much run by, and for, the middle classes and the peasantry, with the result that
the frequently changing governments had neither the ability nor the incentive
to help modernize what was probably one of the most backward economies in
Europe. Scandal after scandal rocked the Republic, starting perhaps with the
infamous Dreyfus case, which led to deep suspicion and conflict between the
military and the republican forces at a time when France’s need to avenge its
1870 defeat was symbolically vital. Not until after the First World War were
any efforts made to ameliorate the conditions of industrial workers, and even
then the opposition to serious income tax by the supporters of the ruling
centrist parties forced the governments into relying on state borrowing rather
than more efficient means of raising revenue. The republic might have fallen
earlier, under the combined threat of German-inspired fascist movements from
the right and hostility from the developing and Moscow-inspired communist
party on the left. It was saved, temporarily, by the formation of apopular
frontgovernment in the late 1930s, resulting from a switch to a leftwards
orientation by the Radical party. With the German invasion of 1940 the
regime which had done so little for so many in France fell, largely because
there was no reserve oflegitimacyleft to a state that had started almost by
accident. Few were prepared to die for the protection of a small e ́lite of
politicians who had followed each other in and out of office, acting as little
more than delegates for conservative entrenched interests in, largely rural,
constituencies.
Third Way
The Third Way is one of a series of attempts by the BritishLabour Partyto
characterize what they now stand for since they have overtly abandoned the
principles ofsocial democracy. Social democracy, however often it disap-
pointed its own left wing, at least theoretically stood for a discernibly different
approach to running an industrial society fromliberalismor laissez-faire
capitalism. Above all it implied considerable state control of the economy, at
least at the level of regulation, and sometimes in terms of nationalization. The
British Labour Party and, more or less, all other European social democratic
parties, have become complete converts to a deregulated market economy, the
fine tuning of which is made long-range throughcentral bankmanipulation
of interest rates. This leaves only expenditure and tax policy as mechanisms for
economic control; social democratic parties are now electorally unable to
advocate high tax rates, and they find themselves committed to fiscal ortho-
doxy to make good their commitment to a competitive capitalist economy.
What then differentiates a social democratic party from parties to its right on
the political spectrum? The concept of the third way, for which there is no
generally agreed and precise definition, operates by trying to insist that such
Third Way