The Third Way's second chance

REMEMBER Tony Blair and Bill Clinton's Third Way? It is back. The faces and names have changed but the idea that governments can - and should - combine social-democratic values and modern liberal economics has returned to centrestage.

At a June 2000 gathering of leaders in Berlin, hosted by Germany's then-Chancellor Gerhard Schröder, the Third Way seemed like the way of the future. The gathering was Mr Blair's brainchild (though he did not attend because his wife had just had a child). But Mr Clinton held forth eloquently on how new technologies could help to solve age-old social ills.

Leaders from Sweden and New Zealand argued that you could make the state both leaner and more effective. And the Third Way could travel well to what was once called the Third World, claimed South Africa's Thabo Mbeki…