Corporatism is a political system of interest representation and policymaking wherebycorporate groups, such as agricultural, labour, military, business, scientific, or guild associations, come together and negotiate contracts or policy (collective bargaining) on the basis of their common interests.^[1][2][3] The term is derived from the Latincorpus, or "body".

Corporatism does not refer to a political system dominated by large business interests, even though the latter are commonly referred to as "corporations" in modern American vernacular and legal parlance. Instead, the correct term for that theoretical system would becorporatocracy. The terms "corporatocracy" and "corporatism" are often confused due to their similar names and to the use of corporations as organs of the state.^{[citation needed]}

Corporatism developed during the 1850s in response to the rise ofclassical liberalism andMarxism, and advocated cooperation between the classes instead ofclass conflict. Adherents of diverse ideologies, includingeconomic liberalism,fascism, andsocial democracy have advocated for corporatist models.^[1] Corporatism became one of the main tenets ofItalian fascism, andBenito Mussolini'sFascist regime in Italy advocated the total integration of divergent interests into the state for the common good.^[4] However, the more democratic neo-corporatism often embracedtripartism.^[5][6]

Corporatist ideas have been expressed sinceancient Greek and Roman societies, and have been integrated intoCatholic social teaching andChristian democratic political parties. They have been paired by various advocates and implemented in various societies with a wide variety of political systems, includingauthoritarianism,absolutism,fascism,liberalism, andsocial democracy.^[7][8]

Kinship-based corporatism emphasizingclan, ethnic and family identification has been a common phenomenon inAfrica,Asia, andLatin America.Confucian societies based upon families and clans inEastern andSoutheast Asia have been considered types of corporatism.Islamic societies often feature strong clans which form the basis for a community-based corporatist society.^[9]Family businesses are common worldwide incapitalist societies.

Early concepts of corporatism evolved inClassical Greece.Plato developed the concept of atotalitarian andcommunitarian corporatist system of natural-based classes and naturalsocial hierarchies that would be organized based on function, such that groups would cooperate to achieve social harmony by emphasizingcollective interests while rejecting individual interests.^[10]

InPolitics,Aristotle described society as being divided between natural classes and functional purposes: those of priests, rulers, slaves and warriors.^[11]Ancient Rome adopted Greek concepts of corporatism into its own version of corporatism, adding the concept of political representation on the basis of function that divided representatives into military, professional and religious groups and set up institutions for each group known ascollegia.^[11]

After the 5th-century fall of Rome and the beginning of theEarly Middle Ages, corporatist organizations in western Europe became largely limited toreligious orders and to the idea ofChristian brotherhood—especially within the context of economic transactions.^[12] From theHigh Middle Ages onward, corporatist organizations became increasingly common in Europe, including such groups as religious orders,monasteries,fraternities,military orders such as theKnights Templar and theTeutonic Order, educational organizations such as theemerging European universities andlearned societies, thecharteredtowns andcities, and most notably theguild system which dominated the economies of population centers in Europe.^[12] The military orders notably gained prominence during the period of theCrusades. These corporatist systems co-existed with the governing medievalestates system, and members of the first estate (theclergy), the second estate (thearistocracy), and third estate (thecommon people) could also participate in various corporatist bodies.^[12] The development of the guild system involved the guilds gaining the power to regulate trade and prices, and guild members included artisans, tradesmen, and otherprofessionals. This diffusion of power is an important aspect of corporatist economic models of economic management andclass collaboration. However, from the 16th century onward,absolute monarchies began to conflict with the diffuse, decentralized powers of the medieval corporatist bodies.^[12] Absolute monarchies during theRenaissance andEnlightenment gradually subordinated corporatist systems and corporate groups to the authority of centralized andabsolutist governments, removing any checks on royal power these corporatist bodies had previously utilized.^[13]

After the outbreak of theFrench Revolution (1789), the existing absolutist corporatist system in France was abolished due to its endorsement of social hierarchy and special "corporate privilege". The new French government considered corporatism's emphasis on group rights as inconsistent with the government'spromotion of individual rights. Subsequently, corporatist systems and corporate privilege throughout Europe were abolished in response to the French Revolution.^[13] From 1789 to the 1850s, most supporters of corporatism werereactionaries.^[14] A number of reactionary corporatists favoured corporatism in order to endliberal capitalism and to restore thefeudal system.^[15] Countering the reactionaries were the ideas ofHenri de Saint-Simon (1760- 1825), whose proposed "industrial class" would have had the representatives of various economic groups sit in the political chambers, in contrast to the popular representation of liberal democracy.^[16]

From the 1850s onward, progressive corporatism developed in response toclassical liberalism and toMarxism.^[14] Progressive corporatists supported providing group rights to members of themiddle classes andworking classes in order to secure co-operation among the classes. This was in opposition to the Marxist conception ofclass conflict. By the 1870s and 1880s, corporatism experienced a revival in Europe with the formation ofworkers' unions that were committed to negotiations with employers.^[14]

In his 1887 workGemeinschaft und Gesellschaft ("Community and Society"),Ferdinand Tönnies began a major revival of corporatist philosophy associated with the development ofneo-medievalism, increasing promotion ofguild socialism and causing major changes totheoretical sociology. Tönnies claims thatorganic communities based upon clans, communes, families and professional groups are disrupted by the mechanical society of economic classes imposed bycapitalism.^[17] The GermanNazi Party used Tönnies' theory to promote their notion ofVolksgemeinschaft ("people's community").^[18] However, Tönnies opposedNazism: he joined theSocial Democratic Party of Germany in 1932 to oppose fascism in Germany and was deprived of his honorary professorship byAdolf Hitler in 1933.^[19]

In 1881,Pope Leo XIII commissioned theologians and social thinkers to study corporatism and to provide a definition for it. In 1884 inFreiburg, the commission declared that corporatism was a "system of social organization that has at its base the grouping of men according to the community of their natural interests and social functions, and as true and proper organs of the state they direct and coordinate labor and capital in matters of common interest".^[20] Corporatism is related to thesociological concept ofstructural functionalism.^{[10][9][21][22]}

Corporatism's popularity increased in the late 19th century and a corporatist internationale was formed in 1890, followed by the 1891 publishing ofRerum novarum by theCatholic Church that for the first time declared the Church's blessing to trade unions and recommended that politicians recognize organized labour.^[23] Many corporatist unions in Europe were endorsed by theCatholic Church to challenge theanarchist,Marxist and other radical unions, with the corporatist unions being fairly conservative in comparison to their radical rivals.^[24] Some Catholic corporatist states include Austria under the 1932–1934leadership of Federal ChancellorEngelbert Dollfuss and Ecuador under the leadership ofGarcía Moreno (1861–1865 and 1869–1875). The economic vision outlined inRerum novarum andQuadragesimo anno (1931) also influenced the régime (1946–1955 and 1973–1974) ofJuan Perón andJusticialism inArgentina and influenced the drafting of the 1937Constitution of Ireland.^[25][26][27] In response to theRoman Catholic corporatism of the 1890s,Protestant corporatism developed, especially inGermany, theNetherlands andScandinavia.^[28] However,Protestant corporatism has been much less successful in obtaining assistance from governments than itsRoman Catholic counterpart.^[29]

SociologistÉmile Durkheim (1858-1917) advocated a form of corporatism termed "solidarism" that advocated creating anorganic socialsolidarity of society through functional representation.^[30] Solidarism built on Durkheim's view that the dynamic of human society as acollective is distinct from the dynamic of an individual, in that society is what places upon individuals their cultural and social attributes.^[31]

Durkheim posited that solidarism would alter thedivision of labour by evolving it from mechanicalsolidarity to organic solidarity. He believed that the existing industrialcapitalist division of labour caused "juridical and moralanomie", which had no norms or agreed procedures to resolve conflicts and resulted in chronic confrontation between employers and trade unions.^[30] Durkheim believed that this anomie caused social dislocation and felt that by this "it is the law of the strongest which rules, and there is inevitably a chronic state of war, latent or acute".^[30] As a result, Durkheim believed it is a moral obligation of the members of society to end this situation by creating a moral organic solidarity based uponprofessions as organized into a single public institution.^[32]

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

John Stuart Mill discussed corporatist-like economic associations as needing to "predominate" in society to create equality for labourers and to give them influence with management byeconomic democracy.^[33] Unlike some other types of corporatism, liberal corporatism does not reject capitalism orindividualism, but believes that capitalist companies are social institutions that should require their managers to do more than maximizenet income by recognizing the needs of their employees.^[34]

This liberal corporatist ethic is similar toTaylorism but endorses democratization of capitalist companies. Liberal corporatists believe that inclusion of all members in the election of management in effect reconciles "ethics and efficiency, freedom and order, liberty and rationality".^[34]

Liberal corporatism began to gain disciples in theUnited States during the late 19th century.^[14] Economic liberal corporatism involving capital-labour cooperation was influential inFordism.^[15] Liberal corporatism has also been an influential component of theliberalism in the United States that has been referred to as "interest group liberalism".^[35]

A fascist corporation can be defined as a government-directed confederation of employers and employees unions, with the aim of overseeing production in a comprehensive manner. Theoretically, each corporation within this structure assumes the responsibility of advocating for the interests of its respective profession, particularly through the negotiation of labor agreements and similar measures. Fascists theorized that this method could result inharmony amongst social classes.^[36]

In Italy, from 1922 until 1943, corporatism became influential amongst Italian nationalists led byBenito Mussolini. The 1920Charter of Carnaro gained much popularity as the prototype of a "corporative state", having displayed much within its tenets as aguild system combining the concepts of autonomy and authority in a special synthesis.^[37]Alfredo Rocco spoke of a corporative state and declared corporatist ideology in detail. Rocco would later become a member of the Italian fascist régime.^[38]Subsequently, theLabour Charter of 1927 was implemented, thus establishing acollective agreement system between employers and employees, becoming the main form ofclass collaboration in the fascist government.

Italian Fascism involved a corporatist political system in which the economy wascollectively managed by employers, workers and state officials by formal mechanisms at the national level.^[4] Its supporters claimed that corporatism could better recognize or "incorporate" every divergent interest into the state organically, unlike majority-rules democracy, which (they said) could marginalize specific interests. This total consideration was the inspiration for their use of the term"totalitarian", described without coercion (which is connoted in the modern meaning) in the 1932Doctrine of Fascism as thus:

When brought within the orbit of the State, Fascism recognizes the real needs which gave rise to socialism and trade unionism, giving them due weight in the guild or corporative system in which divergent interests are coordinated and harmonized in the unity of the State.^[39]

[The state] is not simply a mechanism which limits the sphere of the supposed liberties of the individual... Neither has the Fascist conception of authority anything in common with that of a police ridden State... Far from crushing the individual, the Fascist State multiplies his energies, just as in a regiment a soldier is not diminished but multiplied by the number of his fellow soldiers.^[39]

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

Within the corporative model of Italian fascism each corporate interest was supposed to be resolved and incorporated under the state. Much of the corporatist influence upon Italian fascism was partly due to the Fascists' attempts to gain endorsement by theRoman Catholic Church that itself sponsored corporatism.^[40] However, the Roman Catholic Church's corporatism favored a bottom-up corporatism, whereby groups such as families and professional groups would voluntarily work together, whereas fascist corporatism was a top-down model of state control managed primarily by government officials.^[40][41]

The fascist state corporatism of Roman Catholic Italy influenced the governments and economies — not only of other Roman Catholic-majority countries, such as the governments ofEngelbert Dollfuss inAustria,António de Oliveira Salazar inPortugal andGetúlio Vargas in Brazil^[42] — but also ofKonstantin Päts andKārlis Ulmanis in non-CatholicEstonia andLatvia.^{[citation needed]}

Fascists in non-Catholic countries also supported Italian Fascist corporatism, includingOswald Mosley of theBritish Union of Fascists, who commended corporatism and said that "it means a nation organized as the human body, with each organ performing its individual function but working in harmony with the whole".^[43] Mosley also regarded corporatism as an attack onlaissez-faire economics and "international finance".^[43]

The corporatist state of Portugal had similarities toBenito Mussolini's Italian fascist corporatism, but also differences in its moral approach to governing.^[44] Although Salazar admired Mussolini and was influenced by hisLabour Charter of 1927,^[45] he distanced himself from fascist dictatorship, which he considered a paganCaesarist political system that recognised neither legal nor moral limits. Salazar also had a strong dislike of Marxism and liberalism.

In 1933, Salazar stated:

Our Dictatorship clearly resembles a fascist dictatorship in the reinforcement of authority, in the war declared against certain principles of democracy, in its accentuated nationalist character, in its preoccupation of social order. However, it differs from it in its process of renovation. The fascist dictatorship tends towards a pagan Caesarism, towards a state that knows no limits of a legal or moral order, which marches towards its goal without meeting complications or obstacles. The Portuguese New State, on the contrary, cannot avoid, not think of avoiding, certain limits of a moral order which it may consider indispensable to maintain in its favour of its reforming action.^[46]

ThePatriotic People's Movement (IKL) in Finland envisioned a system with elements of direct democracy and professional parliament. The president would be elected with direct vote, who would then appoint the government from among professionals in their respective fields. All parties would be banned, and members of parliament would be elected by vote from corporate groups representing different sectors; Agriculture, Industry and Public servants, free trades, etc. Every law passed in the parliament would be either ratified or overturned by a referendum.^[47][48][49]

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

Neo-corporatism is a democratic form of corporatism which favors economictripartism, which involves stronglabour unions,employers' associations and governments that cooperate as "social partners" to negotiate and manage a national economy.^[6][15]Social corporatist systems instituted in Europe after World War II include theordoliberal system of thesocial market economy in Germany, thesocial partnership in Ireland, thepolder model in the Netherlands (although arguably the polder model already was present at the end of World War I, it was not until after World War II that a social-service system gained foothold there), the concertation system in Italy, theRhine model in Switzerland and the Benelux countries and theNordic model in the Nordic countries.

Attempts in the United States to create neo-corporatist capital-labor arrangements were unsuccessfully advocated byGary Hart andMichael Dukakis in the 1980s. As secretary of labor during the Clinton administration,Robert Reich promoted neo-corporatist reforms.^[50]

Jonathan Unger and Anita Chan in their essay "China, Corporatism, and the East Asian Model" describe Chinese corporatism as follows:^[51]

[A]t the national level the state recognizes one and only one organization (say, a national labour union, a business association, a farmers' association) as the sole representative of the sectoral interests of the individuals, enterprises or institutions that comprise that organization's assigned constituency. The state determines which organizations will be recognized as legitimate and forms an unequal partnership of sorts with such organizations. The associations sometimes even get channelled into the policy-making processes and often help implement state policy on the government's behalf.

By establishing itself as the arbiter of legitimacy and assigning responsibility for a particularconstituency with one sole organization, the state limits the number of players with which it must negotiate its policies and co-opts their leadership into policing their own members. This arrangement is not limited to economic organizations such as business groups and social organizations.

The political scientistJean C. Oi coined the term "local state corporatism" to describe China's distinctive type of state-led growth, in which a communist party-state withLeninist roots commits itself to policies which are friendly to the market and to growth.^[52]

The use of corporatism as a framework to understand the central state's behaviour in China has been criticized by authors such as Bruce Gilley and William Hurst.^[53][54]

In twospecial administrative regions, some legislators are chosen byfunctional constituencies (Legislative Council of Hong Kong) where the voters are a mix of individuals, associations, and corporations orindirect election (Legislative Assembly of Macau) where a single association is designated to appoint legislators.

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

TheConstitution of Ireland of 1937 was influenced by Roman Catholic Corporatism as expressed in the papal encyclical,Quadragesimo anno (1931).^[55][56]

Under the DutchPolder Model, theSocial and Economic Council of the Netherlands (Sociaal-Economische Raad, SER) was established by the 1950 Industrial Organisation Act (Wet op de bedrijfsorganisatie). It is led by representatives of unions, employer organizations, and government appointed experts. It advises the government and has administrative and regulatory power. It oversees Sectoral Organisation Under Public Law (Publiekrechtelijke Bedrijfsorganisatie, PBO) which are similarly organized by union and industry representatives, but for specific industries or commodities.^[57]

The SloveneNational Council, the upper house of the Slovene Parliament, has 18 members elected on a corporatist basis.^[58]

Generally supported bynationalist^[59] and/orsocial-democratic political parties,social corporatism developed in the post-World War II period, influenced byChristian democrats and social democrats in Western European countries such as Austria, Germany, the Netherlands, Denmark, Finland, Norway and Sweden.^[60] Social corporatism has also been adopted in different configurations and to varying degrees in various Western European countries.^[61]

The Nordic countries have the most comprehensive form of collective bargaining, wheretrade unions are represented at the national level by official organizations alongsideemployers' associations. Together with thewelfare state policies of these countries, this forms what is termed the Nordic model. Less extensive models exist in Austria and Germany which are components ofRhine capitalism.^[61]

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Encyclopedias

• Corporatism –Encyclopædia Britannica
• Corporatism –The Canadian Encyclopedia

Articles

• Professor Thayer Watkins,The economic system of corporatismArchived 2020-05-10 at theWayback Machine,San Jose State University, Department of Economics.
• Chip Berlet, "Mussolini on the Corporate State", 2005, Political Research Associates.