The 'Third Way' 4.0

Quangos. Our natural inclination is to shudder. Even if like me, you're not quite sure what they do. Or maybe that is a legitimate reason to shake your head and wonder what's become of our wonderful world. But it does raise issues about what government means to people. They are employers who give out gold-plated pensions, give us something to moan about, help businesses function and grow, take a nation to war - sometimes against popular sentiment, and represent our interests in all manner of things.

Indeed, how big and pervasive should government really be? The Tories like small government, big business and do not have much historical sympathy for social welfare. Although whether Dave is changing this remains to be seen. On the other hand, the Labour Party has turned from the party of protest, the party for cotton mill workers in Yorkshire, to one that gave us New Labour, Peter Mandelson, and 'spin'. A brief look back into history indicates that Clement Attlee presided over the first Labour government from the end of the Second World War to 1951, and gave us the NHS - oh that precious institution! But nowadays, governmental departments and public sector organizations have come under intense (and deserved) scrutiny. But social welfare is just such a cuddly affair these days; people lose initiative and independence as the patronising politicians talk about child poverty, social mobility and other big words which make up the political jargon of the 21st century. The Daily Mail can't get over red tape either.

But is this argument about the size of government viable in this age of increasingly complex forms of political governance? Does the sub-contracting of a government contract still count as public sector work? Luckily, this is not a one way street. It is not about the private and public sector having divergent goals. Of course government cares about people more, and businesses focus solely on profit; but new ways of thinking about political and corporate governance has emerged where government and business work together. Add in NGOs, charities, and foundations too. Suddenly you have a recipe for the utopia that the New School in New York would definitely be proud of. The Economist has entered this debate too - it is not just about the British coalition government reneging on an £80 million loan to the innovate Sheffield Forgemasters company following austerity measures. One can ask bigger questions on humanitarian aid and social innovation.

Many are familiar with the politics and complexities of international aid, but social innovation is new. By using forms of governance more familiar in profit-driven companies, a new way to solve social problems emerges. A prime example of this is Muhammed Yunus' contribution to global poverty with the introduction of micro-finance, leading to his much deserved Nobel Peace Prize. Who would have ever thought an Economist winning that? But social innovation is an era of research and policy which is only just beginning to hit the mainsteam. We have moved on from the disgust in which Private Finance Initiatives - that cruel and corrupt arrangement between government and corporation - were seen as the ultimate solution. It was the 'third way'.

But social innovation has a lot more to offer, and is fast becoming quite in vogue in the social policy world. One should note: watch this space.

Oh, and let's not forget "philanthrocapitalism" either, it is really taking off!

See relevant links:
BBC: So just what is a quango?
The Economist: "Entrepreneurs and charities can do more for the poor than official aid."
Attlee and the NHS
Sheffield Forgemasters among companies dealt blow in government cuts
The Yunus Centre
Young Foundation - a centre for Social Innovation
Philanthrocapitalism: How Giving can change the World
The Great Billionaire Giveaway to the Gates Foundation