What is Corporatism?
Corporatism is a political idea and practice in which society is organized into functional groups, such as employers, workers, farmers and professions, that are formally recognized by the state and take part in making economic and social policy. The word comes from the Latin corpus, meaning body, and refers to the image of society as an organism whose parts must cooperate. Corporatists reject both unregulated competition and class struggle, arguing that conflicts between capital and labor should be settled by negotiation inside official institutions. Scholars usually distinguish authoritarian state corporatism, where the government creates and controls these bodies, from democratic neo-corporatism, where independent unions and employer groups bargain with government.
Core beliefs
- Society is an organic whole made up of interdependent functional groups.
- Employers and workers should cooperate rather than engage in class conflict.
- Organized interest groups should be formally represented in policy making.
- The state should coordinate the economy without abolishing private property.
- Wages, prices and working conditions can be settled through negotiated agreements.
- Social stability and harmony are central goals of economic policy.
History
Corporatist ideas drew on memories of medieval guilds and on nineteenth century reactions against both liberal individualism and socialism. The sociologist Émile Durkheim proposed occupational groups as a source of social solidarity. Pope Leo XIII's encyclical Rerum Novarum of 1891 called for cooperation between classes, and Pope Pius XI's Quadragesimo Anno of 1931 proposed vocational groups bringing together employers and workers. In the interwar years, authoritarian regimes adopted state corporatism. Mussolini's Italy issued a Charter of Labour in 1927 and replaced the Chamber of Deputies with a Chamber of Fasces and Corporations in 1939. Independent trade unions and strikes were banned, and historians generally describe the corporations as instruments of party and state control. Salazar's Estado Novo in Portugal, the Austrian regime of 1934 to 1938 and Franco's Spain also used corporatist structures. After 1945, democratic forms emerged in Austria, Sweden, the Netherlands and elsewhere, where peak organizations of labor and business negotiated wages and policy with government.
Variants
Catholic or social corporatism, inspired by papal teaching, stresses class harmony and subsidiarity. State or authoritarian corporatism, found in fascist Italy and other dictatorships, placed all interest groups under state control. Neo-corporatism or liberal corporatism describes voluntary bargaining among independent unions, employers and government in democracies. Political scientists also use the term to describe how organized interests are built into policy making, in contrast with pluralism.
Criticisms
Liberals and libertarians argue that corporatism protects established interests, discourages competition and gives unelected groups power over public policy. Socialists and labor historians argue that authoritarian corporatism was used to destroy independent unions and keep wages low while claiming to represent workers. Critics of neo-corporatism say it favors organized insiders over the unemployed, small firms and unorganized workers, and that it struggled with inflation and globalization from the 1970s onward. Supporters argue that negotiated systems produce social peace and low strike rates.
In practice
Fascist Italy, Salazar's Portugal and Franco's Spain built official corporative bodies under single-party or authoritarian rule. Democratic neo-corporatism shaped Austria's social partnership, Swedish centralized wage bargaining after the Saltsjöbaden agreement of 1938, the Dutch consultation model and German codetermination. Tripartite councils of government, unions and employers remain common in many European countries and in the International Labour Organization.