Can we adapt to the Third Way?

Wednesday Book; THE THIRD WAY: THE RENEWAL OF SOCIAL DEMOCRACY BY ANTHONY GIDDENS, POLITY PRESS, pounds 6.95/pounds 25

ANTHONY GIDDENS is a phenomenon. He is a successful businessman, running the publishers Polity Press; the chief executive of a giant "weightless economy" enterprise, the London School of Economics; and a tireless writer and researcher, endlessly magpie-ing through works in foreign tongues. He also represents the triumph of sociologists over economists as the intellectual mentors of the post-socialist left. The days of Dalton and Durbin, of Crosland and the Cambridge Alternative Economic Strategy dons, are dead. Only in the Conservative Party do they still hearken to defunct economic theoreticians. Max Weber has triumphed over Karl Marx.

His new book on the "Third Way" is a vade mecum to the strange new politics that the western world is trying to define as it says goodbye both to the mid-century settlement and to the counter-revolution of the right that has dominated politics since the mid-1970s. Voters are opting for the Third Way without quite knowing what they are buying. At last, here is a readable and accessible guide.

One of the strengths of the Third Way is that it takes to heart the fable of the emperor's new clothes. The generation of politicians represented by Tony Blair has been the first on the left for decades to see and say the world as it really is - not as it might be in the idealised schemas that led Labour up blind alleys of sectarian militancy or else a limpet attachment to tradition.

Giddens's last book was entitled Beyond Left and Right, but he has wisely given up the forlorn search for the political philosopher's stone that dissolves real differences. Indeed, the subtitle of his new book, "the renewal of social democracy", will be music to the ears of Lionel Jospin. The French socialist prime minister was in London recently, where be coined an excellent Third Way aphorism: "Yes to the market economy; No to the market society".

Writing in the current Nouvel Observateur, Jospin states that if "the Third Way lies between ultra-liberalism and state socialism, I'm interested. If the Third Way locates itself between (neo-) liberalism and social democracy, count me out." Giddens has no doubts that the Third Way is about the modernisation and renewal of social democracy. Refuting those observers who feared that it embodied the Americanisation of British governance, Giddens trawls through Europe for examples of good practice.

He quotes more German than American authors, and cites examples of Third- Way politics in the Netherlands and Scandinavia. Most 20th-century Labour thinkers and politicians have been profoundly insular. The Conservatives still are. Blair and his team are not captivated by any single model, but are unafraid to learn from abroad: from Europe, the US, Brazil or Bangladesh, where ideas on micro-credit and helping women to become independent are more innovative than anything Whitehall can dream up.

The only area where Giddens wanders into a swamp is family politics. He tries, unsuccessfully, to square the circle between the self-indulgence of the 1968 generation and the key ethic of Third-Way politics: which is that rights are always connected to responsibilities. Giddens proposes that men who father children should enter into a contract to be responsible for the child. This is the dream of the rich and powerful throughout the ages: that, as long as they gave some money to the mothers of their children, they could have patriarchal rights without family responsibility.

Giddens also confuses manufacturing with manual labour. Most manual labour now takes place in the weightless or service sector of the economy, and the balance of power between employees and those who hire them is now again a global problem. Much of the current world disequilibirum arises from the failure of Asian and Latin American economies to let their workers consume what they produce.

This is incendiary material for the Third Way, as it goes to the heart of power relationships in the economy. Giddens gives good examples of employee share-ownership, but the dreaded concepts of labour rights and income inequality are skimmed over or not mentioned. In the end, economics and politics may indeed be more important than sociology.

The most interesting aspect of the Third Way is that it rejects both the one-size-fits-all world views of old social democracy, and its opponent - the Tory view that the market will cure all ills. It invites experimentation, to see what works. Can the centralised British system cope with the Third Way, which is all about letting localities decide their tax rate, encouraging mutuality, and requiring companies to accept social responsibilities? Can our political arrangements - based on first-past-the-post elections, a culture of government secrecy and an apartheid education system - adapt to the demands of post-socialist politics as defined by Anthony Giddens? The birthplace of third-way politics - New Labour and Britain - may in fact be the most difficult place to make it work.

The reviewer is Labour MP for Rotherham

Denis MacShane