This article explores the foundations of the Mahayana bodhisattva path and of Confucian ethics. Both of these approaches contain the potential for innovation. In modern scholarship this innovation has found expression in the "Buddhist Third Way" (san-hsi-shuo) --exemplified by Yin-shun--, and the "Confucian Third Way" -- exemplified by Mou Tsung-san. Both approaches have established standards that entail critiques of the other two "Ways" or "systems". This article does not take this approach, exploring instead problems that may exist in all three systems. In this essay I argue that the three doctrines that form the basis of the Mahayana bodhisattva path in Indian Buddhism--the emptiness of nature (Skt. prakrtivisuddhi), alaya-vijnana, and tathagatagarbha --are all founded on certain assumptions. Even the notion of the "empiness of nature", generally considered more in keeping with Buddhist ideas of dependent origination, entails the reification of emptiness (k'ung tzu-hsing-hua). Similarly, while the "Third Way" of Confucianism accepts as orthodox Confucius, Mencius, Lu Chiu-yuan and Wang Yang-ming, while rejecting Chu Hsi, its dependence on "innate virtue" (te-hsing) creates a number of problems. This article traces the historical progression of these intellectual developments, first clarifying their theoretical underpinnings and then subjecting them to analysis. With respect to the theoretical foundations of the Mahayana bodhisattva path, I begin with a discussion of the Scripture of the Ten Stages (Skt. Dasabhumika-sutra), and then expore the theoretical foundations of the bodhisattva path in Madhyamika, Yogacara, Tathagatagarbha, T'ien-t'ai and Hua-yen thought. With respect to Confucian ethics, I first discuss the Shang shu and Book of Poetry before preceding to explore the theoretical foundations of the thought of Confucius, Mencius, the Ch'eng-Chu School, Lu Chiu-yuan and Wang Yang-ming.