Thursday, October 28

The ‘third way’ may have worked for New Labor, but now it’s impossible | Joe Guinan and Martin O’Neill

Fo Labor, the future just isn’t what it used to be. Last week’s election results left the party even further out of power than in the December 2019 general election. There is little indication that its leadership can identify a way forward. Worse still, the reaction to his first electoral defeat has been to resort to the usual noses of the New Labor years. Peter Mandelson has been hired to advise Keir Starmer’s inner circle, and all indications are that a repeat of the third-way strategy is being touted to fill the current strategic void.

In moments of defeat, there is a tendency to look back at what has worked in the past and assume that it could be repeated again in the future. New Labor’s third-way approach under Tony Blair and Gordon Brown was a political and economic strategy that brought remarkable electoral success more than 20 years ago. It was based on a strategy of “triangulation”: the deliberate distancing of the center-left parties from their base and left politics, and the creation of a new centrist synthesis of left and right that sought to transcend both categories. But far from representing the immutable truths of some enduring strategic playbook, the third way was peculiar to a particular moment in history, and fundamentally does not suit the world of the 2020s.

Economically, this approach cannot be re-executed because it depended on a very particular context: the “long boom” of the 1990s and early 2000s. The high growth of this period was the product of a unique set of circumstances, including the fall of the Berlin Wall and the entry of the former communist bloc into global markets at the same time as market reforms in China, creating a “great duplication”. of the global workforce. This excess of cheap labor, together with the liberalization of trade and financial flows, the great wave of privatizations that drove the expansion of capital markets and the rapid onset of financialization and auctioning of asset values, gave rise to a synthetic boom.

The third way was possible in the context of this global economic boom that allowed policy makers to skim the surplus of economic growth to finance increases in social spending without fundamentally changing the distribution of wealth and power. But the approach was complicit in increasing inequality, divestment, offshoring, disqualification and the emptying of the industrial base. The great financial crisis of 2008, which finally put an end to the long boom of the 1990s, revealed the inherent fragility of this economic model. Its social consequences are now deeply written in the regional economic inequalities that have become such an ingrained feature of British life.

The current economy could hardly be more different or less conducive to a repeat of this strategy. Since the financial crisis, the world economy has been alive; Quantitative easing and asset price inflation for the rich have been combined with austerity for the poor. The decade that followed the crisis was marked by the slowest and most uneven economic recovery in memory. By the end of 2019, just before the pandemic set in, the global economy had slowed to its slowest pace since the collapse.

Covid-19 has greatly increased these economic problems. As this public health emergency passes, we face the challenge of restarting – in some sectors, even rebuilding – a severely stressed economy, with vastly amplified inequalities of wealth, power and control. These are not conditions in which the government can again hope to simply “wipe out the surplus” from a prolonged boom.

The original third track ran in parallel on both sides of the Atlantic, and Blair was a careful student of Bill Clinton’s emphasis on fiscal discipline, at a time when governments lived in fear of bond market “vigilantes.” Today, the economic and political environment is completely different. Given the clear need for state investment to address risks such as the climate crisis and future pandemics, Joe Biden’s new administration has freed itself of these self-imposed limitations and is delivering on its promise that “we’re not just going to play around the edges ”.

While Biden is a veteran of 1990s third-way politics, he has shifted his financial position in response to the demands of the day, working constructively with his party’s left rather than marginalizing it. His administration is charting a course of economic stimulus and large-scale public investment with the goal of providing an ambitious response to overlapping crises. If the Democrats are showing that they are not stuck in the past, there is no reason why the Labor Party should not be either.

Just as the third way is economically inadequate for the present moment, it is also unrepeatable in political terms. The strategy consisted of gaining credibility with a large part of the left electoral constituency, a check that cannot be spent more than once. Political credit takes a long time to build and exists in finite supply. The idea that the left (and with it the traditional heart of left-wing parties in industrial and post-industrial working-class communities) can be taken for granted because, to use Mandelson’s words from 1999, they have “nowhere else to go “has been decisively refuted by the constant loss for decades of the former electoral strongholds of the Labor Party in the so-called” red wall. “

If Labor wants to rebuild a successful electoral coalition that encompasses both the young metropolitan precarious and voters in the former northern strongholds of the party, it has to offer something concrete and financially valuable. The party can no longer depend on generational support built on the interests of workers in unionized industrial jobs that have now largely disappeared. His loss of support in post-industrial areas did not begin with the 2019 elections, but has been accelerating over a much longer period. Despite the surge in support in the 2017 election, Labor has failed to regain most of the 91 seats lost in 2010, the first elections after the financial crisis, including those for places like Corby and Cleethorpes.

As the political failures of this decade take shape, Labor must articulate a compelling vision of British society and the economy for years to come. Waving hollow flags is a poor substitute. The party needs a real strategy of investment and economic transformation that offers more than the empty rhetoric of the conservatives of “leveling up.” You need a vision that is in tune with the profound social and economic crises we face, including regional disparities, racial injustice, intergenerational inequality, and climate change.

If the Labor Party wants to draw anything out of the Blair era, it should be a willingness to adapt to changing economic circumstances and an ability to learn from what has worked politically in countries facing similar challenges. Those are lessons worth pondering, long after the substantive content of third-way politics has been relegated to history.

  • Joe Guinan is Vice President of The Democracy Collaborative, a think tank from the US Martin O’Neill is Professor of Political Philosophy at York University. They are co-authors of The Case for Community Wealth Building (Polity, 2019).

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