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Why the Third Way failed

Why the Third Way failed: Economics, morality and the origins of the 'Big Society'

Bill Jordan
Copyright Date: 2010
https://www.jstor.org/stable/j.ctt9qgwxg
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  • Book Info
    Why the Third Way failed
    Book Description:

    In the wake of the economic crash, public policy is in search of a new moral compass. This book explains why the Third Way's combination of market-friendly and abstract, value-led principles has failed, and shows what is needed for an adequate replacement as a political and moral project. It criticises the economic analysis on which the Third Way approach to policy was founded and suggests an alternative to its legalistic and managerial basis for the regulation of social relations.

    eISBN: 978-1-84742-658-1
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Table of Contents
    (pp. iii-iii)
  3. Acknowledgements
    (pp. iv-iv)
  4. Introduction
    (pp. 1-20)

    The economic crash of 2008-09 put the UK and US, along with several smaller states (such as Iceland, Ireland and Latvia), back where they had been before the boom years of 2001-07. It exposed as illusory the gains achieved by these economies, with their reliance on their financial sectors and cheap credit, and created mountains of public debt. But, more seriously, it exploded the claims of Third Way governments, especially New Labour in the UK, to have reconciled global markets with new, ethically informed public policies.

    The Third Way was a set of ideas and policies, first developed by former...

  5. Part I: A moral order?

    • ONE Value, virtue and justice
      (pp. 23-42)

      The questions raised by ‘The benefits busters’ example in the Introduction are ones of political and social justice, equity and fairness among members of a society. But they concern the expression of such moral and social principles through the operation of law and policy, within such institutions as property ownership (including the firm, profit and government contract), employment (wages and salaries, working conditions) and the tax-benefits system (government arrangements for raising revenue from and dispensing income to citizens).

      By reference to the example of the Israeli nursery (pp 3-4) in the Introduction, I have already endorsed Michael Sandel’s approach to...

    • TWO Snap judgements and rational choices
      (pp. 43-62)

      While I have argued that the failure of the Third Way was ultimately a consequence of its moral shortcomings, it came into being as a moral project, to reconcile individual freedom with collective solidarity and security. It was conceived as a political philosophy to improve social justice and to achieve an acceptable equality (of opportunity, not outcome) in market economies.

      No proponent of Third Way ideas was more up-front about his ethical credentials than former Prime Minister Tony Blair. He proclaimed that Labour’s values had not changed under his leadership, but that the means of achieving them should change. The...

    • THREE Nature, science and cosmology
      (pp. 63-84)

      In this chapter I turn to a more fundamental failure of the Third Way – its inability to recognise and challenge tendencies in global capitalism that threaten future well-being. This is certainly not the Third Way’s failure alone, but I argue that its understanding and response to these threats has been mistaken and misleading; a new way of thinking, and a new policy response, is urgently required. The obvious manifestation of this inadequacy is the coming environmental catastrophe, but the issues are broader and deeper even than this.

      When the first Third Way regimes came to power in the early...

  6. Part II: Regulation and relationship

    • FOUR What is economics good for?
      (pp. 87-108)

      The Third Way defined itself in terms of ‘the conviction that a growing market economy can be reconciled with a good society’; it proclaimed that it was ‘at ease with the primacy of the market’, but insisted that ‘the ethical foundations of socialism – fraternity and equality – can coexist with the freedoms of liberalised markets and liberal democracy’ (Latham, 2001, pp 25-6). The most influential economist in the post-Washington Consensus, the former chief economic adviser to the World Bank, Joseph Stiglitz, described the new agenda for global economic development as one in which government and markets were complementary:

      …...

    • FIVE Moral regulation: rituals, symbols and the collective conscience
      (pp. 109-128)

      The moral failures of the Third Way stemmed from its mistaken conception of the process of moral regulation. As its leading exponents claimed, the end of the 20th century marked a period in which society was moving from traditional, collective standards of behaviour, uncritically adopted from family, neighbourhood and class, to individual, ‘reflexive’, self-responsibility, in which ‘we are what we make of ourselves’ and ‘the moral thread of self-actualisation is one ofauthenticity… based on “being true to oneself”’ (Giddens, 1991, pp 75-97).

      In this view, the Third Way was addressing a new kind of society, and had to...

    • SIX In search of a moral compass
      (pp. 129-148)

      In the previous chapter I argued that the Third Way misunderstood the nature of moral regulation in social life, and underestimated its scope. But it could be countered that this was not so much a failure of the Third Way as a problem for all large, diverse, modern societies. After all, Third Way theorists and politicians emphasised the importance of ‘community’ and ‘responsibility’; they also tried to find a basis for political life in human rights and moral values. It is in the link between the everyday world of social relationships, and the more abstract and institutional sphere of general...

  7. Part III: The policy response

    • SEVEN Sharing wealth, income and work
      (pp. 151-170)

      If the Third Way’s failure has ultimately been a moral one, and the evidence of this lies in its incoherence in the face of the global economic crash, what might be a morally persuasive policy response to this new situation? In the final part of this book I turn from analysing the shortcomings of the Third Way to proposing alternative approaches.

      The ideas to be discussed in this and the next two chapters are a mixture of general principles which have been around for many years, and whose moment may finally have come in the present crisis, and specific proposals...

    • EIGHT Sustaining quality of life
      (pp. 171-190)

      At the start of a new century, two issues have challenged public policy, and especially the economic model on which government had come to be based after the momentous geo-political events of 1989. The first was the failure of self-assessed well-being to rise in line with incomes per head in the affluent economies (Kahneman et al, 1999; Frey and Stutzer, 2002; Helliwell, 2003; van Praag and Ferrer-i-Carbonell, 2004; Layard, 2005; Jordan, 2008).

      The second was the evidence of accelerated global warming, and the requirement for coordinated action to reduce carbon emissions. Neither of these newly recognised phenomena was susceptible to...

    • NINE Conclusions
      (pp. 191-204)

      The Third Way can be represented as the latest in a long line of attempts to regulate capitalism in line with some version of morality. It came into being as a response to 15 years of neo-liberal dominance in the affluent Anglophone countries, and in the IMF and World Bank (the Washington Consensus). While European countries remained loyal to Social Democratic and Christian Democratic political traditions and institutional settlements in the 1990s, Third Way ideas have since gradually become more influential in Europe, and especially in the post-communist new accession countries of the European Union (EU), in the first decade...

  8. References
    (pp. 205-222)
  9. Index
    (pp. 223-228)
  10. Back Matter
    (pp. 229-229)