Corporatism

Not to be confused with Corporate capitalism.

This article is about the general social theory. For business influence in politics, see Corporatocracy. For the process of reorganizing institutions on a corporate or business basis, see Corporatization.

Emblems used by medieval German guilds and corporations, displaying various symbols related to their professions.

Corporatism is a political system of interest representation and policymaking whereby corporate groups, such as agricultural, labour, military, business, scientific, or guild associations, come together on and negotiate contracts or policy (collective bargaining) on the basis of their common interests. The term is derived from the Latin corpus, or "body".

Corporatism does not refer to a political system dominated by large business interests, even though the latter are commonly referred to as "corporations" in modern American vernacular and legal parlance; instead, the correct term for this theoretical system would be corporatocracy. Corporatism is not government corruption in politics or the use of bribery by corporate interest groups. The terms 'corporatocracy' and 'corporatism' are often confused due to their name and the use of corporations as organs of the state.

Corporatism developed during the 1850s in response to the rise of classical liberalism and Marxism, as it advocated cooperation between the classes instead of class conflict. Adherents of diverse ideologies, including communism, economic liberalism, fascism, and socialism have advocated for corporatist models. Corporatism became one of the main tenets of Italian fascism, and Benito Mussolini's Fascist regime in Italy advocated the total integration of divergent interests into the state for the common good; however, the more democratic neo-corporatism often embraced tripartism.

Corporatist ideas have been expressed since ancient Greek and Roman societies, with integration into Catholic social teaching and Christian democratic political parties. They have been paired by various advocates and implemented in various societies with a wide variety of political systems, including authoritarianism, absolutism, fascism, liberalism, and social democracy.

Kinship corporatism

Kinship-based corporatism emphasizing clan, ethnic and family identification has been a common phenomenon in Africa, Asia, and Latin America. Confucian societies based upon families and clans in Eastern and Southeast Asia have been considered types of corporatism. Islamic societies often feature strong clans which form the basis for a community-based corporatist society. Family businesses are common worldwide in capitalist societies.

Politics and political economy

Plato (left) and Aristotle (right)

Communitarian corporatism

Early concepts of corporatism evolved in Classical Greece. 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, such that groups would cooperate to achieve social harmony by emphasizing collective interests while rejecting individual interests.

In Politics, Aristotle described society as being divided between natural classes and functional purposes: those of priests, rulers, slaves and warriors. Ancient Rome adopted Greek concepts of corporatism into its own version of corporatism, adding the concept of political representation on the basis of function that divided representatives into military, professional and religious groups and set up institutions for each group known as collegia.

After the 5th-century fall of Rome and the beginning of the Early Middle Ages, corporatist organizations in western Europe became largely limited to religious orders and to the idea of Christian brotherhood — especially within the context of economic transactions. From the High Middle Ages onward, corporatist organizations became increasingly common in Europe, including such groups as religious orders, monasteries, fraternities, military orders such as the Knights Templar and the Teutonic Order, educational organizations such as the emerging European universities and learned societies, the chartered towns and cities, and most notably the guild system which dominated the economies of population centers in Europe. The military orders notably gained prominence during the period of the Crusades. These corporatist systems co-existed with the governing medieval estates system, and members of the first estate (the clergy), the second estate (the aristocracy), and third estate (the common people) could also participate in various corporatist bodies. The development of the guild system involved the guilds gaining the power to regulate trade and prices, and guild members included artisans, tradesmen, and other professionals. This diffusion of power is an important aspect of corporatist economic models of economic management and class collaboration. However, from the 16th century onward, absolute monarchies began to conflict with the diffuse, decentralized powers of the medieval corporatist bodies. Absolute monarchies during the Renaissance and Enlightenment gradually subordinated corporatist systems and corporate groups to the authority of centralized and absolutist governments, removing any checks on royal power these corporatist bodies had previously utilized.

After the outbreak of the French Revolution (1789), the existing absolutist corporatist system in France was abolished due to its endorsement of social hierarchy and special "corporate privilege". The new French government considered 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 to restore the feudal system. Countering the reactionaries were the ideas of Henri de Saint-Simon (1760- 1825), whose proposed "industrial class" would have had the representatives of various economic groups sit in the political chambers, in contrast to the popular representation of liberal democracy.

Progressive corporatism

Further information: Social corporatism

From the 1850s onward, progressive corporatism developed in response to classical liberalism and to Marxism. Progressive corporatists supported providing group rights to members of the middle classes and working classes in order to secure co-operation among the classes. This was in opposition to the Marxist conception of class conflict. By the 1870s and 1880s, corporatism experienced a revival in Europe with the formation of workers' unions that were committed to negotiations with employers.

In his 1887 work Gemeinschaft und Gesellschaft ("Community and Society"), Ferdinand Tönnies began a major revival of corporatist philosophy associated with the development of neo-medievalism, increasing promotion of guild socialism and causing major changes to theoretical sociology. Tönnies claims that organic communities based upon clans, communes, families and professional groups are disrupted by the mechanical society of economic classes imposed by capitalism. The German Nazi Party used Tönnies' theory to promote their notion of Volksgemeinschaft ("people's community"). However, Tönnies opposed Nazism: he joined the Social Democratic Party of Germany in 1932 to oppose fascism in Germany and was deprived of his honorary professorship by Adolf Hitler in 1933.

Corporatism in the Roman Catholic Church

In 1881, Pope Leo XIII commissioned theologians and social thinkers to study corporatism and to 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". Corporatism is related to the sociological concept of structural functionalism.

Corporatism's popularity increased in the late 19th century and a corporatist internationale was formed in 1890, followed by the 1891 publishing of Rerum novarum by the Catholic Church that for the first time declared the Church's blessing to trade unions and recommended that politicians recognize organized labour. Many corporatist unions in Europe were endorsed by the Catholic Church to challenge the anarchist, Marxist and other radical unions, with the corporatist unions being fairly conservative in comparison to their radical rivals. Some Catholic corporatist states include Austria under the 1932–1934 leadership of Federal Chancellor Engelbert Dollfuss and Ecuador under the leadership of García Moreno (1861–1865 and 1869–1875). The economic vision outlined in Rerum novarum and Quadragesimo anno (1931) also influenced the régime (1946–1955 and 1973–1974) of Juan Perón and Justicialism in Argentina and influenced the drafting of the 1937 Constitution of Ireland. In response to the Roman Catholic corporatism of the 1890s, Protestant corporatism developed, especially in Germany, the Netherlands and Scandinavia. However, Protestant corporatism has been much less successful in obtaining assistance from governments than its Roman Catholic counterpart.

Corporate solidarism

Émile Durkheim

Sociologist Émile Durkheim (1858-1917) advocated a form of corporatism termed "solidarism" that advocated creating an organic social solidarity of society through functional representation. Solidarism built on Durkheim's view that the dynamic of human society as a collective is distinct from the dynamic of an individual, in that society is what places upon individuals their cultural and social attributes.

Durkheim posited that solidarism would alter the division of labour by evolving it from mechanical solidarity to organic solidarity. He believed that the existing industrial capitalist division of labour caused "juridical and moral anomie", which had no norms or agreed procedures to resolve conflicts and resulted in chronic confrontation between employers and trade unions. Durkheim believed that this anomie caused social dislocation and felt that by this "it is the law of the strongest which rules, and there is inevitably a chronic state of war, latent or acute". As a result, Durkheim believed it is a moral obligation of the members of society to end this situation by creating a moral organic solidarity based upon professions as organized into a single public institution.

Corporate solidarism is a form of corporatism that advocates creating solidarity instead of collectivism in society through functional representation, believing that it is up to the people to end the chronic confrontation between employers and labor unions by creating a single public institution. Solidarism rejects a materialistic approach to social, economic, and political problems, while also rejecting class conflict. Just like corporatism, it embraces tripartism as its economic system.

Liberal corporatism

Main article: Liberal corporatism

Portrait of John Stuart Mill

John Stuart Mill discussed corporatist-like economic associations as needing to "predominate" in society to create equality for labourers and to give them influence with management by economic democracy. Unlike some other types of corporatism, liberal corporatism does not reject capitalism or individualism, but believes that capitalist companies are social institutions that should require their managers to do more than maximize net income by recognizing the needs of their employees.

This liberal corporatist ethic is similar to Taylorism but endorses democratization of capitalist companies. Liberal corporatists believe that inclusion of all members in the election of management in effect reconciles "ethics and efficiency, freedom and order, liberty and rationality".

Liberal corporatism began to gain disciples in the United States during the late 19th century. Economic liberal corporatism involving capital-labour cooperation was influential in Fordism. Liberal corporatism has also been an influential component of the liberalism in the United States that has been referred to as "interest group liberalism".

Fascist corporatism

See also: Preussentum und Sozialismus

SKA poster: "Away with the party lines! Work for the national community!"

A fascist corporation can be defined as a government-directed confederation of employers and employees unions, with the aim of overseeing production in a comprehensive manner. Theoretically, each corporation within this structure assumes the responsibility of advocating for the interests of its respective profession, particularly through the negotiation of labor agreements and similar measures. Fascists theorized that this method could result in harmony amongst social classes.

In Italy, from 1922 until 1943, corporatism became influential amongst Italian nationalists led by Benito Mussolini. The 1920 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 and authority in a special synthesis. Alfredo Rocco spoke of a corporative state and declared corporatist ideology in detail. Rocco would later become a member of the Italian fascist régime. Subsequently, the Labour Charter of 1927 was implemented, thus establishing a collective agreement system between employers and employees, becoming the main form of class collaboration in the fascist government.

Italian Fascism involved a corporatist political system in which the economy was collectively managed by employers, workers and state officials by formal mechanisms at the national level. Its supporters claimed that corporatism could better recognize or "incorporate" every divergent interest into the state organically, unlike majority-rules democracy, which (they said) could marginalize specific interests. This total consideration was the inspiration for their use of the term "totalitarian", described without coercion (which is connoted in the modern meaning) in the 1932 Doctrine of Fascism as thus:

When brought within the orbit of the State, Fascism recognizes the real needs which gave rise to socialism and trade unionism, giving them due weight in the guild or corporative system in which divergent interests are coordinated and harmonized in the unity of the State.

[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... 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.

Fascist organizations aiming to unite employers and employees: German Labor Front (DAF), Spanish Syndical Organization (OSE), National Trade Union Confederation of Finland (SKA)

A popular slogan of the Italian Fascists under Mussolini was "Tutto nello Stato, niente al di fuori dello Stato, nulla contro lo Stato" ("everything within the state, nothing outside the state, nothing against the state").

Within the corporative model of Italian fascism each corporate interest was supposed to be resolved and incorporated under the state. Much of the corporatist influence upon Italian fascism was partly due to the Fascists' attempts to gain endorsement by the Roman Catholic Church that itself sponsored corporatism. However, the Roman Catholic Church's corporatism favored a bottom-up corporatism, whereby groups such as families and professional groups would voluntarily work together, whereas fascist corporatism was a top-down model of state control managed primarly by government officials.

The fascist state corporatism of Roman Catholic Italy influenced the governments and economies — not only of other Roman Catholic-majority countries, such as the governments of Engelbert Dollfuss in Austria, António de Oliveira Salazar in Portugal and Getúlio Vargas in Brazil — but also of Konstantin Päts and Kārlis Ulmanis in non-Catholic Estonia and Latvia.

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 regarded corporatism as an attack on laissez-faire economics and "international finance".

The corporatist state of Portugal had similarities to Benito Mussolini's Italian fascist corporatism, but also differences in its moral approach to governing. Although Salazar admired Mussolini and was influenced by his Labour Charter of 1927, he distanced himself from fascist dictatorship, which he considered a pagan Caesarist political system that recognised neither legal nor moral limits. Salazar also had a strong dislike of Marxism and liberalism.

In 1933, Salazar stated:

Our Dictatorship clearly resembles a fascist dictatorship in the reinforcement of authority, in the war declared against certain principles of democracy, in its accentuated nationalist character, in its preoccupation of social order. However, it differs from it in its process of renovation. The fascist dictatorship tends towards a pagan Caesarism, towards a state that knows no limits of a legal or moral order, which marches towards its goal without meeting complications or obstacles. The Portuguese New State, on the contrary, cannot avoid, not think of avoiding, certain limits of a moral order which it may consider indispensable to maintain in its favour of its reforming action.

The Patriotic People's Movement (IKL) in Finland envisioned a system with elements of direct democracy and professional parliament. The president would be elected with direct vote, who would then appoint the government from among professionals in their respective fields. All parties would be banned, and members of parliament would be elected by vote from corporate groups representing different sectors; Agriculture, Industry and Public servants, free trades, etc. Every law that is passed in the parliament is either ratified or overturned by a referendum.

Neo-corporatism

During the post-World War II reconstruction period in Europe, corporatism was favored by Christian democrats (often under the influence of Catholic social teaching), national conservatives and social democrats in opposition to liberal capitalism. This type of corporatism became unfashionable but revived again in the 1960s and 1970s as "neo-corporatism" in response to the new economic threat of recession-inflation.

Neo-corporatism is a democratic form of corporatism which favors economic tripartism, which involves strong labour unions, employers' associations and governments that cooperate as "social partners" to negotiate and manage a national economy. Social corporatist systems instituted in Europe after World War II include the ordoliberal system of the social market economy in Germany, the social partnership in Ireland, the polder model in the Netherlands (although arguably the polder model already was present at the end of World War I, it was not until after World War II that a social-service system gained foothold there), the concertation system in Italy, the Rhine model in Switzerland and the Benelux countries and the Nordic model in the Nordic countries.

Attempts in the United States to create neo-corporatist capital-labor arrangements were unsuccessfully advocated by Gary Hart and Michael Dukakis in the 1980s. As secretary of labor during the Clinton administration, Robert Reich promoted neo-corporatist reforms.

Contemporary examples by country

China

See also: Party-state capitalism

Jonathan Unger and Anita Chan in their essay "China, Corporatism, and the East Asian Model" describe Chinese corporatism as follows:

[A]t 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 arbiter 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 and social organizations.

The political scientist Jean C. Oi coined the term "local state corporatism" to describe China's distinctive type of state-led growth, in which a communist party-state with Leninist roots commits itself to policies which are friendly to the market and to growth.

The use of corporatism as a framework to understand the central state's behaviour in China has been criticized by authors such as Bruce Gilley and William Hurst.

Hong Kong and Macau

In two special administrative regions, some legislators are chosen by functional constituencies (Legislative Council of Hong Kong) where the voters are a mix of individuals, associations, and corporations or indirect election (Legislative Assembly of Macau) where a single association is designated to appoint legislators.

Ireland

Most members of the Seanad Éireann, the upper house of the Oireachtas (parliament) of Ireland, are elected as part of vocational panels nominated partly by current Oireachtas members and partly by vocational and special interest associations. The Seanad also includes two university constituencies.

The Constitution of Ireland of 1937 was influenced by Roman Catholic Corporatism as expressed in the papal encyclical, Quadragesimo anno (1931).

The Netherlands

Under the Dutch Polder Model, the Social and Economic Council of the Netherlands (Sociaal-Economische Raad, SER) was established by the 1950 Industrial Organisation Act (Wet op de bedrijfsorganisatie). It is led by representatives of unions, employer organizations, and government appointed experts. It advises the government and has administrative and regulatory power. It oversees Sectoral Organisation Under Public Law (Publiekrechtelijke Bedrijfsorganisatie, PBO) which are similarly organized by union and industry representatives, but for specific industries or commodities.

Slovenia

The Slovene National Council, the upper house of the Slovene Parliament, has 18 members elected on a corporatist basis.

Western Europe

Generally supported by nationalist and/or social-democratic political parties, social corporatism developed in the post-World War II period, influenced by Christian democrats and social democrats in Western European countries such as Austria, Germany, the Netherlands, Denmark, Finland, Norway and Sweden. Social corporatism has also been adopted in different configurations and to varying degrees in various Western European countries.

The Nordic countries have the most comprehensive form of collective bargaining, where trade unions are represented at the national level by official organizations alongside employers' associations. Together with the welfare state policies of these countries, this forms what is termed the Nordic model. Less extensive models exist in Austria and Germany which are components of Rhine capitalism.

See also

• Class collaboration
• Co-determination
• Conflict theories
• Corporate nationalism
• Corporate statism
• Cooperative
• Distributism
• Fascism
• Gemeinschaft and Gesellschaft
• Gremialismo
• Guild
• Guild socialism
• Holacracy
• Managerialism
• Mutualism (movement)
• Integralism
• National syndicalism
• Paritarian Institutions
• Pillarisation
• Solidarism (disambiguation)
• Third Position
• Proprietary corporation

References

• Black, Antony (1984). Guilds and civil society in European political thought from the twelfth century to present. Cambridge, United Kingdom: Cambridge University Press, ISBN 978-0-416-73360-0.
• Kay, Hugh (1970). Salazar and Modern Portugal. New York: Hawthorn Books.
• Moschonas, Gerassimos (2002). In the Name of Social Democracy: The Great Transformation, 1945 to the Present. Translated by Elliott, Gregory. London, England: Verso Books. ISBN 978-1-85984-639-1.
• Overy, Richard (2004). The Dictators: Hitler's Germany and Stalin's Russia (illustrated, reprinted ed.). London, England: Allen Lane. ISBN 9780713993097.

• Wiarda, Howard J. (1997). Corporatism and comparative politics: the other great "ism". Armonk, NY: M.E. Sharpe. ISBN 978-1563247163.

Further reading

• Acocella, N. and Di Bartolomeo, G. [2007], "Is corporatism feasible?", in: Metroeconomica, 58(2): 340-59.
• Jones, Eric. 2008. Economic Adjustment and Political Transformation in Small States. Oxford University Press.
• Jones, R. J. Barry. Routledge Encyclopedia of International Political Economy: Entries A-F. Taylor & Frances, 2001. ISBN 978-0-415-14532-9.
• Schmitter, P. (1974). "Still the Century of Corporatism?" The Review of Politics, 36(1), 85-131.
• Taha Parla and Andrew Davison, Corporatist Ideology in Kemalist Turkey Progress or Order?, 2004, Syracuse University Press, ISBN 0-8156-3054-9

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

On fascist corporatism and its ramifications

• 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.
• Marra, Realino, "Aspetti dell'esperienza corporativa nel periodo fascista", Annali della Facoltà di Giurisprudenza di Genova, XXIV-1.2, 1991–92, pages 366–79.
• 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.
• My rise and fall, Volumes 1–2 – two autobiographies of Mussolini, editors Richard Washburn Child, Max Ascoli, Richard Lamb, Da Capo Press, 1998
• The 1928 autobiography of Benito Mussolini. Online. Archived 2008-05-04 at the Wayback Machine My Autobiography. Book by Benito Mussolini; Charles Scribner's Sons, 1928. ISBN 978-0-486-44777-3.
• Hicks, Alexander (1988). "Social Democratic Corporatism and Economic Growth". The Journal of Politics. 50 (3). Chicago, Illinois: University of Chicago Press: 677–704. doi:10.2307/2131463. ISSN 0022-3816. JSTOR 2131463. S2CID 154785976.

On neo-corporatism

• Katzenstein, Peter. Small States in World Markets: industrial policy in Europe. Ithaca, 1985. Cornell University Press. ISBN 978-0-8014-9326-3.
• Olson, Mancur. The Logic of Collective Action: Public Goods and the Theory of Groups. [1] 1965, 1971. Harvard University Press. ISBN 978-0-674-53751-4.
• Schmitter, P. C. and Lehmbruch, G. (eds.). Trends toward Corporatist Intermediation. London, 1979. ISBN 978-0-8039-9837-7.
• Rodrigues, Lucia Lima. "Corporatism, liberalism and the accounting profession in Portugal since 1755." Journal of Accounting Historians, June 2003. Archived 2006-02-20 at the Wayback Machine
• Rosser, J. Barkley; Rosser, Marina V. (2003). Comparative Economics in a Transforming World Economy (2nd ed.). Cambridge, Massachusetts: MIT Press. ISBN 978-0-262-18234-8.

External links

Encyclopedias

• Corporatism – Encyclopædia Britannica
• Corporatism – The Canadian Encyclopedia

Articles

• Professor Thayer Watkins, The economic system of corporatism Archived 2020-05-10 at the Wayback Machine, San Jose State University, Department of Economics.
• Chip Berlet, "Mussolini on the Corporate State", 2005, Political Research Associates.
• "Economic Fascism" by Thomas J. DiLorenzo, The Freeman, Vol. 44, No. 6, June 1994, Foundation for Economic Education; Irvington-on-Hudson, New York.