Third way (Neoliberal)

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This article is about the neoliberal political philosophy, for other uses, see Third way (disambiguation)

The Third Way is a centrist philosophy of governance that, at least from a traditional social democratic perspective, usually stands for deregulation, decentralisation and lower taxes. It is embodied by such figures as US President Bill Clinton, British Prime Minister Tony Blair, German Chancellor Gerhard Schröder, Dutch Prime Minister Wim Kok and Brazil's Fernando Henrique Cardoso.

The "Third Way" of the US Senate centrists, following Bill Clinton's lead, emphasize governmental fiscal conservatism, governmental action to replace welfare and other social assistance programs with so-called workfare, and a stronger preference for free markets. At the same time, such centrists claim to dissociate themselves from pure Laissez-faire economics and other Libertarian positions.

The general idea is included within Radical middle.

Origins

The term (and a variant - Third Position) was first popularized by Mussolini in the 20s to describe Fascism, whose economic policy of Corporatism was seen as a solution to the percieved twin faliures of Socialist attempts to develop a workers planned economy and laissez-faire capitalism. It has been argued by a minority of Historians, like Mussolini Biographer Nicholas Farrell that some modern Third Way doctrines and policies, like the self proclaimed Third Way of Singapore's People's Action Party, the UK Labour Party's Public-private partnerships and Lyndon B. Johnson's Great Society strongly resemble some of the economic and social policies of the Italian Fascists in the 20s and early 30s. According to this analysis, the Third Way as a generic movement could be considered as a form of successfull, Liberal Fascism. The Third Way philosophy was developed further, Post-War, in the 1950s by German ordoliberal economists such as Wilhelm Röpke, resulting in the development of the concept of the social market economy.

The term was appropriated by politicians in the 1990s who wished to incorporate Thatcher and Reagan's projects of economic deregulation, privatization, and globalization into the mainstream centre left political parties so that in this context the Third Way is usually understood as a nickname for neoliberal social-economic policy. As such, it has become an important ideology in modern European democracies, especially by some Social-Democratic parties, as well as for some members of the United States Democratic Party (particularly, the Democratic Leadership Council). It gets its name from its alleged role as an alternative to both pure, free market capitalism and the kind of economic order represented by strong welfare states such as the Scandinavian countries and Germany, which are held to be too regulated and taxed at rates that are too high to compete with economies run on free-market principles.

Criticism

Third way is sometimes described as an idea of former social-democrats which replaces socialism with capitalism with a minimum of socialism, and a strategy to bring the social-democratic parties back to power where they have lost elections. Critics argue that third way politicians are in favour of ideas and policies that ultimately serve the interests of corporate power and the wealthy at the expense of the working class and the poor.