Giddens Cites Need for Sea Change In Politics for a New Global World

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Giddens Cites Need for Sea Change In Politics for a New Global World

The following is a summary of the Yumin Memorial Lecture, delivered Monday by Director Anthony Giddens of the London School of Economics and Political Science. The lecture was held at Hoam Hall of the Performing Arts; it was the fourth annual lecture in memory of Hong Jin-ki, co-founder of the JoongAng Ilbo. After the lecture, there was a brief question and answer session. This digest was prepared by the JoongAng Ilbo English Edition staff writers Kwon Chee-min and Park Sung-woo. - Ed.

The third way: is not a middle way between the traditional left and right. It is about how to transform traditional political positions to respond to global changes, three in particular. The first is globalization, an explosive notion that has been poorly understood. Globalization does not refer to proliferation of market forces around the world. It is about changes in our societies and communities rather than changes in economic conditions. The phenomenon began in the late 1960s with the development of satellite communications, and has brought about an interdependent era.

A second big change now taking place has to do with information technology. This is another concept that is poorly understood. Information technology is a product of the knowledge economy not the Internet. The development of information technology dates back about 30 years, and has fundamentally changed the way we manufacture and distribute goods. Three decades ago, 40 percent of European workers were blue-collar workers. Now the EU average is 16 percent.

Finally, the growth of individualism is another phenomenon that is changing the world. Individualism is to be distinguished from selfishness. Individualism refers to the importance of constructing our own lives and can be observed in the transformation of the traditional notion of family. The birth rate in Korea is declining, and the rate of decline is more pronounced in Europe, where there are 1.6 children per family on average.

The "Third Way" should be understood with these changes in mind. The logic behind the emergence of the third way is clear: the two dominant political forces, liberal and conservative, have become obsolete with the end of the Cold War. Social democracy was dominant in the years following the end of World War II, and put many social responsibilities on the state. Neoliberalism, a rival notion, cherished the market.

Now we are in quest of both a competitive economy and preserving solidarity. Existing solutions don't work for these ends. The "Third Way" is just a label; it refers to effective center-left politics. It aims to preserve values such as inclusiveness, egalitarianism and protection of the disadvantaged. We cannot leave the responsibility of achieving these goals to the market. Existing strategies are ineffective and some have even proven to be counter-productive.

There have been some important policy innovations. First is the discovery that public institutions do not necessarily equal the state. The state has often been too bureaucratic, corrupt and non-transparent, so thinking about the government and public institutions has brought about a pragmatic attitude toward privatization as a way to deliver economic and social benefits to the public. The separation is effective in combating public apathy toward politics. Constitutional reform, increased government transparency and legislation are effective means to third way ends. Of course the history of state evolution should be taken into account in the case of Korea.

Second, the role of civic culture is also important. If you look at the history of industrial transformation in the United States, three points emerge. First, the government was involved but it was not dominant. The business community was involved but it was not dominant either. More important was the balancing of government and business. Industrial transformation was most successful when it was supported by an energized civic-minded society. A good society is one in which there is a competitive market economy but the market does not dominate. There should also be an active and dynamic government and an energized civic culture.

The third policy innovation is the amalgamation of social and economic policies. Socialism and neoliberalism are half-theories. In our changed world, we need a correct mix of good social and economic policies. Take, for example, fiscal policy. A good tax policy should aim for equality but also job creation. Spain and Portugal, historically laggards in European economic development, have been successful in developing their own welfare systems. More important than ramping down the unemployment rate is looking at the employment rate. We have an average of about 75 percent employment in the European Union. A sound mixture of social and economic policies creates a "virtuous circle": It provides people with decent jobs and wages, which in turn get people what they really want such as good education and health care system. There are two phases of modernization. One is establishing the government and basic market structure, but a more difficult task is to open up the country and transform it. It becomes easier to innovate once the country becomes more open.

Fourth, reform of the welfare system is important. The traditional concept of welfare state has proven counterproductive. Take a look at public housing in Europe or employment benefits. Welfare reform has a particular significance for Korea since Korea could learn from the mistakes of European countries. Portugal which built its welfare system later than most European countries learned much from the mistakes of other European countries when it built its welfare system.

Finally among these policy innovations, governments must understand and respond to inequality of a different type than in the past. Society is now divided into three strata. On the top, there is the minority of people who make high salaries and are trying to escape local taxation. They are the detached elite. In the middle are those who benefit from scarcity in the labor market. They are those working in the information technology industry, perhaps, or as investment strategists. At the bottom of the labor market are those working in service industries. Thirty percent of service occupations are routine, low-paid jobs.

Instead of direct fiscal measures such as taxation, it is better to bring equality with delivery of services. Active, not passive, social welfare systems that fight poverty and inequality must be implemented. To transform incomes, resources and education to help people make something out of their lives is necessary. Welfare schemes that get people into the labor market are important.

The third way has been proven successful. The Labor Party and Tony Blair in Britain are popular. The same is true in Germany and France. They have all broken with the past. Which system we need depends on individual national history and needs. But the third way is the only game in town.

The third way is relevant to Korea in two regards. First, it is a general debate that is relevant to all countries. Second, Korea has the chance to learn from European mistakes in implementing its policies. A general framework is crucial in formulating plans.
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