{"id":1352,"date":"2022-04-19T09:55:24","date_gmt":"2022-04-18T22:55:24","guid":{"rendered":"http:\/\/davidmhart.com\/wordpress\/?p=1352"},"modified":"2026-04-07T22:22:23","modified_gmt":"2026-04-07T12:22:23","slug":"on-the-impossibility-of-finding-a-third-way-between-liberalism-and-socialism","status":"publish","type":"post","link":"http:\/\/davidmhart.com\/wordpress\/on-the-impossibility-of-finding-a-third-way-between-liberalism-and-socialism\/","title":{"rendered":"On the (im)Possibility of finding a \u201cThird Way\u201d between Liberalism and Socialism"},"content":{"rendered":"

[Note<\/strong>: This post is part of a series<\/a> on the History of the Classical Liberal Tradition]<\/p>\n

Some people can see the logic in applying political, moral, and economic principles consistently and avoiding contradictions which make being consistent impossible. Thus for example, if you really do believe that profit, interest, and rent are immoral (as many early socialists did) because they are \u201cunearned\u201d by the capitalist \/ factory owner, the banker or money lender, and the land or property owner, and which is paid at the expense of those who do in fact \u201cwork\u201d (or \u201clabour\u201d), then this is immoral and a form of exploitation which must be stopped.<\/p>\n

If you really do believe, as another example, that the payment of wages to workers by a profit-making factory owner or employer is also a form of exploitation since the worker never receives the \u201cfull value\u201d of what their labour produces, the difference going to the owner in the form of \u201cprofit\u201d, then this too must be stopped because exploitation is immoral.<\/p>\n

If you really do believe that \u201ccapitalism\u201d is riven by internal contradictions that lead inevitably to periodic economic recessions and depressions, that the workers\u2019 standard of living is doomed to gradually decline through unchecked population growth and the decline in their wage rates, that the exploitation of nature for profit leads inevitably to environmental destruction, pollution, and global warming, that \u201coverproduction\u201d of consumer goods leads to rampant and degrading \u201cconsumerism\u201d, that \u201cglobalisation\u201d of markets creates a race to the bottom as countries with cheap labour drive out of business those countries where wage rates are much higher, if you believe these things then logic tells you that you have to oppose them because they are immoral and damaging to the welfare of ordinary working people and possibly will also lead to the end of the world. Hence the passion held by supporters of \u201cExtinction Rebellion\u201d.<\/p>\n

On other other hand, radical liberals \/ libertarians believe none of these things are true but they do have a similar desire to see their principles put into practice in a logical and consistent manner, namely the idea that individuals by their nature as human beings have rights to life, liberty, and property which pre-date the creation of the state and which trump (no pun intended) any claim the state may have to take away or infringe upon these rights; that the non-aggression principle should apply in all social and economic relations between people; and that when states, groups, or other individuals use aggression to interfere with these natural rights they engage in the unjust exploitation of others which is immoral and thus should be brought to an end as soon as possible. [I will not go into these claims in any detail here. See other sections of this collection of posts for more information.]<\/p>\n

Thus it would seem that there is and can not be any \u201cthird way\u201d or compromise, at least in terms of theory (but perhaps not in terms of actual policies), between the logically consistent socialist\/communist and the logically consistent radical liberal \/ libertarian. Either the payment of wages by a profit-seeking factory owner is exploitation or it is not; likewise, either the seizure and confiscation of a person\u2019s justly acquired property by the state is unjust or it is not. However, this is exactly what those who are less attracted to logical consistency from both sides want to believe is possible. People from both the \u201cliberal side\u201d and the \u201csocialist side\u201d have thought that there must be a way to avoid the \u201cproblems\u201d (as they see them) of the logical extremes of both ends of the political spectrum [See the post on this.]
\nThus we have seen attempts at creating a \u201cThird Way\u201d for liberals in the emergence of \u201cNew Liberalism\u201d in the late 19thC and \u201cneo-liberalism\u201d after WW2, both of which tried to \u201csoften\u201d the extremes of laissez-faire free market capitalism, the appearance of large \u201cmonopoly\u201d firms, and rampant \u201canti-social\u201d individualism with the injection of just enough \u201csocialism\u201d to remove its rough edges.<\/p>\n

We have also seen socialist and Labour Parties do something very similar, with Tony Blair\u2019s Third Way for the British Labour Party in the late 1990s (or \u201cNew Labour\u201d as his campaign slogan called it); the pragmatists and \u201ceconomic realists\u201d in the Australian Labor Party under Bob Hawke and Paul Keating in the 1980s, who wanted to remove the extreme measure of traditional socialist calls for the \u201cnationalisation\u201d of industry by the state and to allow a sizable dollop of \u201cprivatisation\u201d, private ownership, free market pricing, and competition.<\/p>\n

In spite of the logical contradictions this attempt to find a \u201cThird Way\u201d inevitably produces, this has not stopped political parties from pushing these theoretical problems to one side and to nevertheless try to create what I have called a \u201csmorgasbord\u201d of policies which have elements of both liberalism and socialism in them. [See my post on \u201cThe Success of Liberal Ideas has led to the Decline of Radical Liberal Parties\u201d (6 Sept. 2021) ) where I discuss the problems this has caused in creating parties which are LINO (\u201cLiberal in Name Only\u201d) and SINO (\u201cSocialist in Name Only\u201d).] <\/http:><\/p>\n

If we too just push aside the theoretical contradictions this creates and just focus on the policies we can see that the result is not a good one. The Austrian economist Ludwig von Mises (1881-1973) has called these policies \u201cmiddle of the road\u201d policies, by which he means both parties try to avoid being a consistent and radical liberal party on the right hand side of the road, as well as trying to avoid being a consistent and radical socialist party on the left hand side of the road, and thus follow a \u201cmiddle of the road\u201d policy which is supposed to be a bit of each but works out being neither one nor the other. For a variety of reasons I cannot go into here , Mises believes the steady pursuit of \u201cmiddle of the road\u201d policies will end up inevitably taking the party which follows them to the left hand side of the road. See his The Middle of the Road Leads to Socialism<\/a>) given to the University Club of New York, April 18, 1950 and which was later published in his book Planning for Freedom<\/em> (1952) [available online<\/a> .]<\/p>\n

Thus, as I see it, the problem boils down to the following problems:<\/p>\n

    \n
  1. \u201cnew\u201d liberalism or neo-liberalism is not consistent in its adherence to and application of liberalism and thus becomes LINO (\u201cLiberalism in Name Only\u201d)<\/li>\n
  2. the same is true for \u201cNew Labour\u201d or what we might call \u201cneo-socialism\u201d which is not consistent in its adherence to and application of socialism and thus becomes SINO (\u201cSocialism in Name Only\u201d)<\/li>\n
  3. and attempts to follow a \u201cmiddle of the road\u201d policy between these two political and economic ideologies will drive both LINOs and SINOs eventually towards a more interventionist \u201ccentrist\u201d position, as they bid for voter support in elections by offering them more and more \u201chandouts\u201d and subsidies to special interests, as the desire to win and stay ion office overpowers any ideological conviction they once might have had as \u201cliberal\u201d or \u201csocialist\u201d parties.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    [Note: This post is part of a series on the History of the Classical Liberal Tradition] Some people can see the logic in applying political, moral, and economic principles consistently and avoiding contradictions which make being consistent impossible. Thus for example, if you really do believe that profit, interest, and rent are immoral (as many … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_import_markdown_pro_load_document_selector":0,"_import_markdown_pro_submit_text_textarea":"","footnotes":""},"categories":[77],"tags":[],"class_list":["post-1352","post","type-post","status-publish","format-standard","hentry","category-tradition"],"acf":[],"_links":{"self":[{"href":"http:\/\/davidmhart.com\/wordpress\/wp-json\/wp\/v2\/posts\/1352","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/davidmhart.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/davidmhart.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/davidmhart.com\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/davidmhart.com\/wordpress\/wp-json\/wp\/v2\/comments?post=1352"}],"version-history":[{"count":1,"href":"http:\/\/davidmhart.com\/wordpress\/wp-json\/wp\/v2\/posts\/1352\/revisions"}],"predecessor-version":[{"id":203922,"href":"http:\/\/davidmhart.com\/wordpress\/wp-json\/wp\/v2\/posts\/1352\/revisions\/203922"}],"wp:attachment":[{"href":"http:\/\/davidmhart.com\/wordpress\/wp-json\/wp\/v2\/media?parent=1352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/davidmhart.com\/wordpress\/wp-json\/wp\/v2\/categories?post=1352"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/davidmhart.com\/wordpress\/wp-json\/wp\/v2\/tags?post=1352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}