by Trent Schroyer
New attempts to transcend the market ideology of Neo-Liberalism are shaping up -even if, to many, it still seems like "there is no alternative" (TINA). The struggle to fuse a new political philosophy for the European Union presents itself as a "third way", just like the effort to create the "New Democrats" in the U.S.. The United States and the United Kingdom, see the "third way" as a New Progressivism that goes beyond statist social democracy and aspires to a "modernizing social democracy" that does not command but steers society. As stated by the U.S. Democratic Leadership Council in '96 and Tony Blair in '98 it begins with policy reforms concerning the family, crime, the decay of communities, and humanitarian international interventionism in ways that aspire to bring "issues of the left " before the ordinary citizen. It proposes "a politics without adversaries" that accepts the world for what it is! Supposedly new is the mixture of pushing economic dynamism with concerns for social solidarity and culture, while creating an ethos in which entrepreneurial initiative can by challenged and aided. (Democratic Leadership Council-Progressive Policy Institute "the New Progressive Declaration: A Political Philosophy for the Information Age" Washington ,DC:DLC-PPI 1996; Tony Blair and Gerhard Schroder, "Europe: The Third Way-die Neue Mitte " London Labour Party and SPD 1999)
Reception of this anglo-american "third way" in continental Europe, or among the left generally, has not been viewed as new ideas but as a reactive accommodations of societies with weak welfare states to regain political credibility. In short it is an empty vision defining itself negatively against left and right and having little real substance. Witness the 2000 electoral practice in the U.S. where focus groups simulate democratic participation.
Advocates respond that "Third Way" political culture combines market liberalism with a new social and ecological progressivism that amasses a political consensus of the center. Using the metaphor of the three legged stool the third way is imaged as a stable, just and prosperous society where neither the state, market, or civil society are too dominant; each is able to restrain the other's power while also seeking a self-protective and active role in a globalizing world. It is a new way of dealing with the "twin revolutions of a globalizing world and a knowledge economy "(Anthony Giddens "The Third Way and its Critics" pg.163).
Third way theorists have also discovered the social glue of "social capital" ; which was never lost to communities in traditional worlds. Applying this new scientific understanding third way theorists, such as Giddens, advise how to create social cohesion that promotes increased civility while also investing in human capital and societal capacity building too. Social Capital creates mutually respectful, trustingrelationships among citizens and work forces and facilitates active dialogue and optimal sharing of relevant information. Social capital is the essential ingredient in the promotion of institutional confidence and goodwill and has a synergistic relation with human capital formation (i.e. producing specialized knowledge workers) and productivity in increasingly knowledge based and service oriented economies.
For modernizing social democrats like Clinton, and Blair "inclusion", andsocial capital, are the new mechanisms for social reintegration, while economic, social and civil entrepreneurs compete and co-operate to brings services to excluded groups such as the poor, elderly and disadvantaged. For critics these are merely social simulations that can not replace irreversibly destroyed sociality in the fragmenting and deterritorializing commodifications of economic globalization.
The spontaneous impluse to create limits to the down side of the market process has existed since the emergence of market society, resurgence of this effort as part of European Union formation is just one more new opportunity. Other European third ways want to reform their welfare processes (e.g. the Nordic states ) ,the Netherlands proposes a consensus-oriented market model, while Germany and France struggle to legitimate their versions. They all represent dissenting views on the shareholder model of capitalism promoted by the U.S. and U.K. and project instead diverse organizational infrastructures for a stakeholder model of capitalism that includes affected people and communities. Most promising is that this discourse has stimulated suggestions for future reforms of NAFTA too.
But have we been here before?
Karl Polanyi has remarked that after the "Great Transformation" to modern Liberal Capitalism people suffered cultural amnesia about the world that preceded it. The same can be said of the market system's ignorance about the continued presence of subsistence situations in a globalizing world.
The first insight about what to do with the numbers of people displaced by commercializing enclosures emerged amid Quakers whose principle that the "greatest resource is friendship" remains central to equity securing local credit systems in the third world today- such as the Grameen Bank. John Bellars in 1696 proposed "Colleges of Industry"where the poor would exchange between themselves. The same principle was central to later schemes that resisted economic liberalism from Robert Owen's Villages of Union, to Fouriers's Phalansteres, Proudhon's Banks of Exchange, Lois Blanc's Ateliers Nationaux, Lassalle's National Wertstatten. (Polanyi The Great Transformation pg.105ff).
In 1819 Robert Owen republished John Bellars 120 year old plan for setting up Colleges of Industry and used it to promote his own movement that was outvoted in the crucial 1830 elections, where the economic liberals were victorious and created the first market system. Owen claimed that he had discovered the "nucleus of society" in his village communities. He saw the problem of economic society; namely, that what appeared to be economic solutions to poverty were not, because the problems and solutions were basically social. Bellars and Owen understood that the social nature of humans could not be satisfied by economic interventions and ideologies: "the new market "institutional system was the destruction of the traditional character of settled people ...and their transmutation into a new type of people , migratory, nomadic, lacking in self-respect and discipline- crude, callous beings of whom both the laborer and the capitalist were an example. .( In the new economic society)...a principle quite unfavorable to individual and general happiness was working havoc with his social environment, his neighborhood, his standing in the community, his craft, in a word ,with those relationships to nature and man in which his economic existence was formerly embedded." (Polanyi pg. 128ff.)
In this light contemporary "third way" philosophy is a desperate attempt to square the circle of economic society by trying again to simulate the social in ways that are compatible with the primacy of the economic. It ends up being an internal colonization of social existence in the name of building an entrepreneurial culture. Remembering the alternative paths of those who resisted the first market society may be more fruitful .
Looking at the "third way", implicit in what later economic historians called "proto-industrial districts" we see that livelihoods remained tied into craft traditions and their communities. Resisting dislocations they worked out "embedded" co-operative solutions to changing economic circumstances and created municipal social economies that represent the first step of a third way then and now. Hence Proudhon, Terence Powderly (leader of the American Knights of Labor) and Herman Schulze-Delitzsch all promoted systems of co-operatives supported by co-operative banks that stabilized communities in the midst of government interventions that promoted national market formations.
The "progressive" views of Marx, and the classical economists, rejected these craft models because they were tied to the particularities of trade fraternities and mutual- aid societies in municipal centers. In contrast the craft production theorists (social economists) were convinced that competition and productive association were complementary and that flexible machinery could extend human skills. Michael Pirore and Charles Sable have argued in "The Second Industrial Divide" (New York, Basic Books, 1984) that the craft model of "flexible specialization" must now be adopted since its imitations in Japan and Germany can not be ignored. Looking at the socio-political arrangements of Lyonese silk industry or the Saint-Etienne industries, the Solingen cutlery and Remscheid edge-tool industries, Sabel and Pirore show that the realities do not line up with the classical economic model of maximizing mass production. They rather suggest the ongoing relevance of craft traditions and their embeddedness in networks of city regions.
Analogously the response of many city regions to the expansion of the market system was, and remains today, a response to globalization and an affirmation of their own cultural practices and
social arrangements. (Jane Jacobs "Cities and the Wealth of Nations" ;New York,Vintage 1985). Thus an early "third way" was the creation of federated co-operative movements of producers, consumers and credit that enabled communities to resist market dislocations. It is no accident that some of the most critical responses to European third way models have come from international co-operative associations.
Indeed the U.K. could benefit from remembering that its co-operative movement was greatly facilitated by the passage of the Industry and Provident Society acts of 1852 -which were aided by John Stuart Mill. This act gave co-ops limited liability status and the ability to issue shares and by 1865 there were over 100,000 people in co-ops in England. Success was ensured by the co-ops paying a quarterly dividend of 4% per quarter encouraging direct investment in these social enterprises. Their focus was primarily around providing food but the purchasing power of this network was used to buy from co-operatives up the supply chain from farm to granary and bakery; collectively forming a federated cooperative system as a"organic society" within a wider market society.
A contemporary form of this alternative socio-economic integration has been documented by Robert Putnam who has shown that in northern Italy there are many small locally owed firms; local ownership is key. In these contexts the political arrangements can be reversed to create what has been called "Cosmopolitan Localism"; that is, wherever citizens are aware that communities can invest, contract, zone, tax, lobby and thus learn how bottom up politics can influence the national polity. For example the Social Co-operatives Act in Italy (1994) targeted marginal groups and 2,500 social cooperatives were formed creating 60,000 jobs.
Martin Buber examined these 19th century movements in "Paths in Utopia" (Boston Beacon Press,1949) in order to develop principles for " the organic reconstruction of society" . Buber's reflections point to the complex diversity in society which preceded capitalism and suggests that its pluralistic vitality enabled it to resist the totalitarian tendencies inherent in the pre-revolutionary centralist state. This reflection remains valid for many third world countries today where forced neo-liberal "nation-building" destroy organic socio-political configurations that then evolve into dependent totalitarian regimes. In western history these pre-modern organic potentials for resistance by free associations was broken first by the French revolution and then by the centralizing logic of the Liberal state that dealt only with "individuals" and thus succeeded in atomizing society. Buber's reflections suggest that there are other pre-modern "third ways" where culture and local knowledge can be defended in the context of a complex globalizing world.
Ivan Illich has called the era of modernization "a 500 year war against subsistence". The evolution of the capital form forces the creation of physical and social scarcity in ways that are not measured by the indicators of "progress". Illich's reflections imply that modernization has ironically created an inversion of progress in that the common man has been forced into greater suffering and dependency in the name of eliminating the same.
Illich, like Polanyi, see this fear of scarcity as ironically creating scarcity by destroying the cultural environment of those who are to emancipated by modernity. Hence documentation of the systematic destruction of the organic customary (vernacular ) organizations of kinship, neighborhood, profession and creed, establish a different research program that suggests that "third ways" are intrinsic in many traditional social configurations.
Enclosures, including contemporary economic globalization, means intentional destroying, and deliberate disconnecting, from these organic social arrangements, and eventual erosion of the self-limiting cultural restraints that were, and are still today, essential to secure both natural commons and social community. Rather than be pushed into catch-up development, communities and regions that are organized around "sufficiency", or "enoughness", represent the "third way "alternatives to the progress utopias of socialism and capitalism. The wisdom of this organizing principle is denied by all modernizing mentality that wrongly sees only deficiencies and limitations in traditional organic, or subsistence, mentality.
However, in a world of overconsumption that has gone beyond the earth's capacity to provide ever new materials, or absorb the wastes of industrial systems, a logic of minimizing consumption is essential for sustainability. Here renewals of subsistence logics in many diverse cultures are the alternative to TINA, from Gandhi's "swaraj" (self-rule), to diverse movements for decentralization and devolution such as the contemporary eco-village movement. (Bennholdt-Thomsen & Maria Mies The Subsistence Perspective (New York, Zed books ,1999)