According to Tony Blair the "Third Way" is about values-
"traditional values in a changed world". "It draws vitality from the
two great streams of left of centre thought-democratic socialism and
liberalism whose divorce this century did so much to weaken
progressive politics across the world".These values, according to
Tony Blair are individual liberty and social justice, equal worth,
opportunity, responsibility and community. The changes which have
occurred in the world are globalisation, new technology and the
changing role of government. If this does not sound like a new
ideology this is probably because the Third Way represents the
triumph of "pragmatism over theory." He says " we must acknowledge
certain realities such as the fact that the state no longer has a
major redistributive role, the earlier cornerstone of social
democracy." In other words the Third Way accepts completely the
philosophy of the capitalist economy, whilst attempting to govern
with a social conscience.. The theory can be seen in the
practicalities of the policies of New Labour – the Working Families
Tax Credit, the New Deal and Minimum Wage, the development of
public/private partnerships, and .the government’s commitment to be
tough on crime in the name of reviving a community spirit. It can
also be seen in what New Labour has not done in terms of not
reversing Tory cuts in public expenditure and not taking into public
ownership industries which have been privatised.
Sociologist and supporter of Blair, Anthony Giddens has attempted
to put more theoretical flesh on the "third way". He openly argues
that old style socialism,by which he means both communism and social
democracy, although they were both in their own ways completely
different, is now finished for ever. They both relied on the state to
redistribute wealth, be it through nationalisation or taxation. The
fact that one of them accepted ownership of the majority of the
economy by private capital and the other did not is supposed to be an
irrelevent detail! The Third Way he believes is the response of
social democracy to a changing world – the changes being
globalisation which prevents effective government action by a nation
state, the growth of individualism, the emergence of green politics,
the decline of the nuclear family and the end of traditional notions
of left and right in politics. So there is not much to go on there
either. Where they both have a point is that social democracy "is"
operating in changed conditions and that is why it seems worse than
the Labour Party of the 1940s, 1950s or 1960s. It is not just that
Labour leaders have mysteriously got worse! The changed conditions
are a result of the end of the post-war economic boom which allowed
for economic growth and an expanding welfare state in the main
capitalist countries of the world. Marxists must analyse this and
not react in terms of proclaiming new parties or announcing that the
traditional organisations of the working class are finished. This is
indeed social democracy at its worst.
Before analysing the origins of the Third Way or New Labour, it
is worth looking at some quotes from the capitalist press. Tony Blair
has campaigned to take Third Way values to Europe. In the run up to
the European elections he and Gerhard Schroder of Germany drew up
"Europe the Third Way", an attempt to reject tax and spend policies
and embrace the free market. "We must combine the economic dynamism
that Europe desperately needs with the commitment to social justice
that remains at the core of our beliefs" said Blair. The Independent
claimed that the Third Way was an idea "whose time is come". It
argued that the attempt to reconcile the best aspects of the
Thatcherite revolution (flexible markets and enterprise) with the
traditional values of social justice was a worthwhile one. According
to the Financial Times it said "most of the right things about the
market economy". "More importantly it rejects some of the
wrong-headed ideas still current on the left".Only the Daily
Telegraph and the Wall Street journal expressed scepticism.
particulary about the German Social Democratic leader. But the most
emphatic endorsement of New Labour came of course from the Guardian,
the paper which consistently campaigned against the Tories while they
were in office, and is now seen as the guardian of New Labour, came
this editorial coinciding with the 20th anniversary of the election
of the Tories in 1979. The editorial was entitled "Thatcher’s
legacy-she changed Britain and created Blair" .-It read-
"Still Margaret Thatcher has earned a genuine place in history.
She changed the face of the British economy. With her programme of
privatisations, she slimmed down a state which had become flabby and
overstretched, reconciling Britain forever to the market. She
effected the change brutally, and with great pain,but it was a change
we had to make. Our partners in Europe are having to undergo that
process now; thanks to Thatcher we were ready for the global
marketplace sooner than they were.
"That basic shift has been recognised, even embraced by Labour,
They have ditched state socialism once and for all, reinventing
themselves as the champions of enterprise. That has left the
Conservative Party without a message, flailing around for something
to say. They cannot escape the Lady’s shadow; nor can they claim to
be her true heirs. That mantle has gone, bizarrely to Tony Blair. It
is probably this- the common commitment of both main parties to the
market, coupled with a prime minister in her own image -that is
Thatcher’s greatest legacy". (April 1999)
Free market?
So if the Third Way is simply the adjustment of social democracy
to the values of the free market, why and how has this occurred? What
was characteristic of old Labour and what remains today? Why has the
Labour Party embraced the free market?
The traditional values of the Labour Party, were set out in its
early years. Formed from the trades union movement in 1900 the
Labour Representation Committee aimed to get the cause of labour
represented in Parliament. It had very clear class aims, recognising
that there was a basic antagonism of classes in society. The existing
two political parties the Liberals and the Tories represented
employers and could not represent workers. The principle of labour
independence was there right from the beginning. Although deals were
done subsequently between Labour MPs and Liberals, the constitution
of the Labour Party spelt out the fundamental conflict of interest. A
leaflet issued by the Labour Representation Committee in 1901 claimed
"This is a new movement" – "It originated in the desire of the
workers for a party that really understands itand is prepared to deal
with their grievances and has grown to its present strength by the
systematic attacks in the press and the Law Courts upon combined
labour and its funds. It is the workers’ reply to the aggressive
action of the Federated Masters and Trusts. But upon this conflict
between capital and labour neither a Liberal nor a Conservative
Ministry can be trusted to stand by the workers."
In 1918 the Party adopted a constitution committed to public
ownership ( Clause 4, Part 4) None of this was accidental. It had a
very clear political purpose. The 1945 Labour election manifesto
reiterated the point that a vote for the Liberals was the same as a
vote for the Tories. Blair may think that he can change the party in
the present but he cannot change history! Old style socialism was
associated with public ownership and class politics. In 1945 the
Labour Government nationalised some of the basic industries in
Britain – the mines, railways and public utilities. But this was not
socialist nationalisation. These were industries which were losing
money, the capitalists were glad for the government to take them over
as long as they received compensation and they ran the boards. The
workers had no say. Further nationalisation was not proposed until
the 1970s, when the economic crisis and rising unemployment caused
the Labour Party to move to the left.
Keynesianism
Supporters of the Third Way and the free market also attack the
tax and spend policies of Old Labour. In the 1930s the Labour Party
after the 1931 election defeat was converted to Keynesianism. Indeed
so was much of the capitalist class on a world scale. The New Deal in
the United States was seen as an interventionist model for some
trades union and labour leaders. The Conservatives however who ran
Britain for the 1930s were reluctant to commit themselves to that
path. But the destruction caused by World War 11 emphasized the need
for economic planning in reconstruction and their was a popular
determination not to go back to the years of mass unemployment. The
post war boom formed the basis for a Keynesian strategy for the best
part of a quarter of a century, not just in Britain but
internationally. The Bretton Woods Agreement allowed the governments
to take an interventionist role. Like selective nationalisation and
the welfare state this was not fundamentally challenged by the
Conservatives when they were returned to office in the 1950s. This
was the post-war settlement of which the 1945 Labour Government was
the architect in Britain. Growing prosperity and economic growth were
taken for granted by both main political parties.
Nevertheless during the Wilson Government of 1964-1970 there were
signs of some of the features associated with New Labour. The
emphasis on modernisation. "the white heat of the technological
revolution". These were issues which were classless and took Labour
away from its grassroots. Just as Tony Blair likes to imitate
President Clinton, Harold Wilson liked to model himself on President
Kennedy. Political activism within the Labour Party was at a low ebb.
The Party had run out of steam. Anthony Crosland in 1960 wrote that
"The elan of the rank and file is less essential to winning
elections. With the growing penetration of the mass media political
campaigning has become increasingly centralised and the traditional
local activities, the door to door canvassing and the rest and now
largely ritual". The Labour Party machine collapsed. In local
elections Labour lost cities like Sheffield and Leeds for the first
time since the 1930s, only four out of twenty London boroughs were
retained.
However the crucial change in direction was to come during the
life of the 1974-79 Labour Government. The election of the Tories in
1970 had marked the re-emergence of classwarfare in Britain on a
scale not seen since the 1930s. Unemployment rose to half a million.
The Tories announced attacks on the trades union movement which led
to national strikes of the miners, dockers and transport workers. The
mood within the Labour Party changed, with the left making gains. The
party committed itself in 1974 to an irreversible redistribution of
wealth towards working people and their families. However by 1975 the
effects of the end of the post war boom decisively hit the British
economy. There was a crisis for sterling and the Inernational
Monetary Fund demanded a cuts package. This was a defining moment for
the Labour Party in the post war years as well as for British
capitalism which was seen as the "basket case of Europe".The Labour
Party abandoned its commitment to Keynsianism once and for all at the
behest of the IMF. In 1976 Callaghan the then Chancellor of the
Exchequer made an infamous speech, quoted favourably by monetarists
such as Milton Friedman. He said:
"We used to think that you could spend your way out of a recession
and increase employment by cutting taxes and boosting government
spending. I tell you in all honesty that that option no longer exists
and that in so far as it ever did exist it worked on each occasion
since the war by injecting bigger doses of inflation into the
economy, followed by a higher level of unemployment as the next step.
Now we must go back to fundamentals." He added "The willingness of
industry to invest in new plant and machinery requires of course tht
we overcome inflation but also that industry is left with sufficient
funds and has sufficient confidence to make thenew investments- I
mean they must be able to earn a surplus and that is euthemism for
saying they must be allowed to make a profit. The wealth must be
created before it is distributed."
Cuts in welfare state
This speech to the 1976 Labour Party Conference in full view of
the world bankers was to tear the party apart. Cuts in the welfare
state were now on the order of the day. The Labour Government was
set on a collision course with the party membership who saw the
crisis as a reason for more radical socialist policies, not less. The
government was taking the line that the crisis of British capitalism
had to be solved at the expense of the working class. This was to be
the fundamental basis of every government, Labour or Tory to the
present day! The social contract with the trades union movement,
which had been based on voluntary wage restraint in return for
maintaining the "social wage" was under threat. This was to lead to
the winter of discontent and the defeat of the Labour Government in
1979. The Labour leadership launched a witch hunt against the
membership of the party, directed initially at the Marxists in the
Labour Party Young Socialists, but also at supporters of the Campaign
for Labour Party Democracy, the Labour Co-ordinating Committee and
hundreds of activists in the constituencies and trades union branches
who supported the left, and left wing politicians such as Tony Benn
and Eric Heffer. Marxists at the time predicted the possible split in
the Labour Government, similar to 1931, when in times of financial
crisis, the Labour Cabinet failed to get acceptance for cuts in
unemployment benefit and the then Prime Minister Ramsay MacDonald set
up a national government, with a handful of Labour ministers,
Conservatives and Liberals. In the event this did not happen. The
Labour Government soldiered on until 1979 when it lost the election.
Labour was not to win another election until the summer of 1997.
During that time the gains of the labour movement were reversed by
successive Conservative governments, including large scale
privatisation, closure of industries, reform of the welfare state and
attacks on trades union rights. Under the impact of these defeats
the Labour Party itself changed. When Labour won the election in 1997
all vestiges of the election commitments of the 1970s and 1980s had
gone.Tory policies including government spending targets were
maintained. It seemed that the only difference was a set of values,
putting a human face on capitalism.
Tony Blair claims that Labour lost four elections because of the
influence of the left-wing of the party. The impact of the crisis in
the 1970s led the left to make demands for changes in the Party The
Campaign for Labour Party Democracy made was successful in obtaining
the automatic reselection of MPs. Labour Party democracy was the main
focus of the left in the party. It was the right wing establishment
who were on the defensive and resistant to change at this time. The
left was also commited to more nationalisation and increased public
expenditure. The Alternative Economic Strategy however, which
attracted support within the Party and trade unions was essentially a
Keynesian document at a time when the ruling class were moving
towards monetarism. Only a full socialist programme of
nationalisation of the commanding heights of the economy would have
been a genuine alternative. This was put forward by Marxists in the
Labour Party at the time.
Labour Party left
However at no time, in spite of its growing influence did the left
actually win control of the Labour Party! The right wing of the party
always maintained the leadership. The policies of the left were most
influential in the early 1980s. In 1980 after one year of the
Thatcher government, Labour was at 50% in the opinion polls, the
Tories were at 34%. Thatcher had become the most unpopular prime
minister since the war! She could not win even the majority of her
cabinet to monetarist policies. Unemployment soared to over 3
million. The Labour Party organised marches in Liverpool, Cardiff and
Glasgow. Her contribution to globalisation however was the abolition
of exchange controls in 1979, a critical IMF demand.
Labour was on course to win the 1983 general election., until the
Falklands War which cut across the continued crisis for British
capitalism and gave the Tories 7% in the opinion polls. The election
victory of 1983 gave the Tories, and the Thatcher leadership in
particular the majority in Parliament they needed to take on the
labour movement. Within a year we were into the longest national
1985 istrike in the history of Britain – the 1984/1985 miners strike.
To this day the defeat of the miners is seen by the ruling class as
the critical battle in the struggle against organised labour.
The Blairites blame the left for the disunity which took place in
the party in the 1980s. But it was the right wing who organised the
most vigourously to promote civil war within the Party. Organisations
such as the Solidarity Group and the St Ermins Group of Trade Union
leaders organised to defeat left wing resolutions on the National
Executive Committee and the Party conference. Decisions taken by
local general management committees and the Party conference were to
be ignored. Left candidates such as Peter Tatchell in Bermondsey and
Pat Wall in Bradford North were not endorsed. Former left winger,
Michael Foot became party leader and a prisoner of the right wing.
Not content with attacking gains made by the left in the party, some
of the right split away to form the Social Democratic Party amidst
much media hype. This short lived experiment split the Labour vote in
the critical years of the 1980s allowing the Tories to win. on a
minority vote. Furthermore the Labour leadership disowned the 1983
election manifesto, calling it the "longest suicide note in history".
This was what lay behind the 1983 election defeat. Attacks on the
left of the party continuned under the leadership of Neil Kinnock.
Where the Labour left gained control of local parties, such as the
Greater London Labour Party, Liverpool and Sheffield, successes were
gained for the Labour Party. Like the miners these received more
attacks than support from the leadership of the Labour Party! Neil
Kinnock went on to lose another two elections. In spite of the
approval he obtained from the Tory press for his attacks on the
membership of the Party they felt that he could not be trusted in
government.Labour even lost in 1992 when Thatcher had been
discredited after the defeat of the poll tax. The defeat of the poll
tax of course owed nothing to the leadership of the Labour Party.
Labour government elected in 1997
So why was Labour electable in 1997. The Tories were divided and
discredited. Their handling of the economy after black Wednesday was
under question. Their administration was littered with sleaze and
incompetence. Perhaps even the ruling class in Britain were worried
about the social consequences of the Tory’s "counter-revolution." One
third of children live in poverty. Unemployment remained high. An
underclass had developed. Crime and drugs were rife in some estates
and former working class areas, like pit villages destroyed by the
mine closures.. A percentage of the population would never know what
it was like to have a job. The social security bill was soaring in
spite of public expenditure cuts.The destruction of working class
communities had been all part of the Tory offensive against the
labour movement. But now the social fabric of the country was under
threat. These excesses had to be sorted out whilst maintaining a free
market, low tax economy. So New Labour was called upon after 18 years
to repair the damage! Electable meant acceptable to the capitalist
press and the ruling class in general.
The Third Way has more in common with socially concerned Tories
and Liberals of the 19th century, than with 20th century socialism.
At the end of the 19th century the British ruling class were
concerned about casualisation, ill health and malnutrition amongst
the lower classes for similar reasons. The underclass was a threat.
Lack of education and skills meant that Britain’s workforce was not
competitive. We hear the same things today. We hear alot about the
politics of social exclusion. Much of Labour’s strategy is aimed at
these problems. To get people in to work, topping up wages to
encourage them to work. The people, not the system is the problem!
This will only work as long as the economy can provide jobs. And
that means operating within capitalism. A world recession will
undercut all Labour’s commitments to the long term unemployed. Little
or nothing has been done to address the problems faced the working
class as a whole- job insecurity, longer hours and pressures at work,
and declining public services. These all result from the crisis of
capitalism. The policies of four Tory governments and now New Labour
may be designed to stop people from fighting back but they have not
solved the basic problems which faced the Labour Party conference 25
years ago. Privatisation has proved to be inefficient, corrupt and no
answer to lack of investment in public services. It is still opposed
by the majority of people in this country. The Third Way (if there is
such a thing) has no solution to what is a fundamental inability of
the capitalist system to ensure prosperity and security for working
people.
