The British version is recycled from an earlier era

...The third way first showed up in British politics ninety-five years ago...

...libertarian conservatism...

...But it goes to the heart of the question whether there is room for a third route to good policy and political success...

...If there is a course to be set between Scylla and Charybdis, the third way is it...

...But as this example suggests, the government wants on the other hand to keep up employment...

...Unemployment is not yet rising...

...member the events of 1976 when the British government had to submit to the instructions of the International Monetary Fund, they even remember the disaster of seventy years ago when the Labour government led by Ramsay Macdonald adopted orthodox conservative economics as the economy headed into a slump, and kept the Party out of power for the next fourteen years...

...Although a variant on the scheme was approved by Parliament, it was resisted by large numbers of backbench Labour members...

...This is not a novel point...

...Will the government step in as employer of last resort...

...What will happen when that ceases to be true...

...THE EMPHASIS on work as a means to membership in the wider society is itself a third way thought, and, of course, a commonplace in recent American discussion...

...The larger embarrassment is so far potential rather than actual, however...

...Even defenders of the government, such as Raymond Plant, have raised it...

...That is to say, neither state socialism nor DISSENT / Spring 1999 n 77 THE THIRD WAY...

...Since Clause Four of the Labour Party constitution—printed on every membership card until four years ago—said it was the intention of the Party to secure the benefits of production for workers by hand and brain by means of the common ownership of the means of production, distribution, and exchange, it was a genuinely radical move for Tony Blair to throw out Clause Four...

...In other areas, the crux is less sharp...

...the productivity of the workforce is thought to be some 40 percent lower than that of the American workforce and 20 percent lower than that of the German workforce...

...The moral drawn by many Labour supporters was that the party must be as tough on the trade unions as Thatcher had been—a view that certainly seemsto resonate with Mandelson and Blair...

...Hugh Gaitskell had wanted to do it in the 1950s, but knew he couldn't, and none of THE THIRD WAY...

...Blair, however, I should add that the third way does not define "New Labour...

...The winter of discontent turned out to have destroyed the power of the trade unions even more effectively than that of the Labour government...

...80 n DISSENT / Spring 1999...

...it is a national embarrassment to be so much less efficient than our major European partners...

...when sensible independent thought would be useful, it sides unthinkingly with the United States over Iraq...

...HERE Is where there is a genuine hole at the heart of Labour policy...

...On the one hand, the government wants a more productive economy...

...ALAN RYAN is Head of New College, Oxford...

...layoffs are increasing, but late in 1998 it was still true that more jobs were being created than lost...

...Having made that much of a concession to Mr...

...It is therefore widely believed that with the sudden departure of Peter Mandelson the third way has collapsed...

...The Labour government that lost power in 1979 was swept out of office by the widespread feeling that it was simply unable to govern...

...Positively, it is communitarian, and negatively, it finds the third way by avoiding two familiar and famous errors—the belief that political control inevitably improves upon the random and chaotic operations of the market, and the belief that it never does...

...in that sense it is thoroughly post-Keynesian...

...The old third way had an easier time...

...The government is in something of a cleft stick, indeed...

...Last summer, the government insisted that no more gas-fired power stations were to be built in the next five years, as a way of supporting the few remaining coal mines...

...All that is true...

...The recently privatized railways are a national joke, and many public services, from the National Health Service through to inner-city primary schools, are shabby and underfunded, staffed by depressed and demoralized workers, and delivering results that everyone knows to be inferior to what is produced in the rest of Europe...

...That is to say, the alliance of Blair and Mandelson has collapsed, and with it the public relations exercise that got Labour into power in May 1997...

...Few people noticed that he was an efficient Minister for Trade and Industry, too, whose major offense was wanting a nice house and having a friend who would buy it for him...

...T0 THE extent that such a view prevails, the government will tilt right rather than left when it confronts the question of what to do about unemployment...

...To say this distresses my social democratic friends...

...Within the European Union, only Portugal and Greece are unequivocally poorer than Britain...

...The truth is that the third way is neither New Labour, as its admirers say, nor warmed-over Thatcherism, as its detractors say, but a reversion to a very old idea...

...Even the more moderate left appears to think that the third way was only a matter of Tony Blair and Peter Mandelson ostentatiously reassuring "middle England" that taxes would not rise, that the trade unions would never again rise up in revolt, and that after eighteen years of Margaret Thatcher they could safely vote Labour...

...Whether these are fears they ought to have is another question...

...The sharpness of the class warfare of the interwar years made the control of coal mining, steel-making, and transport central to political debate...

...That is why British New Liberals spoke the same language as American progressive liberals such as John Dewey...

...It was defended by philosophers (L.T...

...they rightly point out that the Labour Party owes much to the social democratic heritage of the British labor movement, and that a Labour Party committed to social democracy swept away the Liberals in the 1920s and 1930s, and replaced them as the only serious anti-Conservative party...

...The thought that animates enthusiasts for the third way is that we need neither try to gain complete control over the economy in order to secure prosperity and full employment nor give up the attempt to do something to secure these things...

...it neither puts its trust in the state's control of increasingly large areas of human life nor does it wish to reject state action in principle...

...Tony Blair's version of the third way amounts, rhetorically speaking, to "neithernor...

...It is true that Britain and the United States have the highest rate of out-of-wedlock births in the developed world...

...If it does, what happens to its pledges not to raise taxes (or increase public debt) in the lifetime of the present Parliament—which ends in 2002...

...This is the view of the socalled Labour "hard left," including Members of Parliament Tony Benn and Dennis Skinner...

...This conviction has already led the government into one embarrassment...

...The third way rests on the assumption that the ownership of the means of production is not the central issue in politics...

...Of course, the government itself professes to believe that this moment of crisis will not come...

...Yet it is not clear that the government has any wiggle room...

...There is nothing in the Labour government's emphasis on work to deny that the first benefit of full employment is the physical well-being of people who would otherwise be unemployed and hard up, badly housed, and perhaps even hungry in consequence...

...Critics of New Labour such as Will Hutton, author of The State We're In, complain that the government does not know its own mind, or in the alternative that it will move to the right in a crisis...

...but they are very far from being the societies with the highest rates of unemployment...

...not only do they reDISSENT / Spring 1999 n 79 THE THIRD WAY...

...From 1908 to 1914, it animated the reforming Liberal governments of Herbert Asquith and David LloydGeorge...

...The new third way is trying to roll back state intervention in the teeth of skepticism about untrammeled free markets, operating a more authoritarian approach to the criminal justice system than any Liberal or Old Labour government would have been content with, simultaneously risking greater devolution to Scotland and Wales than any previous government and imposing tighter controls on local government than even Thatcher had in mind...

...At that point it was, and so far as it is coherent it remains, the ideology known as the New Liberalism...

...but the other side of the coin is that if the Liberal Party had not destroyed itself by taking Britain into the First World War, it would have swallowed the Labour Party and not the other way around...

...This means that it will not—usually—intervene to secondguess the decisions of managers and shareholders...

...But if ownership isn't central, what is...

...Hobhouse and the pre-1914 Bertrand Russell), economists (John Maynard Keynes), and by the begetter of the British welfare state, Lord Beveridge...

...No amount of third way rhetoric can get the government off that hook...

...The business cycle has not been abolished, and even if there is the hoped-for "soft landing" when growth slows, there will be a rise in unemployment...

...In their view, the third way was never more than a screen or fig leaf for the Labour Party's abandonment of its traditional values and policies...

...Indeed, the central aim of third way policy is to use a variety of forms of state intervention, through the education system at all ages, through job-training schemes, and through reconfiguring the payment of unemployment benefits, in order to get more people fit for work and eager to be employed, and by making them members of the working population to bring them back into the social, cultural, and moral mainstream...

...Until 1914, that seemed an entirely plausible project...

...That seems likely to lead it toward allowing parents in a given district to vote to abolish selective schools—thus sacrificing academic excellence for the sake of egalitarianism— while issuing increasingly prescriptive guidelines about curricular and instructional matters— thus sacrificing local democracy and the independence of teachers for the sake of modest academic efficiency...

...Where Americans have feared that black inner-city residents have become locked into a culture of poverty, British commentators have begun to fear that uneducated working-class boys have become unemployable...

...The economy is still reasonably healthy...

...either it will bite the bullet and raise taxes or go into debt in order to create employment, or it will run up the flag of fiscal rectitude and see unemployment rise rather than raise taxes (anyway likely to be counter-productive in a slump) or increase the budget deficit...

...The more of us who go to work on a regular basis, the better we shall be as a people...

...Even so, British industry and the rest of the productive economy are efficient enough to be something other than the providers of employment of last resort...

...The Fabian Society had hoped to work through the Liberal Party, did not want an independent labor-based party, and reckoned that "Lib-Lab" members of parliament would represent the interests of working people perfectly well...

...it wants this not only to take the weight off unpopular expenditure on unemployment benefits, but because it genuinely believes that work is morally good for people...

...But some distinctively American anxieties are also in play...

...to the extent that it does not resemble it, it is neither coherent nor attractive...

...indeed, that the tradition of governing Britain according to the principles of the third way is as old as the century...

...The so-called "winter of discontent," when large numbers of public-sector workers went on strike, is remembered as a time when mountains of trash were piled in city streets, and funerals were turned away from cemeteries by muncipal workers who refused to allow families to bury their dead...

...Its critics expect it to come sooner rather than later...

...And the government wants a competitive economy...

...It was concerned to find productive ways of expanding the state's role, while preserving liberalism's devotion to individual freedom...

...And its electoral charms are likely to prove rather short-lived, too...

...It is not surprising that New Labour admires President Clinton's electoral success...

...Those with fairly short memories will find themselves leaning in the other direction...

...To put it another way...

...Middle England" is worried about pensions, taxation, the quality of their children's education, crime, and what they see as the collapse of civility...

...Labour supporters have long memories...

...Mandelson, was widely credited with using his skills as a spin doctor to ensure Blair's hold on his Party and his Party's hold on the electorate...

...In education, there is a tension between a traditional Labour attachment to egalitarian provision by way of local government providers and a new skepticism about local government that leads Labour, just as it has led so many American states, toward handing over schools to private entrepreneurs...

...If work is the key to citizen virtue, and government policies in education and welfare are designed to make people work-ready and work-eager, the government will be in trouble if it cannot ensure that there are jobs for them to go to...

...Even if those figures are too high, nobody doubts that the income of the average Briton is 20 percent lower than that of the average German or French worker...

...his successors as leader had thought it worth trying...

...it encourages illiberal sentiments on crime, sex, immigration, and education...

...Harsher critics dismiss the suggestion that there was ever an idea for reality to catch up with...

...the British electorate is today very much closer to the American electorate than it has ever been—leaving to one side the happy absence of the Christian Right from British politics...

...I do not much like the Labour government: it kowtows to business and to the tabloid press...

...It is well known that the British economy is pretty unimpressive...

...The yuppies making several hundred thousand a year in the City are not doing it through the ownership of the means of production, and the same goes for the army of lawyers and management consultants...

...It is neither etatiste nor committed to Thatcher's claim that "there is no such thing as society...

...Today, the old class structure has gone...

...and the depth of the depression that arrived in 1919 and ended only with the outbreak of the Second World War made full employment, a national health service, a more egalitarian education system, and the abolition of meanstested benefits major issues for Labour...

...Its desire to get single mothers into employment led it to propose the reduction of the state benefits they ordinarily receive if they refuse to join programs designed to train them for work...

...where Americans fear that black 78 n DISSENT / Spring 1999 teenage mothers demoralize both themselves and their children, the British have begun to have the same fears about uneducated workingclass teenage girls...

...to the extent that it is a coherent or acceptable approach to government it resembles the New Liberalism of the beginning of the century...

...It will reassure the holders of government securities and the anti-tax citizens of Middle England rather than becoming the employer of last resort...

...At the point where the crunch comes, a government seems likely to have to move further left or further right...

...I say "usually" because there has been one piece of thoroughly old-fashioned Old Labour intervention in the affairs of the electricity supply industry...

...Nonetheless, I want to argue an unfashionable case—that there is a third way...

...What is striking is that these anxieties are very like the anxieties of turn-of-the-century pre-Labour Britain and quite unlike the anxieties of 1920s to 1960s Britain...

...The New Labour project does not address itself particularly to the state's role in smoothing out the business cycle...

...But it does address itself to employment...