Quasi-Corporatism: America's Home-grown Fascism

0:00I'm going to be speaking here this afternoon on something I've called quasi-corporatism, America's homegrown fascism. And these remarks are drawn from a much longer discussion with a different title, but also one with the term quasi-corporatism in it, which composes a chapter 25 in this collection published last year of mine called Against Leviathan. Originally I prepared that paper in the late 1980s for a conference held in the Netherlands on corporatism. And so I'm not going to be talking so much about fascism, although I'll keep referring to it to it because corporatism is, as it were, the economic aspect of fascism.

1:00Most people now think of fascism as involving goose-stepping troops and death camps and Dictators in Funny Hats, things like that but corporatism, the economic program of fascism actually had a much longer life than the death camps and the dictators in funny hats, at least in Europe and elements of it have shown up in many different parts of the world and continue to show up and even to thrive and oddly enough in the United States what I call quasi corporatism has thrived, continues to thrive. Although the US Constitution made no provision for formal economic representation, the politicians and organized private groups proceeded to establish de facto what the The framers of the Constitution had hoped to prevent.

2:11In the late 19th century, as the national economy became more tightly integrated, national economic groups, manufacturers, railroad companies, investment bankers, farm organizations, labor unions, reallocated their lobbying efforts from the states to the national government. By the early 20th century, the influence of these broad economic factions on policymaking could be clearly discerned. Certain progressive intellectuals, most notably Herbert Crowley, argued that effective government required a reorganized structure would recognize and deal directly with powerful private actors in the modern, highly organized economy.

3:04And proposals proliferated for some kind of formal cooperation or partnership of business, labor, and the public. Parenthetically, I note that in practice, all such proposals for tripartism actually mean formal partnerships of certain big businesses, labor unions, and government appointees who purport to represent the public. During the past century, such proposals have never ceased. In 1988, for example, just before I was on my way to the Netherlands to give my speech over there, I noticed the New York Times had surveyed the leaders of several major economic organizations to ascertain what economic policies they thought the next president should adopt.

4:04The president of the Steelworkers Union, Lin Williams, expressed a long-standing proposal when he responded that the next president should, quote, take the lead in setting up tripartite institutions for each economic sector, like steel, to bring together government, industry and labor, end quote. And if you think back over it, I'm sure you've all run across countless instances in which people called for some formal effort to organize government, industry and labor. In Western Europe, where similar economic development has occurred, the political response has often taken the form of various corporatist arrangements.

4:56These provide, sometimes by constitutional authority, sometimes by law, sometimes by informal deals, for the extra-parliamentary representation of functional economic interests in policymaking. Corporatism faces the problem of factions directly. In effect, it resolves the problem of the people versus the interests by forthrightly declaring that the interests, when properly organized and channeled, are the people. Americans have never been willing to make such a declaration. To do so would too blatantly belie the nation's political mythology.

5:44But without ever facing up to what has actually been done, they have come closer to the European practice than they care to admit. If the Europeans have developed first corporatism and then Neocorporatism, the Americans have developed quasi-corporatism. A full-fledged corporatism as a system for organizing the formulation and implementation of economic policies requires the replacement of political representation according to area of Residence by Political Representation According to Position in the Socioeconomic Division of Labor.

6:37The citizen of a corporate state has a political identity not as a resident of a particular geographical district, but as a member of a certain occupation, profession, or other economic community. He will probably be distinguished according to whether he is an employer, an employee, or self-employed. One who looks for information about corporatism is frequently referred to fascism. In the International Encyclopedia of the Social Sciences, for example, the entry for corporatism reads simply, see fascism. And by the way, that article in the Encyclopedia of the Social Sciences on fascism was written by the same Italian, Inaudi, that Ralph Reiko referred to a while ago.

7:36Indeed, the corporatist ideal achieved its fullest historical expression in Italy under Mussolini's regime. There, workers and employers were organized into syndicates based on local trades and occupations. Local syndicates joined in national federations which were grouped into worker and employer confederations for broad economic sectors such as industry, agriculture, commerce, banking and insurance. In 1934, the government made peak associations part of the apparatus of state with one corporation for each of 22 economic sectors.

8:21The corporations received authority to regulate economic activities, to fix the prices of goods and services, and to mediate labor disputes. In practice, the Italian corporate state operated not as a grand compromise among economic interest groups, but as a collection of sectoral economic authorities organized and dominated by the government in the service of the dictatorship's aims. Neither capitalists nor laborers enjoyed autonomy or private rights defensible against the fascist Regime. Other fascist regimes in Europe and Latin America operated similarly. As, again, Ralph Raico mentioned for the German case, it was not so much grand cartelization run by big businessmen as it was a fraud of that in which government officials actually dictated ultimately what In light of this experience, one might judge fascist corporatism to have been something of a fraud.

9:46The appearance of rationalized popular participation in government failed to mask the dictatorial character of the system. Not surprisingly, after World War II, fascism became a dirty word and full-fledged corporatism a discredited program. Nevertheless, arrangements bearing some similarity to fascism's corporate state developed in the democratic countries of Western Europe, Most notably in Scandinavia, Austria, and the Netherlands, but also to some extent in other countries. No one describes these arrangements as fascist. Most commonly, they are called neocorporatist.

10:37Neocorporatism, also known as liberal, social, or societal corporatism, sometimes as tripartism, shares with fascist corporatism the preference for representation according to membership in functional economic groups rather than according to geographic location. It disavows, at least rhetorically, fascism's totalitarian aspects and its suppression of individual civil and political rights. Neo-corporate just support the organization of economic interest groups and their participation as prime movers in the formulation, negotiation, adoption and administration of economic policies backed by the full power of the government.

11:42Political scientists have concluded correctly that the United States is not a corporate state. Certainly not a corporate state comparable to modern Sweden or Austria. American interest groups have been too partial in their membership. Normally the government power they hope to seize has itself been fragmented, divided at each level among executive, legislative and judicial branches, and dispersed among the national, state and local levels in a Federalist constitutional system. Residual allegiance to liberal ideology and its political norms and practices, including limited government and territorial representation in the legislature, also impeded the development of corporatism in this country.

12:34country. The American economy is vast and complex to bring it within the effective control of a few hierarchical non-competitive peak associations as the fascists tried or pretended to do in interwar Italy is almost unthinkable here. The closest peacetime experiment under the National Industrial Recovery Recovery Act, during 1933 to 1935, did not work and was collapsing of its own weight when the Supreme Court put an end to it. Nevertheless, during the past century, American history has brought forth a multitude of little corporatisms.

13:22Arrangements within subsectors, industries and other partial jurisdictions. They have drawn on both national and state governmental powers. They operate effectively in the defense sector, in many areas of agriculture, in many professional services such as medicine, dentistry and hospital care, and in a variety of other areas such as fishery management and urban redevelopment. These abundant iron triangles, as the political scientists call them, normally involve well-organized private interest groups, government regulatory spending or lending agencies, and congressional subcommittees charged with policy oversight or appropriations.

14:19A political economy in which such arrangements predominate, as they do in the United States, is commonly called interest group liberalism or neo pluralism. Elsewhere, I've followed Charlotte Twight in calling this system participatory fascism. That's the term I used in my book Crisis in Leviathan. I think it's a good term. Charlotte's never had much luck selling it and I haven't either. But the fascism applies to the economic arrangements and invariably people dismiss it because we don't have an Auschwitz here yet.

15:05But the fascism is real enough in this country when it comes to economic arrangements. And the participatory part is an acknowledgement of the trappings of democracy that are used here to lend legitimacy to all of these arrangements. As long as people get out and vote, then, you know, you can do anything to them. They've had their say, right? But it might as well be called disaggregated neocorporatism or quasi-corporatism. Under crisis conditions, all the forces normally obstructing the development of U.S. corporatism diminish.

15:52Since the early 20th century, in the national emergencies associated with war, economic depression, rapid and accelerating inflation, or large-scale labor disturbances, Conferences, the national government has responded by adopting policies that consolidate power at the top and extend the scope of its authority. With power more concentrated and more actively employed, the incentive is greater for latent private interest groups to organize, increase their membership, suppress their internal Disputes and Demand of Voice in Policymaking.

16:38Far from resenting such a private coalescence of interests, the government usually approves, encourages, and sometimes even sponsors it. In a crisis, swift action is imperative, and the government needs private interests with whom it can deal quickly while preserving the legitimacy that comes from giving affected parties a role in policy making. When the government is imposing unusual restrictions or requirements on the citizens, as it always does during major emergencies, it needs to to create the perception, if not the reality, that these burdens have been accepted, better yet, proposed and chosen by those who bear them.

17:35National emergencies create conditions in which government officials and private special interest groups have more to gain by striking political bargains with one another. The government gains the resources, expertise and cooperation of the private parties, which are usually essential for the success of its crisis policies. Private special interest groups gain the application of government authority to enforce compliance with their cartel rules, which is essential to preclude the free writing that normally jeopardizes the success of every arrangement for the provision of collective goods to special interest groups.

18:23And I might add, of course, there's often a great deal of money to be made in the process. Crisis promotes extended politicization of economic life, which in turn encourages additional political organization and bargaining. In U.S. history, quasi-corporatism has risen and fallen over the course of national emergencies, but each episode has left legacies. Accretions of corporatism embedded in the party-elitist, part-pluralist structure of American government. By now, these accretions, taking the form of disaggregated, neo-corporatist arrangements scattered throughout the economy, add up to a significant part of the political economy.

19:16By far the most significant of these developments is the quasi-corporatism of the military economy. Consuming resources at an enormous rate, total U.S. military related spending for example is now roughly equivalent to the combined GDPs of the Russian Federation and Austria. The national security sector manifests most clearly the association between national emergency and quasi-corporatist arrangements. In defense spending, the lines separating the public sector and the private sector have been almost completely obliterated.

20:04Even where they seem to remain, as in the private ownership of the contracting firms, the appearance has little substance. Government involvement infuses every aspect of the operation of these firms. Working from the other direction, the firms have employed a variety of devices, from advisory committees to extensive rotation of executive personnel, to penetrate the decision-making agencies of the Pentagon. No one has a stronger voice in setting the defense production agenda and sometimes the strategic commitments as well and in directing the R&D that presages future weapons and battlefield scenarios. Other members of the military industrial congressional complex crowd in for their Their Shares of the Money and the Power. Persons and groups outside this tight circle have little hope of exerting influence on the defense sector. Secrecy and old-boy networks deprive outsiders of information, and their lack of expertise, credentials and security clearances ensures that those who would rock the boat will never be allowed on board.

21:29To conclude, in the American experience, most quasi-corporatist policymaking has arisen from national emergencies. The present crisis associated with the government's responses to the 9-11 attacks and the US wars in Afghanistan and Iraq, has fit the pattern established during the past century. And at this point I might want to say that I have another book that just came off the press in the last few days called Resurgence of the Warfare State in which I have much more to say about the events of the past four years and I believe provide some evidence for my statement here that in the current crisis we followed the same pattern witnessed in previous national emergencies.

22:23Note in particular the government's increased collaboration with the airline industry through something called the airline, excuse me, the Air Transportation Stabilization Board and the insurance industry under the Terrorism Risk Insurance Act of 2002 now in the process of being extended and most of all the wallowing in hog heaven now being enjoyed by the leading firms that supply military and homeland security related goods and services. Should the future bring new crises, as it almost certainly will, we may confidently expect to witness the flowering of still more quasi-corporatism.

23:14Thank you very much.