right-wing measure regarding the labor market. In order to make the labor market more flexible and to reduce the high rate of unemployment, measures have been imposed with those two goals in mind. However, this labor market reform comes with an enormous loss of bargaining power for the Unions, paving the way for more unequal negotiations between employees and employers.


Third Way as an electoral survival measure

In order to analyze this renewal of Social Democracy we also need a historical context, the 80’s and 90’s were of extreme importance for Neoliberalism

This conservative right-wing movement was popularized at this time by Margaret Thatcher and Ronald Reagan in their governments. Societies back then lived in a time of Market fundamentalism and global capitalism. On the other hand, the State was continually challenged by being accused of being a disruptive actor of the market’s efficiency. This ideology gained worldwide adherence especially in the United Kingdom and the USA, in such a way that the Tories governed from 1979 to 1997, between 1979 and 1990 Margaret Thatcher was the Prime Minister of UK and from 1990 to 1997 it was John Major. In the USA the neoliberal wave begun under Ronald Reagan governance in his 2 mandates from 1981 to 1989 having been extended by George H W Bush from 1989 to 1993 that had been Vice President of Ronald Reagan.

Democratic left-wing parties really needed to return to power to avoid electoral erosion, and the Third Way was the measure of electoral survival that was found. As Professor Ian Fergun points out in his article Neoliberalism, the Third Way and Social Work: the UK experience, at this time Neoliberalism was widely accepted as the predominant system leading the left to adopt as well the “There is no Alternative to Market” rhetoric.

The Social Democratic parties made their renewal within the Framework of a market economy, setting aside their statist Social-Democratic matrix with emphasis on the Market.This can be confirmed by the Private Finance Initiative, an instrument that serves as the basis for the creation of Public Private Partnerships (PPP’s). PPP’s are a mechanism that allows private capital to be channeled into public projects in which the state has the knowledge and opportunity but can not realize them due to budget restrictions or by option not to do so. With this, we have a kind of “Privatization” in which part of the public sector, especially hospital units and schools, was then owned and managed by the private sector, according to the fundamentalist rhetoric of the market.


(Number and value of PFI projects in England, by financial year )

Looking at the chart above, we clearly see an increase in the number of PPP contracts as well as their added value in the period of 1997-2007, a period that represents the labor governance in which Tony Blair was Prime Minister.


Is the Third Way a viable option today?

As we have seen, this new approach by the social democratic parties was extremely important as a maneuver for electoral survival, particularly in the United Kingdom. After 18 long years without governing, in 1997 Tony Blair would win the elections for Prime Minister something that he would repeat in the elections of 2001 and 2005 having retired in 2007 to carry out the functions of UN special envoy to the Middle East. However, today the reality is different for the Social-Democratic parties.


(Vote share of social-democratic parties, Source: The Economist)

When analyzing the percentage of votes obtained by the Social-Democratic parties in their respective countries in the period 1986-2016 we can see a clear negative trend on the vote share of these parties. It should be noted that in fact the Third Way has somewhat counteracted this tendency in the first decade of 2000, as we can see in the representative year of 2006 in the image above, specially the increase of expression of the Social Democratic parties in countries from Southern Europe.

However, the Third Way is no longer enough to counteract this trend and the Social-Democratic parties are getting more criticized as the time passes and they fall short of what is historically expected. This raises the need to understand why these parties are no longer electorally convincing as before. We should have in mind Slavoj Zizek’s theory, “Radicalization of Moderation”.

According to Slavoj Zizek, the parties advocating the Third Way or Radical Centrism, fall into the trap of radicalizing their moderation, not wanting to commit themselves too much so they can catch electorate on the left and right, they have become too moderate and ideologically empty. This has led to a situation in which these parties have nothing the electorate can identify with. These parties have become “catch-all” going according to the “electoral winds” but today that’s not only not enough as it’s not what the voters want.

The working class, which historically voted predominantly on Social-Democratic parties, has began to cast its vote and hope in Far-Right parties, as we have already seen in the 2014 European elections with UKIP being the British party with most seats in the EP. This trend is here to stay and challenges are coming such as the Dutch General Election in March with Geert Wilders leading the polls and the French Presidential elections, where Le Pen still leads the Polls for the first round.

Third way is kaput, it’s about time the Centre Left reinvents itself or it will face electoral oblivion.


Luís Carvalho, Economics Student and proud 2015 Graduate of democracy

Disclaimer: This Post reflects solely the author’s opinion it does not represent the whole platform


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