Corporatism

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Corporatism, also known as corporativism, is a system of economic, political, or social organization that involves division of the people of society into corporate groups, such as agricultural, business, ethnic, labor, military, patronage, or scientific affiliations, on the basis of common interests.^[1]

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."^[2]

Corporatism is based theoretically upon the interpretation of a community as an organic body.^[3][4] The term corporatism is based on the Latin root "corp" meaning "body".^[4]

One of the main types of corporatism is economic tripartism involving negotiations between business, labour, and state interest groups to establish economic policy.^[5]

Corporatism is related to the sociological concept of structural functionalism.^[6] Corporate social interaction is common within kinship groups such as families, clans and ethnicities.^[7] Aside from humans, certain animal species are known to exhibit strong corporate social organization, such as penguins.^[8][9]

Corporatist types of community and social interaction are common to many ideologies, including: absolutism, capitalism, conservatism, fascism, liberalism, progressivism, reactionism, socialism, and syndicalism.^[10]

[edit] Common types

[edit] Kinship corporatism

Kinship-based corporatism emphasized clan, ethnic, and family identification has been a common phenomenon in Africa, Asia, and Latin America.^[7] Confucian societies based upon families and clans in East Asia and Southeast Asia have been considered types of corporatism.^[7] China has strong elements of clan corporatism in its society involving legal norms concerning family relations.^[11] Islamic societies often have strong clan that forms the basis for a community-based corporatist society.^[7]

[edit] Corporatism in religion and spiritualism

[edit] Christianity

Painting of Paul of Tarsus.

Christian corporatism is traced to the New Testament of the Bible in I Corinthians 12:12-31 where Paul of Tarsus discusses an organic form of politics and society where all people and components are united functionally, like the human body.^[12]

During the Middle Ages, the Catholic Church sponsored the creation of various institutions including brotherhoods, monasteries, religious orders, and military associations, especially during the Crusades to sponsor association between these groups.^[13] In Italy, various function-based groups and institutions were created during the Middle Ages, such as universities, guilds for artisans and craftspeople, and other professional associations.^[13] 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.^[13]

Corporatism's popularity increased in the late 19th century, and a corporatist internationale was formed in 1890, followed by the publishing of Rerum Novarum by the Catholic Church that for the first time declared the Church's blessing to trade unions and recommended for organized labour to be recognized by politicians.^[14] 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.^[15] In response to the Roman Catholic corporatism of the 1890s, Protestant corporatism was developed, especially in Germany, the Netherlands, and Scandinavia.^[16] However, Protestant corporatism has been much less successful in obtaining assistance from governments than its Roman Catholic counterpart.^[17]

[edit] Biology

In social psychology and biology, researchers have found the presence of corporate group social organization amongst animal species.^[8] Research has shown that Penguins are known to reside in densely populated corporate breeding colonies.^[8]

[edit] Corporatism in politics and political economy

[edit] Communitarian corporatism

Plato (left) and Aristotle (right).

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, such that groups would cooperate to achieve social harmony by emphasizing collective interests while rejecting individual interests.^[6]

Aristotle in Politics also described society as being divided along natural classes and functional purposes that were priests, rulers, slaves, and warriors.^[18] Ancient Rome adopted 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 representatives into military, professional, and religious groups and created institutions for each group known as colegios^[18] (Latin: collegia).

[edit] Absolutist corporatism

Absolute monarchies during the late Middle Ages gradually subordinated corporatist systems and corporate groups to the authority of centralized and absolutist governments, resulting in corporatism being used to enforce social hierarchy.^[19]

After the French Revolution, the existing absolutist corporatist system was abolished due to its endorsement of social hierarchy and special "corporate privilege" for the Roman Catholic Church.^[19] The new French government considered corporatism's emphasis of group rights as inconsistent with the government's promotion of individual rights.^[19] Subsequently corporatist systems and corporate privilege throughout Europe were abolished in response to the French Revolution.^[19] From 1789 to the 1850s, most supporters of corporatism were reactionaries.^[2] A number of reactionary corporatists favored corporatism in order to end liberal capitalism and restore the feudal system.^[20]

[edit] Progressive corporatism

From the 1850s onward progressive corporatism developed in response to classical liberalism and Marxism.^[2] These corporatists supported providing group rights to members of the middle classes and working classes in order to secure cooperation among the classes.^[2] This was in opposition to the Marxist conception of class conflict.^[2] By the 1870s and 1880s, corporatism experienced a revival in Europe with the creation of workers' unions that were committed to negotiations with employers.^[2]

Ferdinand Tönnies in his work Gemeinschaft und Gesellschaft ("Community and Society") of 1887 began a major revival of corporatist philosophy associated with the development of Neo-medievalism and increased promotion of guild socialism, and causing major changes of theoretical sociology.^[21] 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.^[21] The National Socialists used Tönnies' theory to promote their notion of Volksgemeinschaft ("people's community").^[22] However Tönnies opposed Nazism and 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.^[23]

Émile Durkheim.

Sociologist Émile Durkheim advocated a form of corporatism termed "solidarism" that advocated creating an organic social solidarity of society through functional representation.^[24] Solidarism was based upon Durkheim's view that the dynamic of human society as a collective is distinct from that of an individual, in that society is what places upon individuals their cultural and social attributes.^[25]

Durkheim claimed that in the economy, solidarism would alter the division of labour by changing it from the mechanical solidarity to organic solidarity.^[24] Durkheim claimed that the existing industrial capitalist division of labour caused "juridical and moral anomie" which had no norms or agreed procedures to resolve conflicts resulting in chronic confrontation between employers and trade unions.^[24] Durkheim believed that this anomie caused social dislocation and claimed that by this "[i]t is the law of the strongest which rules, and there is inevitably a chronic state of war, latent or acute".^[24] As a result, Durkheim claimed 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.^[26]

Portrait of John Stuart Mill

The idea of liberal corporatism has also been attributed to English liberal philosopher John Stuart Mill who discussed corporatist-like economic associations as needing to "predominate" in society to create equality for labourers and give them influence with management by economic democracy.^[27] Unlike some other types of corporatism, liberal corporatism does not reject capitalism or individualism, but believes that the capitalist companies are social institutions that should require their managers to do more than maximize net income, by recognizing the needs of their employees.^[28]

This liberal corporatist ethic is similar to Taylorism but endorses democratization of capitalist companies.^[28] 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".^[28] Liberal corporatism began to gain disciples in the United States during the late 19th century.^[2]

Liberal corporatism was an influential component of the Progressivism in the United States that has been referred to as "interest group liberalism".^[29] The support by U.S. labor representatives of liberal corporatism of the U.S. progressives is believed to have been influenced by the syndicalism and particularly the anarcho-syndicalism at the time in Europe.^[29] 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 Keynesianism and even Fordism.^[20]

[edit] Fascist corporatism

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Fascism's theory of economic corporatism involved management of sectors of the economy by government or privately controlled organizations (corporations). Each trade union or employer corporation would, theoretically, represent its professional concerns, especially by negotiation of labor contracts and the like. This method, it was theorized, could result in harmony amongst social classes.^[30] Authors have noted, however, that de facto economic corporatism was also used to reduce opposition and reward political loyalty.^[31]

In Italy from 1922 until 1943, corporatism became influential amongst Italian nationalists led by Benito Mussolini. 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 and authority in a special synthesis. This appealed to Hegelian thinkers who were seeking a new alternative to popular socialism and syndicalism which was also a progressive system of governing labor and still a new way of relating to political governance. Alfredo Rocco spoke of a corporative state and declared corporatist ideology in detail. Rocco would later become a member of the Italian Fascist regime Fascismo.^[32]

Italian Fascism involved a corporatist political system in which economy was collectively managed by employers, workers and state officials by formal mechanisms at the national level.^[33] This non-elected form of state officializing of every interest into the state was professed to reduce 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 into the state organically, according to its supporters, thus being the inspiration for 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:

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.^[34]

and

[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.^[34]

This prospect of Italian fascist corporatism claimed to be the direct heir of Georges Sorel's anarcho-collectivist, such that 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 partly due to the Fascists' attempts to gain endorsement by the Roman Catholic Church that itself sponsored corporatism.^[35]

However fascism's corporatism was a top-down model of state control over the economy while the Roman Catholic Church's corporatism favored a bottom-up corporatism, whereby groups such as families and professional groups would voluntarily work together.^[35][36] 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, but also Konstantin Päts and Karlis 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".^[37] Mosley also considered corporatism as an attack on laissez-faire economics and "international finance".^[37]

[edit] Neo-corporatism

During the post-World War II reconstruction period in Europe, corporatism was favored by Christian democrats, national conservatives, and social democrats in opposition to liberal capitalism.^[20] 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.^[20] Neo-corporatism favored economic tripartism which involved strong labor unions, employers' unions, and governments that cooperated as "social partners" to negotiate and manage a national economy.^[20]

Attempts in the United States to create neo-corporatist capital-labor arrangements were unsuccessfully advocated by Gary Hart and Michael Dukakis in the 1980s.^[38] Robert Reich as U.S. Secretary of Labor during the Clinton administration promoted neo-corporatist reforms.^[38]

[edit] Asian corporatism

Asian corporatism, as described by Jonathan Unger and Anita Chan in their essay China, Corporatism, and the East Asian Model:^[39]

"...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".^[40]

[edit] Russian corporatism

On October 9, 2007, an article signed by Viktor Cherkesov, head of the Russian Drug Enforcement Administration, was published in the periodical 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.^[41]

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."^[42]

All political powers and most important economic assets in the country are controlled by former state security officials ("siloviks"), according to some researchers.^[43] The control of Russian state and economic assets has been allegedly accomplished by a clique of Putin's close associates and friends^[44] who gradually became a group of oligarchs and who "seized control over the financial, media and administrative resources of the Russian state"^[45] and restricted democratic freedoms and human rights^[43]

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] assumed control 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"^[46]

Analyst Andrei Piontkovsky also considers the present situation as "the highest and culminating stage of bandit capitalism in Russia”.^[47] 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."^[48]

[edit] U.S. corporatism

In the United States, Republican President Ronald Reagan^[49][50] echoed Republican President Herbert Hoover and others who claimed that Franklin D. Roosevelt’s New Deal programs represented an attempt to establish a corporatist state. In particular, these critics focused on the National Recovery Administration. In 1935, Herbert Hoover described^[51] some of the New Deal measures as "Fascist regimentation." In his 1951 memoirs^[52] 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.

Franklin D. Roosevelt in an April 29, 1938 message to Congress warned that the growth of private power could lead to fascism:

The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism—ownership of government by an individual, by a group, or by any other controlling private power.^[53][54][55]

From the same message:

The Growing Concentration of Economic Power. Statistics of the Bureau of Internal Revenue reveal the following amazing figures for 1935: "Ownership of corporate assets: Of all corporations reporting from every part of the Nation, one-tenth of 1 percent of them owned 52 percent of the assets of all of them."^[53][55]

Critics of the notion of the congruence of corporate power and de facto fascism included President Dwight D. Eisenhower,^[56] who nevertheless brought attention to the "conjunction of an immense military establishment and a large arms industry"^[57] 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."^[57]

It should be noted that corporatism means different things in Europe and in the US. In Europe, corporatism refers at least in principle to the domination of the economy by the state, and the word 'corporatism' is obtained from the Latin word for 'body' indicating the belief that the economy should not be treated as something different from society and the state, but as one organ of a whole body. In the US, corporatism usually refers to the domination of the state by the economy, and the word is derived from "corporations", that is, a pop reference to big business which has enough power and money to challenge the state's political power. Therefore, what is understood by corporatism in the US and in Europe are in theory diametrically opposed notions.^{[citation needed]}

[edit] See also

[edit] References

[edit] Further reading

• Jones, R. J. Barry. Routledge Encyclopedia of International Political Economy: Entries A-F. Taylor & Frances, 2001. ISBN 978-0-415-14532-9.
• Black, Antony. Guilds and civil society in European political thought from the twelfth century to present. Cambridge, United Kingdom: Cambridge University Press, 1984. ISBN 978-0-8014-1690-3.
• Wiarda, Howard J. Corporatism and comparative politics. M.E. Sharpe, 1996. ISBN 978-1-56324-715-6.

[edit] 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.

[edit] 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. Search text.
• Olson, Mancur. The Logic of Collective Action : Public Goods and the Theory of Groups. 1965, 1971. Harvard University Press. ISBN 978-0-674-53751-4. Search text. Chapter-previews links, pp. ix-x.
• Schmitter, P. C. and Lehmbruch, G. (eds.). Trends toward Corporatist Intermediation. London, 1979. ISBN 978-0-8039-9837-7. Search text.
• Rodrigues, Lucia Lima. "Corporatism, liberalism and the accounting profession in Portugal since 1755." Journal of Accounting Historians, June 2003.

[edit] 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.

[edit] External links

Look up corporatism in Wiktionary, the free dictionary.

• Corporatism. The Canadian Encyclopedia.
• The Economic System of Corporatism. Professor Thayer Watkins. San Jose State University Department of Economics
• 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 0-8156-3054-9
• "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. ISBN 978-0-486-44777-3. ASIN: B0017RTP5G.
• Corporatism by Jeffrey Grupp
• Global Food Security Threatened by Corporate Land Grabs in Poor Countries - video report by Democracy Now!