Third way is flawed

June 28, 1999|By William Pfaff

PARIS -- The "third way," which serves to describe the programs of the Clinton administration and the Blair government in England, is not an ideology, but an explanation.

Third way politicians say they're committed to the social and egalitarian goals of an older left, but are making necessary accommodations to a market capitalism that has proved a more efficient generator of wealth than did the planned economy dear to the old Left.

The new German government of Gerhard Schroeder, having shed its original economics minister, Oskar Lafontaine, claims now to practice the third way, calming the spirits of German industrialists who, under Mr. Lafontaine, had threatened emigration, taking their industries' jobs with them.

Early this month, just before elections for the European Parliament, Mr. Schroeder and Prime Minister Tony Blair made a joint declaration to Europe's social democrats, telling them to modernize by reducing public expenditure, lowering corporate and other taxes, and ending the culture of dependency.

This declaration was coldly received in Paris, where it was taken as a criticism of France's socialist policies. A few days later, the French Socialists triumphed in France's European Parliament election, leaving the right splintered and broken, while the British Labor Party and Mr. Schroeder's Social Democrats were badly defeated by their conservative opponents, producing satisfaction in France.

The European parliamentary vote proves very little about ideology, but what it did seem to prove was that the third way is not an international vote winner. The British results caused the old left wing of Labour to charge the Blair government with abandoning the party's values, which Mr. Blair denies. However, for the first time since his election, he seems to be vulnerable.

In the United States, Vice President Albert Gore is about to test the ideas of the third way against a reborn (if unacknowledged) liberal Republicanism, that of the front-running Republican presidential candidate, George W, Bush.

The weakness of the third way in the United States and Britain is that it has failed to deliver on its promises. This has been masked by the extraordinary performance of the U.S. economy, casting a spell over the millions of voters with savings in pension and index funds, or running their own speculative accounts on the Internet.

But as one of the original New Democrat intellectuals, former Labor Secretary Robert Reich, has acknowledged, the third way has yet to produce the promised result: jobs with a living wage for everyone willing to work.

Until now, strong overall growth in the United States and Britain has made it possible to contain the social discontent associated with pro-growth policies that enlarge the gap between rich and poor. The leaders have not had to demand much sacrifice from the economies' winners.

That happy condition can't go on. It is reasonable to assume that if a privileged minority benefits from the new economy of deregulation, globalized trade and flexible labor markets, and the rest are left behind, this eventually will prove politically unsustainable.

The third way politicians have until now successfully made the claim (which marks the decade) that you can have it all. No sacrifices needed -- except from those who are the new economy's victims. That has to change.

William Pfaff is a syndicated columnist.

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