The New Statesman Essay - The Third Way is a triumph

Far from being waffle, Blair's philosophy has a solid core: the market should support the welfare st

There must be a secret prize for whoever comes up with the most dismissive epitaph for the Third Way. This seems the only possible explanation for the torrent of phrases depicting it as "vague", "fuzzy", "waffle", "a masterwork of ambiguity" or, as the Economist had it: "Trying to pin down an exact meaning is like wrestling an inflatable man. If you get a grip on one limb, all the hot air rushes to another."

Yet consider what this much-maligned public philosophy has achieved. In the US, the Third Way not only gave us Bill Clinton, but also bit George W Bush so hard in the tail that he may yet disappoint his dominant right wing. Having lost control of the Senate after only four months in office, Bush may be forced to move closer to the centre from which he campaigned rather than from where he has so far governed. In Britain, the Third Way has given Labour an unprecedented second full term in power. In Germany, soon after Tony Blair spoon-fed it to the reluctant Gerhard Schroder, the Third Way (or "new middle") brought another previously failing left party to power; now the SPD seems poised for an even stronger second term. Third Way thinking is a major force in the Dutch miracle, and it is a road from which Scandinavian parties benefit whenever they can find it. Yes, I know that the Italians veered to the right, but they were never quite centred; previously they were somewhere off in left field.

Better still, the Third Way is not merely a potent recipe for gaining power; it is also a solid public philosophy. True, it has a somewhat blurred margin - and thanks be given that it is far less detailed than a Soviet dogma or a Catholic doctrine. But it has a clear core.

Part of that core is to make opponents who used to hobble each other into productive partners. How quickly we forget the days when the prevailing ideology was that government was the problem, and not even a part of the solution, and when it was considered that the more we threw people on the tender mercies of the market, the better not just we, but also they, would be. Even Bush no longer dares speak such Thatcher-Reaganisms. Cutting the civil service or closing down the education department, the environment department and public service television - all of which were once conservative targets - are not even mentioned now. On the contrary, Bush has just increased the federal government's budget and its role in education.

On the other side of the coin, the Third Way has banished not only the belief that the market is the source of all evil, but also the simplistic notion that if citizens just pay their taxes, the welfare state will do the rest.

The Third Way's central tenet is that both the state and the market are part of the solution, that each has a significant and legitimate role to play, and that they need to co-operate rather than constantly be at loggerheads. Both Blair and Clinton have been supportive of the free market and have been rewarded with economic success. Far from shutting down or undermining the welfare state, stronger economic growth helped sustain it. We tend to think of the economy as producing widgets and ball bearings, toothpaste and chewing gum. But when its engines are humming, it delivers much more. Hefty economic growth provides hefty additional tax revenues that can be used to finance numerous goodies, from more policing to better education. Moreover, the "extra" growth curtails unemployment, which in turn reduces welfare costs, thus freeing yet more money for public services. But, at the same time, the market should not be allowed to run amok. The role of the state is to keep it in place by, for example, requiring proper notification before a factory is closed.

The second core element of the Third Way is communitarian. It holds that society is like a stool that rests on three legs, two of which (the state and the market) are too long, and one is too short. The third leg is the things people do for one another as members of families and neighbourhoods, as friends and co-workers. The underlying theory is that we should not commodify all social relations. After the loss of a spouse, a parent or a child, a visit from a family member or friend is far better than a session with a "grief counsellor". When people grow old, it is far better for them to help each other and to perform minor chores (which many more now can for many more years) than rely merely on social workers.

Blair made such concepts of community and responsibility (for oneself and for others) a core element in his first election campaign. In office, his ministers helped launch or support or extend many programmes that have a communitarian ring to them: community policing, neighbourhood watch and anti-crime patrols (of the kind found in Balsall Heath, Birmingham), tenant management associations and local food-buying groups. Gordon Brown encouraged charitable giving and volunteerism by, for example, scrapping the £250 minimum limit for donations to attract tax relief. Other measures encourage people to make gifts of shares.

These are merely baby steps on this stretch of the Third Way. The US has hundreds of thousands of groups (often, misleadingly, called self-help groups when they are actually mutual-help groups) which provide services far more carefully tailored to the individual than anything a government can provide. They help millions cope with alcoholism, depression, breast cancer, spousal abuse, and much else. These are not goody-two-shoes "voluntary associations" in which the affluent members of the community bring good deeds to the poor, acts of charity and altruism (such as reading to the blind) - although these, too, have their place and merit. Mutual-help groups are more sustainable and can carry heavier loads because their members are deeply engrossed and they benefit one another day in and day out. It is hard to see how the health service will ever find its way unless it joins the Third Way, as millions take more responsibility for themselves (quit smoking, reduce alcohol abuse, take exercise) and for each other.

More generally, whether it is a matter of childcare or protecting the environment, people need to assume responsibility. The largest and fastest-growing group that can do more are senior citizens, who live longer and healthier lives and would benefit psychologically from doing more for one another and their communities. Taking responsibility is a vital element of the Third Way, which Blair has often pointed to, here and there introduced, but not quite led the British people truly to embrace, with his top-down government and stress on efficiency.

This is particularly notable when it comes to devolution. Blair devolved, but not far enough. Devolving to regions that have ethnic affinities and cultures of their own is a risky business. While separatist sentiments and voices have temporarily quietened down, their nascent threat is never far away. This term, Blair should work much more directly with smaller, more local communities. And he should fashion an increasing number of development projects that cut across regional borders, for instance, across north-east England and southern Scotland.

Those who charge that there is no place for equality on the Third Way are right. There has never been a country that has come close to equality; surely not the Soviet Union. Even the small islands of true socialism in Israel, the kibbutzim, are on their last legs. Yet the Third Way must address the question of social justice. It cannot just wax and wane about "opportunity" and look the other way as inequality rises to the point where a growing segment of the population leads a life immune from all the travails the rest have to tolerate, from riding the Tube to queuing for X-rays.

In a previous article for the NS (15 May 2000), I proposed that everyone should be entitled to a rich basic minimum. Blair's proposal to grant everyone a bond at birth is a step in that direction. This is an approach to social justice that seeks not to take people's assets away and distribute them equally, which is either an illusion or a recipe for brutality, but to flatten the pyramid mainly by lifting the lower levels, again and again, and to a significant degree.

Even if they work, the poor will always be with us, as long as they have no assets. People who own assets, especially a place of residence, are more likely to "buy" into a society, to feel that they are part of the community and to be an active member of it. One way to advance home ownership is through schemes that allow those on low incomes to obtain mortgages. This might be achieved by giving poor people, say, £2 for every £1 they set aside, to provide them with the seed money for buying a home. Alternatively, "sweat" equity might be counted as a contribution if, for instance, a potential homeowner works on his or her future house.

The greatest challenge to Blair in his second term may come not from Europe, but from multiculturalism, from the dangerous clash between those who want to abolish Britishness to accommodate diversity and those who retain patriotic sentiments. Here, the Third Way, and particularly its communitarian elements, provides an answer. It can see Britain as a community of communities. The nation can welcome - indeed, feel enriched by - people of divergent background and heritage, and happily tolerate differences of habits and subculture. At the same time, it can expect all citizens to buy into a significant set of shared values and mores.

For instance, there is no reason to object to people who pray in a mosque rather than in a church. But people's freedom to marry whom they like should be one of the shared values, thus ruling out forced marriages. Again, parents may be free, indeed welcome, to teach their children the language of their country of origin. But this should not be at the cost of a full command of English.

So, all in all, there are clear signposts on the Third Way. True, Blair has passed only some of them and many are barely in sight. But this road is far better than the first road, which was raw capitalism, or the second road, which was the planned economy.

Amitai Etzioni's most recent book, The Monochrome Society, has just been published by Princeton University Press. Demos published his The Third Way to a Good Society last year

This article first appeared in the 25 June 2001 issue of the New Statesman, The slow death of Tory England