Executive Summary
Corporatism is redefined to include Functional Corporatism and Ideological Corporatism with a further sub-division into Neo-corporatism, Experimental Corporatism, Ideological Corporatism and Historical Corporatism. This paper attempts to provide a broad definition of Corporatism together with the history and causes for the emergence of corporatist state structure. While detailing the fundamentals of neo-corporatism, the paper also attempts to compare and contrast Fascism and Corporatism. Recent evidences on the prevalence of corporatism around the world also form part of the paper. The broader definition of corporatism exhibit that corporatism can be considered as an ideal model for under-developed, non-democratic countries in the same way as it is applied in a number of industrially advanced nations especially in the Continental Europe.
Introduction
Corporatism is regarded as one of the most polyvalent terms in the disciplines of social and political sciences. It is also one of the concepts which have been most contested. However the concept has not assumed any great significance in the Marxist discourse and analysis, since corporatism has been criticized by the Marxists as an essentially bourgeois ideology. Therefore, within Marxism corporatism has won only a limited reception, mostly to describe “specific forms of capitalist state, political regime or industrial relations system.” Through the works of Wirada, Schmitter and a number of other scholars corporatism emerged as a both a descriptive term that explains and analyzes a wide ranging political behavior and institutions. It also emerged as an alternative model or interpretive theory as opposed to liberalism and Marxist-socialism.
The corporatist model was conceived and developed so that it can be placed as an alternative to the other important theoretical models like Marxism and pluralism present at that point of time. Corporatist model has the perspective of aiding the viewing, describing and interpreting historical, political and social development in a society. There are two significant elements addressed by the corporatist model. First it considers an alternative interpretation of national development and a state-society relationship from a distinct viewpoint. In the context of national development corporatism advocates that state has numerous paths to experience and travel to reach the destination of development. Secondly the corporatist model also suggests that it can act as a stage of a longer multi-tiered development process.
In a broader sense, corporatism is a system of interest representation which features a planned integration of some associational interests in a society into the decision-making structures and policy arena of the state. In this model, the state has a leading role to play. The state regulates, creates and sets the ground rules for the organization of internal activities of some give interest categories. In the corporatist model, the state also decides the external interactions between the interest groups and between the groups and the state. In its typical and ideal form, corporatism uses the tools of recognition, licensing and compulsory membership of designated categories to ensure controlled emergence and numerical limitation of the interest demands submitted in an organized way by the groups. This is contrast to the autonomous and spontaneous expansion of interests as noticed in pluralist political systems.
It is worth considering the explanatory value of corporatism in its role in describing the social-political relationships. In this context Chalmers offers a well-defined response to the question of the extent of social-political relationships as embedded in corporatism (Wirada).
According to Chalmers
- Corporatism begins with the role of the state and it incorporates group interests as studied in their relation to the state. The contribution of corporatism in offering discovering solutions has been able to emphasize the key role of state-group ties in its explanation for a variety of outcomes
- Corporatism incorporates not only the interests of the state at its domain. It is also equally interested in explaining the structure which defines the relationship between various interests, the functional organizations representing those interests and the bureaucracy
- Corporatism also considers state as a naturally divided entity rather than a single entity with a single interest. As per corporatist view the state as a divided entity is made up of specific relationships with the major economic groups or functional organizations or in whatever way the interests are defined to exist. As such the state cannot be isolated from civil society to exist on its own rights and is defined by the series of links that form both the state and the societal groups that are interconnected in achieving the desired economic or social goals
- Corporatism focuses its attention on the importance of the structure of state-group relationships which are mostly state-initiated. By doing this corporatism draws attention to the choices being made by those who are instrumental in designing those links.
Recently developed theories have identified corporatism to take at least two broad avenues.
Williamson distinguishes these distinctive models as ‘consensual-licensed’ and ‘authoritarian-licensed’. According to Schmitter corporatism takes the form of ‘societal corporatism’ and ‘state corporatism’. O’Donnell categorizes them into ‘privatizing’ and ‘statising’ (Wirada). This paper while explaining the conceptual base of corporatism also explores the history of corporatism and describes the salient features of ne-corporatism and state corporatism. A discussion on the recent evidences of corporatism across the world also forms part of the paper.
Definition of Corporatism
The basic idea of corporatism is that the society and economy of a country should consist of major interest groups which are sometimes referred to as corporations. Corporatism advocates that the representatives of such interest groups settle any problems through negotiation and joint agreement (Watkins). Unlike market economy which operates through competition, a corporatist economy works through collective bargaining. The concept of corporatism was first used in Sweden and other Scandinavian context in its modern “neo-corporatist’ sense immediately following the World War II (Lehmbruch). A serious interest in corporatism as an analytical concept with the identification of a novel political phenomenon within the discipline of political science has developed during the 1970s. The work by Philippe Schmitter was the first article encompassing a wide-ranging review of corporatism which was written in the year1974. This was followed by several other contributions. For instance Pahl and Winkler wrote on the trends of corporatism in Britain and Lehmbruch submitted works on development of corporatism in Central Europe. However, Schmitter’s work has been acknowledged as the standard point of reference to future works on corporatism. With the growing interest on the concept, a number of new connotations and interpretations describing all the new societies as corporatist at some point or other developed over the period (Cawson and Ballard; Wiiliamson). Since there are a number of approaches to corporatism this paper intend to review two influential definitions of corporatism by Schmitter and Pahl and Winkler. Even though there are different set of criteria available to evaluate the concept, these two works carry a common reference point of their concern with the state and its function in capitalist societies.
Schmitter on Corporatism
The most often cited definition of corporatism is the one contributed by Philipe Schmitter. This definition comprises of a fourfold typology of political representation. The definition is placed side by side with the definitions of pluralism, monism, and syndicalism (Schmitter). Corporatism as defined by Schmitter is presented below.
“Corporatism can be defined as a system of interest representation in which the constituent units are organized into a limited number of singular, compulsory, noncompetitive, hierarchically ordered and functionally differentiated categories, recognized or licensed (if not crated) by the state and granted a deliberate representational monopoly within their respective categories in exchange for observing certain controls on their selection of leaders and articulation of demands and supports.” (Schmitter)
The definition was found to be abstract in nature by Schmitter himself and therefore he suggested two distinct approaches in the form of ‘societal corporatism’ and ‘state corporatism’. While the societal corporatism is “characterized by the autonomy of interest associations from the state and piecemeal evolutions from below”, state corporatism “is marked by the subordination of interest association to the state and a crisis-induced, repressive imposition of authoritarian political forces from above”. The original paper of Schmitter on corporatism still contained a number of ambiguities, the chief among them being the assumption that the political representation simply took the state as given. In addition the assumption that the state is endowed with power to license, control or indeed to create corporatism was also questionable.
Philippe Schmitter was of the view that cultural factors are not important in the development of corporatism. He argues that corporatism is simply another form of organizing interests and therefore cannot be associated with one culture or cultural history. He further suggests that in order to make it useful for analytical purposes, corporatism needs to be disengaged from its past failures. In effect Schmitter views corporatism as an alternative to the interest politics of pluralism. According to Schmitter even though state corporatism construes “corporations” as part of its structure, the legitimacy or authority of the states are not supplemented by these corporations. However social corporatism considers the corporations to have the ability to legitimize the state and the government. Schmitter instead of basing his explanation for corporate development on cultural or historical factors argues that state corporatism emerges at the end of nascent pluralism and social corporatism takes its birth on the decay of advanced pluralism. Schmitter was of the view that corporatism is compatible with capitalism because he believed capitalism can “correct the inherent defects linked to the processes of internal concentration and external competition.” Schmitter considered corporatism as a reaction to the problems of modern society.
Definition of Corporatism by Pahl and Winkler
The definition provided by Pahl and Winkler is also considered as influential one. The authors also located corporatism in term of a fourfold typology as in the case of the definition by Schmitter. However in their definition types of political economies have been considered rather than political representation. Ownership and control of the means of production are the cross-classifying variables in the four cell ‘property space’ typology developed by Pahl and Winkler. Each of these variables is further dichotomized into nominal values of private and public concepts. Based on these terms corporatism was initially defined as a “system of private ownership of the means of production combined with their public control. Corporatism was counterpoised to capitalism with the emphasis on private ownership, socialism comprising of ownership and control and syndicalism specifying private ownership and control. The purposes of public control were uses as the further step by Pahl and Winkler for developing the notion of corporatism. After all these stages, the definition of corporatism as provided by Pahl and Winkler reads as “an economic system in which the state directs and controls predominantly privately owned business towards four goals; unity, order, nationalism, and success (Pahl and Winkler).
Apart from employing a fourfold typology, Pahl and Winkler also developed two other sub-types of corporatism namely egalitarian and inegalitarian. Unlike Schmitter, Pahl and Winkler did not focus on the development of a general theory of corporatism and its subtypes. Instead they concentrated on the development of corporatism in Britain. Based on their finding, they suggested that ‘fascism with a human face’ will attain prominence within a decade as from the year 1974. Pahl and Winkler considered corporatism as a tertium genus distinct from both capitalism and socialism.
The corporatist development model of Peter J Williamson can be considered to lie between the two theoretical interpretations of corporatism by Schmitter and Pahl and Winkler. Williamson looks at corporatism as a method of organizing producer groups in a society. Corporatism also incorporates the producer groups into the official structure, since the objectives of the producer groups are different from and contrasting to those of politicians. According to Williamson corporatism developed as a critique of pluralism and is based on the relationship of pluralism to interest groups. In the discussion of corporatism by Williamson, the state takes a dominating position and assumes a hierarchical position of power in the producer organizations. However Williamson has included only major producer groups in the corporate structure and consumer groups and small producer groups do not find a place in the corporate structure. In his theoretical model, “regime type” is essentially important in the construction of the theory. This is because according to Williamson there is a “structure of domination” embedded in corporatism which has the function of maintaining the existing social order against the varied interests of the producer groups. Williamson believes that the divergent interests of producer groups can be controlled either by repression or incorporation of these interests and he theorized corporatism to use incorporation for effecting the control on the interest groups. However the theoretical model of Williamson is not supported by any empirical evidence.
Thus corporatism can be broadly defined as having two possible explanations – ideological and functional. Functional corporatism takes place where there is legitimate organization and access to public policy available to various interest groups. These interest groups should possess the ability to formulate and implement public policy and the government must be prepared to take this input and act there upon. Ideological corporatism on the other hand organizes interests but does not talk of providing any access to the legislative executive levels of the government or alternatively provides access but adopts the practice of systematically repressing or ignoring the influences of the groups. These broad categories are subdivided into several other forms to capture the unique effects of each type of corporate state structure.
History of Corporatism
The history of corporatism can be traced back to the biblical, ancient Greek and Roman times and the concept developed through the Middle Age and through the French Revolution to get shaped. The conceptual developments after World War II and after witnessed the formulation of the concept of corporatism as it exists in the present day context. This section details the history of the development of corporatism.
During Ancient Greek and Roman Times
The emergence of Comparative Politics can be traced back even from ‘The Bible’. It may be observed in the Old Testament the prophets usually compare the people of Israel with Egyptians and Persians. The earliest systematic comparison of more advanced political systems with the ingredients of most of today’s Comparative Politics was formulated by the ancient Greeks. Plato’s Republic and Aristotle’s Politics are the real beginning of the political ideologies and these books cover several of the “key issues of politics, nature of power and leadership, the different forms of government, public policy and so on.” (Omo-Bare) Thus the emergence of a particular form of corporatism can be traced to Ancient Greece. Aristotle advocated the idea that society should be organized based on different functional lines like warriors, priesthood, slaves or ruling class. However the idea of ruling class and slaves are no more applicable in the present day context. Wirada writes “nevertheless, his notions that society should be organized along functional or occupational lines, on an ordered and bureaucratic basis, that each unit of society should perform its proper functions and that all the parts need to be harmonized into an organic whole world” prove to provide the basis for modern corporatism.
The next influence on corporatist theory can be associated with the political theories of ancient Rome. Apart from dwelling on the ancient Greek concepts of state and society, Roman political theorists added newer concepts concerning the society and politics. While Greek system was embodied with the concept of direct citizen participation in their small city councils, Romans introduced the system of indirect representation; and that the representations to be in part by functions resembling the basics of corporatist conception. Secondly ancient Rome witnessed an elaborate system of corporate and societal groups in the form of several military, professional and religious institutions having their own charters. Even though these groups were independent and monopolistic in nature, states exercised control over them and monitored the relations among the associations. Romans also introduced ‘republicanism’ under which a strong state competed for power with the component corporate units. During some period of time Romans made the method of ‘authoritarianism’ popular.
Therefore, in the biblical, Greek and Roman conceptions, most of the ingredients of modern corporatism could be traced. Such conceptions include:
“the organic or unified view of society, the organization of that society into well-ordered and integrated functional or corporative units, the licensing and regulation of these units by the state for common good and an almost constant and dynamic tension between the top-down, authoritarian and statist form of corporatism and a more democratic, pluralistic, representative and societal form” (Wirada)
During the Middle Age
After the disintegration of Roman Empire in the fifth century, many of the sophisticated social and political institutions representing the corporatist ideologies disappeared or were reduced to less elaborate forms. Social and economic organizations developed by the Greek and Romans reverted to the primitive forms during the Dark Ages. The corporatist principles reemerged during the eleventh and fifteenth century A.D (a period known as ‘high’ Middle Ages) during which a corporatist conception gaining a Christian form supported by the dominant religious beliefs prevailed at that point of time when Christian notions of brotherhood and just principles were applied in governing various relationships like between buyer and seller, employer and employee and so on. It may be observed that in the twentieth century, the two dominant traditions of ancient Roman principles and the Christian principles of brotherhood complementing each other; however sometimes competing for power.
During the high Middle Ages, social and political organizations in large scale started to reappear including a number of religious organizations associated with Roman Catholic Church, various military orders, towns and cities, universities that emerged as autonomous organizations and artisans and craftsmen. This period also witnessed the emergence of guilds playing the role to monitor the conduct of their members, regulate trade and prices and these guilds represented self-governing professional associations which facilitated the progress and social peace. It is the guild system that was later referred to as the base for corporatist models which led to efficient economic management and class collaboration. These corporative bodies developed during the high Middle Ages represented by the religious and military orders, self-governing towns, autonomous universities and guilds provided an attractive model for the modern day corporatist writers to draw their inspiration to evolve new conceptual base for corporatism.
This corporate group system encompassed with other systems of medieval estates – primary estate consisting of nobles, second estate formed by the clergy, the third estate of common people – which were based hierarchy, rank and special privileges. During the late Middle Ages, along with these corporate groups, centralized monarchies also grew in countries like France, England, Spain and Portugal and they enhanced their powers. “For a considerable period these two developments, the growth of both corporate society and the central state went hand-in-hand and in parallel fashion.” Later during sixteenth, seventeenth and through the eighteenth century in most of the European countries including France, Spain, Portugal and England prevailing monarchies developed into strong authoritarian ruling systems. In this process, the concept of corporate groups was made to subordinate to principles of absolute governments. In all major countries centralized monarchial powers gained prominence over the main corporate groups. The emergence of monarchies made the representative parliaments which acted as checks on the encroachment of royal absolutism powerless and these corporately organized parliament and well-established group rights became victims to the dominant absolutist tendencies. This situation prevailed through the Renaissance, the Enlightenment and the English Revolutions of 1640 and 1688, until the French Revolution in 1789.
Development of Corporatism during the Period of French Revolution and After
The French Revolution resulted in overthrowing of the monarchy as well as the guilds and the corporate privilege of the Church and other corporate bodies. This was followed by similar eradication of corporate privilege and position in other countries like Belgium, Germany, the Netherlands, Portugal, Spain and other countries. Individual rights as against the corporate or group rights started to prevail after this period. The position in the individual countries differed in respect of recognizing the individual rights – for example in Great Britain the historical corporatism never gained prominence and was having a lesser impact than many of the other continental countries. Because of various reasons like early rise of an independent parliament or the Revolutions of 1640 and 688 or because of any other reason corporatism in England was never strong historically as compared to other European countries.
There were viewpoints that the new individualism and the attendant liberties would result in making the society lose its values and those who were of this view wanted the reestablishment of the “stability, discipline, order and authoritarianism of the ancient” and this gave rise to the early nineteenth century tradition of conservatism. Many of the French and German moderates and scholars like Friedrich Hegel and Max Weber were of the view that without the presence of social organizations of the old regime there would be national disintegration resulting in civil war. Any way this situation developed in many of the European countries from the time of the French Revolution in 1789 until the year 1850 when the stabilization of politics and society took place.
Until the middle of nineteenth century corporatism was supported only by people belonging to reactionary camp. The beginning of 1850s witnessed a more realistic and progressive form and ideology of corporatism. The corporatist though at this point of time was considered as a better alternative to the other great political conceptualizations of liberalism and Marxism. The corporatist writers during this period drew upon various other familiar ideas to form a concept that “blended the benefits of the traditional order and the newer requirements of modernization.” This has made the evolution of corporatist principles that were flexible, accommodative and progressive rather than reactionary, which would serve the new middle and working classes as well as meet the needs of the traditional groups. While group rights were continued to be emphasized over individual rights as is the case with liberalism, prevalence of class harmony was also ensured which is in contrast to the class conflicts of Marxism.
Corporatism emerged as a full-fledged political program and ideology during 1870s and 1880s at least in the European countries if not in the United States. In many of the European countries “Working Men’s Circles” incorporating the corporatist principles of class harmony and employer-employee solidarity were developed which included both owners and employees. The objective of these circles was to contribute to the society as a whole but not to one segment of it. During the same period a Protestant version of the corporatist ideology similar to that adopted by the Catholic political leaders spread well into the Northern part of Europe. It was the intention of both Catholic and Protestant groups to find a formula which would ensure social and economic justice to the rising working class without any form of class conflict, revolution or breakdown of the society. They found corporatism to provide such a solution and hence corporatism gained popularity towards the end of the nineteenth century and was placed alongside liberalism and Marxism as one of major ideologies of the nineteenth century. Starting from this period corporatism was regarded as one of the manifest political ideologies and movements. A commission of theologians and social thinkers at the behest of Pope Leo XIII gave the first official definition of corporatism in 1884 at their meeting held in Freiburg, Germany. This definition considered corporatism as 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.” The meeting in Freiburg was the first one to bring all corporatist thinkers from all over the world to one place and this meeting gave the stimulation for new activities in the direction of propagating corporatism. A “corporatist internationale’ was held in Berlin in the year 1890 which added impetus to the corporatist movement. Based on these initiatives, Pope Leo XIII issued his encyclical called Rerum Novarum meaning the “working man’s encyclical” and this proclamation gave the blessings of the church for the organization of trade unions and trade unions were started to be recognized as legitimate social movements. Corporatism as against liberalism or socialism thus became the preferred papal means for achieving the social goals.
In the context of nineteenth century corporatism was often viewed as a conservative alternative to Marxism with some new departures incorporating workers in the political process rather than suppressing them and new concepts of social justice emerged. Workers organized their own unions without the interference of owners or management and got the right of collective action including the right to strike. Thus the ideology of corporatism took a different direction from the reactionary years of early nineteenth century. However many of the corporatist groups were led by clerics and/or ministers with the result that these groups were mostly looking after social and educational needs of the people rather than behaving as militant trade unions. Nonetheless although corporatism during this period had prominent social justice component, it was regarded as a counter to the rising Marxist and radical unions.
The disillusionment towards ineffective parliament regimes that were the order of the day immediately after World War I also gave some thrust to the development of corporatism. In counties like France, Portugal, and even United Kingdom the prevailing parliament governments proved unable to meet the challenges of rising social issues – the international arms race and competition for colonies which led to World War I and the political tendencies which pointed toward fragmentation and chaos – and corporatism attempted to provide a solution to resolve these issues. During this period the rise of corporatism was given momentum by the writings of anti-liberal, anti-democratic, anti-parliament writers. These writers gave rise to the idea that government should be based on the lowest common denominator of one man one vote as enriched in the concept of democracy. These writings as well as other arguments in support of corporatism strengthened the idea that only a well-led state can bring about changes for the betterment of the society which is not possible by uneducated common man.
Post- World War II Corporatism
Corporatism as practiced in the 1920s and 1930s was considered to be authoritarian and repressive, statist rather than an open, democratic, participatory, pluralist and society-based corporatism. Therefore, during the regimes of Mussolini and Hitler corporatism was identified more with authoritarianism and fascism. Corporatism was also discredited with fascism which was defeated in WW II. This has resulted in the removal or replacement of most of the corporatist regimes left over from the earlier period. Corporatism as an ideology and popular movement disappeared during this time. Corporatism in a changed form was present in Spain and Portugal for nearly thirty years after WW II. Corporatism persisted in a number of forms even in Latin America which remained isolated from the political changes in the Western countries. However the presence of corporatism in these regions did not strengthen its continued development. From a practical perspective it can be stated that in the later 1940s and through the 1950s corporatism seemed to be in “permanent if not yet quite total eclipse.”
Three things happened after 1950 that worked towards bringing back corporatism and corporatist modes of interpretation. The rediscovery of corporatism (though was not recognized in that name) in Europe during the 1960s, resulted in impacting several public policy areas. Polices relating to income distribution, social welfare, economic planning and industrial development are some of the areas that were helped by the corporatist views. Organized labor, management and the government forming into a tripartite group started negotiating the shape and direction of the policy. This involved actions like state organizing, licensing and policing the interest groups involved which are the essential characteristics of corporatism theory and practice. Even though it was not specifically stated as the practice of corporatism, in fact it was corporatism. Eventually these European practices were called as corporatism by some of the scholars and a new name of ‘neo-corporatism’ was adopted.
The second thing that happened to aid the coming back of corporatism is the resurgence of corporatism in Latin America. In countries like Argentina, Brazil, Chile, Uruguay and other Latin American countries, corporatism and authoritarianism came back with much stronger force to eliminate democratic and liberal regimes; but the movements were associated with repression and widespread violation of human rights. The third thing was the widespread discovery of different forms of corporatism in many non-Western and Third World countries like in ethnic societies of several African countries. The existence of strong connection between state and trade in Japan, interconnection between the caste associations, political parties and the bureaucracy that existed in South Asia and the paternalistic relations of leaders and the followers in Islamic societies were the traces that developed the ideology of corporatism in different forms in the period after 1960s.
As such the discovery and rediscovery of corporatism in wider variations evolved greater interest for the scholars and during 1970s and 1980s a large number of people in the comparative politics field started to study and report on the concept. This gave rise to the final definition of corporatism.
“Corporatism was no longer just a set of institutional arrangements and practices in certain countries; it had become a paradigm, a social science approach, a whole way of thinking about and studying distinct political systems that was different from either the liberal-democratic or the Marxist approaches” (Wirada)
The following table provides some of the explicitly corporate regimes of the early twentieth century.
Even though several countries, after their earlier fascination with corporatism, have moved away from authoritarianism toward democracy, the study of corporatism remains fascinating with many countries still practicing one or other form of corporatism. It has become a new topic of study as a number of countries are moving from an “older-fashioned, historical, medieval or statist form of corporatism to a newer form of social or neo-corporatism.”
Impact of Corporatism
There are questions as to whether the effects of corporatism positive or negative. According to Oberg the impact of corporatism can be approached from two angles. First it is concerned with the behavior of interest groups. The behavior of interest groups is that the interest organizations have to bring amends in their claims and the interest groups believe that this can be achieved through deliberative public decision-making. Therefore by adopting the principles of corporatism the activities of the interest groups are monitored. However the actions of the state are not affected to a large extent by applying corporatist policies. The special interest groups accomplish their goals only at the cost of the public. Nevertheless the exact power of general will and the special interest depends much on the prevailing socio-economic conditions and it is difficult to judge the power of each of these competing forces.
Even though corporatism has a moderating and disciplining effect on the interest organizations the effect cannot be said to be automatic. Rothstein and Bergstrom demonstrate the case of Swedish Labor Market Agency board which radicalized the organizations. Such action ultimately made it difficult for them to maintain internal discipline. This case highlights the disbandment of interest representation by corporatist theory. Subsequently the board had to be reorganized to include only a state actor and the organized interests were represented by an advisory body established separately. The powers of the interest organizations were reduced from formal executive level to formal advisory nature. Therefore it follows that if corporatism does not force the interest organizations to modify their claims and discipline their members, causal relationships cannot be maintained at the macro level as that exists between corporatism and economic performance. Lewin argues that there is a correlation between the rise and decline of corporatism and the rise and fall of Swedish economy during the twentieth century, irrespective of the fact there was an understudy of the exact causal relationship.
The impact of corporatism on the contents of public policy can be answered from the findings of various researches in the area. The research indicates that organized interests often are able to achieve success in shaping up the public policy according to their own interests. May and Winter presents one example of this phenomenon. According to the authors “If Danish municipalities cooperate with agricultural organizations in the enforcement of environmental regulation towards the farmers, then the results in reduced effectiveness of the regulation.”
It is stated as the regulatory capture by the farmers. However there is another example which points at moderating effect of corporatism. The example from Swedish Labor Market Agency evidenced a cooperation moderating claims and the interest groups seem to be in favor of maintaining corporatism. This applies even to the employers as evidenced by the analysis of the deregulation campaign of Danish Government in the year 1980 as reported by Christensen. In this case the organized interests preferred to keep quiet as they feared that they would lose their position in the negotiation system. Despite the presentation of these examples, it is futile to draw general conclusions on the precise impact of corporatism as it would vary depending on the large socio-economic and political conditions prevalent in any nation.
Neo-Corporatism
Neo corporatism can be looked at as “move s towards the development of representative systems of powerful economic interest groups which share a preference for a particular model of state regulation or which are characterized by closer and more dependent links with the state.” (Eurofound) This concept defines the existence of a model for transmitting the requests of the society to the state. The essential condition for neo-corporatism is that such requests from the society should pass through the major functional associations of interests or interest groups. The functional associations are assumed to be of greatest economic importance and they usually represent the trade unions and employers’ associations (Eurofound).
The social categories which make the systems are limited in number. They are usually single and compulsory and are non-competitive in nature. They are also hierarchically ordered and are diversified based on their functional nature. The economic interest groups are created by the state. The state consequently offers these groups a monopoly of representation. The state lays claims usually in exchange for certain influence like for example over the selection of the leaders and the raising of demands. “In their criticism of pluralism, those who posit theories of corporatism and neo-corporatism tend to stress the autonomous role of the state as a third collective actor in the processes of social exchange and bargaining”. (Eurofound)
“Neo-corporatist models differ from those of corporatism, both of the nineteenth-century pre-industrial type and of the Fascist authoritarian type, in the extensive constitutional autonomy of the groups involved and in the voluntary nature of the institutional integration of the social categories in conflict”. (Eurofound) Because of the same qualities it also differs from the fascist authoritarian type. Neo-corporatist views got formed in the post-war scenario because of the excessive intervention of the state in the economy. During the post-war period the growing involvement of the central trade union and employers’ associations in economic planning and incomes policy also led to the formation of neo-corporatist viewpoints. Neo-corporatism can be said to be having an opposing tendency to neo-liberalism in political and industrial relations systems (Eurofound).
Neo-corporatism is thus a view which explains the relationship between the government and some of the specific functional groups. In this model, development and implementation of policies is expected to be achieved through maintaining stability by cooperation. The model concentrates mainly on economic policies. Neo-corporatism involves three sectors of society – business, labor and the government – in matters concerning negotiations about questions of policy. The term intermediation or conservation is used to refer to the institutionalized process of negotiation between representatives of these major sectors (Thomas).
The fundamental element of corporatism can be viewed as the granting by the state of a monopoly of representation to certain functional associations. This is done in exchange for their cooperation in developing and implementing state policies with respect to fulfilling the needs of the society. There is substantial intervention by the government in economy in achieving particular goals. One of the central goals is the development of an acceptable income policy. According to Lehmbruch income policy forms the “core domain” of corporatism. There are certain shortcomings of neo-corporatism which have been listed. One of the major criticisms is that corporatism cannot be considered as more precise in identifying and detailing the interest group structure as is the case with such design in pluralism (xroads).
Neo-corporatism also known as “societal” or “open” corporatism is present in the modern, industrial, social-welfare oriented countries with lesser presence in the developing nations. The model incorporates the interest groups directly into the decision-making machinery of the modern state. Industrial policies, social welfare, pensions and economic planning are some of the areas, where the interest groups are involved to contribute towards developing and implementing policies. Neo-corporatism implies formalized consultations between the state and the major interest groups. This differs from the US style pluralism where the incorporation of these groups is usually under the auspices of the state. The state directly incorporate the groups in the decision making process. The state also incorporates their formal representation and vote n its vast regulatory and planning apparatus. Unlike the earlier authoritarian corporatism, neo-corporatism is compatible with parliamentary democracy, which is another form of pluralism. The model also can co-exist with the modern social welfarism (Wirada and Skelley).
Neo-corporatism is also visible in welfare programs. For instance when workers, the unemployed people, mothers, older persons are brought into a consultative group, in the administration of certain social welfare schemes, such an instance provides the chance for not only an occasional expression of views, but transforms into a system where the groups affected themselves can become a part of the state machinery responsible for implementing their programs. Neo-corporatism can also be observed to be present in central planning negotiations over industrial policy or in circumstances where wage restraints are necessary with the expectations of the state to assure both employers’ associations and trade unions to accept the new wage policies. Thus neo-corporatism can be found in a number of issues present in the modern context and also in a variety of forms. A strong corporatism is present in countries like Austria, Sweden and Switzerland and a weaker corporatism in countries like France, Germany and Great Britain. However all of them have one phenomenon in common –“the formal incorporation of interest groups into the actual decision-making apparatus of the modern state, rather than their remaining freewheeling, independent interest groups, as under liberal-pluralism.” (Wirada and Skelley)
Neo-corporatist theory was criticized from some angles. One of the critics is that it is a not a distinct interest group system at all. This view argues that neo-corporatism is just another form of pluralism, since neo-corporatism still functions within a pluralist political environment. In addition, only major groups are involved in the special relationship with the government. All the other smaller and insignificant interest groups occupy the same position as they do in a pluralist system. The other criticism is that neo-corporatism is lacking the important characteristics and therefore corporatism is practiced in different ways. Just as the same way pluralism operates, neo-corporatism operates in different countries adopting different bases. These bases usually take into account the sociopolitical conditions presently prevailing in the countries and the past circumstances which prevailed. In fact the interest group system in democratic countries can be understood in comparison with the scale as being operated in countries like United States with no dominant peak associations at one end; “countries such as New Zealand which combines elements of pluralism and neo-corporatism, in the middle; and predominantly neo-corporatist systems such as those of Scandinavia at the other end of the scale.” (Encyclopedia Britannica)
State Corporatism
State corporatism is “a political system in which the state requires all members of a particular economic sector to join an officially designated interest group.” (Quizlet) According to Philippe Schmitter, state corporatism is a system of noncompetitive, compulsory, hierarchical and limited-interest representation which helps the ruling elites to “repress and exclude the autonomous articulation of subordinate class demands”. It may be noted that classical corporatism and the recently developed neo-corporatism recognizes the role of corporate bodies in the decision-making process of the state. However the concept of corporatism used in the context of studying the function of interest groups in autocratic states refers to a process in which the state makes use of officially-recognized organizations as a mechanism for restricting the participation of the public in the political and decision making process. In this way the state limits the power of civil society. In this context such corporatist movement is referred to as ‘state corporatism’. State corporatism is mostly found in studies relating to corporatism in the context of south Asian countries.
Unger describes the characteristics of state corporatism. In this model, at the national level, the state recognizes one and only one organization. For instance a national labor union, a national business association, or a farmers association at the national level gets the recognition of the state to enter into the decision making process or in the implementation process of economic and social policies. This organization is designated as the sole representative of the sectoral interests of the individuals, enterprises, or institutions that come within the ambit of the recognized organization. It is for the state to designate which organizations will carry the official and legitimate power of taking part in the decision-making process. The state enters into an unusual partnership with such organizations.
“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.” (EncyclopediaII) In the model of state corporatism such an arrangement is not limited to economic or business organizations but extends to religious and social organizations. There are numerous examples for this arrangement. One of the examples may be found in the People’s Republic of China’s Islamic Association of China. In this case the state actively intervenes in the appointment of Imams. The state also controls the educational contents of their seminaries. The seminaries are to be approved by the government which also dictates the courses to be conducted which may also include courses on ‘patriotic reeducation’. Yet another example is the organization of Japan Inc. In this organization major industrial conglomerates and their dependent work force were affiliated and through this organization the Japanese MTIT was able to manipulate its industrial policies to achieve the maximum post-war economic growth.
Sheilagh Oglivie in her book State Corporatism and Proto-Industry: The Wurttenberg Black Forest 1580-1797 focuses on the Wurttemberg Black Forest. In this geographic location a dense worsted industry arose during 1560s. The industry possessed all the necessary characteristic features of a classic “proto-industry”. It has been argued that these dense rural handicrafts helped to breakdown the traditional society in Europe. It has further been presented that this “proto-industry” could prepare the way for factories and capitalism in the future. However Dr. Ogilive showed that this never did happen. “On the contrary, until at least 1800, traditional corporate institutions – communities, rural guilds, and merchant companies – exercised enormous power over the lives of ordinary individuals” (Ogilive). Dr. Ogilive argues that this system can at best be described as “state corporatism”. According to Dr. Ogilive state corporatism is an alliance in which special privileges were granted to certain favored interest groups by the expanding early modern state.
These privileges are granted in return for the fiscal and regulatory co-operation by the organization groups. She remarks that Württemberg cannot be considered anomaly in this respect. “State corporatism” was prevalent in many other European countries and in the context of their industries. According to the author the development of such industries was the key reason for the poor state of many of the European societies. This state continued until the special groups lost their privileges which were granted by the state.
State Corporatism and China
Corporatism has to be considered as a multipurpose concept. The concept has been used to characterize major elements of a political system consisting of structures and institutions involving the polity, of politics with its processes and mechanisms and policy outcomes. Corporatism has also been applied to different levels of organizational arrangements in several social contexts (Molina and Rhodes). The term corporatism has been found to be synonymous with ‘fascist’ and ‘repressive’ regimes prevalent during 1930s and is seen as different from the ideology of democratic pluralism. Since the period starting from 1970s corporatism has been accorded greater conceptual precision through research conducted in different areas connected with the concept. The differentiation between social corporatism and state corporatism has been brought out by scholars like Schmitter and Lehmbruch. In the corporatist model integration is essential for political exchange. This position arises because corporatism delegates social partners the powers to make policies and influence. The alignment of state and societal power enables the state to maintain its power especially in situations where the state is undermined by frequent non-compliance in policy areas and when the non-compliance is caused by the lack of a strong political base (Migdal). Here the state is to be viewed as a ‘naturally’ divided entity made up of links with various interests prevailing in the society. This implies that state itself is a distinct part of societal interests. There are two distinct phenomena – pro-environment and pro-development – that are connected with the existing distribution of power in favor of pro-development stage. This distribution of power has underpinned the development of ‘local state corporatism’ in China. The development of local state corporatism has facilitated “the coexistence of a strong local officialdom, a thriving market economy and a weakened central state.” The role of China in influencing the non-state organizations at present has been encompassed in the term “civil society”. However the term civil society can be counterpoised for corporatism. Civil society is considered as an alternative way of envisioning the role played by associations and the state and the society.
State Corporatism in East Asia
The East Asian countries of Japan, Taiwan and South Korea have erected strongly authoritarian corporatist structures. These structures have been established by the countries during periods of intensive development and amidst perceived threats from other countries. Over the time the internal and external pressures have pushed these countries toward following the principles of societal corporatism. Just in the same way as China, Japan, Taiwan and South Korea have been adopting programs for rapid economic development with the same intent as that of China. Each of these countries had to resolve numerous obstacles faced by the industrializers. The state has to involve itself heavily in securing a competitive edge for the industries. This has led the countries to the point of adopting some form of corporatism. The development strategies by themselves were not merely perfectionist in nature but were also aggressively export-oriented. The path to industrialization of these countries as well as of China has been strongly based on exports from the respective countries. These East Asian countries could share a common advantage in adopting state-corporatist solutions for their industrial growth. The countries already possessed well-organized bureaucracies with established traditions which were a boon for the adoption of corporatist principles. They also represented a form of ‘hard states’, in which the government systems were autonomous and relatively immune to pressure from interest groups. In the case of Japan, the Meiji Restoration in the nineteenth century had brought a government to power. This government was bent on the point that the Japanese independence would be protected through modernization programs which are run exclusively by the state. The government also determined not to be beholden by any powerful constituencies.
In the context of Taiwan from the mid 1940s the Kuomintang government had a completely hostile attitude towards the interest groups present in the country. The intention of the government was to maintain its strong position by making the interest groups weak. It also wanted the interest groups to become subordinated to it. In the case of Korea the Korean military that assumed power in Seoul in 1961 was also having the same type of agenda as Japan and Taiwan to remain above and impervious to sectoral political pressures from interest groups. “Similarly, within China on the eve of the Dengist economic revolution, the Communist Party of China and the bureaucracies that it controlled were hardly influenced by either social demands or non-governmental interest groups; considerably more than in Taiwan or Korea, the Chinese government enjoyed a high measure of political autonomy.” (Unger and Chan) This common thread of ‘hardness’ existed among these East Asian countries has been viewed as one of the core ingredients to determine whether state corporatism can be successfully imposed in these countries with the level of state autonomy existed in these countries. Apart from the factor of state autonomy, the countries also shared a common cultural bias that was considered favorable to the formation of corporatist structures. The Confucianist teachings which pervaded the culture of the East Asian region, considered giving primacy to private interests as selfishness and the teachings manifested greater good to result from a consensus overseen by the moral authority of the leadership which best fitted into the culture of these countries (Pye).
“The notion that individual and sectoral interests should be compromised for the greater good, as represented by a higher leadership, was conducive in the modern age to patriotic appeals, and East Asian governments have not been slow to wrap themselves in the garb of nationalism and national interest’ in their promotion of corporatist solutions”. (Unger and Chan)
The state-corporatist regimes all over the world have adopted the element of patriotism and associated sacrifice as a tool for instituting the principles of state-corporatism in the respective nations. An additional advantage for the East Asian economies is the cultural background which they used as a promotional tool for adopting corporatism to supplement their efforts in promoting sanctity of national interests (Unger and Chan).
The East Asian model of corporatism has drawn heavily from the experience of Japan in implementing corporatist structures during the earlier periods of this century. Japanese tactics and mechanisms for controlling and getting the cooperation of the people belonging to lower classes to prevent them from becoming autonomously organized have greatly helped Taiwan, and Korea (Pempel and Tsunekawa). In Taiwan the Kuomintang government adopted the Japanese example. The Korean government adopted the model of farmers’ associations in the same way Japanese colonial regime had established. The peasantry of Korea was tied into a dependency relationship with the state along the same provisions of services as the farmers’ cooperatives had enforced. The appointment of general managers appointed by the KMT government made the associations at all levels to be operated as quasi-governmental institutions rather than as bodies promoting the interests of the farmers. The state took interest in regulating and controlling the associations in other spheres of activity. This included Taiwan’s industrial and commercial associations, professional associations, labor unions and religious organizations. Almost all of these associations are found to be hierarchical in nature. They also remain exclusive to one another and they do not compete with each other. “All are registered with the government; once they are licensed other competitive groups in the same trade are legally prohibited.” (Hung-mao)
While state corporatism still allowed certain limited activities of the organization, fascism represented the state assumption of all decision-making powers even with the existence of interest groups. The next section deals with fascism which is construed to have merged the state and corporate powers.
Fascism and Corporatism
“Fascism should more properly be called corporatism because it is the merger of state and corporate power.” – Benito Mussolini. The word ‘fascism’ was invented by Italians during the early twentieth century. The Italians described the word by ‘estato corporative’ which means the corporatist state. The structure of fascism is corporatism or the corporate state. Understanding fascism is to understand that power will be concentrated in fewer hands. It is this concentration and consolidation of power that had led to several disastrous situations which the world history has witnessed (Mills). Therefore fascism is to be reckoned as a government structure. “The most notable characteristic of a fascist country is the separation and persecution or denial of equality to a specific segment of the population based upon superficial qualities or belief systems.” (Lewis)
In its simplest sense fascist government always consists of one class of citizens who is considered superior to another. This superiority is decided upon race, creed or origin. It is possible that a state can be both fascist and a republic. In such a state the preferred class of citizens lives in the republic while the oppressed or lower class citizens are bound to live in a fascist state. The important feature of fascism is that it creates legal segregation in housing and allocation of national resources and offering employment opportunities follow some sort of preferential treatment. Fascist government even provides a two tiered legal system catering to two different segment of the population. Such a legal system was the order within Nazi Germany where Jews, Homosexuals, Catholics, Communists, Clergy and the handicapped were governed by one set of rules and courts, while rest of the German citizens were subjected to different rules and legislation (Lewis).
The replacement of corporatism as a politically full-fledged system was the pre-requisite for the formulation and implementation of economic policies. The system was required for organizing representation according to different positions which was dependent upon the socioeconomic division of labor. In a corporate state, there is no identity of a citizen established as a resident of any particular geographical district; but he is considered as a member of any specific occupation, profession or other economic community established based on the division of labor and at best he could be an employer, employee or self-employed person. One who is interested to study is invariably referred to fascism.
Local syndicates were affiliated to national federations. This resulted in the establishment of one corporation for each of the 22 economic sectors prevailing in the country. The corporations were empowered to monitor all the activities relating to trade and commerce including price fixation for various units of production. The corporations were also allowed to settle any disputes among the labor. In actual practice the nature of Italian corporate state is to act as a collection of sectoral economic authorities organized and dominated by the government. The aim of the corporate state is to serve the dictatorship but not to act as a grand compromise among economic interest groups (Einaudi). Other fascist regimes in Europe and Latin America followed more or less the same pattern. In the light of the experience with many of the fascist regimes, one may easily conclude that fascist corporatism is somewhat a fraud or scam on the society. Therefore after WW II fascism was considered as unacceptable and consequently full-fledged corporatism was regarded as a discredited program. Nevertheless fascism was developed in some of the democratic countries of Western Europe such as Scandinavia, Austria, and the Netherlands. Such arrangements also could be found in some of the other nations across the world. None of these arrangements were described as fascist, but they were commonly classified and described as neo-corporatist (Higgs). Neo-corporatism has some resemblance to fascist corporatism in which preferences for representation according to membership in functional economic groups are promoted rather than according to location of the citizens. “Neo-corporatists support the organization of economic interest groups and their participation as prime movers in the formulation, negotiation, adoption, and administration of economic policies backed by the full power of the government.” (Higgs) This aspect is different in approach than that of the fascist movement.
In the context of the United States, political scientists are of the view that the country cannot be considered as a corporate state comparable in any way with modern Sweden or Austria. This is also due to the reason that the government power which the interest groups are hoping to seize has remained fragmented and divided at each level. The power has remained distributed among executive, legislative and judicial branches and it also is dispersed among various levels like national, state and local due to the federal constitutional system being followed in the country.
Dr. Lawrence Britt has evolved 14 defining characteristics common to the fascist regimes. He studied the fascist regimes of Hitler (Germany), Mussolini (Italy), Franco (Spain), Suharto (Indonesia) and several other regimes in Latin America. They are: (1) fascist regimes by the constant use of mottos, slogans, symbols, flags and other paraphernalia for ensuring powerful an continuing nationalism, (2) there is disdain for the recognition of human rights in the guise of protecting the people from the attack of enemies, (3) there is a perceived threat of a common enemy and the enmity may be based on racial, ethnic or religious considerations, (4) despite the existence of numerous domestic problems military is given a disproportionate government funding, (5) the fascist governments were almost male dominated, (6) there is strict control over the media, (7) there is obsession with national security and fear is used as a motivational tool by the government, (8) fascist governments tend to use the most common religion in the country as the tool for manipulating public opinion, (9) there is strict protection over corporate powers, (10) there is suppression of labor power, (11) fascist nations have an aversion towards academia and free expression in the arts and letters is prohibited, (12) fascist regimes are always governed by groups of friends and associates appointing each other to positions of authority, (13) police are given limitless power to enforce laws and (14) in fascist countries fraudulent elections are held (Britt).
It is the normal contention of many people that all the above characteristics of fascism are produced by corporatism. However Paine is of the view that to make fascism synonymous with corporatism is incorrect. This is because according to Paine only a minority of Italian Fascists espoused corporatism. The act of these minority people was before the compromise of Mussolini with the monarchy and the fusion with nationalists. Even the most radical and developed form of fascism represented by German National Socialism explicitly rejected formal corporatism, because a part of corporatism represented pluralist principles.
Recent Evidences of Corporatism
During the 1980s corporatism received an obsessive academic attention. However in the early 1990s with the waning of its explanatory powers, corporatism appeared to have fallen from favor. The fall of Keynesian welfare systems under which corporatism flourished is another reason for the decline in the popularity of the concept of corporatism. Molina and Rhodes observe “In the late 1990s, a new interest in corporatism emerged, in line with new patterns of concertation and corporatist behavior in some unexpected places—countries in which the institutional basis for collaborative, bargained methods of policy making and conflict resolution seemed distinctly unpromising.” Evidences of the development of corporatism can be seen in several international organizations aimed at improving the social and economic status of the citizens on a global basis rather than restricted to any particular nation or state. For instance the end of Cold War coalitions necessitated the change in the outlook of the organization of the United Nations. At the same time several newly founded international organizations brought the NGOs and IGOs into different forms of cooperation unheard of before. One of the best examples can be found in the World Commission on Dams established in the year 1998. This organization served as a prototype of the corporatist organization where international civil society, business associations, and established international organizations like International Labor Organizations could overcome the institutional differentiation between different organizational levels and nature. Of course, this newer form of corporatism entirely differs from the concept developed after WW I which brought new actors into the international system but also contributed for the development of fascist corporatism (Herren).
The role of corporatism has gained momentum in developing countries in recent periods. Despite the criticisms regarding authoritarianism, corporatism still finds strong support among the developing countries, and this is evidenced by the recent cases involving the countries like South Korea and Taiwan. The evidences from these countries indicate that strong political institutions even though occasionally may tend towards authoritarianism, can still be considered as suitable vehicles for economic and democratic development. “As both states continue to consolidate democracy, the paths of development through a statist and corporatist model suggest that corporatism may still have enormous untapped potential.” (Wirada)
The continued failures of economic and political development in other nations suggest that corporatism can come to the rescue of these countries. Corporatism can ensure proper development despite the monolithically predominant presence of neo-liberalism and pluralism in these countries and corporatism thus can prove as an effective alternative. In the example of Russia since neo-liberalism has failed to transform the Russian economy, a potential corporatist model for the Russian economy would enhance the stability of the economy and enable the state to implement more economic reforms easily.
Research in the 1990s has demonstrated that corporatism is pervasive and is progressing. The concept varies in its form and intensity across policy sectors. However corporatist traits are found in more areas of Scandinavian policy making much wider in scope than being presented by the traditional studies. One of the examples is in the healthcare sector. Erichsen through a research conducted on the healthcare development in Norway and Sweden demonstrates that the medical profession has dominated healthcare policies in these countries because of the access of its organization to the central power. The staffing of health bureaucracy at the central level by the organization and its prominent position at the micro-level hospitals has also provided the necessary power to the organization to influence the healthcare policies to its advantage. Pallesen observes a similar situation in Denmark where the influence of Danish Medical Association in the formulation of Danish healthcare policy has been prominent throughout the century.
Conclusion
Corporatism is based on a body of ideas that could be traced through the periods of Aristotle, Roman law, medieval social and legal structures. The concept can further be traced into contemporary Catholic social philosophy. The idea behind corporatism is that only a political community can fulfill man’s nature and therefore the central core of the corporatist vision focuses on the political community. The ideology advocates that an individual cannot by himself attain fulfillment and it is possible only through the political community which can contribute to the happiness of mankind. Therefore under corporatism state is considered as the interventionist and it holds all the power. The various flavors of corporatism include the social democratic regimes of Europe and the United States. It also incorporates the corporatist styles of political arrangements in the East Asian economies such as Taiwan, Singapore and Islamic fundamentalist regimes Iran. The Islamic socialist states like Syria, Libya and Algeria can be considered more as corporatist than socialist. The same is the case with Iraq under the regime of Saddam Hussain. Classical examples of communist turned corporatist economies are Russia and China, as they follow the corporatist economic policies, although not in name.
Despite numerous challenges to the corporatist ideology both in theory and practice, it can reasonably be stated that corporatist values will command considerable value in the future. Based on the fact that corporatism and neo-corporatism continue to lend strong support to both developing and developed countries, it can be said that corporatism is to be considered as a significant element for representing the demands of different interest groups and it cannot merely be regarded to be in a transitional stage or is an instrumental label. However within the comparative politics discipline corporatism has received only a mixed acceptance. This mixed approach to the concept has enabled scholars and students to pursue further research opportunities in corporatism and neo-corporatism both as an explanation and as a model. Further research is sure to address the challenges of the modern context to corporatism in practice.
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