Study Notes

Third Way (Socialism)

AQA, Edexcel

Last updated 15 Jun 2020

The "third way" is a middle-ground alternative route to socialism and free-market capitalism.

The third way is a political and theoretical perspective that seeks to modify left-wing ideas towards the economic and political realities of globalisation. This centre-left way of thinking advocates a balance between rights and responsibilities and a combination of social justice alongside market-oriented economics.

As a practical illustration of this mindset, the welfare state should provide a ‘hand up not a hand out.’ There is also a strong emphasis upon stakeholding (where businesses have a responsibility to various groups rather than just ‘fat-cats’ at the very top).

In ideological terms, the third way is closely related to the concept of communitarianism which emphasises the interest of communities and societies over those of the individual and seeks to reinvigorate social democracy.

Whilst in government, New Labour introduced a whole raft of policies and measures consistent with the promotion of left-wing ideology. For instance, the rate of income tax on high earners was raised in order to fund policies such as the minimum wage and the Educational Maintenance Allowance. In the jobs market, the Labour government sought to remedy areas of market failure via the welfare-to-work programme (with policies such as Sure Start, tax credits and the adaptation of the Social Chapter into UK law).

New Labour also increased the level of government expenditure on essential public services. On the other hand, it could be argued that a government shaped by the third way abandoned socialism. With the benefit of hindsight, it is significant to note that the old Clause 4 (which pledged the party to large-scale nationalism to ensure that workers received the full fruits of their labour) was watered down in one of Tony Blair’s first acts as leader. During his time in office, Blair was fully committed to privatisation, deregulation and the marketisation of the welfare state. Crucially, there was little or no progress towards a more even distribution of wealth. Despite a widespread belief that Gordon Brown was further to the left than Blair, he also adopted policies shaped by third way thinking.

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