Is ‘Third Way’ Social Democracy still a form of social democracy?

1. “Third Way” What does it mean?

The concept of the “third way” stands broadly for an alternative middle way between two extreme positions. Known as “third way” is a middle form of socialism and capitalism, e.g. competition socialism, or new concepts of politics and economics, e.g. the free economy or the ordoliberalism. This shows that the “third way” can focus on economic, political and also cultural aspects, basically a mixture of it all.^[1]

There are many different definitions for the “third way” of social democracy. This is on one side because the discussion about that is already happening for a long time and on the other because it is not lead uniformly. The term already appeared in context with the Euro communism or the “socialism of human countenance” (Alexander Dubcek) of the Prague Spring. But in that case it was always meant to be a middle way between communism and existing socialism. In the seventies of the 20th century the concept of “tredje vägen”, the “third way” was shaped by Sweden’s social democratic party and Olaf Palme (then prime minister of Sweden).^[2] However, the concept of today’s “third way” is a middle course between unstrained turbo capitalism of neo-liberal stamping and the welfare state of Keynesian traditional stamping.

2. Motives of a “Third Way” Social Democracy

First there is the Question why such a ground was required between unbridled markets of neo-liberalism and the traditional Keynesian policies. For what reasons did such a middle way of social democracy become necessary? At the beginning of the 80th of the prior century science expected and talked about a descent of European social democracy. The climax of this debate was reached when Dahrendorf’s with his formula in 1983 announced the “end of the social democratic century”.^[3]

Not only had British social democrats asked themselves the question what it takes to win elections again. The classic social democratic model which stood for liberal democracy, Keynesian economic and fiscal policy, and a developed welfare state with relative social equality was no more up to date for that time. A main reason for the downfall of the social democracy was the globalization because of the increasing internationalization of goods in the Keynesian welfare state, also global finance and capital markets that worked not in favour of the this model. Hence it became increasingly difficult for the state to intervene in the markets with macro-economic instruments as the competition conditions would change.

Also because of the new social structure the industry would change. The secondary sector of the former western industrial nations would start to shrink and transform in favour of an increase in the service sector. The traditional voter milieu of the social democracy, the working class, would start to decline. Beside the apparent disappearance of the social democratic trunk electorate, a competition between the different national political economies would develop furthermore.^[4] This leads to a non detainable erosion in the welfare state, an additional affect on the social systems because of the unfavourable demographic development. It is feared that through unfair tax competition of individual states, public services for individual citizens would not be possible any more. As result of these changed basic conditions, a loss was named on social democratic side in the discourse about programs and ideas.

The downfall of social democracy at the end of the 20th century did not happen after all. However, social democratic parties experienced an unexpected popularity in many European countries. Social democratic parties sticking to their old views and programmes is not the reason for the new boom, however the ability of social democracy to transform and adapt.

3. The Basic Concept of the “Third Way”

The basic intention for Giddens` “Third Way” is already located in the subtitle of his work: “The renewal of the social democracy”. Therefore it is about the design of a new concept of social democracy policies. Therefore first there had to be an analysis of the existing political design. He describes the difference between the classic social democracy which he names left, and the Thatcherism or Neo-liberalism (the new right). Not only preferences of the old conservative and left politics should be mixed, but also to develop a new understanding of politics. The “third way” should express the new understanding of politics and should cancel out old contrasts between the old ways.

4. The Third Way

Giddens main concern of the “third way” is to help the citizens to find a way through globalization, changes in their personal life and the relationship to nature and the environment.^[5] Therefore, the third way has to accept globalization, but in contrast there must not be an uncontrolled free trade. Instead, politics must be aimed at conservative, traditional economic protectionism that would result in fighting economic blocks.

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^[1] Gallus, Alexander; Eas sind Dritte Wege? Page 16-17

^[2] Leick, Romain, ,,Wir sind die neuen Radikalen", in: Der Spiegel Nr. 44, 1999, S.160-166.

^[3] Dahrendorf, Ralf: Die Chancen der Krise. Page 16

^[4] Jun, Uwe: Der Wandel von Parteien in der Mediendemokratie. Page 200

^[5] Giddens, The Third Way, Page 80.