The Third Way promised a hand-up rather than a hand-out
By the 1980s many centre-left parties doubted that big state spending still worked, while free-market politics was winning elections. Their answer was the Third Way, a blend of market economics and social democracy summed up as rights with responsibilities. Bill Clinton and Tony Blair made it their banner.
The core idea was to keep social democracy's goals while dropping some of its tools. Instead of unconditional welfare, Third Way governments favoured workfare, job training and education, public-private partnerships and tight budgets, paired with equal opportunity and personal responsibility. Blair described his socialism as a set of values around social justice rather than rigid economic determinism, and later spoke of a new capitalism. The sociologist Anthony Giddens became its leading theorist, laying out a radical centre in books such as Beyond Left and Right in 1994 and The Third Way in 1998.
The phrase itself is older and has meant different things. German ordoliberals such as Wilhelm Röpke used it in the 1950s while developing the social market economy. During the Prague Spring of 1968 the economist Ota Šik proposed a third way that was really a loosened planned economy. Italy's communist leader Enrico Berlinguer sought his own middle path in the 1970s and 1980s. In Australia, the Labor governments of Bob Hawke and Paul Keating from 1983 floated the dollar, cut tariffs and replaced central wage-fixing with enterprise bargaining.
Supporters rarely agreed on details. Giddens wanted to scrap the retirement age so people could stop work when they had saved enough, whereas France's Emmanuel Macron raised it to balance the budget. Clinton, who campaigned on Third Way themes in 1992, drew on the controversial political scientist Charles Murray and was cooler toward welfare than most Democrats.
Critics attack from both flanks. Democratic socialists, communists and anarchists call it a betrayal of left-wing values, and some analysts describe it as neoliberalism in disguise. Libertarians and classical liberals, meanwhile, object that it still leaves too much room for the state.
Source: Third Way
