Neo-corporatism
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 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 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 Singapore, the National Wages Council and other state-created entities form a tripartite arrangement between the major trade unions (NTUC), employers and the Government that co-ordinates the national economy. In Italy, the Carlo Azeglio Ciampi administration inaugurated in July 23, 1993 a concertation (italian: concertazione) policy of peaceful agreement on salary rates between government, the three main trade unions and the Confindustria employers' federation. Before that, salary augmentations always were conquered by strike actions. 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 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[1],
at the national level the state recognizes one and only one organization (say, a national labour union, a business association, a farmers' association) as the sole representative of the sectoral interests of the individuals, enterprises or institutions that comprise that organization's assigned constituency. The state determines which organizations will be recognized as legitimate and forms an unequal partnership of sorts with such organizations. The associations sometimes even get channelled into the policy-making processes and often help implement state policy on the government's behalf.
By establishing itself as the arbitrator of legitimacy and assigning responsibility for a particular constituency with one sole organization, the state limits the number of players with which it must negotiate its policies and co-opts their leadership into policing their own members. This arrangement is not limited to economic organizations such as business groups or trade unions; examples can also include social or religious groups. Examples abound, but one such would be the People's Republic of China's Islamic Association of China, in which the state actively intervenes in the appointment of imams and controls the educational contents of their seminaries, which must be approved by the government to operate and which feature courses on "patriotic reeducation".[2] Another example is the phenomenon known as "Japan, Inc.", in which major industrial conglomerates and their dependent workforces were consciously manipulated by the Japanese MITI to maximize post-war economic growth.
Criticism of Corporatism
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 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.
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.
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.
Other critics say that they are pro-capitalist, but anti-corporatist. They support capitalism but only when corporate power is separated from state power.
Corporatism and Fascism
Some critics equate too much corporate power and influence with fascism. See Fascism and ideology. Often they cite a quote claimed to be from Mussolini: "Fascism should more properly be called corporatism because it is the merger of state and corporate power." However the most common cites for the quote do not track back to this phrase, and it is most likely an Internet hoax. [3]. Despite this, the alleged quote has entered into modern discourse, and it appears on thousands of web pages [4], and in books [5], and even a conspiracy theory advertisement in the Washington Post.[6]. However, the alleged quote contradicts almost everything else written by Mussolini on the subject of the relationship between corporations and the Fascist State.[7].
In one 1935 English translation of what Mussolini wrote, the term "corporative state" is used,[8] but this has a different meaning from modern uses of the terms used to discuss business corporations. In that same translation, the phrase "national Corporate State of Fascism," refers to syndicalist corporatism. The dubious quote is sometimes claimed to more accurately summarize what Mussolini did and not what he said. However many scholars of fascism reject this claim. See Fascism and ideology.
There is a very old argument about who controlled who in the fascist states of Italy and Germany at various points in the timeline of power. It is agreed that the army, the wealthy, and the big corporations ended up with much more say in decision making than other elements of the corporative state [9] [10] [11]. 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[12].
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.
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. In this sense of capitalism, corporatism would be perceived as anti-capitalist as socialism. Other critics argue that corporatist arrangements exclude some groups, notably the unemployed, and are thus responsible for high unemployment. This argument is the basis of the book "Logic of Collective Action" by Harvard economist Mancur Olson.
In the United States, some claim that Franklin D. Roosevelt’s New Deal programs were an unprecedented jump towards a corporate state. Although there is a long history of narrow economic interests controlling the decision-making process in America, these critics, usually libertarians, say that the New Deal in general and the National Recovery Administration in particular represented a new and broad experiment in corporatism. [13] Several portions of the New Deal were struck down as unconstitutional by the US Supreme Court. For example, the Court in striking down the Agricultural Adjustment Act stated that "a statutory plan to regulate and control agricultural production, [is] a matter beyond the powers delegated to the federal government..."Some [14] claim that later US governmental programs represent further state corporatist activity. In this context, corporatism has been described as economic fascism. See: Fascism and ideology.
Sources
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. [15]
- This page was last modified 03:25, 5 June 2006.
- All text is available under the terms of the GNU Free Documentation License (see Copyrights for details).
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