The Chimera of the Third Way
Abstract
It would be premature to attempt an assessment of what Britain’s Tony Blair or Germany’s Gerhard Schröder mean by the ‘Third Way’ and it is not yet clear if their policies really amount to a distinctive break with neo-liberalism. What can be assessed at this point, however, are the various policy frameworks set out in recent years by social democratic intellectuals which share the premises of the third way in their reliance on a revitalized discourse of ‘partnership’, while claiming to offer a strategic alternative to both neo-liberalism and post-war forms of social democracy.
The essay begins with a brief survey of the changing fortunes of corporatist arrangements over the post-war period and the dominant centre-left explanations for the breakdown of these arrangements. Next, the disparate approaches in search of a 'new' corporatism are synthesized and mapped. The essay identifies three distinguishable, though often linked, intellectual strands. (1) ‘Supply-side corporatism’ calls for a new productivity pact to link progressive outcomes to improvements in the competitive capacity of labour and industry (e.g. post-Fordist theories of flexible specialization, diversified quality production, and progressive local economic initiatives). (2) ‘Open-economy corporatism’ proposes a new distributional politics, recasting social and incomes policies to spread the benefits and sacrifices of economic growth within international constraints (e.g. advocates of a more competitive welfare state and national social pacts). (3) ‘Corporatist social governance’ urges a broader social compromise aimed at improving both productive and distributional outcomes by extending participation in all spheres of social life (e.g. models of associationalism, stakeholding and social capital to embed economic actors and engage the so-called third sector). The essay concludes with a critique of these new corporatist proposals, drawing on analysis and examples to expose how they rest on economistic assumptions, are vulnerable to the same contradictions at the heart of the old corporatism, and risk becoming negotiated paths to austerity under the deflationary pressures created by neo-liberal globalization.
The essay begins with a brief survey of the changing fortunes of corporatist arrangements over the post-war period and the dominant centre-left explanations for the breakdown of these arrangements. Next, the disparate approaches in search of a 'new' corporatism are synthesized and mapped. The essay identifies three distinguishable, though often linked, intellectual strands. (1) ‘Supply-side corporatism’ calls for a new productivity pact to link progressive outcomes to improvements in the competitive capacity of labour and industry (e.g. post-Fordist theories of flexible specialization, diversified quality production, and progressive local economic initiatives). (2) ‘Open-economy corporatism’ proposes a new distributional politics, recasting social and incomes policies to spread the benefits and sacrifices of economic growth within international constraints (e.g. advocates of a more competitive welfare state and national social pacts). (3) ‘Corporatist social governance’ urges a broader social compromise aimed at improving both productive and distributional outcomes by extending participation in all spheres of social life (e.g. models of associationalism, stakeholding and social capital to embed economic actors and engage the so-called third sector). The essay concludes with a critique of these new corporatist proposals, drawing on analysis and examples to expose how they rest on economistic assumptions, are vulnerable to the same contradictions at the heart of the old corporatism, and risk becoming negotiated paths to austerity under the deflationary pressures created by neo-liberal globalization.