any have interpreted Tony Blair's Third Way
as a rejection of socialist values and therefore Labour
traditions. But it could be seen as a modern extension
of the 'libertarian socialist' tradition. Although this
tradition goes right back to the origins of socialism, it
was not given prominence or priority and so lost out to
the 'state socialist' tradition - to the left's great historic
The key elements of libertarian socialism - decentralisation,
democracy, popular sovereignty and a refusal to accept that
collectivism means subjugating individual liberty - have a
strong pedigree, going back to the mid-seventeenth century,
the English Civil War and the radical activists of that age:
the Levellers, Agitators and Diggers. Chartists and still
later Suffragettes carried on this tradition, as did Robert
Owen's co-operative movement and groups of workers such as
the Rochdale Pioneers who in 1844 put into practical effect
local socialist ideas for workers' shops, insurance societies,
credit unions and companies. Through such initiatives, early
trade unionists and socialists invented and practised what
the historian A. H. Halsey described as "the social forms
of modern participatory democracy". Another nineteenth century
socialist, William Morris, explicitly criticised state socialism
for upholding the status quo of a centralised, unequal society.
Trade unionism provided a continuing conduit for non-state
socialism, especially through syndicalists, such as Tom Mann,
who in 1910 started introducing ideas about industrial democracy.
Later, G.D.H. Cole's Guild Socialism proposed an alternative
to both capitalism and state socialism.
In the 1930s nationalisation was adopted as a model, with
the emphasis upon planning and state ownership of still hierarchically
run enterprises, rather than industrial democracy. The success
of World War II's centralised planning of production and resources,
and the imperatives of post-war reconstruction, shaped a consensus
which went far beyond socialists, for nationalisation and
planning by central government, as well as new national health,
education and social services.
But in Western democracies, the huge popular legitimacy for
state socialism after World War II was undermined, first,
by its attachment to remote and insensitive bureaucracy, second,
by a careless disregard for efficient management of the public
sector and, third, by a refusal to engage seriously with the
reality of market forces operating in any society.
In the East, Stalinist state socialism stood condemned for
its tyrannical denial of freedom, bloated self-serving bureaucracy
and innate economic inefficiency.
Discredited by its association with statism, socialism's
rehabilitation can only be achieved through a recovery of
its libertarian roots, applying these to the modern age through
Labour's Third Way.
Devolution lies at the heart of the Third Way. On constitutional
reform Tony Blair's Labour Government is proving to be the
most radical in memory. So much so that the old British state
- quintessentially centralised, elitist, secretive - is being
dismantled. It was not so much a British as an English
state, defined above all by hostility to regional or local
autonomy. Wales' National Assembly, Scotland's Parliament
and Northern Ireland's Assembly allow Britain to be reconstituted
into a modern, pluralistic state, with diversity and decentralisation
celebrated, not suppressed. The Irish settlement, embracing
the South through the British-Irish Council, is perhaps the
most radical in the blistering pace of devolution set in the
first year of the new Labour Government.
The Third Way constitutional reform Agenda goes beyond devolution.
The incorporation of the European Convention on Human Rights
into UK Law through the Human Rights Act has also been fundamental.
For the first time, everybody will have citizenship rights
enshrined in statute. Planned reform of the House of Lords
strikes at the very heart of the ancien regime as does
planned Freedom of Information legislation.
So does electoral reform. The element of proportionality
for the devolved governments breaks with the Westminster tradition
of first-past-the-post - also now in question following the
recommendation of the Jenkins Commission on Electoral Reform
and Labour's promise of a referendum. The absence of first-past-the-post
in Wales and Scotland will by itself promote a more pluralistic
politics since it will be less easy for a single party to
secure an overall majority, and so will encourage government
by partnership. The same pluralistic democratic imperative
was vividly expressed in the 'pure' proportional representation
system adopted for the first time in the 1999 European elections,
where Labour has sacrificed its huge majority achieved under
Underlying libertarian socialism is a different and distinct
notion of politics which rests on the belief that it is only
through interaction with others in political activity and
civic action that individuals will fully realise their humanity.
Democracy should therefore extend not simply to government
but throughout society: in industry, in the neighbourhood
or in any arrangement by which people organise their lives.
The Labour Government's commitment to inserting citizenship
into the school curriculum is especially important after a
Thatcherite era which celebrated personal greed, privatised
lifestyles, a retreat from community and, indeed a denial
of the very concept of 'society'.
A statist focus negates the spirit of collectivism and community
which ought to be the essence of socialism. The absorption
of all social functions by the modern state, whether capitalist
or communist, led to a culture of dependency in which individuals
become clients of the state rather than autonomous citizens,
passive recipients rather than active co-operators with each
other. Rundown, untidy council estates with urine-ridden lifts,
graffiti everywhere and neighbour disputes are the result.
Although high quality public provision remains a vital priority
for socialism, its centralised character and delivery made
people dependent upon the state, in the process jettisoning
reliance upon communal identity, collective organisation and
personal relationships, which are the foundations of citizenship
and a good society. Hence the Blair Government's desire to
transform a welfare culture based upon 'dependency' into one
which is empowering. Examples are the 'New Deal' offering
the long term unemployed the chance to work, retrain or undertake
full time study together with the Working Families Tax Credit
which makes it much more worthwhile for the low paid to work
rather than be trapped on benefit.
However, power can only be spread downwards in an equitable
manner if there is a national framework where opportunities,
resources, wealth and income are distributed fairly, where
democratic rights are constitutionally entrenched, and where
there is equal sexual and racial opportunity. This is where
socialism becomes the essential counterpart to libertarianism
which could otherwise - and indeed sometimes is - right wing.
It means nationally established minimum levels of public provision,
such as for housing, public transport, social services, day-care
facilities, home helps and so on. The extent to which these
are 'topped up' and different priorities set between them,
is then a matter for local decision. Hence also the case for
the Labour Government's new statutory minimum wage, above
which pay levels can be negotiated by independent agreement.
The minimum wage however is not just a matter for the law:
its effective enforcement depends partially upon trade union
pressure, illustrating another Third Way characteristic which
is empowerment from below through support for trade unionism.
Most individuals need active government to intervene and
curb market excess and distortions of market power. For choice
and individual aspiration to be real for the many, and not
simply for the privileged few, people must have the power
Nevertheless the old left nostrum that markets equal capitalism
and the absence of markets equals socialism, is utterly simplistic.
As Aneurin Bevan argued, the extent to which markets are regulated
or subjected to strategic intervention by government is not
a matter of theoretical dogma, but a practical matter to be
judged on its merit. That is why a Third Way Labour government
is not passive, but highly active, working in partnership
with business and investing in the skills and modern infrastructure
which market forces and the private sector do not provide.
The principle of partnership also lies behind Labour's legislation
for fairness and rights at work, with its twin principle,
empowerment, expressed through the removal of punitive restrictions
upon trade unions. Here is the Third Way in action: government
legislation to establish a balanced framework in the workplace
underpinned by the freedom of trade unions to protect and
assert individual rights.
However, partnership needs to go further by encouraging
industrial democracy. This is one of the keys to the high
productivity, investment and wealth needed for economic success,
by helping generate greater team working and commitment which
is such an important requirement of complex modern production
By rooting the Third Way debate in a libertarian socialist
framework it can be given fresh impetus, ideological clarity
and greater legitimacy in the labour movement.
* See my Ayes to the Left: a future for socialism
(Lawrence and Wishart, 1995), chapter 1.
Welsh Office Minister Peter Hain is MP for Neath. His new
pamphlet, A Welsh Third Way? is available price £2.50
(inc. p&p) from Tribune Publications, 308 Grays Inn Road,
London WC1X 8DY