Corporatism is a system of economic, political,
and social organization where
corporate
groups such as business, ethnic, farmer, labour, military,
patronage, or religious groups are joined together into a single
governing body in which the different groups are mandated to
negotiate with each other to establish policies in the interest of
the multiple groups within the body. Corporatism views society as
being alike to an organic body in which each corporate group is
viewed as a necessary organ for society to function properly.
Corporatism is based on the
sociological
concept of
functionalism.
Countries that have corporatist systems typically utilize strong
state intervention to direct
corporatist policies and to prevent conflict between the
groups.
The word "corporatism" is derived from the
Latin word for body,
corpus. This meaning was
not connected with the specific notion of a business corporation,
but rather a general reference to anything collected as a
body.
Corporatism has been supported from various proponents, including:
absolutists,
capitalists,
conservatives,
fascists,
progressives,
reactionaries and
theologians.
Political scientists may also use
the term corporatism to describe a practice whereby a
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 corporations.
This usage is particularly common in the area of
East Asian studies, and is sometimes also referred
to as
state corporatism. Some analysts have applied the
term
neocorporatism to certain practices in Western
European countries, such as the
Tupo in Finland
and
Proporz system in Austria.At a popular
level in recent years "corporatism" has been used in a pejorative
context to refer to the application of corporatism by
fascist regimes or to mean the promotion of the
interests of private business corporations in government over the
interests of the public.
History of corporatism
Early concepts of corporatism have been traced back to ideas found
in
ancient Greece,
ancient Rome, and religions such as
Buddhism,
Christianity,
Confucianism, and
Islam.
Ancient Greece and Rome
Ancient Greece developed early concepts of corporatism.
Plato developed the concept of a
totalitarian and
communitarian corporatist system of
natural-based classes and natural
social hierarchies that would be organized
based on function, whereby the groups would cooperate to achieve
social harmony by emphasizing
collective
interests while rejecting individual interests.
Aristotle in
Politics also viewed society as
being divided along natural classes and functional purposes that
were priests, rulers, slaves, and warriors. Ancient Rome copied
Greek concepts of corporatism into their own version of corporatism
but also added the concept of political representation on the basis
of function that divided up representatives into military,
professional, and religious groups and created institutions for
each group called
collegios.
Christian corporatism in the Middle Ages
During the
Middle Ages, the
Roman Catholic Church sponsored the
creation of various institutions including brotherhoods,
monasteries, religious orders, and military associations,
especially during the
Crusades to sponsor
connection between these groups.
In Italy
, various
function-based groups and institutions were created in the Middle
Ages, such as universities, guilds for
artisans and craftspeople, and other professional
associations. The creation of the guild system is a
particularly important aspect of the history of corporatism because
it involved the allocation of power to regulate trade and prices to
guilds, which is an important aspect of corporatist economic models
of economic management and
class
collaboration.
Absolute monarchies in the Middle Ages gradually subordinated
corporatist systems and corporate groups to the authority of
centralized and
absolutist governments,
resulting in corporatism being used to uphold
social hierarchy.
The French Revolution and the overthrow of absolutist
corporatism
In the aftermath of the French Revolution, the existing absolutist
corporatist system was completely dismantled due to its support of
social hierarchy and special "corporate privilege" for the Roman
Catholic Church. The new French government saw corporatism's
emphasis on group rights as inconsistent with the government's
promotion of individual rights. Subsequently corporatist systems
and corporate privilege throughout Europe were abolished in
response to the French Revolution. From 1789 to the 1850s, most
supporters of corporatism were
reactionaries. A number of reactionary
corporatists favoured corporatism in order to end liberal
capitalism and restore the
feudal system.
Progressive corporatism
From the 1850s onward
progressive
corporatism rose in response to
liberalism and
Marxism.
These corporatists supported providing group rights to members of
the middle classes and working classes in order to secure class
harmony. This was in opposition to the Marxist conception of
class conflict. By the 1870s and
1880s, corporatism experienced a revival in Europe with the
creation of workers' unions that were committed to class harmony
and negotiations with employers.
This new strand of corporatism also began
to gain adherents in the United States
.
Freiburg meeting, corporatist internationale, and Rerum
Novarum
In 1881, Pope Leo XIII commissioned theologians and social thinkers
to study corporatism and provide a definition for it.
In 1884 in Freiburg
, the
commission declared that corporatism was a "system of social
organization that has at its base the grouping of men according to
the community of their natural interests and social functions, and
as true and proper organs of the state they direct and coordinate
labor and capital in matters of common interest."
In the aftermath of the Freiburg meeting, corporatism grew in
popularity and the
corporatist internationale was formed
in 1890 followed by the publishing of
Rerum Novarum by the
Roman Catholic Church that for the
first time declared the Church's blessing to trade unions and
called for organized labour to be recognized by politicians. Many
corporatist unions in Europe were backed by the Roman Catholic
Church to challenge the rise of
anarchist,
Marxist and other radical unions, with the
corporatist unions being fairly conservative in comparison to their
radical rivals.
Fascist corporatism
In Italy, corporatism became influential amongst Italian
nationalists. The
Charter of
Carnaro gained much popularity as the prototype of a
'corporative state', having displayed much within its tenets as a
guild system combining the concepts of autonomy & authority in
a special synthesis. This appealed to Hegelian thinkers such as
Mussolini who were looking for a new alternative to popular
socialist & syndicalist stances which was also a progressive
system of governing labor and still a new way of relating to
political governance as a whole.
Alfredo
Rocco spoke of a corporative state and declared corporatist
ideology in detail. Rocco would go on to become a member of the
Italian Fascist regime.
Italian
Fascism involved a corporatist political system in which
economy was collectively managed by employers, workers and state
officials by formal mechanisms at national level. 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). Corporatism
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:
This prospect in Italian fascist corporatism 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. Much of the corporatist
influence upon Italian Fascism was in part due to the Fascists'
attempts to gain support of the
Roman Catholic Church that itself
sponsored corporatism. However fascism's corporatism was a top-down
model of state control over the economy while the Roman Catholic
Church's corporatism favoured a bottom-up corporatism, whereby
groups such as families and professional groups would voluntarily
work together.
The fascist state corporatism influenced the
governments and economies of a number of Roman Catholic countries,
such as the government of Engelbert
Dollfuss in Austria
and António de Oliveira Salazar
in Portugal
.
Fascists in non-Catholic countries also supported Italian Fascist
corporatism including
Oswald Mosley of
the
British Union of
Fascists who commended corporatism and said that "it means a
nation organized as the human body, with each organ performing its
individual function but working in harmony with the whole". Mosley
also saw corporatism as an attack on
laissez-faire economics and "international
finance".
Corporate liberalism, Fordism, and Tripartism
In the
United
States, economic corporatism involving capital-labour
cooperation was influential in the New Deal
economic program of the United States in the 1930s as well as in
Fordism and Keynesianism.
In the post-
World War II reconstruction
period in Europe, corporatism was favoured by
Christian democrats,
national conservatives, and
social democrats in opposition to liberal
capitalism. This type of corporatism faded but revived again in the
1960s and 1970s as "
neo-corporatism"
in response to the new economic threat of
stagflation. Neo-corporatism favoured economic
tripartism which involved strong and centralized labour unions,
employers' unions, and governments that cooperated as "social
partners" to negotiate and manage a national economy.
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 Sweden
, Austria, Norway
, Ireland
, Belgium
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
( ) 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
strike. In 2001 the
Silvio Berlusconi administration put an
end to
concertation.
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.
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
authoritarian or
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,
"...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". 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.
Russian corporatism
On October 9, 2007, an article signed by
Viktor Cherkesov, head of the Russian Drug
Enforcement Administration, was published in
Kommersant, where he used the term
"corporativist state" in a positive way to describe the evolution
of Russia. He claimed that the administration officials detained on
criminal charges earlier that month are the exception rather than
the rule and that the only development scenario for Russia that is
both realistic enough and relatively favorable is to continue
evolution into a corporativist state ruled by security service
officials.
Here is some background.
In December 2005, Andrei Illarionov, former economic adviser
to Vladimir Putin, claimed that
Russia
had become a
corporativist state.
"The process of this state evolving into a new corporativist (sic)
model reached its completion in 2005. ... The strengthening of the
corporativist state model and setting up favorable conditions for
quasi-state monopolies by the state itself hurt the economy. ...
Cabinet members or key Presidential Staff executives chairing
corporation boards or serving on those boards are the order of the
day in Russia. In what Western country—except in the corporativist
state that lasted for 20 years in Italy—is such a phenomenon
possible? Which, actually, proves that the term 'corporativist'
properly applies to Russia today."
All political powers and most
important economic assets in the country are
controlled by former state security
officials ("siloviks"), according to some
researchers. The takeover of Russian state and economic assets has been allegedly
accomplished by a clique of Putin's
close associates and friends who gradually became a leading
group of Russian oligarchs and who "seized
control over the financial, media and administrative resources of
the Russian state" and restricted democratic
freedoms and human
rights
Illarionov described the present situation in Russia as a new
socio-political order, "distinct from any seen in our country
before". In this model, members of the Corporation of Intelligence
Service Collaborators [Russian abbreviation KSSS] took over the
entire body of state power, follow an omerta-like behavior code, and "are given instruments
conferring power over others – membership “perks”, such as the
right to carry and use weapons". According to Illarionov, this
"Corporation has seized key government agencies – the Tax Service,
Ministry of Defense,
Ministry of Foreign
Affairs, Parliament, and the government-controlled mass media –
which are now used to advance the interests of KSSS members.
Through these agencies, every significant resource of the country –
security/intelligence, political, economic, informational and
financial – is being monopolized in the hands of Corporation
members"
Analyst Andrei Piontkovsky also
considers the present situation as "the highest and culminating
stage of bandit capitalism in Russia”. He believes that "Russia is
not corrupt. Corruption is what
happens in all countries when businessmen offer officials large
bribes for favors. Today’s Russia is unique. The businessmen, the
politicians, and the bureaucrats are the same people."
In popular usage
Contemporary popular (as opposed to social science) usage of the
term is more pejorative, 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.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 lawmakers by money donations. 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 left wing 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. Many
supporters of the free market see this as unnatural and due to
extensive state intervention.
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 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. In particular, these critics focused on the
National Recovery
Administration. In 1935, Herbert
Hoover described some of the New Deal measures as "Fascist
regimentation." In his 1951 memoirs 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
information, see The New
Deal and corporatism.
Some authors also discuss modern American corporatism.
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.
Fascism and corporatism
Some critics equate too much corporate power and influence with
fascism. Often they cite a quotation that has been attributed to
Mussolini, although it doesn't appear in any of his texts: "Fascism
should more properly be called corporatism because it is the merger
of state and corporate power." Several variations of the alleged
quotation exist. However, no text written by Mussolini has yet been
found with any variation of the alleged quotation. Despite this,
the alleged quotation has entered into modern discourse, and it
appears on thousands of web pages, and in books, and even an
alternative media advertisement in the Washington Post.
However, the alleged quotation contradicts almost everything else
written by Mussolini on the subject of the relationship between
corporations and the Fascist State.
In one 1935 English translation of what Mussolini wrote, the term
"corporative state" is used, 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 quotation is sometimes claimed to more
accurately summarize what Mussolini did and not what he said.
However, many scholars of fascism reject this claim.
There is a very old argument about who controlled whom in Fascist Italy and Nazi
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. 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.
Franklin D. Roosevelt in an April 29, 1938 message
to Congress warned that the growth of private power could lead to
fascism:
From the same message:
Critics of the notion of the confluence of corporate power and de
facto fascism included President Dwight D. Eisenhower, who
nevertheless brought attention to the "conjunction of an immense
military establishment and a large arms industry" in his 1961
Farewell Address to the Nation, and stressed "the need to maintain
balance in and among national programs -- balance between the
private and the public economy, balance between cost and hoped for
advantage."
See also
References
Sources
On Tory Corporatism
- William Stewart, Understanding Politics
On Italian Corporatism
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.
On Fascist Corporatism
External links
- corporatism, or corporate state, or corporativism,
or corporativismo, or state corporatism (ideology). Britannica Online Encyclopedia.
- "Corporatist Ideology in Kemalist Turkey Progress
or Order?", Corporatist Ideology in Kemalist Turkey Progress or
Order? by Taha Parla and Andrew Davison, 2004, Syracuse University
Press, ISBN 0815630549
- "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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