Third Way

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Not to be confused with third positionism.
I'm glad to see the debate being carried on our side of the field, but there could be a huge backlash if the left fails to deliver. Ultimately, in a democracy the poor rely upon the social judgment of the middle class.
—Bill Clinton in conversation with Tony Blair, 1997.[1]

The Third Way (or Economic Rationalism, if you're an Aussie) is a school of political thought which tries to reconcile capitalism and socialism: combining market-based economic orders with redistributive policies. Basically, it involves admitting that a number of wealthy people got that way partly by chance, and that poorer people may be poor due to circumstances beyond their control.

Since they don't fall squarely into either the left or right, they are perceived as something distinct from both, but apparently not distinct enough to warrant a more creative name.

Third Way politics is as close to actual centrism as you'll get, although it has been dismissed as right-wing economics.[2] Many have pointed out similarities between Third Way Democrats and the pre-1964 GOP.


The most famous practitioners of the "Third Way" came out of the reformist parties in the early-to-late 1990s, such as Bill Clinton's "New Democrats," Tony Blair's "New Labour" or the German SPD under Gerhard Schröder.

Others include the Australian Labor Party's Bob Hawke and Paul Keating (who invented the Third Way doctrine) from 1983-96, NZ's Roger Douglas from 1984 to 1988, Fernando Henrique Cardoso of Brazil, Wim Kok of the Netherlands, José Sócrates of Portugal and Matteo Renzi of Italy.

Pros and cons[edit]

"My party had been out of 10 Downing street for 18 years. When you win an election you go into Downing street the next day and the predecessor walks out the back door, just as the new PM walks in. I remember when I walked in on my first day. The staff applauded the former PM. When I walked in. the staff were weeping. I was feeling guilty about the whole thing. I went into the cabinet room. The chief civil servant – a very grand person — said to me and a very British way. “Well done. Now what?” That’s the great issue of governance. You can be a great communicator, which gets you the job, but once in power, you’re a CEO and need to run a business.
—Tony Blair in 2015[3]

There are many different models, but the majority leaned toward neoliberal approaches to government, most commonly:

  • Maintenance of European-style welfare programs
  • Centralization of government
  • A bedazzlement of financial institutions
  • Deregulation and privatization
  • Hawkish foreign policy
  • Authoritarian when it cares (union-busting, counter-terrorism), socially liberal when it doesn't (equal rights, drug sentencing)
  • Naïvely technocratic
  • Ruthlessly efficient at winning elections

In a nutshell, it was all about equality of opportunity, rather than the old-style idea of equality of outcome. Such parties occupied the political center for years, boosting their electoral chances. In most Anglo countries, the center has gotten very crowded since then, since every major party copied their moves. This reduced the overall distance between the left and right for a time, and so the term has mostly fallen out of favor (or is substituted with "neoliberalism"). However, the current upsurge of populism among both left and right combined with greater polarization overall has left it badly weakened.

It also provided an acceptable cover for unfettered capitalism at every level. What the libertarian movement has done is drop this pretense.

Other uses[edit]

See also[edit]


  1. Transcript of Telcon with Labour Party Leader and Prime Minister-elect Tony Blair, Clinton Presidential Library (1 May 1997, 11:25 pm).
  2. Third Way? No way!, 19 October 1997.
  3. le Cordeur, Matthew, "Blair: Investors must help improve African infrastructure - As it happened", excerpts from "Investing in African Mining", 21st annual Indaba, via Fin21 (10 February 2015, 12:31).