¹ Gray is cited here not as an exemplar of Third-Way thinking, since his work is not part of the Third-Way mainstream. It is used to frame this article as representative of writings on the apocalyptic implications of globalization for social democracy. See Gray, J., After Social Democracy, London, Demos, 1996, and False Dawn, London, Granta, 1998.Google Scholar

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¹¹ The term is borrowed from Keman, H., ‘Theoretical Approaches to Social Democracy’, Journal of Theoretical Politics, 5:3 (1993), pp. 291–316 CrossRefGoogle Scholar. Many analyses of the relationship between globalization and social democracy emphasize ‘encompassing’ labour movements in facilitating social democratic response to adverse international economic conditions, see, for example, G. Garrett, Partisan Politics in a Global Economy. However, these analyses offer little insight into social democracy in national contexts where such institutions are inherently weak and on the wane (e.g. Britain) or never existed in the prescribed form (e.g. France). It is in no small part the need to plug this gap in the literature which has inspired the choice of the Labour Party and the Parti Socialiste for consideration here.

¹² So dominant are the northern, and particularly Scandinavian social democracies within the literature that one study which claimed to be a comprehensive analysis of the entire social democratic dataset made no mention of France or any of the ‘southern’ social democratic movements. Pontusson, J., ‘Explaining the Decline of European Social Democracy: The Role of Structural Economic Change’, World Politics, 47 (07 1995)CrossRefGoogle Scholar.

¹³ See Hirst, P. and Thompson, G., Globalization in Question, 2nd edn, Cambridge, Polity 1999;Google Scholar Held, D., McGrew, A., Goldblatt, D. and Perraton, J., Global Transformations, Cambridge, Polity, 1999 Google Scholar and Vandenbroucke, F., Globalization, Inequality and Social Democracy, London, IPPR, 1998 Google Scholar, especially chs. 4–7; Gray, J., After Social Democracy and False Dawn, especially pp. 88–89.Google Scholar

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¹⁹ Ibid., p. 10.

²⁰ Ibid., p. 7.

²¹ Ibid., p. 4.

²² T. Blair, Speech at the annual Friends of Nieuwspoort dinner, the Ridderzaal, the Hague, 20 January 1998.

²³ T. Blair, The Third Way, p. 1.

²⁴ T. Blair, Speech at the annual Friends of Nieuwspoort dinner, op. cit.

²⁵ Brown, G., ‘The Politics of Potential: A New Agenda For Labour’, in Miliband, D. (ed.), Reinventing The Left, Cambridge, Polity, 1994, p. 122.Google Scholar

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²⁷ Ibid., pp. 38–42.

²⁸ White, S., ‘Interpreting the Third Way’, and B. Clift, ‘New Labour’s Third Way and European Social Democracy’, in, Ludlam, S. and Smith, M. (eds), New Labour in Government, Basingstoke, Macmillan, 2001, pp. 55–72.CrossRefGoogle Scholar

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³⁰ Ibid.

³¹ Ibid. See S. White, ‘Interpreting the Third Way’.

³² A. Giddens, The Third Way, pp. 107–9.

³³ T. Blair, The Third Way, p. 11.

³⁴ As Hirst, P. and Thompson note, G., ‘despite all the official rhetoric about the UK being the best home for FDI in Europe because of its basic competitive advantages, in fact there has been a consistent hollowing out of the UK domestic investment as better opportunities for competitive success seem to have presented themselves abroad’. Peculiarly high levels of foreign holdings of domestic manufacturing stock ‘makes the UK peculiarly vulnerable to externally initiated shocks and to decisions by foreign business interests’, ‘Globalization in One Country? The Peculiarities of the British’, Economy and Society, 29:3 (2000), pp. 341–3.Google Scholar

³⁵ D. Held et al., Global Transformations, pp. 180–2 and 224.

³⁶ B. Clift, ‘New Labour’s Third Way and European Social Democracy’, pp. 69– 71.

³⁷ Gordon Brown, Mais Lecture, 19 October 1999.

³⁸ Final Text of the PS National Convention on Globalization, France, Europe, 30–31 March 1996, Vendredi, 276, 8 April 1996.

³⁹ L. Jospin, Modern Socialism, London, Fabian Society, 1999, pp. 4, 8 and 7.

⁴⁰ See Lordon, F., ‘The Logic and Limits of Désinf lation Competitive’, Oxford Review of Economic Policy, 14:1 (1998), pp. 96–113.CrossRefGoogle Scholar

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⁴³ Jospin, L., L’Invention du Possible, Paris, Flammarion, 1991, p. 11.Google Scholar

⁴⁴ Jospin, L., 1995–2000: Propositions pour la France, Paris, PS Presse, 1995.Google Scholar

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⁴⁶ See Guyomarch, A., Machin, H. and Ritchie, E., France In The European Union, Basingstoke, Macmillan, 1998 CrossRefGoogle Scholar, ch. 6, and also D. Held et al., Global Transformations, pp. 177 and 180.

⁴⁷ Figure quoted in Morin, F., ‘A Transformation in the French Model of Shareholding and Management’, Economy and Society, 29:1 (2000), pp. 36–53 CrossRefGoogle Scholar. See also F. Lordon, ‘Logic and Limits’, and B. Clift, ‘The French Model of Capitalism: Still Exceptional?’, in J. Perraton and B. Clift (eds), Where Are National Capitalisms Now?, Basingstoke, Palgrave, forthcoming.

⁴⁸ The notion of ‘Keynesianism’ as employed here refers not to precise mechanisms of fine or coarse tuning, or to deficit financing, but to the broader insights into the relationship between the state and the economy, and the role of the state in ensuring security of employment.

⁴⁹ L. Jospin, Modern Socialism, p. 6.

⁵⁰ Muet, P., Achieving Full Employment, London Policy Network, 2000, p. 9.Google Scholar

⁵¹ L. Jospin, Modern Socialism, p. 11.

⁵² T. Blair, speech to the PES Congress, Malmo, 6 June 1997.

⁵³ T. Blair, Mais Lecture, 22 May 1995.

⁵⁴ ‘In today’s deregulated, liberalized financial markets’, argued Brown in his speech at the Mansion House, 11 June 1998, ‘the Keynesian fine tuning of the past which worked in relatively sheltered, closed national economies and which tried to exploit a supposed long-term trade-off between inflation and unemployment, will simply not work’. As noted above, this positing of a closed national economy is to say the least dubious. (See, e.g., P. Hirst and G. Thompson, ‘Globalization in the Country’, op. cit.).

⁵⁵ Corry, D., ‘Macroeconomic Policy and Stakeholder Capitalism’, in Kelly, G., Kelly, D. and Gamble, A. (eds), Stakeholder Capitalism, Basingstoke, Macmillan 1997, p. 188.Google Scholar

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⁵⁹ Final Text of the National Convention on Globalization, France, Europe, 30– 31 March 1996, Vendredi 276, 8 April 1996.

⁶⁰ L. Jospin, Modern Socialism, p. 10.

⁶¹ P. Moscovici, Plaidoyer une autre politique, p. 55.

⁶² D. Held, ‘Globalization: The Timid Tendency’, p. 25.

⁶³ Balls, E., ‘Open Macroeconomics in an Open Economy’, Scottish Journal of Political Economy, 45: 2 (1998), p. 117.Google Scholar

⁶⁴ E. Balls, ‘Open Macroeconomics’, pp. 117 and 120.

⁶⁵ Ibid., p. 122.

⁶⁶ See G. Brown, Statement by the Chancellor of the Exchequer on the Comprehensive Spending Review, 14 July 1998. The ‘old style tax and spend’ rhetoric is yet another example of New Labour’s tendentious caricature of Old Labour, which in the post-war years adhered to the ‘Golden rule’, with the possible exception of 1967–76. See Notermans, Money, Markets and the State, p. 163.

⁶⁷ Gordon Brown, Statement on the Pre-Budget Report, 3 November 1998.

⁶⁸ E. Balls, ‘Open Macroeconomics’.

⁶⁹ It is not clear for how long this situation would have to endure before the ‘open letter’ calling for ref lation were issued. Nevertheless, such a course of action is clearly much more than just a theoretical possibility.

⁷⁰ E. Balls, ‘Open Macroeconomics’, p. 130.

⁷¹ It is a mistake to infer from the rhetoric that New Labour’s macroeconomic outlook ‘rules out’ Keynesian policies. In certain circumstances, such as a recession, when unemployment falls well below the NAIRU, ‘macro-policy can undoubtedly be very effective and should be used boldly’. See D. Corry, ‘Macroeconomic Policy’, p. 191.

⁷² Gordon Brown has gone so far as to confidently assert that he would, if necessary, borrow to cover these spending commitments, Financial Times, 23 October 1998.

⁷³ For example, in March 1999, income tax fell from 23 per cent to 22 per cent, and a 10 per cent income tax band was introduced. However, in less reported areas, the government increased its fiscal revenues through the abolition of Pension Funds Tax credits for Advance Corporation Tax — intended to raise £5.4 billion — and married couples’ allowance and mortgage tax relief.

⁷⁴ Dyson, K., ‘Benign or Malevolent Leviathan? Social Democratic Governments in a Neo-Liberal Euro Area’, Political Quarterly, 70: 2 (1999), p. 196.CrossRefGoogle Scholar

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⁷⁶ P. Muet, Achieving Full Employment, p. 10.

⁷⁷ Thus, the PS argues, in the event of a conjunctural downturn, spending should not be changed even if it were to slightly overshoot the 3 per cent deficit target, allowing macro-policy to counter a crisis of insufficient demand as part of the job-creating strategy. PS, Changeons L’Avenir ; P. Moscovici, Plaiydoyer pour une autre politique, pp. 96–98.

⁷⁸ K. Dyson, ‘Benign or Malevolent Leviathan?’, p. 202.

⁷⁹ See Libération, 16 December 1998. Other measures advancing the declared aim of increased ‘fiscal justice’ include reductions on tax breaks on inheritance and life assurance, and reducing concessions for firms investing in other financial ventures, as well as plans to reform VA T and habitation tax along more progressive lines. Libération, 23 July 1998.

⁸⁰ In March, a 10% income tax cut was introduced for 5m lower earners, and 650,000 particularly low earners were exempted from taxation altogether. Financial Times, 23 March 2000. In September 2000, income tax was further reduced. Libération, 31 August 2000.

⁸¹ See OFCE, L’Economie Française, Paris, La Découverte 1999, pp. 19 and 63.Google Scholar

⁸² Gordon Brown, Mais Lecture 19 October 1999.

⁸³ Ibid.

⁸⁴ As Cross notes, ‘the natural rate hypothesis provides a rationale for the contemporary fashion of confining macroeconomic policy to the task of achieving targets for the rate of inflation or of price stability. The counterpart is that the only effective way to reduce unemployment or raise output in a sustainable way is through micro or “structural” policies.’ ‘Natural and Unnatural Frameworks: Is the Natural Rate Redundant?’b, New Economy, 6:2 (1999), p. 66. See also Corry, D. and Holtham, G., Progressive Macro-economics, London, IPPR, 1995, pp. 11–16.Google Scholar

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⁸⁶ Gordon Brown, Statement on the Pre-Budget Report, 3 November 1998.

⁸⁷ This relief involves, at its height of its sliding scale, state remuneration of 18.2% at minimum wage level. See Gutman, O. and Lefèbvre, E., ‘Le rééquilibrage de la fiscalité du travail et du capital’, Regards sur l’Actualité (02 1999), pp. 3–16.Google Scholar

⁸⁸ Libération, 19 October 1998.

⁸⁹ The ‘leave it to the supply side’ assumptions of a conception of the NAIRU heavily influenced by neoliberal political economy is seen by many as the reason for the ‘failure’ in employment creating terms of the policy of competitive disinflation in the 1980s and 1990s.

⁹⁰ Muet, P., Achieving Full Employment, p. 11.Google Scholar

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⁹³ T. Blair, Speech at the annual Friends of Nieuwspoort dinner, the Ridderzaal, the Hague, 20 January 1998.

⁹⁴ Labour Ministry figures, see the website: www.nsej.travail.gouv.fr/actualite/ bilan. Such results, however, must be placed in the context of a wider economic upturn, making the precise impact of the Plan Aubry difficult to discern.

⁹⁵ Excerpts from the Projet de Loi PS website http://www.parti-socialiste.fr/html/change/index.html. See also Gubian, A., ‘Les 35 heures et l’emploi: la loi Aubry de juin 1998’, Regards sur L’Actualité (11 1998), pp. 20–21.Google Scholar

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