Last year Webdiarist extraordinaire and new Doctor of Philosophy Tim Dunlop stirred up a hornet’s nest with an epic piece on dairy deregulation. This year, as Webdiarists fire up on the future, if any, of the Left, Tim has written a tome trashing Mark Latham’s Third Way, now in vogue within the Labor Party. To end, a postscript on Latham’s ‘let’s all be shareholders’ idea by Ivana Bottini.
THE THIRD WAY: OUR MORAL DUTY TO ‘FREE MARKETS’
By Tim Dunlop
Introduction and scene-setting
There’s an old joke that goes, why is golf called golf? Answer: because fuck was already taken. That’s pretty much how I feel about the third way. There’s also that Turkish proverb that says: When the axe came into the forest all the trees said, ‘at least the handle is one of us.’ That comes even closer. But given that the left in Australia is hardly overflowing with presence, new ideas or influence at the moment, it is worth our while at least considering the third way. Given also that it is the pet project of an almost certain future Labor leader – Mark Latham – it warrants our particular attention. So where do we start?
It was George Orwell who suggested that saints should be judged guilty until proven innocent, and outside of a criminal trial, it is probably a presumption that should be applied to every intellectual endeavour. So I begin an examination of the third way from the same point of view: guilty until proved innocent.
Of course, to its advocates, this approach will reek of defeatism and the very sort of small-mindedness their new grand scheme is meant to confront. Well, bad luck. If I’m going to be expected to live under the dictates of any system that claims to be the only thing around that will offer me a life worth living, then I absolutely reserve my right to Orwellian scepticism. As citizens in a democracy, we are under no obligation whatsoever to accept what we are told at face value by those who exercise power over us and we have every right to expect from them a full account of their schemes.
Having said that, advocates of the third way are often, with good reason, annoyed by the sort of criticism they receive. It is true, as Mark Latham notes in his article ‘Defending the Third Way’, that too much time has been wasted on concerns about the name (third way) and unrealistic expectations that it should present a complete and foolproof game plan to transform society now. The challenge Latham offers critics is simply to find something of substance to say about third way proposals or shut up.
Okay then.
Let’s not bother with peripheral matters like the name and do him and everybody else a favour and just kill off the concept in its entirety so that no-one ever has to bother dealing with it again. The third way, as currently presented by advocates like Mark Latham, is a hodge-podge of catchphrases and buzz words that don’t amount to a significant reappraisal of social democratic and leftist politics. In fact, in too many ways, they submerge social democratic principles within the dictates of neo-liberalism, the very thing they claim to be avoiding (axes and forests and all that). As presented by Mr Latham and others, third way theory can never achieve the social aims it claims it can because they are undermined and even negated by their economic aims.
The problem that kills the third way, therefore, is its internal incoherence. The nature of that incoherence is this: at the social level it advocates a enhancement of community, shared morality and trust and participatory democracy, but at the same time it advocates at the economic level policies that undermine the conditions for that social program. It plants a white picket fence in the path of the bulldozer it is itself driving. This is the third way’s fatal contradiction and unless third wayists can answer it, it is they who should shut up.
What is the third way?
When supporters try to encapsulate the project in a brief definition it gets a bit vague, perhaps understandably, but most at least agree that it positions itself between the unbridled forces of completely ‘free’ markets and the monolithic control of a centrally planned economy. It is often associated with the ‘centre left’ parties like Tony Blair’s New Labor or Bill Clinton’s New Democrats, and both are held up as exemplars of the sorts of governments that the third way should bring about.
The third way wants ‘free markets’ and the alleged benefits of them (such as economic efficiency, growth and competition), but it wants a kinder and gentler form of this ‘new capitalism’, one that takes society and democracy seriously. Different theorists and proponents give different emphasis to different aspects. Latham endorses John Lloyd’s summation: ‘[The third way] is an attempt to construct societies that can protect their citizens in an age of globalisation; to democratise the content and practices of globalisation; and to recast the explicit and implicit contracts that citizens make with the state.’
The sorts of catch-phrases that go with this sort of thinking are ‘civilising global capital’, ‘knocking the rough edges off globalisation’ and other vague terms of amelioration.
Amatai Etzioni, sometimes citied as the father of the third way, resents the label of vagueness, although he is happy that the concept is a bit ‘blurred’: ”True, it has a somewhat blurred margin – and thanks be given that it is far less detailed than a Soviet dogma or a Catholic doctrine.” But it is a bit more than blurred when major theorists contradict each other. Etzioni, for example, is clear that it tries to find a path between free markets and centralised state control.
For me, the Third Way is a synthesis of two principles often considered contradictory. There was a school of government (maybe the First Way) which believed that the state is the agent of society and the more the state controls centrally and in finer detail (not only economic life but also social life), the better the society. This is a project that the Soviet Union tried to lead on. The First Way allowed some minor corners for capitalism; it saw capitalism as evil, and market forces could be slightly tolerated but were in principle wrongheaded.
The Second Way took, in effect, the opposite view. It believed that the state (as President Reagan said) was not part of the solution – it was the problem. It recognised that there needed to be some place for the state, but basically it was an evil. The good was in the free market and the freedom of choice that engendered.
So here you have two fairly radical and opposed views, both of which the Third Way swears are useful. Both have a positive role to play, both are part of the solution and neither is the problem. We surely need an active state, we surely need a free market, and actually it is just a question of the proper balance.
Giddens, the other great international theorist of the third way, says almost the opposite: ”Third way politics, as I conceive of it, is not an attempt to occupy a middle ground between top-down socialism and free-market philosophy. It is concerned with restructuring social democratic doctrines to respond to the twin revolutions of globalisation and the knowledge economy.”
Third wayists will have to excuse us if we’re confused.
Mr Latham, to his credit, tries to extract a core element, a unifying theme from his well-read excursions through the literature of the third way: ”I believe the Third Way has a guiding ideology – a single philosophy which links all parts of its policy program. It is this: the true socialist principle of our time is the dispersal of economic, social and political power. This is the defining feature of information age politics: the chance to break down hierarchies and democratise power and social opportunity.”
This is a brave call, and a reasonable conclusion. But it is also the very thing that brings us up against the central contradiction of the third way and helps explain why we should discard it as a viable program of leftist action. If we can show that the program fails to deliver on this core element, then we have shown that the program is fatally flawed.
One way of doing this is by the use of some examples, and the more compelling those examples are, the more reasonable it is to assume that the same problems will arise in other examples. The real test for critics of the third way, however, would be to show that in principle it cannot deliver on this promise to ”break down hierarchies and democratise power and social opportunity” because of some basic flaw in their thinking. Not only is this possible, it is obvious, once you start to think about it.
A closer look
The third way installs ‘free markets’ at the heart of its program. It cannot do without them and doesn’t want to. Everything else in the program flows from this one simple fact and in this one simple fact the third way is completely at one with right wing advocates of the ‘free market.’ It stands to reason therefore, that any problems that arise in the application of the idea of ‘free markets’ will cause problems in the application of the third way. This is our starting point.
Again we have a terminological problem. We can’t just accept the term ‘free market’ as if we all knew what it meant or even as if it meant what it said. When neo-liberalists speak of ‘free markets’ they don’t actually mean a system of exchange between people with no interference between them. Without laws of private property, national and international trade agreements, the power to enforce contracts and other such restraints we truly would have free trade, and we’d be living in a Hobbes jungle.
No-one wants that, least of all the corporate and political leaders who constantly advocate ‘free markets’. In fact, far from being a restraint on trade, such controls provide the conditions for trade to happen effectively in the first place. As Donald Livingston has put it, ”economic relations cannot exist outside of noneconomic restraints”.
What advocates actually mean by ‘free market’ is an historically specific set of social, legal, political and cultural conditions in which exchanges take place. And while it is true that ‘free market’ advocates wish to minimise the role of government and other non-economic considerations in their ability to exchange goods, this is not same thing as saying they don’t want any controls on exchange at all.
What they want, in fact, is a particular set of restraints on the exchange of goods and the workings of labour, ones that, naturally, favour their own circumstances. If this wasn’t so, governments, businesses and bodies like the World Bank and the IMF wouldn’t spend years and years negotiating ‘free trade agreements’. If we were literally talking about ‘free trade’, then a ‘free trade agreement’ would almost be an oxymoron.
The particular form of non-economic constraints that provide the conditions for what neo-liberalists and third wayists call ‘free trade’, which has its greatest realisation in ‘globalisation’, that other buzzword of the nineties, are summed up in a group of policies known variously as the ‘Washington consensus’, neo-liberalism, or, in Australia, economic rationalism.
Its key features include minimising legal controls over how business operates, especially in regard to international finance (deregulation); the application of business models to government operations and the wholesale shift of these from the public to the business sector (privatisation); minimising controls over the employment of labour, including abolition of minimum wages, scaling back of working conditions legislation, including dismissal laws, an emphasis on boss-to-worker negotiation of pay and conditions rather than on collective bargaining (‘workplace flexibility’); an emphasis on the control of inflation rather than the control of unemployment; and an emphasis on economic growth as the basis and measure of a successful economy.
So this is what advocates mean when they talk of ‘free trade’ in the neo-liberal system at the heart of the contemporary process of globalisation. And as I say, third wayists insist that this is the essential condition of their political program. It therefore requires some consideration in its own right and the first question to ask is does it provides the benefits they claim?
We need to be honest here: for every expert I can throw up to dispute the glories of the Washington consensus, I’m sure third wayists, and neo-liberalists for that matter, can throw up another who will dispute such conclusions.
So I’m not pretending that a couple of quotes from a couple of experts is a knock-down victory for my side of the argument. All I am doing at this stage is accumulating some evidence that at least shows that there is considerable doubt to be cast over the over-weening certainty of those third wayists who suggest that ‘free markets’ are the only true road to social and economic freedom. So ripe with conviction are the writings of most third wayists that it is easy to be overwhelmed by their enthusiasm and to be fooled into thinking that all arguments have been won and there is nothing left to discuss. But this just isn’t so, as economists like James Galbraith and Paul Omerod have pointed out.
Galbraith wrote in 1999: ”The doctrine known as the Washington Consensus was, after its fashion, the Apostle’s Creed of globalisation. It was an expression of faith, that markets are efficient, that states are unnecessary, that the poor and the rich have no conflicting interests, that things turn out for the best when left alone. It held that privatisation and deregulation and open capital markets promote economic development, that governments should balance budgets and fight inflation and do almost nothing else.
”But none of this is actually true.The push for competition, deregulation, privatisation and open capital markets has actually undermined economic prospects for many millions of the world’s poorest people. It is therefore not merely a naive and misguided crusade. To the extent that it undermines the stable provision of daily bread, it is actively dangerous to the safety and stability of the world, including to ourselves. There is, in short, a crisis of the Washington Consensus.”
Remember, you of the left looking for a way to reinvigorate leftists politics, this is the economic prescription the third way considers essential to that project.
Ormerod, an economist and economic forecaster, is just as blunt: ”The advice to follow pure free-market policies seems in any event to be contrary to the lessons of virtually the whole of economic history since the Industrial Revolution.
”With the possible exception of the first wave of industrialisation in Britain, every country which has moved into the strong sustained growth which distinguishes industrial, or post-industrial, societies from every other society in human history, has done so in outright violation of pure, free-market principles. Markets, competition and entrepreneurship are all very important, but by themselves they are not enough. Infant industries – even when they have become industrial giants – have sheltered behind tariff barriers; government subsidies have been widespread; there has been active state intervention in the economy; and, perhaps most important of all, successful companies have exercised power and control over their markets.
”Even Far Eastern economies such as South Korea and Singapore, which are held up as models of free-market principles, do not in practice conform to the ideal. The governments of these countries possess a degree of internal power which is far greater than is the norm in Western societies, and they are not afraid to use it.”
And yet, Mark Latham and other third wayists are adamant about this point: ”Free trade is the most powerful force the world has known for ending poverty. Over the past three decades the development of trading economies in East Asia has lifted 150 million men, women and children out of abject poverty. The countries which have been unable to break the poverty cycle – most notably, in Africa, parts of Latin America and the old Soviet Union – are those which have been most resistant to clean institutions and free trade.”
Now each side of the argument can throw up their experts to debates the merits of ‘free trade’, and as I’ve conceded, there are probably no knockdown arguments. But statements like this from Mr Latham are simply brazen. No respected economist would endorse the interpretation he gives here.
Far from being the beneficiaries of ‘free trade’, the economies of East Asia owe any success they’ve had to an increase in international trade made possible by and coupled with strong government control. Not only have they not administered anything that could be called ‘free trade’ in the literal sense, they have also not administered anything that resembles the neo-liberal concept that advocates call free trade. In fact, the closer they have come to fulfilling this prescription, the worse the results have been.
The most successful of these countries, China, Korea and Singapore, are the ones who maintained the tightest government control over the ‘opening up’ of their economies, the very opposite of what the neo-liberal prescription dictates. When the Asian meltdown of the nineties kicked in, the neo-liberal acolytes blamed ‘crony capitalism’, not the flight of footloose foreign capital doing exactly what the neo-liberal agenda mandates.
When Malaysia, in response to the meltdown, reintroduced capital controls – almost the biggest sin against ‘free trade’ possible – they were castigated by the neo-liberal intelligentsia and assured that it would cause even more problems, particularly in terms of capital flight. In fact, the controls worked, again flying in the face of the received wisdom of neo-liberal brotherhood.
So, far from being the thankful beneficiaries of ‘free trade’, the people’s of Asia, to the extent they have benefited, have benefited from large scale government intervention and management.
On the other hand, the one country in the ‘developing’ world that most closely adhered to the neo-liberal prescription was Russia. As it has been an abject failure, no-one in the neo-liberal community wants to claim it.
Mr Latham goes so far as to say it has been ‘most resistant’ to the preferred agenda (of neo-liberalism) but this is an inexplicable comment from an honest reporter. Far from being ‘resistant’, it is the one country that most openly embraced the neo-liberal project. Thus advocates who do seek to explain the Russian failure generally take the opposite approach to Latham and claim that the ‘reforms’ did not go far enough. Jeffrey Sachs of Harvard, one of the key economic advisers to the Russian government, argued exactly this point in The Independent in October 1993. Whatever form of mitigation is offered, Russia is simply the most obvious example, not of a country being resistant to ‘free trade’ as defined in neo-liberal terms, but of adopting it wholesale and suffering the consequences.
So although the quotes from Ormerod and Galbraith may not of themselves be knockdown arguments, they do at least have the benefit of coinciding with what actually happened in Asia and Russia.
Mr Latham himself puts Australian competition policy at the heart of his understanding of the free trade he advocates, which is bit like leading with your chin. Always an over-rated manoeuvre, its credibility fell in a heap with dairy deregulation. Rather than delivering the promised cuts in the retail price of milk and a more efficient industry, it has delivered higher retail prices, a decimated industry, disrupted rural communities, and about half-a-billion dollars extra a year to the largest retailers – virtually the exact opposite of what it promised and certainly the exact opposite of what third wayists claim their approach will deliver. If this is what they mean by ‘civilising global capital’ or ‘knocking the rough edges off’ free markets, then we certainly have reason to pause.
The debacle of dairy deregulation, along with the collapse of major firms within deregulated industries of airlines and insurance, brought the ‘father of competition policy’, Fred Hilmer, out in defence of his baby. Writing in The Sydney Morning Herald, Professor Hilmer defended competition policy in these terms: ”In these difficult times, as you phone friends and family overseas, have you noticed a little good news? Overseas phone calls have become quite inexpensive. Similarly, as petrol prices rose and rose again, did you notice how stable your electricity and gas bills have been? And as you speculate on these and other matters over a drink, have you noticed the wide variety of interstate products, from Cascade to Coopers, available at close to prices of local beers, compliments of lower freight costs throughout Australia?”
Pardon me if I’m underwhelmed. This is the father of competition policy and the best arguments he can muster are cheaper international phone calls (a dubious claim probably more attributable to technological advance than deregulation) and better availability of boutique beers? Gee. And as for the stability of utility bills, the word to invoke is ‘Enron’. Wait till we get our version of that particular debacle of the ‘free market’ and deregulation.
An even closer look
As I’ve said, because neo-liberalism is so central to the third way project, any doubt cast upon the former must be shared by the latter. But my aim is to show a fatal internal contradiction, so let’s return to Mark Latham’s core principle of the third way, ‘the chance to break down hierarchies and democratise power and social opportunity’.
This is such an enormous claim that it is hard to overstate it. It means that by employing neo-liberal economic policies we can create a situation whereby more and more of us (eventually everyone who is willing to participate) will be freed from the drudgery of the sort of mindless, repetitive work associated with industrial capitalism and we will all become something like independent contractors, negotiating our own wages, working our own hours, living in communities of respect and trust. The claim makes a causal link between neo-liberal economic policies and the new social-democratic world of ‘civilised’ global capital, of active citizens and coherent, functioning communities.
The third way puts a lot of faith (all of it, in fact) in the ability of deregulated, internationalised market forces to create improved work conditions, as Mr Latham testifies: ”In the new economy, semi-skilled jobs are to be found in the services sector. The extraordinary growth in tourism and leisure services in Cairns is a good example of this process. These jobs provide a more comfortable and interesting work environment than their equivalent in the old economy – the degrading tedium and discomfort of production-line work. A defining feature of the new economy is the upgrading of workplace skills. Jobs which were previously regarded as semi-skilled, such as motor mechanics, now require qualifications in computing and electronics. This is the great benefit of the information revolution. Across the board it is producing cleaner, safer and more stimulating work. For most of human history, technological change was used to replace labour in the production process. In the information economy, however, it is being used to support the creative skills and instincts of people. This is an opportunity for workers to take greater control of their labour and improve their economic bargaining position.”
As a general response, we can look to the work of sociologist Richard Sennett. He is less than convinced: ”Flexibility is used today as another way to lift the curse of oppression from capitalism (the very thing Latham is getting with phrases like ‘civilising global capital’). In attacking rigid bureaucracy and emphasising risk, it is claimed, flexibility gives people more freedom to shape their lives. In fact, the new order substitutes new controls rather than simply abolishing the rules of the past – but these new rules are also hard to understand. The new capitalism is an often illegible regime of power.”
Sennett gives a telling specific example that involves a Boston bakery, a place whose work practices and social interactions he first studied in the sixties and then revisited in the nineties. It had gone from being a site of manual labor performed by a group of professional bakers, highly unionised and more or less having a job for life, to being a hi-tech bread factory that ‘works according to principles of flexibility, using sophisticated, reconfigurable machines’ that allow, by the push of button, the bakery to churn out anything from French bread to bagels to Italian loaves.
This shift from labour intensive work to a highly automated, hi-tech, modern whizz-bang set-up is precisely the sort of change that third wayists applaud, encourage and claim will improve working conditions by ‘dispersing power’ and freeing people to ‘live better’. What Sennett found in the Boston bakery was something far less positive and far more complex than the simple ‘technology = good’ slogan of the third wayists.
Let’s not get all starry-eyed about the old bakery and the old way of doing things as if the technology is in essence bad and has displaced some sort of working man’s paradise. No-one should romanticise the pre-technological past: certainly the bakers didn’t. As Sennett reports, most of them hated the work – it was physically hard and the hours we long and generally at night. The bread made by the new machines is ”excellent, an opinion shared by many Bostonians, since the bakery is popular and profitable”. I join Mr Latham and others in their contempt for any sort of sentimental longing for a more ‘pure’ past. The reality of the bakery was probably more like the conditions described in Upton Sinclair’s The Jungle, and only a dunderhead could not join George Orwell in his view that ”how right the working class are in their materialism”.
Another side effect of this technological ‘upgrade’ is that there is now huge wastage at the bakery. The machines, it seems, the technological marvels, are not that marvellous. They wrongly estimate yeast levels, cooking temperatures, the timing of the bread rising and though the ‘bakers’ can ”fool with the screen to correct somewhat for these defects”, they can’t actually ”fix the machines, or more important, actually bake bread by manual control when the machines all too often go down”. As Sennett notes, ”In the old days, I saw very few waste scraps in the shop; now each day the huge plastic trash cans of the bakery are filled with mounds of blackened loaves.”
The point to note is that the technological advances led to a deskilling of the workforce – no-one could actually make bread anymore. The replacement skills, a little bit of computer operation, could be learned in five minutes and in terms of job satisfaction offered no more, and perhaps considerably less, than the production line process that third wayists disparage. But more important still was what the technological upgrading had done to the workers themselves and their work environment.
In the old, manual bakery, where the bakers could actually make bread, the men (it was only men) were all of the same community and could and did relate to each other on a social and professional level: they literally lived a life in common. In the new hi-tech bakery, ”Workers come and go throughout the day; the bakery is tangled web of part-time schedules – the old night-shift replaced by a much more flexible labor time. The power of the bakers’ union has eroded [and] as a result, the younger people are not covered by union contracts, and they work on a contingent basis as well as on flexible schedules. What is truly new is that, in the bakery, I caught sight of a terrible paradox. In this high-tech, flexible workplace where everything is user-friendly, the workers felt personally demeaned by the way they work. Operationally, everything is so clear; emotionally, so illegible.”
Again, we don’t need to romanticise the pre-tech past and completely disparage the new flexible conditions. It is not that the technology has displaced some utopian world of happy, content workers, but that it has not produced anything much better. It is the nature of the oppression that has changed: oppression itself has not altered at all. Far from ‘dispersing’ power and providing more worker freedom, it has simply concentrated power in other, less obvious ways. In addition, it has corroded the sense of community (or solidarity) between the workers, isolating people rather than bringing them together in new ways as the third wayists insist. But as it is this relationship – that between contemporary work practices inspired by a globalised economy and social relationships – that is at the heart of my criticism of the third way.
A further example: Communication technologies
A more telling example of how the claims made on behalf the new capitalism by third wayists are grossly exaggerated comes from one of their favourite industries, that of the new communications industry and the internet. No industry is more dear to the hearts of third wayists than this. Not only does it represent the sort of hi-tech workplace that is going to be more conducive to self-fulfilling work, the products of this industry – computers, the internet, the web, cables, satellites – are meant to be the tools of social and political empowerment. They are the tools that are going to reconnect us with community and put us in charge of our own political destinies.
I am not setting out to disparage the new technologies or their potential as tools of democracy – I’ve written my own paeans to this potential. But to argue that they currently represent a tool of power dispersal and equalisation is not to be living in the real world. Anyone who doubts the glories of globalisation and free markets is, in Latham’s terms, a ‘pessimist’.
But consider the claim being made: ”The pessimists correctly point to the concentration of capital in the old industries of manufacturing, mining and agriculture. In the information technology and personal services sectors, however, a different trend is taking place. Advanced IT is wiping out the middle person, collapsing hierarchies and challenging traditional centres of economic power. This dispersal of information skills and economic opportunities is a positive force for change.”
Is this true? Fortunately, we can test it. Dan Schiller, a professor of communications at the University of California, San Diego, has done the work for us in his book, Digital Capitalism. It is a painstaking and readable account of the shift of the new technologies from being public goods to being private property. He isn’t specifically addressing the claims of the third wayists, but he could be: ”Hopes that a wired future will prove blissful are generally conditioned by fears that our system of schooling is inadequate, that civic commitment has flagged, that social groups are polarised and economically unstable.” As I say, this could be addressed to an essay by Latham or Giddens. Schiller goes onto say:
”I argue that we should be skeptics about the potential of cyberspace. Knowledge carried through the Internet is no less shaped by social forces than it is elsewhere. Far from delivering us into a high-tech Eden, in fact, cyberspace itself is being rapidly colonised by the familiar workings of the market system. Across their breadth and depth, computer networks link with existing capitalism to massively broaden the effective reach of the marketplace. Indeed, the Internet comprises nothing less than the central production and control apparatus of an increasingly supranational market system.
”The shift from public to private – that is, from public ownership of technologies to their ownership being concentrated into a few, private, hands – begins in the 1950s in the US. A number of trade organisations were established whose sole purpose was to ‘undertake a long march through the nations regulatory arena’. At this stage, it was the government and a number of universities and schools who owned and operated almost three quarters of the country’s computers.
”Into the 1960s, this balance shifts, as a number of industries, particularly banking, oil, insurance and large retailers look to streamline functions such as payroll, credit authorisation and accounting. Still, only thirty-one computers were online – that is connected to each other – in 1960.
”Telecommunication companies were classified as public utilities and common carriers and were highly regulated, especially in regard to their public obligations: they were expected to provide services on a non-discriminatory basis, so that everybody in the country got just about the same level of service. It was this principle that the private firms sought to over-turn and to replace with a ‘systematic discrimination in favour of their own special-purpose networks and against the general-purpose system on which ordinary telephone users relied’.”
Space does not allow me to do justice to Schiller’s work, but we can briefly consider the example of the internet itself. It has its origins largely within the US military and to a lesser extent the university system, with a network known as Arpanet. It was the military’s desire to connect disparate computer systems and the need for uniformity between them that led to the establishment of certain protocols, that is, standardised instructions that allowed one computer to communicate with another. This is the origin, in the early 1970s, of the TCP (Transmission Control Protocol) that the internet as we know it uses today.
The important point to note is that all this technology lay in the public domain: that is, it was free to use and nobody made money from it. Without these developments in the public sector, it is unlikely that the internet would have developed into what we have today.
With the protocols in place, the stage was set for commercial exploitation. The Arpanet system was not only a ready-made ‘backbone network’ for them to exploit, it was also one that had cost them nothing to develop. Already, companies had been searching for ways of streamlining their own computer telecommunication systems, and they had been lobbying the government hard to allow them to operate proprietary systems. Initially it was the National Science Foundation (NSF) system that allowed the system to be exploited beyond its military application. This public network (called NSFNET) connected university, government departments and a certain number of think tanks.
As Schiller explains: ”By 1992, the interconnection of disparate networks via the NSFNET had grown to the point that 5,000 systems, to which an estimated 4 million users had access, were making use of Internet technology. The not-for-profit system’s growing mass and escalating momentum were now such as to draw a full-scale entrepreneurial intervention.
”Thus an effort commenced to restructure the Internet on starkly neoliberal lines. In February 1994, the NSF announced that four Network Access Points (NAPs) would be built so that a new class of Internet operators might interconnect directly with each other to exchange traffic. The purpose of the scheme was to cede provision of the Internet backbone network directly to commercial carriers. Little more than a year later, the NSFNET was indeed supplanted by the NAP architecture, and the latter in turn became the internet.”
No-one who uses the internet regularly needs to be told of its commercialisation. I, like millions of others, are spammed with electronic commercial flyers daily. I am surveilled by electronic spies like cookies and trojans. Little programs get into my system and change my homepage without my foreknowledge or permission. They dump adware on my hard-drive and activate it at their convenience. More and more sites – The Financial Times, The Wall Street Journal, my former favourite search engine, Northern Light – are pay-for-view only. Google is kite-flying the prospect of a fee-based service as we speak. Access to archived newspaper articles is on a user-pays basis. I even have to click through ads when I want to read posts on discussion lists I’m subscribed to: when I want to read a post someone has sent to certain lists, I am forced to read an ad before the system will allow me to read the post.
In addition, eighty percent of internet users access sites through huge corporate portals such as America Online. Far from being sites of the dispersal of power and the democratisation of knowledge and information, the services offered by new technologies like the internet are tending to concentrate power and ownership and work purely on market principles.
Again, this is not to say that there hasn’t been an upside to the development of the new technologies. But the history of their development does force us to confront the claims that third way policies that enshrine market forces at their centre are somehow going to provide the conditions for more democracy and more power for the people. Working from the evidence available to us, the opposite seems to be the case. I am more inclined to agree with Sennett’s analysis that far from dispersing power, the ‘new capitalism’ (the thing the third wayists want to let free and tame at the same time) just concentrates power in different, less obvious, ways. In all good faith, third wayists should at least confront this possibility (or, I really should say, this reality).
Concentration without centralisation of power
It is worth considering Sennett’s conclusion. (Unfortunately he uses the abstruse language of the sociologist, but it isn’t too difficult to follow the thrust.) He concludes that far from dispersing power, the ‘new capitalism’ hides a new form of centralisation behind its rhetoric of flexibility; that the ”system of power that lurks in modern forms of flexibility consists of three elements: discontinuous reinvention of institutions; flexible specialisation of production; and concentration without centralisation of power”.
In outlining the first of these – discontinuous reinvention of institutions – Sennett is at one with Mr Latham in his analysis: hierarchical structures of order and command are replaced with network-like systems where one part can be replaced or cancelled without, theoretically, upsetting the entire system. Such flexibility is enhanced by the use of computer programs that map and simulate this loose corporate structure and that enables management to look for areas of non-performance or redundancy and to eliminate or restructure them. It is such organisational structures that allow the ongoing downsizing of businesses that has become commonplace in the last twenty years.
But as Sennett and some managers and management consultants point out, the promised returns on productivity are illusory. What sets in is another sort of logic born of this flexibility, namely the belief that any change, or at least the ability to change, is a good in and of itself, and this is reflected in higher stock prices for those companies that show themselves to be capable of such change.
Thus, while the promised productivity returns may not materialise, the signal of ‘flexibility’ given through constant reorganisation and downsizing serve to increase a company’s share price so that ”Perfectly viable businesses are gutted or abandoned, capable employees are set adrift rather than rewarded, simply because the organization must prove to the market that it is capable of change”.
Within such a system, individual units may be accorded a great deal of autonomy – much more than in traditional, Fordist businesses, just as third wayists claim – but their autonomy is only to be found within a system that may allow their unit to disappear from underneath them. In some senses, as Latham claims, power is dispersed, but fundamentally, it isn’t. At the demands of ‘the market’, those who are really in control can simply zap a unit from the overall network. Not only do the workers suffer when this happens, but they live and work in an environment with the full knowledge that it could happen anytime. Insecurity becomes embedded, ingrained in the day-to-day practice of such firms. You simply don’t need the same sort of day-to-day management oversight and control to ensure that the work is done: all that control is internalised and thus the dispersal of power is illusory.
The new corporation, as described by writers like former US Secretary of Labor Robert Reich, is an outsourced hodge-podge of decentralised units coordinated by a central firm who brings all the parts together. So while each individual unit – the private company that makes the headlights for a car, the other company that makes the rubber seals, the yet other company that tints the windshields – is much more independent of the production line manufacture of cars than in the past, they are nonetheless bound to the controlling organisation in a far-from independent way. Control is exercised through the setting of production and profit targets and by the ongoing tendering for parts supplied. For workers at the window-tinting company, the power is felt secondhand, even if they are all independent contractors.
But again, Mr Latham is adamant: ”The most powerful trend in Australian politics is the emergence of free agents – the new class of consultants, contractors, knowledge workers and entrepreneurs in the new economy. These are people who have broken free from large, hierarchical organisations and become agents of their own economic future.They use this freedom to create their own rules and lifestyle options. Part worker, part owner, free agents have crossed over the industrial relations divide. Small and self-reliant, they see no need for union or employer representation. Their idea of a good society is a deregulated economy, quality education and safe and supportive neighbourhoods.”
So what about these ‘free agents’ who get to work at home? On the surface it seems attractive, but anyone who has ever done it knows that it requires a whole new layer and level of control, beginning with a strict personal discipline. Additionally, as Sennett shows, the level of surveillance of such workers actually increases and the micro-management of their time is reflected in the keeping of work logs and the constant monitoring of the computer systems themselves, where email is read, key strokes are counted.
So this sort of flexibility has allowed people to work from home and exercise some extra control over exactly when the work is done, but it has given the worker absolutely no control over the production process itself. Sennett: ”Time in the institutions and for individuals has been unchained from the iron cage of the past” [just as Latham says] but subjected to new, top-down controls and surveillance. The time of flexibility is the time of a new power. Flexibility begets disorder, but not freedom from restraint.”
Thomas Geoghegan, a Chicago lawyer, cites some interesting statistics and offers an interesting analysis that goes hand in hand with this move towards ‘free agents’ and ‘flexible’ workplaces: ”But is there full employment?”, he wonders in reviewing US labour statistics. ”No one can measure it, I believe, in the way we did 30 years ago.”
”Consider: About 30 percent of American workers who work part time are transient workers or self-employed. According to the Economic Policy Institute, the vast majority of free-lancing workers – two of three women or three of four men – would like to find full-time work, or a real boss who pays Social Security or just a permanent port to pull into. But what about the other 70 percent? According to the Wall Street Journal, by the age of 30 or so, a worker today has held 9.2 jobs. And what’s in this young, often college-educated person’s cash balance plan, or pension, or 401(k)? Zero, most of the time. Nothing. Not a cent. Now imagine that the same person at age 30 has been married 9.2 times. Can we say that such a person has been married really even once? “Job,” or the notion of “job,” is about as impermanent in this country as the elaborate mandalas Buddhist monks construct from grains of colored sand then sweep away upon completion.In addition, there are millions of people who have simply dropped out of the labor market. Vanished. Not there. Not even in these ephemeral short-term jobs, with the half-lives of specks of carbon. Now it seems to me, any tiny little wage bubbles get pricked every time people move. In any given year, a new job, a new HMO, a million tiny things that we can’t pick up with our crude measures, wipe these bubbles out.”
And remember, these are foundations on which the third way wishes to build stable and functioning communities. This is what I’m coming to.
Equality and democracy
My aim thus far has been to cast some serious doubt on the claims of the third wayists, to look past their infectious rhetoric and go, ‘Well, um’. But I also said that I wanted to show the internal contradiction in the third way, of how, even on its own terms, it is dabbling with failure at every step. It should be reasonably obvious now wherein that contradiction lies, namely, in trying to reconcile the promises of social stability, trust and community building with the needs of ‘free markets’. It is with that central aim still in mind that we can examine one final aspect of the third way: its attitude towards equality and democracy. So before we pull together all the threads offered here, let’s look at what they have to say about these two key concepts.
It may surprise you to know that the third way has no interest, as does traditional social democracy, in doing much about inequality. ”Surely the purpose of a good society should be to abolish poverty, not to abolish inequality,” Mr Latham says.
Giddens writes that social democrats must overcome their attachment to equality. Why? Because it doesn’t sit very well with the demands of the market. He endorses what he claims are the views of T.H. Green, Leonard Hobhouse and ”others who thought like them [who] distanced themselves from socialism and took an affirmative attitude towards market mechanisms”. Thus, although some level of redistribution is still going to be desirable, ”social democrats should continue to move away from heavy reliance on taxes that might inhibit effort or enterprise, including income and corporate taxes”. Let’s keep the markets and their corporations happy, then we’ll see what we can do about inequality. (And in one, perverse sense, he’s right: how can you solve inequality until you create it?)
It is almost impossible to separate the third way discussion of equality from its understanding of morality, economics, community, education, duty, stakeholding and ultimately democracy itself. Actually, they don’t want to separate these things and in fact, the third way’s most brilliant achievement has been to marry all of these things together into what appears to be a coherent whole.
As we go through it, however, note how it all revolves around meeting the demands of ‘free markets’ and how it forms – once we make a number of questionable assumptions – a virtuous circle between doing what is morally correct and doing what the market wants anyway. It’s truly clever. Nonetheless, the technique is relatively simple, though undoubtedly bold, and it is this: continue to use the language of social democracy, but give the words neo-liberal meanings. It is what Paul Cammack calls semantic engineering.
First, under the third way the emphasis is on equality of opportunity not of outcome. This is their master-stroke. In one fell swoop, nearly all responsibility for a ‘good life’ or any personal circumstances is shifted from the state – or the community – to the individual. From this flows the whole rhetoric of the end of state provisions, personal responsibility, and moral condemnation that is implicit (and sometimes explicit) in the third way agenda.
But such a conclusion relies on a very important assumption: that everyone starts out on a equal footing. My kid and Bill Gates’s kid. Shane Paxton and George W. Bush. So obvious is this flaw in their reasoning that third wayists set out to address it. They acknowledge that some levelling is necessary for them to be able to claim with at least some plausibility that everyone starts with an ‘equal opportunity’, but once they have that, they’re onto a winner. You see, once you can claim that everybody started from the same point, you are then able to say that any subsequent success or failure by an individual is down to them. Blame and credit accrue to the individual: the state and other citizens are absolved from any further involvement.
So what is the third way’s big plan for levelling the playing field? It’s education.
When fitting all this together, remember you have to put it all into the context of the brave new world that the third way envisages, where highly skilled workers work in flexible, hi-tech workplaces, working with ideas and symbols. This is another unspoken and dubious premise of the third way (like, we’re still not going to need someone to take out the garbage, cook the food, deliver the goods etc. etc.). Anyway, we all have to be highly skilled which means we all need an education, not for its own sake, but for purely instrumental, economic reasons.
The third way says, okay, that’s the obligation of government, to provide you with that education. There, we’ve performed our social democratic duty as a government of the left, we’ve allowed you all to start from the same starting point, it’s now down to you. You don’t need us to worry anymore about equality because we have now deemed you all equal – equal in opportunity. If you’re not equal in outcome, well that’s you’re fault – you didn’t work hard enough, you didn’t avail yourself of our educational opportunities, you made bad decisions – and you only have yourself to blame.
But it gets better. Having provided you with an ‘equal opportunity’ you now have a moral responsibility to repay us, society, the state, the government, by being a productive citizen. Thus all the talk in the third way literature about ‘duty’. As Michael Ehrke puts it: ”The most important duty is gainful employment, the incentive for which is neither attractive material rewards nor job satisfaction – but duty.”
And if you happen to lose you’re job we’ll give you a bit of hand, the dole, but you have a ‘mutual obligation’ to work for that money and re-educate. If you don’t do this, you are being irresponsible and immoral. We can ignore you. You have no intrinsic human worth, just a market value. If you can’t ‘add value’ to our society by being a good producer and a good consumer, that’s you’re a problem. From such a basis Bill Clinton was able to ‘end welfare as we know it’, thus pleasing the markets, the right, the conservatives, the moralists and the third wayists.
And so it all neatly ties together: equality becomes ‘opportunity’, all responsibility is personal, failure also is personal and a sign of weakness, weakness is potentially morally debilitating, so if you aren’t contributing you are obliged to do so by working for the dole or taking re-education courses.
Third wayists even speak of ‘lifetime learning’ which is kind of the contemporary version of ‘no rest for wicked’. And the reason you have to commit yourself to this is because, hey, this is a market economy, and the skills you just picked up with that four year course mightn’t be needed anymore, or the company you worked for has downsized or folded and so you need a whole other new skills’ base, and this is good and this is exciting and, oh by the way, we’d really like it if you could all belong to stable and harmonious communities by committing your free time to civil society.
Democracy and the third way
The ramifications of abandoning equality for the third way’s democratic project are some of the least examined aspects of its agenda. How exactly do you do democracy without equality? No serious thinker since serious thinking began thought you could have democracy without a fair degree of equality. The necessary precondition for a functioning democracy is not just minimal outright poverty, but a reasonable degree of similarity between the life and life prospects of the citizens.
There is always going to be some sort of gap, and to a certain extent, such a gap is necessary and healthy. But if the gap gets too big between top and bottom, then they are literally living in different worlds. And given that your basic working definition of democracy is something like ‘collective self-rule by citizens with a reasonably equal chance of influencing outcomes’ it seems to me that the third way, by abandoning the concept of equality, abandons democracy.
But what am I talking about? The third way literature is filled with flashy phrases and motherhood statements endorsing democracy and calling for more of it: The Third Way is committed to repairing other aspects of the democratic system. Parliamentary politics needs to be modernised to meet the demands of the Information Age.
In an era in which information and know-how are being dispersed and people are demanding a more direct say in decision making, the parliament looks like a horse-and-buggy institution. It concentrates too much power in the executive and not enough in participatory democracy. This is why it is riddled with public distrust and false expectations.
The new politics requires the dispersal of power. The electorate, geared up with educational qualifications and mass information, wants to cut out the middleman. It wants a direct say in the political process, not just a vote every three or four years.
Traditionally, our system of government has relied on three heads of constitutional power – the executive, the parliament and the judiciary. A fourth power is now necessary, concerning those matters best determined by the direct participation of the public.
Dick Morris has pointed to the enormous potential of Internet democracy, especially as Net access becomes universal. This new tool for public participation will force a rethink of the division of power in Western politics.
And then we get this from Latham: ”I do not share Morris’s view that direct democracy will be applied across the board. The Federal Parliament’s delegation of power on economic matters – to bodies such as the Reserve Bank and World Trade Organisation – will remain in place. This is a logical consequence of globalisation.”
Consider again those quotes immediately above: they really are extraordinary. Direct democracy still requires strong federal parliaments, but the people shouldn’t be given control of everything that affects their lives. Not only that, certain matters such as ‘power on economic matters’ will not be handed over to the sovereign people through some form of direct internet democracy. It won’t even be retained by the federal parliament, which, for all its failings, at least has the benefit of having been elected by the people and therefore some claims to democratic legitimacy. No, this ‘power on economic matters’ will be handed over by the federal parliament to the Reserve Bank and the World Trade Organisation. This is ‘logical’.
Come again?
These quotes come from an essay by Mr Latham called The New Economy and the New Politics, from a section subtitled ‘Reinventing Democracy’. Well, it’s certainly that. This is reinventing democracy as not democracy. The sovereign people that the third way is so concerned with are factored out of all economic decisions – this is logical – and that power is handed by their parliament to unelected, supranational bodies.
But all is not lost: even as their economic sovereignty has been handed to unelected, faceless bureaucrats who are almost entirely unanswerable to them or any other body of sovereign citizens anywhere in the world, the third wayers have found a role for us: ”The rise of Internet politics, however, will force the Parliament to develop a new set of delegations. Already it is being called on to give people a greater say on issues with a moral dimension. That is, matters on which we all have an interest and an opinion, especially in how we relate to each other. Invariably, these are policy decisions in which the parliament has no greater knowledge or expertise than the general public.”
Like, we don’t have an interest in or opinion on economic policy?
More compelling than this theoretical outline of how our ‘reinvented’ democracy will work are the examples that Mr Latham gives to support it: ”To give two examples: the question of whether the Australian Government should apologise to the Aboriginal stolen generation; and the current debate within the NSW Parliament to ban smoking in restaurants and cafes.”
Thus, he continues, ”our political system can only be revitalised by opening decision making to public participation. Internet democracy seems a logical change. It has the capacity to re-engage people in the political process by giving them more information and more democratic power.”
So we’ve handed control of our economy to the WTO, but thanks to the marvel of the internet (a business owned by an ever-decreasing number of super, multinational conglomerates) we get to vote on whether people can smoke in restaurants in Sydney. What a trade-off.
And there is a final point worth making about the third way’s democratic credentials: the third way itself is not a prescription arrived at after long, wide-ranging discussion amongst citizens from all levels of society. It is exactly as Mr Latham says it is, ”an international network of policy makers and politicians, sharing ideas about the future of social democracy’ In its formulation, therefore, it violates its very own guiding principles – that power should be dispersed – and it seems reluctant to brook too much criticism. If those who push this sort of approach can’t even abide by their own guiding principles, why should we expect anyone else will be able to, especially those businesses and corporations who are already in the drivers seat of the ‘market economy’?
The central contradiction
A brief recap is in order: the third way is predicated on ‘free markets’, on neo-liberal economics. Neo-liberalism relies on market mechanisms (that is, the use of money) to distribute goods in a society. So does the third way.
But the third way also believes in a bigger role for government, which, of course, its guiding economic philosophy doesn’t. Its central tenet, at least according to some, is that third way policies will disperse economic and political power, but it doesn’t believe in redistribution of income to do this.
It also doesn’t believe in equality but it does believe in competition. Through competition, everyone gets their fair share, therefore everyone is equal, at least in opportunity. If some are left behind, this is their fault and not a problem because we don’t believe in equality anyway. Those who are left behind have an obligation, a duty, to retrain, move or do whatever it takes to find gainful employment.
Workers, therefore, should be flexible, willing to relocate and retrain as needed, and they should also be part of stable, long-term communities. They should work whatever hours are necessary, with minimal regulation governing the hours and conditions of work, and they should commit themselves to participating in civil society.
Finally, they should adapt to the demands of globalisation, even handing over control of their economies to non-elected and therefore unaccountable international organisations, and they should be sovereign, democratic citizens, voting online about things like reconciliation and whether to smoke in restaurants or not.
The inherent contradiction can be found in comments like this: ”The new economy actually demands more government involvement, not less. It is, however, involvement of a radically different kind: fewer government enterprises, fewer pump priming budgets, fewer corporate subsidies and fewer sheltered industries; but with more investment in education, more support for R and D, the more equitable ownership of capital, plus more emphasis on market competition.”
Let’s look at that carefully: we are going to have more government planning and intervention, the very thing the theory of free markets says we can’t have; we are going to have a more equitable ownership of capital, presumably, again, through government intervention, because left to market this just doesn’t happen; but we are also going to have more competition, that is, the free reign of market forces that has absolutely no way of causing a ‘more equitable ownership of capital’. As one set of third way reforms is introduced at the start of the paragraph, it is tacitly withdrawn at the end. Over and over again, explanations of the third way do this. They say it; they say the opposite.
In such statements we see the real weakness of the third way, it’s internal contradiction that renders the whole project moot. We need to get this through our heads. By embedding its entire logic in the primacy and unchallengeability of market economies -largely as defined by G8 governments and the corporations they support – the third way is not an alternative to the market it claims to want to ‘knock the rough edges off’, it is merely window-dressing for it. Democracy is not the ruling criteria here, it is the forces of the market economy.
Being able to buy things in an economy is not the same thing as being able to participate in a democracy. The third wayists seem to have confused consumer confidence with civic trust; our worthiness as citizens with our credit-rating.
This is the point I have speaking around during this entire article. If the third way is predicated on the dynamics of a market economy then it must accept the logic of that dynamic. The question is, therefore, do market economies allow this dispersal of power that Mr Latham cites as the ‘guiding ideology’ of the third way and do they allow the formation of cohesive communities?
They don’t, do they?
”The era of either/or debates has ended”, Mr Latham says. ”To solve poverty we must address both its economic and social dimensions; to manage a risk society we must enable people to provide for an uncertain future, drawing on both private and public resources; to maximise Australia’s economic growth we must invest more in education and research, in both the public and private sectors; to build a more cohesive society we must demand responsibility from both the corporate and welfare sectors.”
But surely the point is, if we are all obeying the logic of market capitalism, as third wayists have made abundantly clear that we should, there is no way to ‘build a more cohesive society’. All these other things about ‘responsibility from the corporate and welfare sectors’ are just rhetorical bunting flapping in the wind.
In a society where people are told to expect ‘lifelong learning’ because they are going to have to change not just jobs but careers maybe ten times in their life; where they are told they have to ‘go where the jobs are’, whether that be interstate or overseas (and where a significant percentage of the US workforce already can look forward to 10 jobs by the time they’re thirty); where they are being asked to work longer hours, and where both parents increasingly have to work the same sorts of long hours; where people are forced to farm out their kids to minders or simply not have children, then exactly where and how are these new ‘cohesive societies’ going to form?
Communities, by bloody definition, are built on the associations formed over long periods of time. So are families. And so, for that matter, is learning. You can’t force thought any more than you can conjure community and family out of snatched moments over rushed dinners or at the door of child care centres, or ungrammatical exchanges on internet discussion lists. You can’t have ‘cohesive communities’ or families or centres of learning if you work twelve hours a day, six or seven days a week and if you have to move every year or two or three or four.
This is not to say that some sort of community life can’t be built, but as Sennet puts it, although such ”communities are not empty of sociability or neighbourliness, no one in them becomes a long-term witness to another person’s life”.
This almost describes my family’s current situation to a tee: we live in the US because that’s where my wife’s work has taken us. We are friendly with our neighbours, with people at work, and with the kids and parents at our son’s school. We have them over, we go to community events, participate in school functions, do all the stuff. But it’s all surface level. In three years, we’ll be gone, and so will lots of others – already two children have left my son’s class as their parents follow work to other parts of the country, and that’s in just three months.
This sort of tentativeness and impermanence, this fugitive quality, is built into the relationships we are currently forming; it underwrites them all, rendering them shallow because who wants to invest the sort of time and effort and expense involved in forming close relationships when we all know that none of us will probably see each other again once our ‘posting’ is up?
You can’t have cohesive communities and free markets: it’s that simple. The values that are embodied in the contemporary workplace of high capitalism, the things the market values – flexibility, transportability, light attachments, independence – are the very things that undermine stable, cohesive communities.
You can talk about civil society as much as you like – and Mr Latham does – but civil society lives or dies in the couple of extra hours a day ‘market forces’ demand we all work. If you don’t get home till 8pm, or you’ve got to get up at 6am, or both, or if you have to leave the community in a few weeks or a few years, leading a strong community life is not just a luxury, it’s an impossibility. You’re doing well enough to kiss your kids goodnight and watch a bit of telly, let alone regear yourself for an intelligent conversation at the town hall about the local issue du jour or the pros and cons of some major piece of legislation. And why would you even bother when you probably don’t even know the other people at the meeting?
By carping on about civil society and the joys of participation, third wayists just serve to make us all feel that little bit more guilty about our role in life. I suggest that this is nothing to thank them for.
So the third way is a furphy: it is an attempt to dress the excesses of market capitalism in the clothes of democracy. It is a rhetoric of participation and community to disguise a world of discontinuity and short-termism. Community is not something you empower by treating everyone as a consumer and everything as a commodity. It is something that grows slowly behind walls of trust and respect built up over time, not in the serial encounters in Microsoft chatrooms and other proprietary interfaces. In fact, no-one even says interface in a real community. Until its proponents address the disconnect between the needs of the market and the needs of actual human beings, it will remain nothing but a mirage.
The worst thing about the third way, though, is its phoney promise to reinvigorate the left. In fact, all it does is turn the left into the right. It is not interested in society’s losers, the left-behinds, the inevitable second-stringers. It’s only interested in winners: it is philosophy for the already successful, and it’s your fault if you’re not one of them.
You think I’m exaggerating?
Here is a speech where Mr Latham speaks about reinvigorating the Labor Party: ”We need to find new issues, new constituencies and new ideas on which to campaign.” We need new constituencies: he said it, not me. So where do we look?
”The most powerful trend in Australian politics is the emergence of free agents – the new class of consultants, contractors, knowledge workers and entrepreneurs in the new economy.” And what do we do? ”You don’t need to be Einstein to work out what this means for the ALP. Old constituencies based on blue-collar work and organised labour are fading away. Old ways of thinking might produce a nice sense of nostalgia, but they are insufficient to win national elections and form national Labor governments.”
Just how much clearer do advocates like Mr Latham have to make it? This is a philosophy for winners, not workers.
The real end
I’ve spent a fair bit of time reading through the literature, getting together material for this article. But the fact is, I could’ve written it off the top of my head. Why? Because I’ve lived the third way for at least the last twenty years. I could almost be their pin-up boy.
In that time I’ve owned and run businesses, one with astounding success, others simply failures. I’ve done this in a number of fields, in retail and in advertising. I’ve trained and retrained over the last ten years, getting first a BA, then an MA, then a PhD. A lot of this has meant being a ‘free agent’, working from home (though the a more accurate term would be ‘self unemployed’). During all of this, I’ve done editing work, written articles, reviews and even scripts and managed to make some money in so doing. I’ve taught part-time and full-time to make a buck, and nice work it is too. I’ve also worked odd jobs when necessary and have only received unemployment benefits for a couple months during a particularly tough period.
I know some people thrive under these conditions, but so what? What about those who don’t? All the third wayists have to say is that we are pessimists, nostalgic, immoral. We are told there is no alternative; we are told to get with the program, to adapt ourselves to the needs of global capital. They literally say that. Thus, Greg Lindsay, head of the neo-liberal think tank the Centre for Independent Studies, warned in a newsletter that: ”The atavistic desire for security, the free lunch and for someone else to ease the pain of life’s responsibilities has become an epidemic. This is socialism and it goes way beyond economics. Governments, of all complexions, always ready to exercise more power, respond too readily.A generation of aging, selfish and indulged voters is seemingly incapable of taking responsibility for key decisions that have longer-term implications and turn to the state to keep them pure, rich and out of harm’s way. This is a recipe for the servile state that writers as diverse as Hayek, de Tocqueville, Belloc and Orwell have warned us about. Yes, communism is dead he said, but socialism in all its various forms may always be with us.”
I guess I just must be one of the ‘aging, selfish and indulged voters’ who want the economy to work for us and not the other way around. (Besides, I thought the whole idea was to be selfish, that by looking out for our own interests we provide the conditions for a ‘free’ society? Isn’t this the Smith/Hayek formula? I guess I must be the wrong sort of selfish.)
So I’m not just attacking the theory of it all – I’ve lived the practice. I’ve seen my friends and family live it too, the one’s I’ve been able to stay in contact with. My nephew and niece have lived in five countries in eight years, as their dad, my brother-in-law, goes where the company needs him. I’ve watched my five year old son spend those first five years in the one house, close to both sets of grandparents and an extended family that loves him unconditionally. And I’ve watched him cope with resilience to being dragged away from it all to the other side of the world to start again. We send letters, emails, and even have a website where we put up family photos so his grandparents and cousins and aunts and uncles can see them. It’s better than not having a website, but let’s not kid ourselves, right?
Over the last few months, I’ve watched him start to form close friendships and to, yes, become part of a school and a local community, and I know that he is going to have to leave it all in a couple of years and start it all over again, again, with a new set of people in another country. We might have to do this three or four more times before he leaves school. And then what does he do when he enters the workforce? What lessons has he learned about community cohesion? Or family stability for that matter.
Of course there is an upside to all of this. I’m not claiming to have a miserable life; in some ways it’s simply incredible. But there’s a downside too, and no third wayists wants to admit it. So if I sound more pessimistic than I should or intend to, then it because the third wayists are more optimistic and gung-ho than they should be.
In amongst it all, the third wayists and other neo-liberals have managed to pin onto us other lefties this image of being anti-progress, anti-comfort, anti-material, anti-the modern world. It’s a nonsense, but one that serves their purposes very well. The left, the real left, has always been for material progress, for making life easier, better, more fulfilling and they still are. Hell, they’ve even been in favour of globalisation, if that’s what you want to call it: their theme song isn’t The Internationale for nothing. If you think for a minute that I don’t want a nice house, a decent car, gadgets and remote controls, then you’ve really got the wrong idea. Who in their right mind wouldn’t want all these things?
And only a hypocrite could not recognise the truth in this passage from Raymond Williams, reflecting on the 1930s and 40s: ”At home we were glad of the Industrial Revolution, and of its consequent social and political changes. True, we lived in a very beautiful farming valley, and the valleys beyond the limestone we could all see were ugly. But there was one gift that was overriding, one gift which at any price we would take, the gift of power that is everything to men who have worked with their hands. It was slow in coming to us, in all its effects, but steam power, the petrol engine, electricity, these and their host of products in commodities and services, we took as quickly as we could get them, and were glad. I have seen all these things being used, and I have seen the things they replaced. I will not listen with any patience to any acid listing of them -you know the sneer you can get into plumbing, baby Austins, aspirin, contraceptives, canned food. But I say to these Pharisees: dirty water, an earth bucket, a four, mile walk each way to work, headaches, broken women, hunger and monotony of diet. The working people, in town and country alike, will not listen (and I support them) to any account of our society which supposes that these things are not progress: not just mechanical, external progress either, but a real service of life.”
To Williams’ list I’m happy to add that I’m glad of the advent of the new communications technologies, of the internet, the cordless phone, the DVD, as well as two minute noodles, eftpos and Wet-Ones.
But I’m not happy, or willing, to give all the credit and all the profit and my undying obedience to the great abstraction of market forces and to then organise my whole life around its whims and fancies. I’m especially not willing to listen to the sort of crap that says I can have all the material stuff and have stable families, cohesive communities, participatory democracy as if they appeared like manna from heaven rather than as the consequence of the use of real resources and the application of real labour.
I’m not willing to listen to it because I know it’s neither true nor possible. Market forces do not create the conditions for good and stable communities because they demand loose attachments and shallow roots. And as they can only distribute goods on the basis of user-pays then they cannot even provide a just distribution of the material conditions of an adequate, let alone a good, life.
And it is that simple contradiction that kills the third way dead.
Stripped of the flab of its catch-phrases and buzz words, the third way is really pretty much what we have at the moment – John Howard’s government. One can reasonably assume that if the Labor Party follows the lead of the third way then people will perceive no difference between the parties (because there isn’t any) and will opt for the original rather than the imitator, just as they did in the 2001 election.
Labor can then look forward to another term on the opposition benches, waiting, no doubt, for the next big idea.
And the left can look forward to being lumbered with another boring process of self-examination and reinvention until someone eventually plucks up the nerve to say, ‘It really is the economy, stupid. We need to control it, not worship at its altar.”
Please, just don’t call it the Fourth Way.
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Ivana Bottini
You gotta love the Labor Party, completely lost and they don’t even know it. Guess it’s what you come to expect from a bunch of career politicians. (If that isn’t an oxymoron then it should be.)
What Labor do best is economic policy. Though you have to admit that the Liberal Party does a pretty good imitation when it comes to complete incompetence.
Way back when someone noticed that Australia had a low savings rate. So what did Labor do? Well they made savings mandatory. Call it savings for fascists. No, just call it the Superannuation levy. Why didn’t these guys just take all our earnings and give us back coupons?
Anyway Superannuation worked. Well not exactly. Australia still has a low savings rate, still runs a large current account deficit and Net Foreign Debt has spiralled out of control. In the meantime a huge new industry, complete with huge new bureaucracy, was created from nothing at the expense of the gullible voting public.
After that hugely successful and widely popular policy initiative Labor is modernising. The great big new idea is that everyone wants to get rich. The even bigger new idea is that the way to do that is to own shares. Sounds good, Margaret Thatcher would be very proud. I can’t wait to see the details.
I guess this could not have come at a better time, for the Liberal Party that is. More than two-thirds of Australian chief executives surveyed by accounting firm Ernst & Young believed the Federal Government’s tax reform agenda has failed. Failure strikes me as a pretty big word. You wouldn’t want that sort of stuff to get too much press. Thanks to the Labor Party’s wunderkind Mark Latham (wunderkind really?) and this new dog of a policy, it probably won’t.
Am I the only one who is incredulous?