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Maharey: The Third Way and how I got on to it

Steve Maharey Speech: The Third Way and how I got on to it

Lecture to Massey University’s 'New Zealand Society' course. Palmerston North.


Thank you for the invitation to be here.

My invitation suggested that I reflect on “the Third Way three years on”; the “renewal of social democracy” and how I, as a former academic sociologist, made the transition to politics.

These are reasonable requests. Indeed they go together well so let me start by explaining how I got into politics before turning to the Third Way and new social democracy.

How I got on the Third Way

My transition to parliamentary politics began in 1981 on the streets of New Zealand cities during the Springbok Tour. Like most people I joined the protests that took place because I opposed apartheid in South Africa.

However, as Geoff Fougere pointed out in an early edition of the Cultural Studies Working Group Journal, the protests were less about apartheid than they were about the kind of society that existed in New Zealand.

Inside the gates of each game could be found traditional New Zealand. Outside the gates could be found people chaffing under the economic and social constraints of a society that then Prime Minister Robert Muldoon said he wanted to leave as he had found it. If he had succeeded today tourists could come to see not only middle earth but also the middle of the last century.

Traditional New Zealand won the battle of the Tour but went on to lose the war in 1984 when the people outside the gates delivered a landslide victory to the fourth Labour government led by David Lange.

It is hard to describe how liberating the 1984 election result was for the hundreds of thousands of New Zealanders who supported the Labour Party. They felt that post-war New Zealand was finally about to change and that anything was possible. Changes that had been held back for over a decade were about to break through.

The fourth Labour Government lived up to expectations. It changed everything; but not quite in the way many had imagined.

Soon after the election deteriorating economic conditions led to the introduction of a radical economic agenda. Labour floated the dollar as a precursor to the policies of deregulation and privatization that came to define the new administration. After decades of heavy regulation of the economy and a welfare state, the market was back.

In 1984 I was an academic teaching sociology and an active member of the Labour Party. I had mixed feelings about what was happening around me.

On the one hand I could see what Roger Douglas was on about. There was no way New Zealanders could resist the demand for change in the economy. Since the 1960s when the British entered the European Economic Community our commodity producing, low wage, low skill, low productivity, full employment economy had become an endangered species. For decades we had done too little to change and finally arrived at the day of reckoning.

However, the direction we had chosen to go in seemed to me to be unsustainable. We were abandoning our land-based economy in favour of such strange notions of becoming the finance capital of the Pacific.

Around me I saw a few people getting rich without giving anything back. Meanwhile the ordinary Kiwi household struggled. Social problems grew, the promised sustained economic growth did not manifest itself and many people felt abandoned by a society that seemed to no longer need them.

I found myself in a curious position. The left opposed Rogernomics and as someone who regarded himself as part of the left I felt sympathetic. Yet it seemed to me that the defensive posture adopted by the left would lead nowhere. While I accepted that the traditional left values of solidarity, collectivity and social justice remained valid, new ways of delivering them were needed.

I took up a rather isolated position in the debate that raged during the 1980s criticizing both the right and the left. I wanted to see social democrats acknowledge the need for change and offer a new political agenda based on social democratic values. The British politician and academic David Marquand called this - old values, new politics.

As a sociologist I wanted to help construct a better understanding of what was going on in our society and found a way forward in the work of British academics drawing on what became popularly known as the New Times thesis.

Stated succinctly, the New Times argument was that the world had changed and that societies like our own were increasingly characterised by diversity, differentiation and fragmentation rather than homogeneity, standardization and the economies of scale that characterised 20th century society.

There is not time to take us through the whole argument but suffice to say I found the work of such people as Stuart Hall, Geoff Mulgan, Goran Therborn, Charlie Leadbeater, Mark Latham, David Marquand, Robert Reich, Tony Giddens, Amitai Etzioni, Robert Putnam and many others to be moving in a promising direction.

Their aim was to try and understand the New Times that were taking shape and tentatively to suggest the kinds of public policies that should flow from such an understanding.

This debate preoccupied me during the 1980s to the point that I began to think about going into politics.

In the mid 1980s I was elected as a city councilor and found the work both interesting and important.

In 1990 I stood as a candidate for Labour in the Palmerston North electorate. Labour was extremely unpopular and candidates like me were left in no doubt of voters opinions. I was grateful for a very narrow victory and the opportunity to be part of the renewal of Labour.

Once again there is not the time to rehearse the story of how that renewal took place. Instead I want to focus on the emergence of what has been variously called Third Way, radical centre, middle way and new social democracy.

In the 1990s as a first term parliamentarian I began to look a lot harder for the kinds of policy prescriptions that represented a social democratic response to New Times.

The answer, it seemed to me lay in the kinds of ideas debated by people around Bill Clinton, Tony Blair and a range of European social democratic parties. For convenience let’s call these ideas the Third Way.

These people were not united by a single version of the Third Way. What they had in common was an understanding that new times demand new answers from social democratic politicians. They could see that right wing neo-liberal politics had dominated the 80s and 90s by appearing to respond to social change and they wanted to “modernize” their own parties.

During its period of renewal, New Zealand Labour did not consciously decide to become a Third Way party. However, there is a great deal of the Third Way in former Labour leader Mike Moore’s approach and Helen Clark has talked of Labour being a Third Way party.

After leading the political debate during the 1990s and the early part of this century, the Third Way has fallen on hard times. President Clinton completed two terms and watched his agenda swept aside by the new incumbent George W Bush. Tony Blair is still in power but talks less of the Third Way. Meanwhile in Europe anti-immigration parties have defeated many social democratic governments.

Despite these setbacks the ideas behind the Third Way label are, I would argue, still valid and relevant to New Zealand.

The Third Way

So what is the Third Way?

Let me first quickly dispel a misconception. It is often said that the Third Way is just a compromise between the concerns of the market and social justice. I do not agree. Or at least I would argue that the Third Way does not need to be reduced to a political agenda that appears to be just a clever mixture of ideas from across the political spectrum. What has antagonized its critics is that so often it has in practice turned out this way. Perhaps this is why the Clinton agenda disappeared so quickly with the election of George W Bush. While Clinton left a legacy of many progressive policies (and some not so progressive), he did not shift the fundamental organization of the American economy and society. Bush was therefore able to sweep aside whatever Clinton had achieved and install his own agenda almost overnight.

Perhaps the lesson we learn from Clinton is that Third Way politicians should be less cautious. They need to lead rather than seek to appease those on the political right. They need to map out a vision of what society can become and actively build support for change. Afterall, as the Australian Labour MP Mark Latham puts it, the Third Way is more than the management of an open, mixed economy. It is an attempt to answer the core challenge of Information Age politics: is it still possible to practice the shared bonds and responsibilities of a good society? Is collectivism still viable? The Third Way thinks that it is.

Here is what Prime Minister Tony Blair has to say:

“ The new progressive politics has two driving concepts behind it. First it defines a new role for collective action – national and local government, voluntary and community organizations, trade unions – which advances the interests of the individual. The purpose of such action is to empower individuals to fulfil their potential and meet their responsibilities. It is not about dictating to the individual; it is not about the supremacy of the collective good over individual aspirations. It is there to help people make the most of themselves, recognizing that in unequal societies, in the absence of collective help, only the privileged few will get the chance to succeed.

Blair goes on to say:

“But it does not stand for rigid forms of state ownership or provision. It is pragmatic as to whether public or private means are the best delivery mechanism”.

And: “… [it] represents a historic realignment of economic and social policy, at a time when the old boundaries between economy, state and society are breaking down…”

Concluding that:

“…the ideas associated with the Third Way are still the wave of the future for progressive politics…Parties and governments struggling to make sense of a new world , yet determined to cling to a belief in social justice, have used the third way as a means of modernizing their approach to politics whilst holding true to fundamental values”.

“Modernising” is characteristic of many Third Way governments. These governments accept the challenges of new times and champion the possibility of using new policies to achieve social justice.

Most important, as argued by Charles Leadbeater, is the creation of a knowledge society.

“The goal of politics in the 21st century should be to create societies that maximize knowledge, the wellspring of economic growth and democratic self-governance. Markets and communities, companies and social institutions should be devoted to that larger goal. Financial and social capital should be harnessed to the goal of advancing and spreading knowledge. That will make us better off, more in charge of our lives and better able to look after ourselves.

The goal of becoming a knowledge-driven society, however, is radical and emancipatory. It has far-reaching implications for how companies are owned, organized and managed; for the ways in which rewards are distributed to match talent, creativity and contribution; for how learning and research are organized; and for the constitution of the welfare state and the political system.

Knowledge is out most precious resource; we should organize society to maximize its creation and use. Our aim should be to harness the power or both markets and community to the more fundamental goal of creating and spreading knowledge”.

A vision of a society based on knowledge requires a new political agenda that looks like the following.

1. The challenge of harnessing the new technologies to create prosperity.

The history of New Zealand’s economy is one, as I noted earlier, of commodity production. This has not been the basis for wealth creation for many decades and as a result the incomes of New Zealanders fell throughout the 70s, 80s and 90s. We now recognize that the way forward for our economy is to add value to our biologically based economy. For these reasons the government has promoted, in the “Growth through Innovation” strategy, the need to develop three key competencies: IT, biotechnology and the creativity. Biotechnology in particular has been controversial because it has meant confronting such difficult issues as genetic modification.

The government’s view has been that we must push forward the boundaries of science but that this will be done within the context of cautious and careful management. The Royal Commission on Genetic Modification gave us the framework within which to proceed with caution.

2. The challenge of transforming education.

To thrive in a knowledge society all New Zealanders will need to access the kind of education that will allow them to achieve their potential. The expansion of the early childhood and tertiary education sectors to create opportunities for life-long learning are essential.

It is also necessary to rethink the role of education as has been done through the Tertiary Education Strategy and the formation of the Tertiary Education Commission. Education must continue to play its role of equipping New Zealanders to be active members of a democratic society, but it must also underpin the nations social, economic, cultural and environmental development. As a nation we need to be clear about the kind of future we are building and ensure New Zealanders are making strategic choices about the educational and research programmes that will make a difference.

3. The challenge of inequality.

The price of reform during the 1980s and 90s was increasing inequality. To at least some of the reformers this price seemed to be inevitable and, perhaps, acceptable. Third Way thinking does not accept inequality and the exclusion.

However, if everyone is to be included in the kind of knowledge based future at the heart of Third Way thinking the focus of traditional models of welfare on the transfer of income is not enough. Individuals, families and communities will need the capacity and capability to thrive in a more demanding society. Achieving social justice requires the extension of economic opportunity as much as the redistribution of wealth.

The new social democracy places the welfare state, or the new welfare state, at the confluence of economic and social justice. It is the clearest demonstration of the historical realignment of economic and social policy that Tony Blair speaks of.

To progress and grow this nation and its people must be equipped and capable to be part of the knowledge economy and society that is the hallmark of the early 21st century. This demands changes to the way we operate our welfare state.

This means our social security system needs to be revitalized and renewed. It needs to provide people with the opportunity to benefit from the development of their country. Having a job that pays a decent wage is the surest road to social justice for those of working age. It is for this reason that the government has emphasized in its social security “Pathways to Opportunity” six key areas of reform: simplifying the benefit system, jobs and training, support such as childcare for families and children, mutual responsibilities; partnerships with the communities, and poverty.

4. The challenge of reshaping government and the public service.

The traditional shape of the state meant one-size fits all approach to services offered. This does not meet the needs of a diverse community and the government has responded through a curiously titled programme called “Review of the Centre”.

The review is intended to overcome the fragmentation of the state by requiring departments to act in a more strategic and coordinated manner: to offer “joined up solutions to joined up problems”; to seek solutions to social issues by focusing on outcomes rather than outputs; to work in partnership with the community; to resource people to find solutions to their own problems; to make use o new technology to offer a new more responsive level of service.

The renewal of the state is about renewing our confidence in our ability to work, together on issues of shared concern. By working collectively we have the best chance of empowering people to thrive in the complex and demanding world of the 21st century.

5. The challenge of renewing democracy.

This is clearly a huge issue in New Zealand despite then smallness and intimacy of our political system. New Zealanders adopted MMP because they felt that politics and politicians were letting them down. In 2000, when Labour was elected, the conscious decision was made to rebuild confidence in government.

In practice this has meant; commitment to making proportional representation work; clearly setting out policy prior to implementation; working in partnership with those who will effected by politics; constantly building networks of people from a variety of communities; and seeking to rebuild social capital by encouraging people to reconnect with their society particularly through voluntary organizations.

6. The challenge of international engagement.

This government is strongly committed to internationalism. We are a small country that benefits directly from a world governed by clear and enforceable agreements that guarantee fair treatment.

Through the work of such people as Helen Clark, Phil Goff, Jim Sutton and Pete Hodgson the government has consistently sought to ensure New Zealand’s voice is heard around the world and that our needs are taken seriously. Perhaps the most significant international engagement for us has been the war in Iraq. Our position has been that the war needed the endorsement of the United Nations Security Council if it was to involve a multilateral force. We argued that unilaterialism set a dangerous precedent that could lead to the more powerful nations of the world acting alone to secure their interests. .

Why and How

Recognition of these challenges and the policy responses represent a renewal of the social democratic tradition in New Zealand and elsewhere. However, they do not mark a departure from the values that social democracy has always embodied. Our goal is still the egalitarian project that has motivated all social democratic parties: the full development of every individual however disadvantaged they are by birth or circumstances.

However, the means by which we intend to further the project have altered. The focus now is on the creation of a knowledge society and investment in policies that make this goal a reality. I believe this to be the basis of a very exciting future for New Zealand. So let me close using the words of Peter Biggs current Chair of Creative New Zealand who has eloquently brought to life the kind of world that lies in front of us.

“This is my vision for this country: that these beautiful islands can be the most creative, daring and innovative country on the planet.

So much so that the world looks on us in awe and wonder – not simply because of the beauty of our landscape, not simply because of our legendary efficiency and practicality, and not simply because of our warmth and compassionate humanity – but also because of our creativity and out courage, and our openness to risk, to experiment, to innovate and to transform.

And so I see a world in which any exhibition of New Zealand art is a ‘must see’; where any performance of New Zealand music or dance is a ‘must get to’; any New Zealand poetry, novel or book is a ‘must read’; a world where New Zealand products are a ’must have’ because of their extraordinary quality, added value and, above all, their integrity; where New Zealand fashion, New Zealand advertising and New Zealand design set the trends for the world scene because of our boldness and flair; a world where New Zealand businesses are admired and win because they don’t just develop solutions for current problems – they create solutions for the problems of tomorrow and open up opportunities that no one had ever thought of . A world where New Zealand researchers are revered for their willingness to explore and for their insights and discoveries.

This is the New Zealand of the future. And it is our only future – if we are to fulfil the dream of being a prosperous, dynamic and socially harmonious nation.”.

Thank you for listening.

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