Writing in The Guardian on 27 June 2006, Tony Blair asserts that "economic efficiency and social justice are entirely compatible." The assertion, quoted with approval in a leading article by The Guardian a day later, is redolent of "third way" thinking and reminiscent of Lionel Jospin's maxim "Yes to a market economy, no to a market society."

But like so much that is offered under the "third way" label, the assertion confuses more than it clarifies. Taken literally and at face value, it is unexceptionable. But it is not meant to be taken literally. We need not agonise for too long about the meaning of "social justice" in Blair's formulation (though there is no doubt a debate to be had about that), but the meaning of "economic efficiency" is meant to and does cover a multitude of sins.

In Tony Blair's thinking, "economic efficiency" is shorthand for and synonymous with the kind of free-market economics enjoined upon - not to say imposed upon - us by global investors. As a self-proclaimed "globaliser" (see his speech to News Corp in July), Tony Blair is categorical in his belief that the global economy and the triumph of free-market economics on a global scale are not only good in themselves but are also consistent with - indeed guarantors of - social justice, however defined.

This is, however, self-delusion on the grand scale. As I argue in The Democracy Sham, the huge power of global capital is not deployed in virtually every country to ensure that right-wing economic policies are adhered to, simply to have the outcomes undone by national governments intent on securing "social justice". What the "third way" proponents overlook - or resolutely turn a blind eye to - is that the cardinal tenets of free-market economics are that only market-driven outcomes are to be tolerated, that governments must not be permitted to intervene in the market, and that costs that do not have a market rationale must be "externalised", if undertaken at all. The whole point of free-market economics is to leave the market dice where they fall, which is just another way of saying that the objective is to achieve social injustice.

The notion that market outcomes can be reversed or even modified by publicly funded social policies is simply a piece of window-dressing - either deliberate or self-deluding - on the part of governments that have no political will or analytical capacity to do any such thing. The sloppiness and laziness of the Blair formulation and the perpetuation of this delusion by "third way" academics or The Guardian have themselves become major obstacles to the "social justice" that is in increasingly short supply.


Bryan Gould
5 September 2006