Third Way

Third way believes in:

  • a greater focus on equality of opportunity rather than equality of outcome

  • liberalisation of the economy to provide more money for public spending

  • privatisation over nationalisation

  • a greater focus on social and political equality as well as economic equality

Third way ideas developed as a response to the rise of neo-liberalism and the success of politicians such as Margaret Thatcher and Ronald Reagan in the 1980s. Left-leaning parties such as the Labour Party made the pragmatic decision to abandon many of their socialist commitments in an attempt to win elections and lead governments. Arguably, the third way is not a strand of socialist thought but actually a form of modern liberalism.

The term itself suggests that it has moved beyond left and right. Third way ideas were developed by Anthony Giddens and influenced Bill Clinton as well as Blair and New Labour. Also referred to as neo-revisionism, it takes a pragmatic approach to socialism, embracing free-market capitalism and public–private partnerships, and favours the creation of more wealth rather than redistribution. Third way supporters believe in a more limited welfare state, with a ‘carrot and stick’ or ‘hand up not hand out’ philosophy. This approach to politics was responding to the decline of the industrial working class, the rise of the service sector and the need to appeal more widely to get elected. In some respects, it is pragmatic rather than ideological. New Labour recognised that globalisation meant it was difficult to reject the free market as businesses would simply shift abroad. Therefore they chose to accept it. Changes in class structure led the party to abandon class-based politics and to attempt to appeal to all and win votes from a broad section of society. Despite this apparent shift to the right and rejection of class-based politics, third way ideas are not based on individualism and can be described as ‘communitarian’, with a focus on communities and citizenship.

Third way supporters are happy to accept competition and support introducing competition into the public sector, for example into the education system and the NHS. Keynesian economics focusing on controlling demand and state intervention was rejected by Tony Blair’s 1997 Labour government in favour of a focus on monetary control. However, there are clear elements of third way policies connected to socialism. There is a focus on poverty reduction and social inclusion.