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 capital flight.

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 democratic policies.

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.

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