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CHAPTER 6: CORPORATISM Corporatism is a political philosophy that espouses the association of people with common interests into corporate groups, or statemandated associations that ostensibly represent the political interests of their members. The philosophical underpinnings of corporatism arose from the works of nineteenth-century Catholic theologians who wanted to develop a social system that would <strong>org</strong>anize individuals into state-directed groups that would serve and work toward the good of the community. 1 Corporatism remained a theoretical concept until interest rekindled with the rise of state dictatorships in the early twentieth century. Since that time, several countries have exhibited corporatist tendencies for varying lengths of time, including Russia, 2 the United Kingdom, 3 Argentina, 4 Portugal, 5 and, most famously, fascist Italy. The formal institutionalization of national corporations is a way to align the incentives of state, employer, and labor interest groups with the goals of a nation-state. The modern conception of corporatism is most commonly associated with Benito Mussolini’s Italy and is a variant of fascism. Corporatism in fascist Italy was born CORPORATISM 45
out of Mussolini’s desire to wed the efficiency of traditional market capitalism with the enlightened planning of a powerful state. After his ascension to power with the March on Rome in 1922, Mussolini initially allowed the established liberal economic regime to continue functioning without major interventions by the state. Frustrated by the uncontrolled outcomes of competitive production, in 1926 Mussolini enacted reforms that entrusted more power in economic planning to state agents. Mussolini’s vision of state capitalism consisted of segmented corporate entities owned by private interests that were beholden to the state’s goals. 6 Mussolini therefore aimed to rein in the undisciplined outcomes of competitive capitalism by blurring the lines between state and market. In consolidating and cartelizing entire structures of production under the hierarchy of an authoritative corporation, Mussolini’s corporatism incentivized individuals to expend their energy navigating the numerous and confusing corporatist chains of command instead of developing productive ways to create value for consumers. In practice, Italian corporatism did not significantly differ from traditional fascism and can accurately be considered a subset of fascism. Like fascism, corporatism prioritizes the good of the nation-state above all other considerations, including individual well-being. Mussolini was very clear about his vision for Italy when he wrote in his 1928 autobiography that the citizen in the Fascist State is no longer a selfish individual who has the anti-social right of rebelling against any law of the Collectivity. The Fascist State with its corporative conception 46 LIBERALISM AND CRONYISM
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LIBERALISM AND CRONYISM Two Rival P
Page 4 and 5: LIBERALISM AND CRONYISM: TWO RIVAL
Page 6: CONTENTS Introduction 1 Chapter 1:
Page 10 and 11: INTRODUCTION People often see polit
Page 12 and 13: who have the power to make decision
Page 14 and 15: CHAPTER 1: LAYING A FOUNDATION Befo
Page 16 and 17: hijacking of the term to describe a
Page 18 and 19: esources can be taken from some for
Page 20 and 21: suffers from “market failure,”
Page 22: is a group of cronies in a dictator
Page 25 and 26: ecause it permits voluntary exchang
Page 27 and 28: people’s economic well-being. The
Page 29 and 30: consumer demands. Examples of rent-
Page 31 and 32: the Politburo and the needs of conn
Page 33 and 34: consider the benefits and costs of
Page 35 and 36: upon state privilege and disproport
Page 37 and 38: their loyalty to the socialist stat
Page 39 and 40: cronyism from gripping every area i
Page 41 and 42: communism are well documented and w
Page 43 and 44: Accountability was embodied by refo
Page 45 and 46: despite comprising only 3 percent o
Page 48 and 49: CHAPTER 5: FASCISM Fascism, the pol
Page 50 and 51: use the sword of the Nazi state to
Page 52 and 53: planners created a back door for in
Page 56 and 57: puts men and their possibilities in
Page 58: that this form of guided capitalism
Page 61 and 62: therefore provide sufficient benefi
Page 64 and 65: CHAPTER 8: PROGRESSIVISM Progressiv
Page 66 and 67: people who argue for limited govern
Page 68: Security, Medicare, and Medicaid do
Page 71 and 72: the direct election of senators, ch
Page 73 and 74: argue for narrow individual interes
Page 75 and 76: their roots to diverse sources of i
Page 77 and 78: promises to assume a company’s de
Page 79 and 80: enefits for his former venture capi
Page 81 and 82: prices of firms within the textile
Page 83 and 84: ment the power to make decisions an
Page 85 and 86: of social justice, cronyism has an
Page 87 and 88: for women in the twentieth century,
Page 89 and 90: ecause it advocates granting these
Page 91 and 92: should pay the same as comparable b
Page 93 and 94: way, the US government replaced the
Page 95 and 96: an individual, social justice advoc
Page 98 and 99: CHAPTER 12: CRONY CAPITALISM AND DE
Page 100 and 101: subsidies, political connections di
Page 102 and 103: CHAPTER 13: INDUSTRIAL POLICY The t
Page 104 and 105:
“cottage industries” that clust
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of complex systems. He applied this
Page 108 and 109:
South Korean industrial policy gave
Page 110:
The degree to which Japan’s and S
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to get involved in lobbying to prot
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CHAPTER 15: LIBERALISM VERSUS CRONY
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that power will arise with another
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with power support each other to ma
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an incentive to cooperate for the b
Page 125:
environmental movement often advoca
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6. Ludwig von Mises, Human Action,
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12. James Heinzen, “The Art of th
Page 133 and 134:
CHAPTER 5: FASCISM 1. Peter Temin,
Page 135 and 136:
CHAPTER 8: PROGRESSIVISM 1. Terry L
Page 137 and 138:
16. Bruce Yandle, “Bootleggers an
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3. Eamonn Fingleton, “Japan’s I
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FURTHER READING Acemoglu, Daron and
Page 144 and 145:
ABOUT THE AUTHORS Randall G. Holcom
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