The Third Way
The politics of betrayal
by Edward S. Herman
Z magazine, November 1999
One of the most notable features of New World Order politics
has been the systematic abandonment of not only socialism but
the rudiments of social democracy by purported socialists and
social democrats. It is virtually uniform practice for politicians
who have campaigned on a "people first" and egalitarian
program to abandon such programs swiftly on taking office. Admittedly,
the campaign programs and promises were sometimes vague and contradictory,
and Britain's Tony Blair was almost up front on his intention
to build on the Thatcher legacy, but any ambiguities or contradictions
are invariably resolved in favor of capital, not "the people."
Problematic of Betrayal
The systematic character of this politics of betrayal suggests
that it has structural roots and is not attributable to personal
defects of the betrayers, although betrayal requires the advance
of politicians who will meet the betrayal standard as well as
the exclusion of those for whom social democratic principle and
truthfulness weigh too heavily. The power of money in elections,
the increased concentration and conservative bias of the media,
the resurgent strength and aggressiveness of capital and finance
in a globalizing economy, and the weakening of labor, provide
the structural background. In this context genuinely progressive
parties will fail to get financial or media support, will be discredited
and smeared, and in the fluke case of attaining office would face
But parties want to win, so the natural evolution in the process
of raising money, getting media support, and avoiding capital
flight is to put forward candidates and programs that will serve
these ends. Tony Blair's pre-election trip to Australia in 1996
to placate the mogul reactionary Rupert Murdoch epitomizes the
process, and Murdoch's support of "New Labor" reflects
his recognition that New Labor was really "New Tory."
This process leaves the former socialists and social democrats
with a problem, however, as their voting constituencies are still
dominantly social democratic-a major Blair-era social survey showed
that 87 percent of the British public favored a downward redistribution
of income and wealth-so that a dose of false promises and ambiguity
are a must in party campaigning. Only after election victory can
it be revealed that "realism" demands that any social
democratic promises will not be met.
This systematic betrayal is devastating to any substantive
democracy and is an important part of the explanation of growing
public anger and cynicism and declining voter participation rates.
The betrayal process means that the publics of the affected countries
have no real choices, with only tweedledum -tweedledee options
of openly business parties and business parties that are only
nominally populist. The differences between the parties shrink
further because the latter must lean over backwards to convince
the business community that their populism is only rhetorical
and that they are as reliable business agents as the openly business
parties. This is why Blair's first act was to turn over control
of monetary policy to the Bank of England, thus assuring the financial
community that monetary and fiscal policy will not be used to
serve any populist ends.
By the same token, the main enemy of the New Tories is the
party's "left," which poses a double threat: on the
one hand, it calls attention to the sell-out and presses for a
return to populist values; and on the other hand, its very existence
suggests to "the market" that the old menace of redistributional
policies and regulation in the public interest may not yet be
dead. This is why a Lafontaine, Benn, and Reich must be pushed
aside in favor of "pragmatists" like Fischer, Cook,
and Summers, and why a Jospin must be lectured to on the need
to get in closer step with leaders like Blair, Clinton, and German
Prime Minister Gerhard Schroder.
It is in this context that Blair and Clinton proclaimed themselves
pioneers of a new Third Way that pursues a middle course between
the nasty conservative right and unpragmatic old left, and they
have been joined in this pursuit by Schroder and other social
democrats. It is notable that Clinton is a charter member of this
new set, as he is also a charter member of the Democratic Leadership
Council, which is an openly right-wing faction of the not very
social democratic Democratic Party. Blair and other European social
democrats have frequently expressed admiration for the U.S. model,
with its low wages, job insecurity, contingent labor, and relatively
low unemployment levels. The convergence of thought and policy
among Blair, Schroder, and Clinton indicates how far to the right
European social democracy has traveled.
The most remarkable feature of Third Way leaders' thought
is its virtual identity with neoliberal doctrine and with what
market operatives believe in and strive for in policy-making.
Blair and Clinton can't speak too highly of the efficacy of the
market and the importance of bringing as much as possible within
its orbit. Blair's speeches, his government's position papers,
and his joint statement with Schroder in June 1999 are a litany
of cliches dear to the hearts of the business community and right
wing: no more "tax and spend," and although budgets
have "reached the limits of acceptability" (Blair) we
must lower taxes, but only to reward "hard work and enterprise"
and to make business "globally competitive." Global
competitiveness also calls for the containment of wages and pensions
via "labor flexibility" and "hard decisions"
to get welfare costs down and to make people more "responsible."
The cliches flow-modernization, hard work, reform, ending
dependency, even encouraging morality. John Pilger reports that
in his speech in Australia addressed to Rupert Murdoch, Blair
used the words "moral" and "morality" 18 times,
and we may be sure that he wasn't assailing Murdoch's union busting,
Iying, or systematic exploitation of pornography in his media
enterprises. Blair's (as well as Clinton's) market ideology and
cliches could have come straight from the Cato or Adam Smith Institutes,
and in fact the Adam Smith Institute quickly declared that Blair
had made a "remarkably promising start" (Daily Mail,
December 10, 1997).
Third Way Practice
What then is the difference between the Old and New Tories,
Reaganism and Clintonism, that defines a Third Way? The Reagan
administration ideologues had the same faith in the "miracle
of the market," attacked "tax and spend" policies,
the welfare state, and "dependency" with great vigor,
and were also lavish toward spending for arms. The Third Way leaders
claim, however, that in contrast with the Old Conservatives they
believe in "fairness" and "social justice"
(Blair), and ensuring that "spirited economic competition
among nations never becomes a race to the bottom, in environmental
protections, consumer protections or labor standards" (Clinton).
The Third Way allegedly offers a humane component protecting the
weak against the excesses of a dynamic market.
But these claims are a fraud; the humane elements in Third
Way practice are at best tokenism designed to cover over acquiesence
to market hegemony and the abandonment of social democratic goals
and policies as rapidly as conditions permit.
Preserving structures of inequality. Tony Blair admitted that
he was elected to "put right the damage done" in the
Thatcher era. He inherited a society that had suffered a huge
upward redistribution of income and wealth, but instead of making
any effort to rectify the resultant unfairness, the first Blair
budget provided major tax incentives to business and cutbacks
on welfare. Fairness called for strengthening trade unions, which
had been decimated and weakened under Thatcher, but Blair made
no significant moves in this direction and his minister of trade
warned the unions that if they opposed Blair's policies they would
forfeit any influence (Financial Times, September 18, 1998). While
claiming to support education as a fairness and equal opportunity
policy, an early Blair initiative was ending universal tuition-free
higher education in Britain. As John Pilger notes, "Thatcherism
never went this far."
Clinton has a comparable record, with inequality rising to
new levels during his term of office, despite one positive and
progressive tax reform move in 1993; but with his terrible welfare
"reform" act of 1996, his failure to help strengthen
the trade union movement, his support for further media concentration
and commercialization, and his devotion to free trade legislation,
he has on balance helped consolidate structures of inequality.
Further weakening the welfare state and safety net. The threat
of dependency, the welfare burden, and the need to shrink the
welfare state are major policy thrusts of the global market, and
the Third Way leaders have honed their plans accordingly. Blair
has given high priority to pushing single mothers (poor ones)
and other welfare recipients into the work force, and a number
of British commentators have pointed out that Blair's Welfare
to Work program is a much more aggressive assault on the welfare
state than anything the Old Tories and John Major had attempted.
Clinton signed the Personal Responsibility Act of 1996 ending
any federal commitment to the poor, and his recent "poverty
tour" and tokenistic budget gestures to ordinary citizens
are swamped by his planned $129 billion in discretionary budget
cuts over the next three years (while increasing military expenditures
by $110 billion).
Schroder is slashing social spending by $16 billion and freezing
pensions (while lowering business taxes), and trying to "go
way beyond what Chancellor Kohl and the Christian Democrats ever
dared," according to Social Democrat Karsten Voight.
Both Blair and Schroder suffered major losses in the European
parliamentary elections in June 1999, with an exceptionally low
voter turnout. Blair suffered his first internal political setback,
in the midst of his "humanitarian" bombing of Yugoslavia,
when his attempt to cut back benefits to the disabled met with
an unexpected volume of opposition within his own party. Schroder
has suffered a series of crushing internal electoral defeats while
pursuing his neoliberaI economic program, but he presses on despite
what the "people" are telling him, because there is
no other option for a Third Way politician unwilling even to consider
policies that would interfere with corporate rights and privileges.
Building in trickle-down economic policy. Third Way leaders
have also turned control of economic policy over to "the
market," thereby abandoning monetary-fiscal policies that
might benefit ordinary citizens such as targeting a low unemployment
rate. As noted, Blair quickly gave monetary policy authority to
the Bank of England, and Clinton has left monetary policy in the
hands of Alan Greenspan. The departure of Lafontaine marked Schroder's
abandonment of a social democratic macro policy and similar genuflection
to the demands of financial market leaders.
Third Way leaders do call on business and the powerful to
behave responsibly, and they pretend that this is a useful vehicle
for solving social problems, but they never lecture businesspeople
sternly as they do labor, the poor, and the weak. In fact, Third
Way leaders identify their own "leadership" role as
one of serving business-"the state should 7 row but not steer"
according to the Blair-Schroder ) proclamation of June-and they
"row" by helping business with lower taxes, subsidies,
and pushing for market openings abroad. In the pursuit of trade
advantage, environmental protections, consumer interests, and
labor standards have been entirely outside the Blair/Clinton framework
of policy concern.
Arms merchandising and the warfare state. Another major feature
of the Third Way in practice is that despite the faith in the
market, leaders like Blair and Clinton have been ardent supporters
of negotiated trade deals and an enlarged weapons business and
militarism. Clinton is enlarging the U. S. military budget, which
towers above all others, and Blair is increasing the British arms
budget, which exceeds that of any other EU country. John Pilger
makes a good case that Blair has gone beyond Thatcher as an arms
merchant-doing what Thatcher called "batting for Britain"-and
that selling weapons is the New Tories "industrial policy"
(Pilger, Hidden Agendas).
Blair and Clinton have been aggressive arms merchants to Third
World dictators and ethnic cleansing states like Turkey and Indonesia,
and both have been in the forefront of military action in Iraq
and Kosovo, with Schroder joining them in Kosovo. A very good
case can be made that Schroder, Clinton, and Blair have gravitated
to the ready use of military force against "rogues"
not only to serve the weapons industries and imperial state, but
also to divert attention from their domestic failings and betrayals
in a traditional manner. (Each of these leaders at least temporarily
boosted their poll ratings by their "humanitarian bombing"
of Yugoslavia.) This further abandonment of social democratic
principle on the evils of militarism and war does not bode well
for the future.
In sum, the Third Way is the betrayal road that has abandoned
social democracy in favor of neoliberalism and service to the
business community. Its unique feature is its hypocritical pretense
of caring, although with a brash neoliberal like Blair even this
is thrust aside in the need to lecture the weak on morality and
assure the powerful that he cares for them. And just as the role
of civilian governments in Argentina, Brazil, and Chile following
brutal military dictatorships was to make regressive neoliberal
policies palatable to the bottom 80 percent-who had already suffered
from the same policies under regimes of terror-so Blair, Clinton,
Schroder and company play the role of selling regressive policies
to its victims in the developed countries today. The victims are
the people who had voted in these politicians to serve not the
neoliberal elite but the victims themselves.
What the Third Way leaders refuse to do is challenge corporate
power and force corporate "responsibility" and corporate
service to the community. That would entail penalizing shifts
of capital abroad and the associated blackmailing of workers and
governments; taxing corporations and their investors more heavily
to support community needs and to pay for their environmental
damage; nationalizing those that try to sabotage a community-oriented
economic order; and making business into a means of community
ends dictated by the democracy rather than the ruler of policy
through its political instruments like Third Way leaders. It would
mean ending trickle-down economic policies in favor of social
This notion of actually allowing popular options to be available
and popular rule and policies serving the general interest to
be implemented, is, admittedly, semi-revolutionary at present,
but the first step in regaining some kind of democratic polity
is to recognize the Third Way as a road of betrayal and to call
it by its right name.
Edward Herman is an economist and media analyst. His latest
book, published by Peter Lang, is The Myth of the Liberal Media:
An Edward Herman Reader.