The So-called Third Way.

• Author: HIGGS, ROBERT

Anthony Giddens has seen the future that doesn't work, and he recommends it.

Giddens, a distinguished sociologist and director of the London School of Economics and Political Science, is described nowadays as Tony Blair's guru or favorite intellectual. In The Third Way: The Renewal of Social Democracy (Cambridge, Eng.: Polity Press, 1998), he offers a recipe for "social democratic renewal." In so doing, he exemplifies the desperate efforts of leftish intellectuals throughout the Western world during the past decade to vindicate far-reaching interventionism, to "reinvent" the imperious managerial state and defend it against its Thatcherite, Reaganite, and libertarian enemies.

Get the Golden Eggs; Redistribute Them

The post-World War II interventionist state ultimately provoked strong political challenge because it could not deliver the goods. By the 1970s the economies of the interventionist states were floundering. Runaway regulation, high taxes, monetary inflation and, in some countries, inefficient government-owned industry were sapping economic dynamism. At the same time, the notion that centrally planned economies could outperform market-oriented economies--the "convergence hypothesis" widely accepted in the West during the 1950s and 1960s--no longer seemed compelling, despite the reluctance of many authorities, from Paul Samuelson to the Central Intelligence Agency, to abandon it. No matter how much the intellectuals might abhor the capitalist goose, they finally had to admit that no other kind could lay golden eggs at the same high rate. As large elements of the public arrived at the same conclusion, the political success of Thatcher, Reagan, and a number of lesser promarket politicos in the West ensued. Ultimately, even the Communists in China and the Soviet bloc gave up on central planning and moved, ever so clumsily, in search of the miracle of the market.

"No one," Giddens recognizes, "any longer has any alternatives to capitalism--the arguments that remain concern how far, and in what ways, capitalism should be governed and regulated" (pp. 43-44). He never seems to doubt, though, that however much the social democrats might govern and regulate the market economy, it will remain "capitalism," and the goose will go on laying the golden eggs without pause.

At the very beginning of his tract, Giddens expresses the characteristic melancholy and sense of loss with which the Old Leftists have reluctantly accepted the market:

Socialism and communism have passed away, yet they remain to haunt us. We cannot just put aside the values and ideals that drove them, for some remain intrinsic to the good life that it is the point of social and economic development to create. The challenge is to make these values count where the economic programme of socialism has become discredited. (pp. 1-2) Central among those revered values, it would appear, is envy. Throughout his discussion (for example, pp. 4042, 78,100, 106, 108,147) Giddens repeatedly denounces the evil of...