Corporate state

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Corporatism refers both to a distinctive institutional structure and a body of political thought.Its central characteristic is a system of governance exercised through an established set of private associations linking business, labor, agriculture, and other functional groups with each other and with the state for purposes of achieving political stability and harmonious economic and social development. In most versions of corporatism, business, labor, agricultural, and professional societies have representation in joint councils that share power with public agencies and theoretically serve all legitimate interests.

Modern corporatist thought, originating in response to nineteenth‐century liberalism and socialism, called in essence for modernized guilds and estates that could recreate a harmonious moral order grounded in organic social relationships. Its first theorists were primarily Roman Catholics and aristocrats. By the end of World War I, however, secular, laboristic, and technocratic versions had appeared as well, some of whose advocates discerned a modern corporatism in the institutional machinery produced by war mobilization. Subsequently, fascist theorists in Europe urged that the state itself be turned into a corporative apparatus, but efforts purporting to do this, notably in Italy and Germany, were mostly a camouflage for dictatorships.

Fascist‐style corporatism had little appeal in liberal democracies. But new forms of governance through state‐society partnerships did attract supporters who produced designs for a corporative apparatus operating alongside the liberal state. In the United States, where reformers and businesspeople desire to remedy market failures while minimizing governmental growth, the result was a “Progressivism” stressing public‐spirited private “associational action” rather than expanded public administration. Such was the approach advocated by the National Civic Federation (founded in 1900) and later by Herbert Hoover, who, as secretary of commerce (1921–1928) and then as president, sought to establish an associational structure that would make state bureaucratic growth unnecessary.

The United States came closest to being “corporatized” during the Great Depression of the 1930s, when President Franklin Delano Roosevelt's initial alternative to a failed Hooverism, the National Recovery Administration (NRA), a more coercive associationalism under which the state would force noncooperators into line. In practice, however, the NRA worked badly, and following its invalidation by the Supreme Court in 1935, the New Deal moved toward the creation of an enlarged welfare and regulatory state as more appropriate to liberal economic governance. Only in a few select industries and in special cases like defense mobilization did the Roosevelt administration's flirtation with corporatist solutions continue.

Still, World War II and the postwar recovery undermined antibusiness liberalism, and associationalism again won support as the best way to meet economic and social needs without undue governmental expansion. A limited corporatism found new champions in the war‐spawned Committee for Economic Development and a new array of government‐established industrial councils. It was also central to the Dwight D. Eisenhower administration's vision of a “corporate commonwealth” working to curb “socialism” by entrusting a share of the nation's governance to responsible wielders of private economic power. During the 1950s, America did not erect the corporatist institutions that were helping to guide European economic development, yet even in the United States development, the “cooperative mode” then in vogue meant an enlarged role for private organizations.

In the 1960s and 1970s, new critiques of the political economy altered the functions of both the federal government and the private intermediaries sharing in national governance. Still, some critics alleged that the new policies failed to achieve the balance between planning and freedom that highly developed capitalist economies required. The United States, so an articulate group of “reindustrializers” and “industrial policy” advocates argued, needed its own version of the corporatist machinery that was achieving such a balance abroad. Moreover, a growing body of academic theory held that corporatism was evolving spontaneously in advanced capitalist societies everywhere and could take forms compatible with liberal‐democratic values.

In the 1980s and 1990s, agitation for making America more “competitive” through corporatist policies continued but enjoyed little success. Serious presidential support ended with Ronald Reagan's inauguration, and Americans repeatedly showed their unwillingness to embrace corporatist forms of state building. In the polity at large, corporatism encountered potent opposition from populist republican, and entrepreneurial forces that invoked historical experience and the persisting divisiveness of government, business, and labor as reasons why joint public–private planning could never work in the United States. Limited forms of corporatism did exist, however, in state‐level development commissions and in partnerships for technical research.

Corporatism has been more at home in western Europe, Latin America, and Asia than in the United States. But variations of it entered into twentieth‐century American political discourse, and recurring attempts at “corporatization” left an institutional residue and proved useful for certain public regulatory and promotional tasks.
See also Capitalism; Depressions, Economic; Economic Development; New Deal Era, The; Progressive Era; Republicanism.]

Bibliography

Eugene O. Golob , The “Isms”: A History and Evaluation, 1954.
James Weinstein , The Corporate Ideal in the Liberal State, 1900–1918, 1968.
Philippe C. Schmitter and Gerhard Lembruch, eds., Trends toward Corporatist Intermediation, 1979.
Robert Griffith , Dwight D. Eisenhower and the Corporate Commonwealth, American Historical Review 87 (Feb. 1982): 87–122.
Peter J. Williamson , Corporatism in Perspective: An Introductory Guide to Corporatist Theory, 1989.
Ellis W. Hawley , Society and Corporate Statism, in Encyclopedia of American Social History, eds. Mary K. Cayton, Elliott J. Gorn, and Peter W. Williams, 1993, pp. 621–36.

Ellis W. Hawley

corporative state economic system inaugurated by the Fascist regime of Benito Mussolini in Italy. It was adapted in modified form under other European dictatorships, among them Adolf Hitler's National Socialist regime in Germany and the Spanish regime of Francisco Franco. Although the Italian system was based upon unlimited government control of economic life, it still preserved the framework of capitalism. Legislation of 1926 and later years set up 22 guilds, or associations, of employees and employers to administer various sectors of the national economy. These were represented in the national council of corporations. The corporations were generally weighted by the state in favor of the wealthy classes, and they served to combat socialism and syndicalism by absorbing the trade union movement. The Italian corporative state aimed in general at reduced consumption in the interest of militarization. See fascism .

Bibliography: See R. Sarti, Fascism and the Industrial Leadership in Italy, 1919–1940 (1971).

Corporatism An ideology which sees a political community as composed of various economic and functional groups, syndicates, or corporations, which then represent the interests of their members. It was developed in Fascist Italy where all officials within syndicates and corporations were members of the party. In this way, the state greatly increased its control over economy and society. After 1945, corporatism has tended to involve the direct participation of economic interest groups in policy-making in areas ‘relevant’ to the concerns of the various interests.

corporatism, see commission on vocational organization.

corporatism See CORPORATE SOCIETY.