POLITICS-ARGENTINA: ‘Third Way’ Politics Face Dubious Audience

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Jul 6 1999 (IPS) - Academics and government advisers from several industrialised nations proposed alternatives to “savage capitalism” Tuesday, while several Argentinean politicians maintained their defence of the free market.

Foreign political experts spoke on the feasibility of a “third way” between capitalism and socialism before an auditorium filled with Argentinean bankers and members of the business community.

Edward Luttwak, of the Washington-based Centre for Strategic Studies; Jacques Attali, former advisor to French president Francoise Mitterand; and Nicola Rossi, adviser to the Italian prime minister Massimo D’Alema, debated the “third way” issue in a panel organised by Argentina’s Association of Banks.

The speakers recommended that developing countries put aside the orthodox application of neoliberal policies.

But Argentina’s president Carlos Menem declared that “the third way is dead.” Eduardo Duhalde, governor of Buenos Aires province and the Justicialist Party’s presidential candidate who is favoured to win the October elections, affirmed that there is just one way, and that is capitalism.

The centre-left Alianza Party’s candidate, Fernando de la Rua, is running a close second to Duhalde according to polls. He, however, stated that Argentina needs more jobs and the means to improve social justice.

The meeting, which brought together more than two thousand participants at Monday’s opening session, was focused on the “third way” debate. A study on the increasing inequality in income distribution in Argentina during the 1990s was presented parallel to the discussion.

The study by the Foundation for Latin American Economic Reasearch indicates that, despite the achievements of the Menem administration’s neoliberal reforms, the gap separating the rich and the poor continues to grow in Argentina.

In that context, the foreign academics tried – with some difficulty – to define the “third way” concept – to frame and develop the idea for an audience of people from the relatively conservative banking and business sectors.

British sociologist Antony Giddens developed the idea which, as an alternative to capitalism and socialism, has gathered steam among European social-democrats, including German chancellor Gerhard Schroeder and British prime minister Tony Blair.

According to the experts, the third way calls for neutralising the negative social impacts of economic liberalism and globalisation. It does not mean abandoning the free market, privatisations or fiscal balance. The role of the State would be to alleviate inequities.

Rossi, head of the Italian government’s Economic Advisers Council, stated that 13 of 15 European countries elected centre- left parties to power in recent years, demonstrating that the electorate prefers the redistribution of income as a means of reducing inequalities.

“Equality is possible in a competitive world,” assured Rossi, for whom competition “absolutely requires a social conscience, not just for isolated individuals, but in relation with all others.”

Attali, Mitterand’s former adviser and member of the International Academy of Paris, maintained that despite what Menem had said, the “third way” debate is timely for Argentina as it is currently trying to consolidate an alliance between the market and democracy.

“The third way is a new way to think about the social-democracy that is growing in Europe, that ensures both the success of the market and the reduction of its most negative aspects,” remarked Attali.

The third way means accepting the market economy with all its consequences, including privatisations and the return of production to the private sector, with an efficient State and within the context of globalisation.

Ethan Kapstein, professor at the University of Minnesota in the United States, disagreed with Menem saying that the third way is already setting an agenda for the new millenium and therefore, is an inevitable debate.

To advance this alternative, Kapstein underscored the need to increase investment in education for developing countries. It is the only way to make the principle of equal opportunity a reality and to promote equitable growth, he added.

Luttwak joined Kapstein in denying Menem’s assertion that the third way is dead, saying it exists in the type of capitalism followed in many European, Asian and Latin American countries, where they are implementing a model that is not completely neoliberal.

The expert stated that U.S. capitalism produces inequalities that are maintained through a culture that says the rich have money because the work – an idea that “the American medium” reaffirms, he said, even the poorest sectors of society.

“It doesn’t matter whether or not it is true. There is a myth that is in effect that serves as compensation,” added Luttwak. He also suggested that countries following the third way should implement more rapid and generalised reforms focused on certain sectors, such as tourism.

Like Kapstein and nearly all panelists, Luttwak stressed that if a more equal social development is to become a reality, the best investment is education, because it will increase society’s overall productivity.