Corporatism

The core meaning of corporatism is an institutional relationship between governing authorities and the representation of interests, notably capital and labor, with the central organs of the state. In this sense, corporatism is closely associated with fascist ideology, notably in Italy and Germany, which promoted capitalist enterprise but directed it into specific works and, with strong links to labor movements, ensured a harmony of control between the major interest groups in society. After World War II, sometimes with the prefix neo-, corporatism became associated with a dominant state that mediated, usually through formal tripartite agreements, macroeconomic conditions between employers and labor unions. During the late 1970s and 1980s, corporatism or neocorporatism was lauded by many academics as providing a high level of macroeconomic performance, both controlling inflation and maintaining relatively low levels of unemployment. At that time, corporatism was associated with Keynesianism. However, the precise form of corporatism and its relationship to state power structures has been much debated.

Interest in corporatism revived among political scientists in the 1970s with Philippe Schmitter's 1974 Review of Politics article, “Still the Century of Corporatism?” He contrasted corporatism (or neocorporatism) as a form of interest representation that differed from other state forms such as pluralism, statism, and syndicalism. He saw it as a distinct system of political power relations that affected macroeconomic and social forces within states. Within the literature were those who concentrated on corporatism as an institutional form through which interests are represented and by which contestation between different sides of the capital divide was contained and those who saw it more as a form of policy making that did not necessarily include specific institutional structures. In the first, specific formal institutional structures included social pacts made between government and the overarching capital and labor organizations, peak organizations that represented employers and workers within those pacts, tripartite negotiations led by government, and regulatory functions accorded to nonstate organizations such [Page 149]as employers' groups or major trade unions. Within the second, it was recognized that not all (or even any) of these formal institutional structures were necessary for corporatism to hold at least at times within a country. All that was needed was coordination by the state to guide agreements between different interests with a degree of integration into the state of organized groups. Within these structures, a host of types of corporatism were identified, such as mesocorporatism, which concerned clusters of groups around specific interests such as industrial or professional sectors, or private interest government concerning the self-regulation of professional groups.

The central theoretical concern was how corporate states handled issues of public goods, statelevel collective action problems, and the national economy. In the 1970s, states were recovering from oil price rises, raging inflation, and higher unemployment, which were challenging the Keynesian orthodoxy of the postwar period. Many writers argued that corporatist states fared better than did more free market or pluralist ones. Under pluralism, the forces of capital and labor were ranged against each other as unions strived to bring about inflation-proof wage rises and resisted new work practices to maintain employment levels while firms struggled to contain labor unrest. The mix was not conducive to controlling inflation or enabling growth through capital investment. However, tripartite corporatist arrangements were thought to help overcome these problems. Through the facilitation of government, peak-level organizations on both the employer and labor sides could negotiate to ensure longer-term strategies over wages and work conditions, allowing government to manage the economy in Keynesian fashion, enabling growth to promote future profit, wages rises, and job security. Various comparative analyses of economies suggested that on issues such as inflation, employment, and investment, the nations that seemed more corporatist were doing better than were those that were more pluralist. It would seem that corporatist arrangements did enable the state to overcome state-level collective action problems to promote the public goods of low inflation, high employment, and economic growth, making everyone better off.

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