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Where the Third Way began by Martin McIvor Review of Social Democracy in Neoliberal Times: The Left and Economic Policy since 1980, edited by Andrew Glyn (Oxford University Press 2001) We have become accustomed to acclaiming New Labour as the cutting edge in social democratic revisionism, just as the Thatcherites in Britain pioneered the international turn to neoliberalism whose victories must now be accommodated to. But this is a partial and, perhaps, strategically misleading view, in part an effect of Blairite propaganda and Tony's globe-hopping Third Way roadshow. In truth the British Labour Party has come extremely late to a process in train since the early 1980s, whereby left parties in power across Europe and Australasia have subordinated social justice goals to the parameters of low inflation, low taxation, and market-led economic policies. This collection of essays edited by influential left economist Andrew Glyn surveys these experiences on a country-by-country basis. As such it provides an invaluable reference work for learning from the local successes and pervasive limitations of this downgraded version of social democracy in the 1980s and 1990s. Overall, the verdict is not an inspiring one. Only Australia, Austria and Sweden managed to contain the unemployment consequent upon a deflationary macroeconomic regime, and there is little evidence that governments of the left were anywhere able to make a difference to the (in most places worsening) income inequalities of the period. What has forced this comprehensive withering of ambition and achievement? There is a tendency of contributors to the volume to downplay the importance of "globalisation" in restricting governments' freedom of manoeuvre (international capital markets' swift punishment of countries running high inflation rates being the main exception). For the most part the retreat of social democracy in this period is portrayed as a consequence of two interconnected factors. First, the general downturn in profitability, investment, productivity and growth that afflicted all Western economies from the 1970s onward created problems for policies that had seen governments through the postwar "Golden Age". But second, and crucially, was the ascendancy of New Right thinking as a prescribed solution to this crisis and defeat of more radical left alternatives. It is the reminder given of these now largely forgotten policy programmes, mostly developed during the 1970s as a kind of radicalisation of social democracy from within, that is one of the most interesting aspects of this book. Not only the Alternative Economic Strategy in Britain but the Swedish Meidner plan, Mitterand's early moves on nationalisation and industrial democracy, and new forms of industrial planning in Australia and Greece, attempted to resolve the crisis of investment and productivity by, in Glyn's words, "democratizing ownership and control in the economy". The practical failure and ideological eclipse of such options emerges as a fundamental determinant of subsequent history. An important question not explored here - understandably given the disciplinary focus of the book - is the extent to which this defeat was a matter not only of intellectual underdevelopment but also of political strategy and organisation. But in sum this book provides a vital lesson that, in addition to looking
across the channel for contemporary working models of social democracy
that challenge the purported necessity of our own government's ultra-minimalist
variant, the left everywhere must learn again to think beyond these limits
if genuine social advance in the medium and longer term is to be a serious
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