So-called "Third Way" political policies are a futile attempt to square a circle by mixing socialism with capitalism, according to many economists, and is to blame for Asia's economic crisis. Moreover, Third Way prescriptions are no more than "warmed over socialism," says George Mason University economics professor Walter Williams.

"The Third Way was introduced as the 'Asian model,' in which a distorted version of free-market democratic capitalism was adopted in (one) region of the world on the basis of what were called 'Asian values,'" notes Jose Pinera, Chile's former secretary of labor and the architect of that country's social security privatization.

In Pinera's view, that "dangerous and erroneous idea" bred the structural problems that led to the current Asian crisis.

• The International Monetary Fund says that, to date, 11 countries are in recession and nine others are close to it -- while the agency has taken nearly $200 billion from taxpayers, mostly in developed countries, to try to boost the economies of Asia, Russia and South America.

• Even before Hong Kong was turned over to mainland China, it began increasing welfare benefits -- at which point its booming economy turned negative, shrinking by 5 percent last year.

• In Japan and other Asian countries, the government picked specific industries and funneled capital their way -- a move which caused "massive malinvestment," says Brink Lindsey of the Cato Institute.

• Experts distinguish between Third Way policies employed in Asia and Europe -- the former propping up businesses, while the latter subsidizes individuals through welfare- state mechanisms.

"These days, nobody's saying, 'Let's be like Asia," Williams remarks.

Source: Michael Chapman, "Asia Finds No 'Third Way' Out," Investor's Business Daily, February 23, 1999.