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 12: South Afirca: a Third Way in the Third World?

Jonathan Michie and Vishnu Padayachee

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


CHAPTER 12 13/7/01 3:57 pm Page 1 12. South Africa: a Third Way in the Third World? Jonathan Michie and Vishnu Padayachee 12.1 INTRODUCTION The late 1990s appeared to mark a shift in global politics and economic policy ‘away from the free-market frenzy that ruled the world roost for some two decades after the mid 1970s’ (Westergaard, 1999, p. 429). Left-of-centre and social democratic governments are in office in many parts of the world, including virtually the whole of Western Europe. In Britain, the ‘New’ Labour Government claim to be adopting a new economic approach, one distinctively different to the orthodox, neo-liberalism of the 1970s and 1980s, but also one that does not carry the socialist or corporatist burdens of ‘old labour’. That view is echoed in other parts of Western Europe, albeit with modifications and variants in the detail. ‘On the threshold of the third millennium, we are told, the future lies with a new Third Way’ (Westergaard, 1999, p. 429). To what extent are these approaches new? Are they similar enough in content to characterise as a single new approach or are the differences among them too great? And how relevant are these ideas and frameworks for developing and transitional economies, such as South Africa, faced as many are by the challenges of addressing significant levels of poverty and inequality, re-integrating into the global economy, and creating and consolidating sometimes fragile democracies? Since 1955 when the Freedom Charter became the touchstone of its ideology, combining a ‘wide-angled...

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