[Paleopsych] Wikipedia: Corporatism

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Historically, corporatism or corporativism (Italian corporativismo) is
a political system in which legislative power is given to corporations
that represent economic, industrial and professional groups. Unlike
pluralism, in which many groups must compete for control of the state,
in corporatism, certain unelected bodies take a critical role in the
decision-making process. A corporatist state

   ... does not simply license the existence of organised interest
   groups but incorporates them into its own centralised hierarchical
   system of regulation. In doing so, the state simultaneously
   recognises its dependence upon these associations and seeks to use
   them as an instrument in the pursuit and legitimation of its

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
any incorporated body. Its usage reflects medieval European concepts
of a whole society in which the various components 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. (Also
see neofeudalism.)

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. This
usage is particularly common in the area of East Asia studies, and is
sometimes also referred to as state corporatism.

Modern popular usage of the term is more perjorative, 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.
If there is substantial military-corporate collaboration it is often
called militarism or the military-industrial complex.

Some modern political scientists and sociologists use the term
neo-corporatism to describe a process of bargaining between labor,
capital, and government identified as occuring in some small, open
economies (particularly in Europe) as a means of distinguishing their
observations from popular perjorative usage and to highlight ties to
classical theories.


   * 1 Classical theoretical origins
   * 2 Neo-corporatism
   * 3 State corporatism
   * 4 Criticism
  + 4.1 Anti-Corporate Criticism
  + 4.2 Free Market criticisms
   * 5 Related Topics
   * 6 External links
   * 7 Sources

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 Catholic trade
unions that organised in the early twentieth century to counter the
influence of trade unions founded on a socialist ideology. Theoretical
underpinning came from the medieval traditions of guilds and
craft-based economics.

Gabriele D'Annunzio and anarcho-syndicalist Alceste de Ambris
incorporated principles of corporative philosophy in their
Constitution of Fiume.

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 allow 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.

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.


In the recent literature of political science and sociology,
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 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, and the Netherlands fit this classification.
In the work of some scholars, such as Peter 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 or in the
Economic and Social Committee of the European Union, the collective
agreement arrangements of the Scandinavian countries, the Dutch
Poldermodel system of consensus, or 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 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 always were conquered by strike
actions. In 2001 the Silvio Berlusconi administration puts and end to

Most theorists agree that neo-corporatism is undergoing a crisis. In
many classically corporatist countries, traditional bargaining is on
the retreat. This crisis is often attributed to globalization, but
this claim is not undisputed.

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.

Under such a system, as described by Jonathan Unger and Anita Chan in
their essay China, Corporatism, and the East Asian Model[2],

   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

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".[3] 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.


Anti-Corporate Criticism

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. 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

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.

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.

In the United States, corporations representing many different sectors
are involved in attempts to influence legislation through lobbying.
This is also true of 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. American corporatism may be
evidenced in the close ties between members of the Bush Administration
and many large corporations, such as Halliburton.

Some [4] claim that Franklin D. Roosevelt's New Deal programs were an
unprecedented jump towards a corporate state. However, this ignores
the long history of narrow economic interests controlling the
decision-making process in America.

Some political activists argue that the political economy of the
United States is heading toward fascism, which critics say confuses
the historic and contemporary uses of the term corporatism. They often
cite a quote on corporatism widely attributed to Mussolini. In an
article written by Mussolini, and reportedly found in the 1932
Enciclopedia Italiana, Mussolini allegedly says:

  "Fascism should more properly be called corporatism, since it
  is the merger of state and corporate power."

However, the quote does not appear in that book, and is arguably
inconsistent with, or contradictory to, Mussolini's writings on
Corporatism. [5]

Free Market criticisms

Free Market theorists like Ludwig von Mises, would describe
corporatism as anathema to their vision of capitalism. In the kind of
capitalism such theorists advocate, what has been called the
"night-watchman" state, the government's role in the economy is
restricted to safeguarding the autonomous operation of the free
market. Other critics argue that corporatist arrangements exclude some
groups, notably the unemployed, and are thus responsible for high
unemployment. This argument goes back to the famous "Logic of
Collective Action" by Harvard economist Mancur Olson. However, 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.

Related Topics

   * Anti-globalization
   * Antitrust
   * Collectivism
   * Corporate nationalism
   * Corporate police state
   * Crony capitalism
   * Globalization
   * Plutocracy
   * Quango
   * New Deal

External links

   * publiceye.org discusses this article, and provides copious
  references on the subject
   * 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 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.

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