Drawing upon a variety of analyses, this chapter constructs a taxonomy of competing approaches to inequality, social cohesion, and citizenship and proceeds to locate the Third Way as a hybrid approach. While the Third Way strongly embraces elements of market liberalism, it also exhibits a mixture of social democratic, communitarian, and moral authoritarian features. The Third Way approach to policies for social inclusion is traced through a discussion of the European Union’s Social Inclusion Strategy, the development of ‘workfare’ type policies, and in the specific context of new labour policies in Britain. The ambiguous consequences of such policies are examined in relation to measures of inequality, poverty, and social exclusion. The chapter concludes that the Third Way maybe more than a pragmatic compromize, but whether it maybe capable of ameliorating the dislocating social effects of a market driven economic agenda remains uncertain.