”Citizens of Gettysburg, before I give my address I would like to thank our sponsor, Richard Jordan Gatling of Gatling Guns. I think it goes without saying that without the financial help provided by Mr Gatling, this speech would not be taking place. Now, as I was saying, four score and seven years…”
Progressive politics in the 1860s did not require Abraham Lincoln to grub around for corporate sponsorship. It is unlikely that either Lincoln or the mayor of Gettysburg was savvy enough to think of decorating a cemetery in Pennsylvania with corporate logos. Poor old Abe, he really didn’t get it.
These days when British Prime Minister Tony Blair, former United States president Bill Clinton and chums meet to discuss the future of globalisation they ask British Airways and Citigroup to pony up cash for their conference.
Does it really matter that big business bankrolled Blair’s talkathon this week? Not at all. It means there are unlikely to be any papers discussing how the exemption of tax on aviation fuel damages the environment, or whether conflicts of interest between the consultancy and auditing arms of the accountancy firms encouraged companies such as Enron.
But let’s face it, these issues would not be discussed even if it were the taxpayer picking up the tab. The premise is that there is really not a lot wrong with the global economy that the baby-boomer progressives cannot put right. A surfeit of jargon will disguise the fact that the third wayers are free marketeers who have learned how to play the chords to Stairway to Heaven.
The old third wayers — Attlee, Bevan, Roosevelt and Lyndon Johnson — believed in managed markets and controlled capitalism, which was why it was not the Coca-Cola Bretton Woods conference and why JP Morgan’s staff used to cut Roosevelt’s pictures out of the papers in case the great financier had a seizure.
A truly third-way analysis would conclude that capitalism is sick and the participants at Blair’s third-way love-in represent countries that display the symptoms of the disease. German Chancellor Gerhard Schröder could speak about how the enthusiasm for deflationary policies has left his country with nearly five million unemployed; Clinton and Blair could explain how they have only avoided the same by pumping so much liquidity into their economies that they are sodden with debt.
Helen Clark could wax lyrical about how the Dr Strangeloves of the economics profession took over New Zealand in the 1980s. Meles Zenawi of Ethiopia knows all about the public spending cuts imposed on his country by International Monetary Fund austerity programmes. Brazil’s President Lula da Silva is the man to talk about the three percentage point drop in forest coverage in the Amazon basin in the past decade. Thabo Mbeki presides over a South Africa where the spread of HIV/Aids means life expectancy is 47,7 years, six years less than in the early 1970s. Some success.
The first signs of the sickness emerged at the extremities of the global economy — in the financial crises of Thailand, Mexico, Indonesia, in the robber-baron capitalism of post-communist Russia, in Africa’s debt crisis. But in the past five years it has spread closer to capitalism’s heart — to Japan, Western Europe and the US.
Now to the diagnosis. Victory in the Cold War carried with it the germs of capitalism’s sickness. Battling a rival ideology kept the market economy in some sort of order, but defeating communism validated not just the policies of the new right in the 1980s but also prompted the new left in the 1990s to go further than Margaret Thatcher and Ronald Reagan dared. Market ”efficiency” required that all controls were therefore removed from capital. The result? Regular and violent speculative crises. Trade rules supposedly establishing global free trade were rigged to favour Western countries and companies. The result? A widening of the gulf between rich and poor, as illustrated in the recent United Nations development report, which showed 54 countries had lower living standards in 2001 than in 1990.
The new third wayers believe in individual choice, but, as those with the misfortune to be living under the new flight paths planned for south-east England will find out, only so long as it doesn’t interfere with the need to be internationally competitive. Commitment to environmental protection also ends there.
Finally we come to treatment. A suggested remedy is to ”let nature take its course”. This is the answer of the right, which says the real problem is that the state is preventing capitalism’s recovery. Heroic surgery is the way ahead: put the patient under the free-market knife so taxes and public spending can be cut and trade barriers torn down.
The third wayers are scornful of this quack remedy, but in truth their solution is not much different. They promote market-based solutions as ”modernisation” — in effect, a value-free, technical matter about which we have little choice. In this ”third-way vision”, fairness and capitalist efficiency are declared to go hand in hand. In practice this means an uncritical belief in the superiority of the private sector, with occasional blasts of ”fairness” mood music aimed at fat-cat directors or fox hunts.
Third-way economics boils down to this. First, the market is a natural state of affairs, a bit like the weather. Second, it is neither possible nor desirable to control the market in any meaningful way. Governments have to learn to live with globalisation. Third, governments should strive to make their respective nations as ”business friendly” as possible by gearing monetary, fiscal, environmental, educational, transport and social policies to the needs of large corporations. Finally, working people must fit into the new ”market agenda”. They must show ”flexibility”, work harder for longer and be prepared to shoulder the burden of ”adjustment”.
An alternative third-way treatment would concede that markets are useful but that there is nothing ”natural” about the market system. The globalisation of financial markets was not an act of God but of governments. Likewise, the limited liability company is a privilege granted by governments to business, not a right.
Given that the state creates the modern market and not the other way around, the second premise is nonsensical. How can you not control something that depends on you for its existence? The third premise is equally wrong-headed, an example of what Oscar Wilde called the tyranny of the weak over the strong. The fourth is morally indefensible and a reflection of the political cowardice of ”progressives”, choosing soft targets for ”adjustment” programmes rather than tackling the cause of the problem.
For too long third wayers have got away with the fiction that theirs is
the only game in town. It isn’t. We need to try a different set of drugs. Preferably not sponsored by Pfizer. — Â