Public Policy Sources #33:
The “Third Way” in Theory—The Political Foundation

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The Third Way is the route to renewal and success for modern social democracy.12

British Prime Minister Tony Blair

Present-day political battles are won in the ideological centre, or what Clinton refers to as the “vital centre.”13 Therefore, according to the German economist, Christian Watrin, this emphasis upon a “new middle” reflects “a simple application of the median-voter theorem of public choice theory.”14 The evolving nature of the electorates of North America and Western Europe are most clearly illustrated by the parallel growth of the middle class and decline in trade union membership. As such, the strategy underlying the Third Way movement may be viewed as an astute political marketing response to a decline in traditional class loyalties and, consequently, traditional partisan loyalties. According to Gerry Holtham, the director of the centre-left British Institute for Public Policy Research (IPPR), the answer lies in, “The sociology of developed societies”:

While in principle the left-right distinction still holds, societies have developed in such a way as to make any left-wing electoral coalition impossible. The mass proletariat with a highly developed class consciousness has disappeared. Most people see advancement in purely personal terms. A successful electoral coalition must include reasonably well-to-do people who are frightened of... redistribution.15

In the late 1930s, the governments of Western industrialized countries consumed, on average, only 20 percent of Gross Domestic Product (GDP); today, that figure has risen to approximately 40 percent.16 Consequently, it is now far more difficult politically for governments to increase (especially direct) taxes to finance additional expenditures on social programs.17 This reality has led to the explicit pursuit of the middle-class voter by centre-left politicians and parties. Centre-left political strategists have especially targeted those middle-class electors whose socio-demographic profile may be summarized as female, suburban, politically independent, and heavy consumers of mass media and information technology. The policy preferences that such electors bring to the political marketplace epitomize current Western electorates’ responsiveness to apparently pragmatic solutions rather than partisan appeals. The American historian Kevin Starr suggests an analogy with the immediate post-War II, non-ideological electorates who viewed government as a potential problem-solver.18

Cynically, but astutely, Michael Novak has observed that, “Social democrats seldom have to say they were wrong; confident in good intentions, they simply pivot in a new direction.”19 Hence, as mentioned, the modernized centre-left speaks of a “vital” or “radical” centre as a device to attract and maintain the support of middle-class voters. Now that the centre-left has ridden into power atop the shoulders of a seemingly moderate Third Way movement, “progressive” statesmen find themselves charged with resolving a particularly problematic question: How to produce, in a conventionally compassionate and efficient manner, the overall economic conditions (and to deliver the public services) that matter most to middle class voters?

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