Failure of the ‘Third Way’

John Kay describes Gor­don Brown as a “redis­trib­u­tive mar­ket lib­er­al, hold­ing, like oth­er adher­ents of Blair’s ‘Third Way’, that

…[t]he eco­nom­ic role of gov­ern­ment should be lim­it­ed and con­fined to a short list of issues described as mar­ket fail­ures. Redis­trib­u­tive mar­ket lib­er­als believe, how­ev­er, in a big role for the state in review­ing the dis­tri­b­u­tion and redis­tri­b­u­tion of income.

The Third Way was a refuge, Kay says, of “social­ists mugged by [the] real­i­ty…” of social­is­m’s fail­ures. But it is now, he argues, in just as much trou­ble as mar­ket fun­da­men­tal­ism was after the excess­es of the late 1980s.

The cri­sis of 2007-08 revealed stark­ly the lim­its of redis­trib­u­tive mar­ket lib­er­al­ism. The range of mar­ket fail­ures was a good deal wider than the lim­it­ed list defined by mar­ket fun­da­men­tal­ists would allow. Both social­ists and social democ­rats have re-emerged from the shad­ows. For social­ists the cri­sis renewed hopes that Marx’s promise of the col­lapse of cap­i­tal­ism under the weight of its own inter­nal con­tra­dic­tions would final­ly be ful­filled. For social democ­rats, for­ev­er in Utopi­an search of sta­bil­i­ty and har­mo­ny, sal­va­tion lay in the cre­ation of a new glob­al finan­cial order, although no one seems to have much spe­cif­ic idea of the nature of that glob­al finan­cial order.” Extract from The Finan­cial Times

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