Democracy and Corporatism.

Economics Political Theory
, , ,
1

I think democracy must necessarily lead to corporatism(defined the collusion of big business,labour and government).

Though corporatism can arise even under monarchy it seems that it really flourishes hugely under democracy because in a democracy you can lobby the state and this is perceived as legitimate and infact the very best part of democracy .

My thinking is that Corporatism must always arise in a democracy nomatter what measures are taken to prevent it.I’d even go further and say corporatism must always arise when there exists a state(except maybe under fully fledged socialism )

to simplify:

  1. lobbying is an inherent party of democracy

  2. lobbying enables corporatism

  3. thus democracy enables Corporatism to occur and it’s very likely it will occur in a democracy due to the incentives present in the system.(this is a huge problem for Minarchism)

Another part of my thinking is that since corporatism is generally accepted to be an integral part of Fascism then **democracy is very likely to become a FORM of fascism(though not the mussolini/hitler etc type we usually think of).**I would argue this is not just economic since we also have political programs/policies of all types mixing big business/states.

  1. Corporatism is fascist.

  2. Democracy allows fascism to arise.

Another thing that got me thinking is Corporatism usually runs on the assumption that there exists competiting economic and/or political interests that must be organised by a central body I.e. the government.

Democracy requires a diverse range of groups with conflicting opinions who are led to believe they have conflicting political/economic interests( when they don’t really) and are encouraged to try to influence legislation to satisfy their beliefs and this continually goes on in a way akin to civil war

e.g. pro life lobbyists ban some kind of abortion then pro choicers lift legislation etc.

these groups are generally held to require organisation by the state and need to organise themselves towards the state.

So my thinking is basically in both these ways I’ve outlined democracy leads to corporatism/fascism or even democracy is so similiar to fascism that it can’t help becoming it.

One further point on accuracy of terminology.

In it’s most basic sense capitalism is about institutional protection of private property rights.

government inherently violates these by it’s very existence due to taxation.It’s Institutional violation(aggression) of rights esp property rights.

**Therefore it’s my belief that government is inherently anti-capitalist.**Government and capitalism cannot co-exist. ‘State capitalism’ is a misnomer.

Now If I understand it correctly Hoppe defines socialism(in a theory of socialism and capitalism) broadly as “institutional aggression on property rights”.

So therefore we could say All government is socialist.

Now corporatism is ,if you accept my argument, fascism. So where does All government’s being socialist leave Corporatism? is this a contradiction?

I would argue no.My argument is that fascism is a form of socialism.Full socialism is complete aggression against private property(i.e. no private property).Fascism is less than that though no less dangerous.Fascism allows the appearance of private property rights in name but restricts them with tariffs,quotas etc.

So the system we have today is fascism/corporatism.We do not have capitalism so socialists attack a straw man(**Ironic.Socialists attack a form of socialism.).**Capitalism has never existed.We’ve had/have the market with Inconsistent respect for private property,division of labour etc but that’s not enough to be Capitalism.Capitalism can only exist under anarchy(sorry to the minarchists) until then the most we can have is more or less corporatism or worse-socialism.

So when we speak of the current system we should call it fascism or corporatism and when we call it socialism we clear we mean a form of socialism.

I know not everyone will agree with these and it’s probably pretty controversial but it just seems to follow for me.

What do you make of these ideas?I don’t think I’ve ever saw this stated explicitly(I think bob higgs has come closest to stating this outright in his talks on US corporatism ).

Links:

http://en.wikipedia.org/wiki/Corporatism"

http://en.wikipedia.org/wiki/A_Theory_of_Socialism_and_Capitalism

socialism being an institutionalized policy of aggression against property,
and capitalism being an institutionalized policy of the recognition of property
and contractual ism." (a theory of socialism and capitalism P.17)

2

I would contend that corporatism (in a very broad sense) is a natural result of any government. The state is like a huge weapon, and who ever is controlling that weapon increases their gain through threat of violence. So you have different interested parties (peasants, CEO’s, bankers, farmers, etc.) attempting to race to the controls of this weapon, or rather racing to whisper in the ears of the controllers (politicians, courtiers, the socialist vanguard, etc.). Al of these controllers are individuals, so they are driven by respective ends, usually power (usually money), so it’s only natural that the party with the best offer becomes the most influential. Many times this is the party with the deepest pockets.

So really, I think the issue is the compulsion to obey that is inherent in any state, not necessarily democracy itself.

3

I like the terms Interventionism or hampered market better. They are much more revealing in terms of the true nature behind them. Corporatism is not as revealing. The State’s violent roll is not being explicitly revealed.

I would argue that political Democracy itself may be considered a form of interventionism no matter how limited your State is.

As Mises clearly showed, Fascism is a form of Socialism (in the guise of Capitalism). So there is no contradiction. They are different variants of the same beast - Collectivism.

I agree with most of your points.

4

Their interest in gaining help of the government is very narrow. Their counter-interest (the American People) is very broad. The former can gain very substantially if they win, and the latter’s losses are spread out across their large numbers.

In this way, small special interest groups will always triumph over the larger interests.

Although I will say that its not necessary for a democracy to always become corporatist… To make a slightly absurd observation, a poorly structured democracy might immediately descend into chaos. A very well structured democracy might do elections via lottery (Old Athenian Democracy) so that special interests cannot influence the politician in advance, although obviously there is still a strong incentive to get around this somehow, either by bribing the dude later, changing the system, or using intellectuals to cover for private interests.

But you’re right. In our American Democracy corporatism is inevitable.

5

I agree. People don’t understand the free market. They see it as something that needs to be under control of the government in order for it to work, which makes absolutely no sense. Then they see the failings of corporatism and somehow get them confused with capitalistic effects. Just like cap-and-trade. They’ll tell you cap-and-trade is about the free market working for a better future, blah blah blah. Nothing is free when it’s being controlled, no matter how discrete it may seem to the common-folk.

6

I would say that democracy without the proper restraints is definitely an enabler for coporatism and that a monarchy is less prone to corporatism. Of course, one could limit democracy properly and corporatism would vanish, but the people in this country like democracy, and consequently coporatism too much for them to vote corporatist representatives out and vote capitalist representatives in. Too many people think they gain from a central bank and invading countries, which leads to a banking cartel and the military industrial complex respectively. Then, the vagueness of the Constitution leads to other corporatist policies being passed.