Historically, 'corporatism' or 'corporativism' (
Italian: ''corporativismo'') refers to a
political or
economic system in which power is given to civic assemblies that represent
economic,
industrial,
agrarian, social, cultural, and professional groups. These civic assemblies, known as ''corporations'' (not necessarily in the same sense as contemporary
business corporations) are unelected bodies with an internal
hierarchy; their purpose is to exert control over their respective areas of social or economic life. Thus, for example, a
steel corporation would be a
cartel composed of all the business leaders in the steel industry, coming together to discuss a common policy on prices and wages. When much political and economic power rests in the hands of such groups, then a corporatist system is in place.
The word "corporatism" is derived from the
Latin word for body, ''corpus''. This original meaning was not connected with the specific notion of a business corporation, but rather a general reference to anything collected as a body. Its usage reflects medieval European concepts of a whole society in which the various components - e.g.,
guilds or
trade unions,
universities,
monasteries, the various
estates, etc. - each play a part in the life of the society, just as the various parts of the body serve specific roles in the life of a body. According to various theorists, corporatism was an attempt to create a
modern version of feudalism by merging the "corporate" interests with those of the state.
Political scientists may also use the term corporatism to describe a practice whereby an
authoritarian state, through the process of
licensing and regulating officially-
incorporated social, religious, economic, or popular organizations, effectively co-opts their leadership or circumscribes their ability to challenge state authority by establishing the state as the source of their
legitimacy, as well as sometimes running them, either directly or indirectly through shill corporations. This usage is particularly common in the area of
East Asian studies, and is sometimes also referred to as ''state corporatism''.
At a popular level in recent years "corporatism" has been used to mean the promotion of the interests of private corporations in government over the interests of the public.
Classical theoretical origins
Corporatism is a form of
class collaboration put forward as an alternative to
class conflict, and was first proposed in
Pope Leo XIII's 1891
encyclical ''
Rerum Novarum'', which influenced the
Catholic trades unions that organised in the early twentieth century to counter the influence of trade unions founded on a
socialist ideology. Theoretical underpinnings came from the
medieval traditions of
guilds and craft-based economics, and later,
syndicalism. Corporatism was encouraged by Pope
Pius XI in his 1931 encyclical ''
Quadragesimo Anno''.
Gabriele D'Annunzio and
syndicalist Alceste de Ambris incorporated principles of corporative philosophy in their
Charter of Carnaro.
One early and important theorist of corporatism was
Adam Müller, an advisor to
Prince Metternich in what is now eastern
Germany and
Austria. Müller propounded his views as an antidote to the twin "dangers" of the
egalitarianism of the
French Revolution and the
laissez-faire economics of
Adam Smith. In Germany and elsewhere there was a distinct aversion among rulers to unrestricted capitalism, owing to the
feudalist and
aristocratic tradition of giving state privileges to the wealthy and powerful.
Under
fascism in Italy, business owners, employees, trades-people, professionals, and other economic classes were organized into 22 guilds, or associations, known as "corporations" according to their industries, and these groups were given representation in a legislative body known as the ''Camera dei Fasci e delle Corporazioni.'' See Mussolini's essay discussing the corporatist state, ''
Doctrine of Fascism.''
Similar ideas were also ventilated in other European countries at the time. For instance,
Austria under the
Dollfuß dictatorship had a constitution modelled on that of Italy; but there were also conservative philosophers and/or economists advocating the corporate state, for example
Othmar Spann. In
Portugal, a similar ideal, but based on bottom-up individual moral renewal, inspired
Salazar to work towards corporatism. He wrote the
Portuguese Constitution of 1933, which is credited as the first
corporatist constitution in the world. See also:
Fascism as an international phenomenon.
State corporatism
While classical corporatism and its intellectual successor, neo-corporatism (and their
critics) emphasize the role of corporate bodies in influencing government decision-making, corporatism used in the context of the study of
autocratic states, particularly within
East Asian studies, usually refers instead to a process by which the state uses officially-recognized organizations as a tool for restricting public participation in the political process and limiting the power of
civil society.
Asian corporatism
Under such a system, as described by Jonathan Unger and Anita Chan in their essay ''China, Corporatism, and the
East Asian Model''
[1],
at the national level the state recognizes one and only one organization (say, a national labour union, a business association, a farmers' association) as the sole representative of the sectoral interests of the individuals, enterprises or institutions that comprise that organization's assigned constituency. The state determines which organizations will be recognized as legitimate and forms an unequal partnership of sorts with such organizations. The associations sometimes even get channelled into the policy-making processes and often help implement state policy on the government's behalf.
By establishing itself as the arbitrator of legitimacy and assigning responsibility for a particular
constituency with one sole organization, the state limits the number of players with which it must negotiate its policies and co-opts their leadership into policing their own members. This arrangement is not limited to economic organizations such as business groups or trade unions; examples can also include social or religious groups. Examples abound, but one such would be the
People's Republic of China's
Islamic Association of China, in which the state actively intervenes in the appointment of
imams and controls the educational contents of their seminaries, which must be approved by the government to operate and which feature courses on "patriotic reeducation"
[2]. Another example is the phenomenon known as "Japan, Inc.", in which major industrial
conglomerates and their dependent workforces were consciously manipulated by the Japanese
MITI to maximize post-war economic growth.
In December
2005,
Andrei Illarionov, former economic adviser to
Vladimir Putin, claimed that
Russia had become a corporativist state.
[1]
Italian fascist corporativism
In
Italian Fascism, this non-elected form of state "officializing" of every interest into the state was professed to better circumvent the marginalization of singular interests (as would allegedly happen by the unilateral end condition inherent in the democratic voting process). Corporativism would instead better recognize or 'incorporate' every divergent interest as it stands alone into the state "organically", according to its supporters, thus being the inspiration behind their use of the term
totalitarian, perceivable to them as not meaning a coercive system but described distinctly as without coercion in the 1932 ''
Doctrine of Fascism'' as thus;
''"… (The state) is not simply a mechanism which limits the sphere of the supposed liberties of the individual…"'' & ''"…Neither has the Fascist conception of authority anything in common with that of a police ridden State…"'' but rather clearly connoting ''"…Far from crushing the individual, the Fascist State multiplies his energies, just as in a regiment a soldier is not diminished but multiplied by the number of his fellow soldiers…"''
This prospect in Italian Fascist Corporativism claimed to be the direct heir of
Georges Sorel's
anarcho-syndicalism, wherein each interest was to form as its own entity with separate organizing parameters according to their own standards, only however within the corporative model of Italian Fascism each was supposed to be incorporated through the auspices and organizing ability of a statist construct. This was by their reasoning the only possible way to achieve such a function, i.e. when resolved in the capability of an indissoluble state.
Neo-corporatism
In social science
Some contemporary
political scientists and
sociologists use the term ''neo-corporatism'' to describe a process of bargaining between labor, capital, and government identified as occurring in some small, open economies (particularly in
Europe) as a means of distinguishing their observations from popular pejorative usage and to highlight ties to classical theories.
In the recent literature of social science, corporatism (or neo-corporatism) lacks negative connotation. In the writings of Philippe Schmitter, Gerhard Lehmbruch, and their followers, "neo-corporatism" refers to social arrangements dominated by tri-partite bargaining between
unions, the private sector (capital), and government. Such bargaining is oriented toward (a) dividing the productivity gains created in the economy "fairly" among the social partners and (b) gaining wage restraint in recessionary or inflationary periods.
Most political economists believe that such neo-corporatist arrangements are only possible in societies in which labor is highly organized and various
labor unions are hierarchically organized in a single labor federation. Such "encompassing" unions bargain on behalf of all workers, and they have a strong incentive to balance the employment cost of high wages against the real income consequences of small wage gains. Many of the small, open European economies, such as
Finland,
Sweden,
Austria,
Norway,
Ireland, and the
Netherlands fit this classification. In the work of some scholars, such as
Peter J. Katzenstein, neo-corporatist arrangements enable small open economies to effectively manage their relationship with the global economy. The adjustment to trade shocks occurs through a bargaining process in which the costs of adjustment are distributed evenly ("fairly") among the social partners.
Examples of modern neocorporatism include the
ILO Conference, the Economic and Social Committee of the
European Union, the collective agreement arrangements of the Scandinavian countries, the
Dutch Poldermodel system of consensus, and the
Republic of Ireland's system of
Social Partnership. In
Australia, the
Labor Party governments of
1983-96 fostered a set of policies known as ''
The Accord'', under which the
Australian Council of Trade Unions agreed to hold back demands for
pay increases, the compensation being increased expenditure on the "
social wage", Prime Minister
Paul Keating's name for broad-based
welfare programs. In
Singapore, the
National Wages Council and other state-created entities form a
tripartite arrangement between the major trade unions (
NTUC), employers, and the Government that co-ordinates the national economy. In
Italy, the
Carlo Azeglio Ciampi administration inaugurated in
July 23'
1993 a ''concertation'' (
Italian: ''concertazione'') policy of peaceful agreement on salary rates between
government, the three main
trade unions and the
Confindustria employers' federation. Before that, salary augmentations were always beset by
strikes. In
2001 the
Silvio Berlusconi administration put an end to ''concertation''. Coincidentally, he was a
billionaire.
Most theorists agree that traditional neo-corporatism is undergoing a crisis. In many classically corporatist countries, traditional bargaining is on the retreat. This crisis is often attributed to
globalization, with increasing labour mobility and competition from developing countries (see
outsourcing). However, this claim is not undisputed with nations like Singapore still strongly following neo-corporatist models.
In popular usage
Contemporary popular (as opposed to social science) usage of the term is more pejorative, especially when used in the shorter form ''corporatism'' (''corporativism'' usually implies only the Italian construct indicating public rather than private organizing), emphasizing the role of business corporations in government decision-making at the expense of the public. The power of business to affect government legislation through
lobbying and other avenues of influence in order to promote their interests is usually seen as detrimental to those of the public. In this respect, corporatism may be characterized as an extreme form of
regulatory capture, and is also termed
corporatocracy, a form of
plutocracy. If there is substantial military-corporate collaboration it is often called militarism or the
military-industrial complex.
Criticism of Corporatism
The use of "corporatism" in these criticisms, to refer to business-dominated capitalism, is unrelated to the classical theory of corporatism outlined above.
'Corporatism' or 'neo-corporatism' is often used popularly as a pejorative term in reference to perceived tendencies in politics for
legislators and
administrations to be influenced or dominated by the interests of business enterprises,
employers' organizations, and
industry trade groups. The influence of other types of corporations, such as
labor unions, is perceived to be relatively minor. In this view, government decisions are seen as being influenced strongly by which sorts of policies will lead to greater profits for favored companies.
Corporatism is also used to describe a condition of corporate-dominated
globalization. Points enumerated by users of the term in this sense include the prevalence of very large,
multinational corporations that freely move operations around the world in response to corporate, rather than public, needs; the push by the corporate world to introduce legislation and treaties which would restrict the abilities of individual nations to restrict corporate activity; and similar measures to allow corporations to sue nations over "restrictive" policies, such as a nation's environmental regulations that would restrict corporate activities.
In the United States, corporations representing many different sectors are involved in attempts to influence legislation through lobbying including many non-business groups, unions, membership organizations, and non-profits. While these groups have no official membership in any legislative body, they can often wield considerable power over law-makers. In recent times, the profusion of lobby groups and the increase in campaign contributions has led to widespread controversy and the
McCain-Feingold Act.
Many critics of free market theories, such as
George Orwell, have argued that corporatism (in the sense of an economic system dominated by massive corporations) is the natural result of free market capitalism.
Critics of capitalism often argue that any form of capitalism would eventually devolve into corporatism, due to the
concentration of wealth in fewer and fewer hands. A permutation of this term is 'corporate globalism'.
John Ralston Saul argues that most Western societies are best described as corporatist states, run by a small elite of professional and interest groups, that exclude political participation from the citizenry.
Other critics say that they are pro-capitalist, but anti-corporatist. They support capitalism but only when corporate power is separated from state power. These critics can be from both the right and the left.
In the United States Republican President
Ronald Reagan[3][4][5] echoed Republican President
Herbert Hoover and others who claimed that
Franklin D. Roosevelt’s
New Deal programs represented a move in the direction of a corporatist state. These claims are highly disputed. In particular these critics focussed on the
National Recovery Administration. In 1935
Herbert Hoover described
[ Herbert Hoover. The NRA. Reply to Press Inquiry, Palo Alto, May 15, 1935] some of the New Deal measures as "Fascist regimentation." In his 1951 memoirs
[Herbert C. Hoover. ''The Memoirs of Herbert Hoover'', vol. 3., "The Great Depression, 1929–1941", 1951; p. 420.] he used the phrases "early Roosevelt fascist measures", and "this stuff was pure fascism", and "a remaking of
Mussolini's corporate state". For sources and more info see
The New Deal and corporatism.
These claims continue to be aired in right-wing publications. These authors also discuss modern American corporatism.
[6][7]
Other critics, namely
Mancur Olson in ''
The Logic of Collective Action'', argue that corporatist arrangements exclude some groups, notably the unemployed, and are thus responsible for high unemployment.
Corporatism and Fascism
Some critics equate too much corporate power and influence with fascism. Often they cite a quote claimed to be from Mussolini: "Fascism should more properly be called corporatism because it is the merger of state and corporate power." Several variations of the alleged quote exist. However the veracity of this quote is highly doubtful since the most common cited texts for the quote do not contain anything like this alleged quote.
[2]. Despite this, the alleged quote has entered into modern discourse, and it appears on thousands of web pages
[3], and in books
[4], and even an alternative media advertisement in the ''Washington Post.''
[5]. However, the alleged quote contradicts almost everything else written by Mussolini on the subject of the relationship between corporations and the Fascist State.
[6].
In one 1935 English translation of what Mussolini wrote, the term "corporative state" is used,
[7] but this has a different meaning from modern uses of the terms used to discuss business corporations. In that same translation, the phrase "national Corporate State of Fascism," refers to
syndicalist corporatism. The dubious quote is sometimes claimed to more accurately summarize what Mussolini did and not what he said. However many scholars of fascism reject this claim. See
Fascism and ideology.
There is a very old argument about who controlled whom in the fascist states of Italy and Germany at various points in the timeline of power. It is agreed that the army, the wealthy, and the big corporations ended up with much more say in decision making than other elements of the corporative state
[8] [9] [10]. There was a power struggle between the fascist parties/leaders and the army, wealthy, and big corporations. It waxed and waned as to who had more power at any given time. Scholars have used the term "Mussolini's corporate state" in many different ways
[11].
See also
★
Anti-globalization
★
Antitrust
★
Capitalism
★
Collectivism
★
Corporate nationalism
★
Corporate police state
★
Corporatization
★
Crony capitalism
★
Government financial reports
★
Economic fascism
★
Globalization
★
National syndicalism
★
Neofeudalism
★
New Deal
★
Plutocracy
★
Quango
★
The New Deal and corporatism
References
1. "China，Corporatism，and the East Asian Model". By Jonathan Unger and Anita Chan.
2. "Human Rights Watch World Report 2002: Asia: China and Tibet".
3. New Deal - Wikiquotes. Ronald Reagan quote on New Deal and Mussolini's "government-directed economy." From May 17, 1976 ''Time'' magazine.
4. Ronald Reagan. A biography. Has quote from May 17, 1976 ''Time'' magazine.
5. "Reagan says many New Dealers wanted fascism." ''New York Times.'' December 22, 1981.
6. "What is American Corporatism?". By Robert Locke. ''FrontPageMagazine.com,'' Sept. 13, 2002.
7. "Quasi-Corporatism: America’s Homegrown Fascism". By Robert Higgs. ''The Freeman'' and The Independent Institute. Jan. 31, 2006.
Sources
On Italian Corporatism
★
Constitution of Fiume
★
''Rerum Novarum'': encyclical of Pope Leo XIII on capital and labor
★
''Quadragesimo Anno'': encyclical of Pope Pius XI on reconstruction of the social order
★ There is an essay on "The Doctrine of Fascism" credited to
Benito Mussolini that appeared in the 1932 edition of the ''Enciclopedia Italiana'', and excerpts can be read at
Doctrine of Fascism. There are also links there to the complete text.
On Neo-Corporatism
★ Katzenstein, Peter: ''Small States in World Markets'', Ithaca, 1985.
★ Olson, Mancur: ''Logic of Collective Action: Public Goods and the Theory of Groups'', (Harvard Economic Studies), Cambridge, 1965.
★ Schmitter, P. C. and Lehmbruch, G. (eds.), ''Trends toward Corporatist Intermediation'', London, 1979.
★ Rodrigues, Lucia Lima: "Corporatism, liberalism and the accounting profession in Portugal since 1755," ''Journal of Accounting Historians,'' June 2003.
[12]
On Fascist Corporatism
★ Baker, David,
The political economy of fascism: Myth or reality, or myth and reality?, ''New Political Economy'', Volume 11, Issue 2 June 2006 , pages 227 – 250.
External links
★
"Mussolini on the Corporate State" by Chip Berlet, 2005, Political Research Associates; Somerville, Massachusetts, USA — includes study of alleged Mussolini quote on corporatism, and quotes from Mussolini texts on corporatism]
★
"Economic Fascism" by Thomas J. DiLorenzo, ''The Freeman'', Vol. 44, No. 6, June 1994, Foundation for Economic Education; Irvington-on-Hudson, New York, USA.
★
2 Mussolini autobiographies in one book. English. Searchable. Click on the result titled "My Rise and Fall" (usually the top result). Then use the search form in the left column titled "search within this book."
★
The 1928 autobiography of Benito Mussolini. Online. ''My Autobiography''. Book by Benito Mussolini; Charles Scribner's Sons, 1928.
★
''Corporatism'' by Michael A. Rizzotti
★
''Corporatism'' by Jeffrey Grupp
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