New Labour's cloak for neoliberalism

by Shane Hopkinson

A. Callinicos, Against the Third Way: an anti-capitalist critique, Cambridge, Polity Press, 2001, 152 pp.

Shane Hopkinson is a member of the Australian Democratic Socialist Party.

Alex Callinicos' Against the Third Way presents a complex anti-capitalist critique. Essentially, this book is an extended commentary on Perry Anderson's comment that "the Third Way is the best ideological shell of neo-liberalism today". In deconstructing New Labour's claims to represent "traditional values in a changing world", Callinicos takes us through the literature on globalisation, on rights and equality and international relations debates. He closes with nine anti-capitalist theses: a summary of key ideas that he thinks Marxists need to contribute to the anti-globalisation movement.

The first section looks at the extent to which we live in a "changing world" or "new times". Here the buzz word is "globalisation". Third Way theorists argue that there is a "new economy" based on information and knowledge that transcends the old class-based hierarchies. We are living in a borderless world governed by finance markets that have undermined the autonomy of the nation-state.

Callinicos works through the formidable literature on globalisation and highlights two key questions: Has there been a qualitative increase in global economic integration over the past century? If so, what are the political implications of this for regulating, let alone transforming, capitalism? In relation to the first question, Marxists like Chris Harman, and social democrats like Paul Hirst and Graham Thompson see many of the claims advanced on behalf of globalisation as the exaggeration of small trends, particularly when compared with the period leading up to World War I, in which key indicators on trade and investment flows were higher than at present. Surprisingly, Callinicos is less sceptical, arguing: "the rational kernel in the claims made for economic globalisation is, on the one hand, the emergence of highly integrated and mobile financial markets and, on the other, the tendency for the production and distribution of commodities to be organised across national frontiers by MNCs and their satellites".

In relation to question two—the consequences for political action—the Third Way theorists argue that the "new times" restrict the scope of political action. While Callinicos is prepared to endorse some changes as a result of globalisation, he is also quick to point out that these economic changes do not mean that international capital is "footloose" and thus free to travel the globe. With exceptions like clothing, textiles and footwear, where capital investment is minimal, multinational capital is usually deeply embedded in local production chains that develop over a number of years and are not easily transplanted. While MNCs can threaten national governments, the carrying out of such threats is difficult. While there is less regulation than in the past, the state is still powerful in its own right and the defeats of reforms—for example in the case of France under Mitterrand (1981-3) or Germany under finance minister Oskar Lafontaine (1999)—were victories for national, not global, capital. Callinicos points out that the blackmailing of reformist governments with the threat of capital flight is "almost as old as social democracy itself". Oddly, he does not then draw out the point that New Labour's willingness to remain within the boundaries set by capital has a long history.

A broader historical focus would have assisted in highlighting the politics more clearly. This is evident early in the book, in his discussion of the origins of the term "third way". Callinicos notes that the first use of the term can be credited to the French fascist movement, which is a nice debating point but hardly germane. He also notes that in 1912 Ramsay McDonald presented labourism as the "third way". This is more to the point, but surely the focus for understanding present Labour Party politics is to start with Bernstein's Evolutionary Socialism, which was the first attempt to find a "third way" between capitalism and revolutionary socialism. James Petras outlines how reformist socialism went on to define itself after World War ii as a project to reform capitalism, usually in its welfare state varieties. Petras points out that the new centre left represented a new second wave of reformism: "this second wave of the Third Way no longer called into question (even theoretically) capitalist property relations, nor did it call for the gradual transformation of the capital-worker relationship".1

In effect, Third Way politics is really a way of saying that there is no second way, but only the capitalist road. Blair's New Labour is reformism's current adaptation to the "realities" of capitalism, this time in its neo-liberal guise. Blair's claim that there is no alternative due to the "fact" of globalisation is a case of using economics to cloak political decisions.

It would have been useful for a Marxist analysis to mention in this context that, whatever else is controversial about globalisation, there is one set of qualitative economic changes that no-one doubts. This is the end of the long boom and the slide into recession since the peak of the early 1970s. This change necessitated the development of new political strategies by capitalist classes—now known collectively as neo-liberalism—to deal with changed economic circumstances. It is necessary to establish that political and economic strategies are an outcome of class struggles; while the working class has been in retreat, the capitalist offensive has become bolder.

Section two addresses the ideology of New Labour. If times are new and New Labour is introducing neo-liberal reforms, then what remains of it as a left project? Blair's answer is that it is the party of values: it is about "a rediscovery of our essential values—the belief in community, opportunity and responsibility". Callinicos, again, addresses a substantial literature on equality and rights, including Richards Dworkins, Amartya Sen, G.A. Cohen and John Rawls. This discussion is interesting but oddly situated inasmuch as he shows both that actual inequality has risen under New Labour and that the key ideologues of the Third Way do not rely on this literature at all. Their notion of equality is the hoary one of traditional liberalism—equality of opportunity. Inequality is to be overcome in the new "knowledge" economy by education, despite the volumes of evidence that the education system is a key institution for reproducing inequality.

Callinicos' critique of the notion of "community" as an ideological tool is excellent. He notes that community for the Blairites is a powerful tool of exclusion. He draws out the authoritarian implications of imposing community as a tool for restricting civil rights, particularly those of minorities. Thus under the guise of "community", there has been a rise in zero-tolerance policing and the persecution of asylum seekers. Imposition of "community" norms can serve as the human face of neo-liberalism. For example, on neo-liberal assumptions, if the supply side settings are right, then any remaining unemployment is voluntary. Thus it must be the product of individual moral failure or a "culture of poverty". This means that individuals are at fault and the rest of the "community" is justified in forcing them to work for the dole on the grounds of equality and equal rights.

Notwithstanding this ideological use, "community" is not a term that socialists should abandon. It must, however, as Cohen's Self Ownership, Freedom and Equality has argued, be linked to an ethos of social justice, and removed from the greed and fear that are the active ingredients in the disciplining effects of the market.

This use of "community" to undermine rights provokes Callinicos to comment: "I invoke the classical liberal argument in favour of rights with some embarrassment. Things have come to a pretty pass when a Marxist has to remind defenders of contemporary Western liberal societies of the point of concepts constitutive of liberalism itself."

After his good job of unpacking "community" and "equality", it is a pity that Callinocos did not extend this to the concept of "reform". Herein lies one of the great ideological victories of recent times, the theft of "reform" from the vocabulary of the left as a signifier of progress and turning it into a signifier of retreat. As Petras put it: "The current version of the third way has none of the apparent reformist platitudes of the earlier version and all of their reactionary vices: extending the neo-liberal agenda while undermining living standards and deepening inequalities".2

In the third section, Callinicos looks at how the ideas of Third Way politics play out in the international sphere. First he looks at the way Tony Blair in particular has attempted to extend the notion of "community" from national to international politics, where its authoritarian implications are even clearer. This was particularly evident in the 1999 Balkan war between NATO and Yugoslavia. Blair argued that it was "a just war, based not on territorial ambitions but on values". Here again the notion of an "international community" which shares certain values—those of the Western liberal democracies—can be mobilised to police "rogue" states, often under the guise of "humanitarian intervention".

Secondly, Callinicos then critiques another myth of the globalisation literature—the "demise of the nation-state". Callinicos makes the point that these "global" changes are themselves a result of state policies of deregulation, trade liberalisation and privatisation, which create the conditions in which "free" markets operate. Mainstream globalisation theorists argue that global politics is characterised by a high level of economic integration, which renders political rivalry a thing of the past. More specifically, these theorists argue that the USA is not a traditional imperial power and therefore the term imperialism is outdated. While it is true that the USA is not a traditional imperial power, this is not a product of some new process of globalisation: it has been the case since it emerged as the greatest world power in World War II.

Callinicos takes Bukharin's Imperialism and World Economy as his reference point, arguing that globalisation should be seen as a species of imperialism. Bukharin worked with the key contradiction between global capitalism's tendency to become more integrated and its tendency towards economic and geopolitical rivalry. Callinicos points out: "By 1996 the American defence budget was slightly larger than the combined military spending of Russia, Japan, France, Germany, Britain and China". The US state is stronger militarily than ever, and not without good reason.

Marxists are not the only ones to question the "demise of the nation-state" thesis. Robert Keohane of the Realist School of International Relations, STRATFOR—the policy think-tank—and the pragmatic planners of the US empire like former national security adviser Zbigniew Brzezinski recognise, unlike many academics, that the world is not governed multilaterally. The reality behind all the talk of "global governance" is that the USA is the first and only global superpower, a position it plans to maintain. Even in more specifically economic fields, the policies enforced by the World Bank and IMF are termed the "Washington consensus". In 1998, Michael Camdessus, then the IMF managing director, declared: "what we are doing coincides with the basic purposes of American diplomacy in the world". Massive military force and global "multilateral" institutions serve the US to mobilise Western powers behind its initiatives and to provide bargaining forums to negotiate conflicts of interest when they emerge. Again, behind all this talk of the end of empires and humanitarian intervention lies the reality of imperial power.

The final section of the book looks at "alternatives" to the Third Way. Beginning with Seattle and subsequent demonstrations against global international financial institutions, there is now emerging a powerful critique of neo-liberalism based on the theme "Our world is not for sale". Callinicos sets out nine theses that form the crucial elements of an anti-capitalist ideology which goes beyond reformism.

1. The enemy is not globalisation but global capitalism.

Protesters are not "anti-globalisation" but oppose global capitalism. They welcome interconnectedness and growing solidarity and oppose the racism of neo-liberals and growing inequalities.

2. The core institutions of global capitalism are multinational corporations, the leading capitalist states and the international institutions that reflect their interests.

Global economic processes are dominated by large MNCs whose investments are concentrated in "core" countries where they have enormous influence over national governments. Likewise the IMF and WTO serve as arenas in which dominant powers can see their interests are met.

3. Capital is a relation, not a thing.

The movement needs to move away from the populist idea that MNCs are part of a global conspiracy and towards an understanding of capitalism as "an impersonal structure of competitive accumulation which none can control, not even the largest individual capitals".

4. The requirements of capitalist production set limits to its regulation and reform.

There are limits to reform within capitalism. Policies perceived to threaten profitable production will provoke resistance—mainly capital flight. The fight for reforms is important, but it is crucial to understand that such limits exist.

5. The capital relation implies the dependence of capital on its opposite, wage labour.

While capitals compete with each other, they all share a common interest in the exploitation of wage labour, from which their profits derive. While the labour movement has been weakened by fragmentation and casualisation since the 1970s, it is by no means obsolete.

6. The relation between organised labour and other social movements is in the process of being defined.

The new social movements and the "old" labour movement have typically been at odds (for example, greens against workers). While the process is still embryonic, these movements share a common enemy, and this opens up possibility of alliances.

7. Defending the environment means challenging capitalism.

Serious environmental reform is not consistent with the requirements of capitalism. The phasing out of cars and building a public transport system to replace them would bring direct confrontation with powerful capitalist interests like the oil and car industries. Internationally, the measures to halt greenhouse emissions, to promote alternative energy and so on require a collectively agreed system of resource allocation, which is beyond the capacities of the present system.

8. Alternative models of society will emerge from the anti-capitalist movements.

While it is reasonable to be asked about alternatives, the criticism that "socialism is dead" is used to close off debate about the possibility of an alternative. The new global justice movements and the wide variety of ideas that the movement has thrown up will be the basis of many new models and methods with which to transcend capitalism.

9. Transcending capitalism requires a revolutionary transformation of society.

While the anti-globalisation movement is focused on capitalism, what is required is not better capitalism, but a break with the logic of capital and its replacement with a system based on meeting human needs and a democratic system of resource allocation—what in an earlier period used to be called socialism.

It is difficult to know exactly what to make of these theses. They do not seem to follow logically from the arguments made in the rest of the book, nor is the Third Way a pole of attraction for movement activists. As it stands, from a Marxist perspective, there is not much to disagree with. His claim that links are growing with the labour movement seems overstated, although he concedes that they are "fragile" and "reversible": most of the unions in the West are wary and focused on nationalist demands. His other concrete suggestions, like the Tobin Tax, do not seem especially Marxist. While the prevailing mood in the anti-globalisation movement is anti-corporate, there remains a huge gap to fill in explaining to movement activists why they need to be anti-capitalist (roughly theses 1 to 3).

However, Callinicos mixes this with the odd sentiment that social democracy is not dead and that "there is no reason in principle why someone committed to a reformist approach could not accept most or even all of them". In the light of the rest of the book, this seems quite strange. He notes that Labour governments of the past have committed themselves to reforms against capitalist opposition using constitutional means (though he only cites an example from the 1930s). He calls for a revitalised reformism which might serve as the basis for a "series of structural reforms whose cumulative effect would be radically to transform global capitalism", citing Boris Kagarlitsky's Recasting Marxism as an example which attempts to spell out such an approach. However, Kagarlitsky summed it up this way: "The problem faced by social democracy today is not related to its moderation or reformism, but on the contrary, to its consistent, fundamental rejection of reformism and of any form of socialism, even the most moderate".3

Left renewal, Callinicos suggests, could develop around a "robust form of social democracy", which could test the limits of what is possible and could lead to the "development of a mass movement centred on the organised working class that seeks the democratic reconstruction of society". While this democratic reconstruction is desirable, it is hard to see how revolutionary socialists can get a bigger audience for our ideas by arguing for a renewed social democracy at a time when its legitimacy is very low. It might have been better to reclaim the word "socialism" and explain what Marxists have in mind when they use the term.

In summary, Callinicos has provided a useful handbook for the activist who wants something more than anti-corporate moralism. It outlines good arguments against the much-hyped concept of globalisation and a solid critique of New Labour as a neo-liberal shell. It main weaknesses are a tendency to take his opponents too seriously, which means that key political points can get lost among the mass of detail. Finally, his anti-capitalist theses are disappointing, not so much in what they say, but in their suggestions, which remain oddly embedded in reforms that do not seem transitional.


1. James Petras, "The Third Way: Myth and Reality", Monthly Review, Volume 51, Number 10, March 2000.

2. James Petras, "Notes toward an understanding of revolutionary politics today", Links, No 19, p. 24.

3. Boris Kagarlitsky,"The prospects for socialism (or barbarism")", Links, No 14, pp. 98-9.