The Third Way is a scam, utterly without substance

The rich are looking for a theology of containment they hope to persuade the poor to swallow
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The Independent Culture
YESTERDAY SOME of the world's great leaders, including the Prime Minister of Britain and the President of the United States, were huddled together in New York, in shared admiration of the Emperor's new clothes of modern politics - a spiritual commitment to the "Third Way". Their single good fortune is that, because the Third Way is utterly without substance, no tell-tale signs of folly or hypocrisy will be left as compromising evidence when anyone gets round to a forensic analysis of their addresses.

This isn't the first time leading world figures have gone off in pursuit of some happy land of a politics without politics. In an age of uncertainties it is deeply tempting to look for a world somewhere beyond left and right, between radicalism and reaction, a fusion of market values and social obligations. Usually the background explanation of its popularity (at least with the establishment) is the same - the market has screwed up. The rich and powerful are looking for a new theology of containment that they hope to persuade the poor to swallow.

This is how it was when the first references to Third Way politics emerged following the 1848 revolutions in Europe. It was a desperate pitch by the Catholic Church to distance itself from the worst forms of exploitation, whilst throwing any obstacle it could in the way of a potential shift in society from capitalism to socialism.

The German Bishop Ketteler advocated new "partnerships" within medieval corporations, where master, journeyman, and apprentice would work harmoniously together without disrupting the hierarchy of wealth and power that exploited at least two of them. So it is today, where the high priests of the Third Way pass over its huge contradictions; a politics which wants to embrace community but not equality, a stakeholder economy but not the wealth redistribution to deliver it, and an inclusive society without the employment rights which protect workers (and whole communities) from being infinitely disposable.

Pope Leo XIII set out the basis of Catholic corporatism more substantially in his Rerum Novarum encyclical of 1891. He gave support to workers guilds (as an alternative to trade unions) in the hope that they might pursue a form of mutualism which would protect members but not threaten employers. One hundred years later Laborarum Novarum goes into transatlantic dialogue with the same convictions, that the prevailing global order should not be challenged; that powers given to corporations are not to be undermined by rights given to workers; and that the personal duties and obligations of citizens need to be enforced by tougher laws, whilst the constraints on corporate power are best left to deregulated market forces.

Preoccupations with Third Way politics are little more than periods in history when governments decide it is too difficult to manage the economy, so they decide to manage the people instead. The global crisis we are in the middle of will not be short-lived. It will not even become manageable until we address paradoxes of far greater importance than anything on the Third Way agenda.

For the first time in human history the world has the ability to meet all its basic needs. Yet the gaps between the rich and poor have widened alarmingly. Poverty and insecurity stalk the landscapes of both developed and developing economies. And the combination of deregulated world markets, speculative capital flows and technological change have thrown sensible economics out of the window.

In April Mitsubishi announced the planned closure of its Scottish television factory in Haddington. Their explanation was that the 500 jobs had to go because international over-capacity was driving down prices to the point where it is no longer viable for us to manufacture televisions in Europe. This was just another way of saying that they had found people to exploit more cheaply elsewhere. It is the same message being repeated by Fujitsu, Xerox, Boeing, Philips, Siemens, and a host of other global players. And it nails the lie that "the skill gap" is somehow the answer to the economic mess.

Does Third Way politics have anything relevant to say about this? No. To talk about social obligations, duties of citizenship or the work ethic presupposes that government itself has a continuing commitment to the job ethic. To do so would mean constraining the right of speculative capital to sell in areas it refuses to produce (and employ) in.

A tax on speculative capital movements would certainly help shift investment from the casino economy to the real economy. With $1,260bn a day going through the world's currency exchange markets, even a nominal rate of tax would be more than enough to fund the whole development programmes of the World Bank, the IMF and the United Nations - if these weren't also part of the problem.

The whole discussion about today's economic upheavals is taking place against the background of even greater ones. Sometimes the news cuts between an economic panic somewhere in the world and an environmental crisis somewhere else. Rarely, if ever, are the two connected.

None of this was part of the script for this week's Third Way love in. All the leaders who attended came with the political baggage that brought us into today's mess. And all were there virtually as guests of the global corporations who have written the script for them.

The hymn sheets do not question global free-trade rules, which prevent countries from protecting their own core industries or long term interests. They do not question their forced cuts in personal welfare programmes, at the same time as increasing subsidies, tax breaks and inducement packages into what has become the new "corporate" welfare state. Nor do they recant on global treaties that give corporations the power to sue countries for putting social or environmental limits on their activities.

If the Third Way is just a scam and a distraction, it does at least challenge us to address the real agenda which lies beyond it. It is only a matter of time before it becomes clear that the Third Way is based on fewer principles than there are jobs in Fujitsu. When that happens a politics of the fourth way will emerge which will be unashamedly redistributive and interventionist in character, unflinchingly environmental and sustainable in its ethics. Ironically, as a form of eco-Keynesianism, it will also turn out to be a better at delivering secure employment and a genuinely inclusive society.

The author is Labour MP for Nottingham South