<html><head /> <body> <META http-equiv="Content-Type" content="text/html; charset=UTF-16"><title>Third Sectors, Third Ways</title><meta name="keywords" content="changes,Civil,communication,community,crime,culture,customs,economy,environment,giddens,global,globalisation,globalization,government,information,labour,market,marketplace,money,nationalism,new,power,science,Society,technology,tradition,way,World,third,politics,anthony,"><table style="font-family:Verdana; font-size:larger; " align="center" border="0" width="50%"><tbody><tr> <td style="background-color:silver; border-color:white; border-left-style:none; border-style:none; " width="730"><span style="font-family:Verdana; font-size:larger; ">Third Sectors, Third Ways</span></td> </tr> <tr> </tr> </tbody></table><br><table style="font-family:Verdana; font-size:medium; " align="center" bgcolor="white" border="0" width="50%"><tbody><tr> <td height="131" width="669"><span style="font-family:Verdana; font-size:x-small;"><strong>Editors Introduction</strong></span><span style="font-family:Verdana; "></span><span style="font-family:Verdana; font-size:x-small; "><img src=auth_giddens.jpg width=80 height=110 alt=giddens valign=top align=right vspace=5 hspace=5> In this article, Anthony <br> Giddens (right) identifies three fundamental transformations affecting humanity: globalisation, scientific and technological innovation, and the retreat of custom and tradition. To cope with such changes, a new political course has emerged--the Third Way. Giddens examines the promise and the pitfalls of the new structure of politics.</span><br><br> <span style="font-family:Verdana; font-size:x-small; ">The debate about Third Way politics is probably the most important political discussion going on around the world at the moment. The debate is not limited to the role of new Labour in the UK; it is a truly global debate. Throughout the world, people working in the third sector, people working in voluntary associations, are deeply involved in this discussion, both in industrial countries and in the developing world.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">The Third Way, of course, lends itself to easy humour--"sixteenth way," "Milky Way," "my way." The term does not refer to some kind of midpoint between two extreme political philosophies. It refers to a political debate which is concerned with reacting to the extraordinary changes transforming the world in which we live.</span><br><br><span style="font-size:x-small;"><strong>The impact of globalisation</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">The first great change is the impact of globalisation. The term "globalisation" sounds miles away from the nonprofit sector and charitable organisations, but I would like to stress very strongly that it is not. Globalisation refers to our increasing interdependence across the world and to the increasing impact of living and working in a single global marketplace. More fundamentally, it refers to a basic shift in the institutions of our lives. Globalisation is changing our personal lives as much as changing the big institutions. It is certainly changing the sovereignty and the nature of states, but it is also changing family life. Basically, globalisation is a profound set of transformations in the way in which we live.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">One has to grasp the fact that the impact of globalisation is not a single one. Globalisation has a three-way impact on the world. Globalisation shifts power away from the nation-state, transforms lives through scientific innovation and technological change and diminishes boundaries of custom and tradition.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">First, the development of the global marketplace takes some power away from the nation-state and quite a lot of power away from politicians. Political leaders do not have the same kind of power over the economy that they used to have.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">At the same time, globalisation, being a complex set of forces, has a kind of "push-down" effect. It underlies the recovery of local community power, the return of local cultural identity and the springing up of local forms of nationalism across the world. The impulse towards decentralisation is part and parcel of the globalising processes. At the same time as it pulls away from the nation, it pushes down below the level of the nation-state. Globalisation squeezes society sideways and creates new economic and cultural regions; some of which crosscut the boundaries of nations.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">The government has to respond to the impact of globalisation. The reason globalisation is such an important backdrop to third sector discussions is that it permits new forms of community development and a return to forms of local democracy. It makes possible a rebuilding of local community fabric in quite a different way, I think, from the way in which people have ordinarily understood the world.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">The second big set of changes transforming our lives is the tremendous impact of scientific innovation and technological change. Technological change often brings to mind "information technology." While it is true that information technology is revolutionising the economies of the world, it is also revolutionising communications systems. Perhaps the biggest conjunction is the new marriage of information technology and communications technology, which has led to the 24-hour money markets that are so important in modern economies.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Also affecting our lives is the renewed impact of science and scientific innovation. Science itself has become globalised. It influences our lives in a much more profound way than ever before. Our relationship to science has changed. As ordinary citizens, we now live in a much more "interrogatory" or "dialogical" relationship with science than any generation has before.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">If we consider the BSE (bovine spongiform encephalopathy, or "mad cow disease") crisis, or the discussion about genetically modified foods, we might assume that these are isolated cases where we have to deal with the impact of scientific innovation. Well, they are not. They are absolutely symptomatic of the sorts of risks all of us will have to face in the future, the very direct political and social implications of which I cannot stress too strongly.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">The third set of changes affecting our lives is on the level of everyday life. Basically, all over the world custom and tradition are in retreat. For past generations, custom and tradition functioned as a fixed landscape for people's actions; much of what we did was structured by the past. This is much less true for us. We live our lives much less as fate than previous generations used to do. It is very easy to see the impact of this on the family, especially women. More women today have to decide what to make of their own lives. This is not limited, again, to the developed countries; this is a revolution sweeping across the world.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">These changes have destroyed old forms of politics. To understand the debate about the Third Way, one has to understand that the construction of an effective political ideology and political programme must be seen in the context of extraordinary transformations occurring in the world.</span><br><br><span style="font-size:x-small;"><strong>Defending public space</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">It is called Third Way politics--the new political position--because it seeks to break away from the two preceding ones. I do not think anyone any longer thinks that the traditional reformist socialism--the kind of socialism which the Labour party in the UK and many other left-of-centre parties have stood for in the past--is able to respond to the world of globalisation. Nor, or the other hand, is the alternative political philosophy, which dominated something like the last 20 years or so, which in technical terms is called "neo-Liberalism." (In a more colloquial vein, that philosophy is known here in the UK as "Thatcherism" and in the US as "Reaganism.")</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Very few people, in the wake of the East Asian crisis, any longer think that you can run the world as though it were a gigantic marketplace. I believe the electorate agrees with this. Looking at the current makeup of the countries in the European Union, 13 out of the 15 countries are either led by left-of-centre governments or have a left-of-centre political leader in a coalition. Why is this happening? It is happening because the electorate has the same diagnoses of the world as the politicians and academics confronting it. We do not want a "top-down," bureaucratic, government-knows-best type of socialism. On the other hand, we do not want to be left unprotected in the face of the global marketplace. We need the hand of active government to provide protection, to provide protection from the buffetings and fluctuations of living in a globalised market economy.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Third Way politics has emerged out of this conjunction. It is fast becoming the dominant orientation in Europe and many other countries across the world. Out of it has come a fairly coherent political programme, each element of which is resonant with implications for the third sector.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Let me just briefly sketch the programme of Third Way politics. I regard this as the framework behind Labour Party thinking and behind reform of many other left-of-centre parties across the world.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Third Way politics is an endeavour to apply left-of-centre values in society: social solidarity; inclusion; protection of the vulnerable; and reduction of inequalities. It argues for a renewal of public institutions, a new defence of public space, and a re-defence of the role of the public realm in our lives. But it refuses to identify the public domain with the domain of government. Old-style left-of-centre politics were characterised as either owned by or controlled by the state. Third Way politics looks to produce a new account of the public interest and to reshape public institutions. There are many ways in which to defend public institutions without the state playing more than a partial role, including the involvement of third sector groups.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">As part of a renewed defence of public institutions, Third Way politics argues for a radical revision of democracy and democratic institutions to respond to the impact of globalisation. The push-down consequence of globalisation means renewing democracy above <I>and</I> below the level of the nation-state, but it also means a second wave of democratisation.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Led by left-of-centre governments, Western countries are attempting to react to one of the major problems of contemporary politics: declining trust in political institutions and political leaders and increasing levels of apathy towards orthodox political procedures, which seem to be particularly pronounced among the younger generation. Disillusion of large sectors of the electorate with politics is by no means confined to this country. It can be found in the US and the majority of Western European countries, too. How should we respond to this situation?</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Survey material on voters' attitudes suggests how we should respond. It is not the case, actually, that people are disillusioned with politics. It is not even the case that the younger generation is more disillusioned with politics than it used to be. What the younger generation is disillusioned with is orthodox politics, parliamentary politics and the activities of existing parliamentary leaders. They see, as all of us can see, that national politicians simply do not have the degree of power that they had a generation ago. They also see these leaders behaving in ways which, to them, are corrupt or not acceptable.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">A recasting of politics of a globalised, open-information society is occurring. Basically, old forms of politics are not acceptable to large chunks of the electorate where, for the first time, most of the population is in the same information environment as the political leaders. In such a world, to recapture interest in politics we have to bring politics back to the people and reconstruct the definition of democracy.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Second-wave democratisation means constitutional reform, freedom of information acts, devolution of power and changing traditional symbols of power (the most obvious one in the UK being the House of Lords, but there are many other examples in other countries). It also means confronting the issue of corruption, which is defined in a different way in today's open-information society. Many political activities were simply ways of "getting things done." Old-boy networks, for example, were the defining characteristics of traditional politics, but they are no longer acceptable in the modern context of an open-information society.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">So Third Way politics looks to restructure the nature of public institutions, and argues for a renewal or a second-wave process of democratisation and for structural reform, including devolution of power that goes along with this package of change.</span><br><br><span style="font-size:x-small;"><strong>Wooing civil society</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">Third Way politics looks to find a different relationship between government and civil society--civil society, of course, being that part of society where the third sector traditionally operates. Old-style socialists thought that the main institutions of civil society could simply be replaced by those of government. They tended to want to replace the basic core of civil society with government-owned, bureaucratic administrations on the basis that they were more efficient and effective. The other side, the market fundamentalists, simply wanted government to get out of civil society altogether. The neo-Liberal argument has always been that if government retreats from civil society, everything will mysteriously become harmonious and we will all live in a renewed civic culture. Well, neither of these views are possible to hold any longer.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">We need active partnerships between government and civil society. A healthy society requires a balance between three things: you need government; the market; and civil society. If any one of these dominates the others, society is in trouble. In a globalising era, we need to find a new balance between these three.</span><br><br><span style="font-size:x-small;"><strong>Education, economy and welfare</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">Third Way politics takes a different view of the economy from each of the two preceding positions. Traditional socialism stressed government intervention in the economy, while the neo-Liberals--or Thatcherites--suggested minimising the role of government. Third Way politics looks for a new form of active involvement of government with economic life, but not through nationalisation. Third Way politics is not hostile to the privatisation of enterprise. Third Way politicians advocate the centrality of the market as a means of producing the most effective economy.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Third Way politics argues for aggressive, supply-side policy, with government playing a central role in investment in education and in the necessary infrastructure of communications, transport and so forth in order to prepare society to be able to respond effectively in a more globalised economy. Education has a much more central role in Third Way political thinking. There is a belief in lifelong education rather than school education, because a highly globalised, mobile economy requires people to respond quickly to change, and to adapt to technological innovation.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Third Way politics argues for structural reform of the welfare state, in order to produce two sets of changes. The existing welfare state in most Western countries has proved only partly effective in controlling poverty and associated risks, and in some cases has produced contradictory consequences. These consequences have to do with the phenomenon that people who study private insurance call "moral hazard" in the welfare system. In other words, we do not want to design a system in which welfare benefits lock people out of work (moral hazard) rather than getting them into work. Yet there are many aspects of welfare institutions which tend to subvert the very goals they were set up to achieve.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">However, Third Way politicians do not look primarily to spend less on welfare institutions; they simply look to spend it more effectively and to direct it towards the supply-side investments I just mentioned.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">We are trying to find a new balance in welfare reform between risk and security. The welfare state has always been, essentially, a passive risk-management system: if you become unemployed, the welfare state will be there to look after you. Now, however, we live in a much more active society, with a new social contract which involves rights and responsibilities of individuals in the wider society and government. We want actively restructured welfare institutions to encourage people to take risks rather than preventing them from doing so. Risk is the basis of innovation, and innovation is the basis of an entrepreneurial attitude. We want both labour forces and managers to have an effective entrepreneurial attitude towards the world. Welfare institutions have to be shaped in such a way as to allow this to happen. There also needs to be a protection mechanism for people when things go wrong. All of this presumes quite radical restructuring welfare.</span><br><br><span style="font-size:x-small;"><strong>The environment and the regions</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">Third Way politics looks for a new relationship with the environment, usually described as "ecological modernisation." It used to be thought that ecologically sound policies would inhibit economic growth and development. New forms of ecological thinking, however, hold the reverse. They argue that ecologically sensitive innovations often create jobs and promote economic growth rather than the reverse.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Giving ecological issues a central role in politics has not been fully achieved in the UK. As I mentioned above, we are dealing with the influence of risk, and especially the forms of risk introduced by technological innovation. We face risk situations which no previous generation has had to face, and politicians have to mobilise themselves to confront them.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Finally, Third Way politics looks to operate not just on a national level or regional level but on a transnational level. Third Way politicians recognise that the structure of international relations has changed. We live in a world of much more "fuzzy" sovereignty than previous generations. A world of fuzzy sovereignty results in a different style of war. Old-style wars were territorial wars between nation-states. New-style wars are wars that happen when the state is too weak; they happen round the edges of disintegrating states, or round the borders of contested areas where a previous political system is in decline or is changing. The war in Kosovo was not a war between two nations but a war between two principles; a war between the principle of a cosmopolitan borderless Europe versus a more traditional, mystical, territorial nationalism in the heart of Europe.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Fuzzy sovereignty has many implications for identity and citizenship. It is the basis of the Northern Ireland peace agreement, for example. A generation ago, a peace agreement in Northern Ireland with even a remote chance of success would have been very unlikely. The current one does, I think, still have a good chance of success. It is based on fuzzy sovereignty, because you can be in Northern Ireland and also be linked to Ireland, the UK and the European Union. Tolerating multiple identities is a key part of what a tolerant society should be. A narrow view of identity then leads to conflict, because it forms the basis of fundamentalist ethnicity, fundamentalist nationalism or fundamentalist religion.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Each of these points is crucial to the debates now surrounding the third sector and the role of third sector organisations, not just in this country but throughout the world. I will conclude by sketching out what some of these implications are.</span><br><br><span style="font-size:x-small;"><strong>Bowling alone and broken windows</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">First, contrary to what many people argue, we now live in a much more active society than previous generations. The American political scientist Robert Putnam argued that, in contemporary societies, what he termed "social capital" is in decline. Social capital is the degree to which you can rely on other people or the degree to which trust exists in everyday life. Trust can be used to generate useful community structures and forms of self-reliance in communities.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">In a famous article called "Bowling Alone," Putnam argued that the civic world--the world inhabited by most third sector groups and charitable associations--is in decline. Since the writing of that article, there have been a range of sociological studies, in this country and elsewhere, which show that the reverse is true. The civic sector is actually growing rather than declining, but the nature of the groups to which people belong in most Western countries is shifting.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">In many countries, old-style voluntary associations are becoming less important, while new-style, partly professionalised self-help groups are springing up and becoming more central to what people do in the third part of their lives, when they are not working or playing.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Having a society with a more active, reflective citizenry is very important for Third Way politics, because it means we can draw upon these wellsprings of activity to produce new relationships between the third sector and a renewed and reconstructed government and economy.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Second, we find in many parts of the world, including the UK, strategies of community renewal in which third sector groups play a key role. I would like to mention two particularly interesting examples. One is the role of third sector groups in controlling criminality and repairing the social fabric in poorer neighbourhoods. I am very influenced by the so-called "broken windows" theory of crime. "Broken windows" is quite different from zero policing. It stresses the importance of everyday civility and, as it were, the trivial aspects of everyday civic interaction as crucial to lowering crime rates in poorer--or indeed more affluent--areas. The idea is that if you leave a window broken, other windows will then get broken; if you repair the window, other windows will not get broken.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">There is a lot of evidence from countries around the world that reconstruction of everyday civility, concentrating on the small aspects of everyday life--for example getting rid of graffiti on buildings--plays a crucial role in community control and community policing. Third sector groups in the US have played a central role in these renewed forms of crime control. The new approach involves moving away from the high-tech approach to crime and moving towards community reconstruction, an approach in which third sector groups can play a crucial role.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">A second example comes from a series of studies on industrial renewal in the United States by Rosabeth Moss Kanta, a researcher at Harvard Business School. She has shown that response to the kinds of technological change I mentioned earlier has been swifter and more effective in the US than in European countries (one of the main reasons that unemployment rates are much lower in the US than they are in Europe). This has been accomplished not simply by lowering their labour regulation so that there are more people working in poorly paid jobs. Rather, it has been accomplished through active, local reconstruction involving local business groups often stretching across different cities. And it is not a question of business simply giving money to a local school or a local group. Businesses look for active investment opportunities, for example, investing in high-tech information technology in an educational environment which has the payoff for the school, the community and the business itself.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">These forms of regional association are quite novel in the United States. They stretch across different cities, rather than just being concentrated in one, and usually involve the state government--though government has not played a dominant role in these processes of industrial renewal, which, crucially, have involved third sector groups as well. In fact, Rosabeth shows that such industrial-renewal projects have been successful only where third sector groups have been directly involved and where not-for-profit groups have taken an active, entrepreneurial role.</span><br><br><span style="font-size:x-small;"><strong>The third sector in the Third Way</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">I think it is clear that, in the context of Third Way politics, a new effort bargain is happening between government and third sector or charitable groups. A new effort bargain which is full of conflicts and possible tensions, it allows third sector groups a much more direct role in government and the formation of government policy. I'm sure some people here have been directly involved. For example, welfare-to-work schemes now include third sector groups in actual policymaking, not just in the execution of welfare-to-work schemes.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Government is also demanding its side of the bargain, which involves what the Labour government in the UK likes to call "modernisation" of the charitable, or third, sector in terms of, for example, how time is used or how funding is provided. This is the other side of the effort bargain. Now, it seems to me that this effort bargain is at the forefront of the struggle to find a new accommodation between the active hand of government and the direct involvement of the third sector.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Creating new conditions for philanthropy, for example, is one aspect of this. The London School of Economics is a good example of Third Way politics. You might think of the LSE as a state institution, which of course it is. However, the LSE now receives less then one-third of its revenue directly from government; it also receives money from student fees and research grants. But, crucially, the LSE has to raise money through its own philanthropic efforts. Personally, I think a change in the tax laws to help create a culture of giving, a culture of philanthropy--somewhat analogous, at least in some ways, to that which exists in the US, certainly in the educational sector--is very important to us in the UK. About 75 per cent of money which is given away in the US actually goes to higher education, which provides a crucial resource for the rather flourishing state of higher education in the US compared with the UK.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Further, it seems clear that the third sector cannot stand aside from the more active risk-taking aspects of modern society. Social entrepreneurship is surely a core part of the transformation of the third sector. The term has been much bandied around and could easily become devoid of meaning, but I believe it has a very precise meaning. It means that charity is not just a matter of giving, but also a matter of "go-getting"; running a charitable organisation means activating capital in much the same way that a business activates capital.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Of course, financial capital is needed to operate a charitable or voluntary organisation, but social capital is also crucial. Essentially, social entrepreneurship means using social capital as though it were financial capital, and also using it as a means of building up financial capital. Third sector groups can play a very large role in sustaining the wider market framework of a society by engaging in the construction of entrepreneurial attitudes towards the creation and use of social capital.</span><br><br><span style="font-size:x-small;"><strong>Globalising the third sector</strong></span><br><span style="font-family:Verdana; font-size:x-small; ">The third sector is no longer just a national or local phenomenon; it is itself becoming globalised. Many people think that, in an era of globalisation, big business can simply trample over people's interests in different parts of the world because of the new mobility of capital. This is not the case. As well as globalisation from above, which is a kind of globalisation of big business and financial capital, you also have a globalisation from below.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Globalisation from below--the globalisation of third sector groups and non-governmental groups--has dramatically increased in number over the last 20 years. These are groups with power, and they should use that power. Third sector groups can play a key role in the creation of a global culture of corporate responsibility.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">We can date the development of these changes to the conflict between third sector groups and Shell around the Brent Spa platform. What Shell discovered in that confrontation was that non-governmental, third sector and consumer groups across the world have great power; that these groups are globalised; and that these groups are keeping an eye, as it were, on the activities of big corporations. Since that time, Shell has shifted, very fundamentally, its definition of corporate responsibility.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">I plead for an eye on the implications of globalisation on the role of the third sector in the modern world. Again, a quid pro quo exists: if there is a new effort bargain between government and the third sector, there is also a new effort bargain between the third sector and business. Third sector groups can play an active role in promoting the transformation of business to become more socially, culturally and ecologically responsible.</span><br><br><span style="font-family:Verdana; font-size:x-small; ">Finally, all this fits into the debate of our times, because everyone here is part and parcel of the new structure of politics, and has a crucial role to play in it. Whatever happens in the near future, just as market philosophies of a crude kind really dominated the last 20 or so years, the debate around Third Way politics, the debate around civil society, the debate around third sector and voluntary groups will be the centre point of political debate, discussion and structure for the next 20 years.</span><br><br><span style="font-family:Verdana; font-size:x-small; font-style:italic; ">This article was first published in September 1999 as CAF Focus Paper No 2, published with Alliance, Vol. 4, No. 3. www.cafonline.org/alliance. Copyright The London School of Economics and Political Science.</span></td> </tr> </tbody></table> </body></html>