The Economics of the Third Way

The Economics of the Third Way

Experiences from Around the World

Edited by Philip Arestis and Malcolm Sawyer

The ‘third way’ is a term often used by politicians and others to indicate a set of new policies adopted by former social democratic parties throughout the world. This book is an attempt to dissect the ideas and economic theory behind the rhetoric of the ‘third way’ through a critical evaluation of the experiences of ‘third way’ administrations in a diverse range of countries.

Chapter 2: The third sociological way

Michael Rustin

Subjects: economics and finance, post-keynesian economics, public sector economics


Michael Rustin Does the Third Way belong, as a topic for social scientific study, to economics, political science, or sociology, or to all three of these? At moments of major transition, of which the politics of the Third Way seems to be at least a reflection, disciplinary boundaries often become blurred, as the different paradigms of social scientific explanation try to capture new or unexpected phenomena within their nets, and find themselves meeting in the course of their investigations. Twenty years ago, problems of worldwide inflation provoked an intellectual turbulence similar to that which the era of ‘globalisation’ and the ‘information age’ have induced. Monetarism and neo-classical critiques of Keynesianism then emerged to explain inflation as a consequence of the follies and errors of governments, whose return to financial orthodoxy would, it was alleged, solve the inflation problem. Political scientists and sociologists developed a theory of governmental ‘overload’, arguing that the political system was unable to cope with the excessive demands being placed on it (Offe, 1984; Habermas, 1988). In a memorable intervention, the sociologist John H. Goldthorpe (1978) argued that the true explanation of inflation lay in changes in the underlying balance of social power in society. The loss of previous restraints on the working class derived from a hierarchical status order, norms of citizenship entitlements at that time extending into the sphere of employment, and the emergence of ‘a mature working class’ able to act in defence of its perceived interests, had brought a greater equality in the...

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