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The term corporatism has different meanings in different contexts. Most notably, the historical usage of the term is not the same as its modern usage. This article deals with both types of "corporatism".
Historically, corporatism or corporativism (Italian corporativismo) is a political system in which legislative representation is given to corporations such as industrial, professional, or economic groups. Unlike pluralism, in which many groups must compete for control of the state, in corporatism, certain unelected bodies take a critical role in the decision-making process. This original meaning was not connected with the specific notion of a business corporation, being a rather more general reference to any incorporated body. The word "corporatism" is derived from the Latin word for body, corpus.
Ostensibly, the entire society is to be run by decisions made by these corporate groups. It is a form of class collaboration put forward as an alternative to class conflict and was first proposed in Pope Leo XIII's 1891 encyclical, Rerum Novarum which influenced Catholic trade unions which were organised in the early twentieth century to counter the influence of trade unions founded on a socialist ideology. The Vatican's ideas were also influential in the development of fascist economic theory.
Gabriele D'Annunzio and anarcho-syndicalist Alceste de Ambris incorporated much of corporative philisophy in their Constitution of Fiume.
One early and important theorist of corporatism was Adam Müller, an advisor to Prince Metternich in what is now eastern Germany and Austria. Müller propounded his views as an antidote to the twin "dangers" of the egalitarianism of the French Revolution and the laissez faire economics of Adam Smith. In Germany and elsewhere there was a distinct aversion among rulers to allow unrestricted capitalism, owing to the feudalist and aristocratic tradition of giving state privileges to the wealthy and powerful.
Under Fascism in Italy, employers were organized into syndicates known as "corporations" according to their industries, and these groups were given representation in a legislative body known as the Camera dei Fasci e delle Corporazioni.
According to various theorists corporatism was an attempt to create a "modern" version of feudalism by merging the "corporate" interests with those of the state. Also see neofeudalism.
This use of the term "corporation" is not exactly equivalent to the restricted modern sense of the word. Compare corporate state and militarism. Corporate in this context is intended to convey the meaning of a "body," as in corpus. Its purpose is to reflect more medieval European concepts of a whole society in which the various parts each play a part in the life of the society, just as the various parts of the body play specific parts in the life of a body.
Some elements of corporatism can be found still existing today, for example in the ILO Conference or in the Economic and Social Committee of the European Union, or the collective agreement arrangements of the Scandinavian countries.
Corporatism is also used in reference to tendencies in politics for legislators and administrations to be influenced or dominated by the interests of corporations rather than citizens. In this view, government decisions are seen as being influenced strongly by which sorts of policies will lead to greater profits for favored companies. In this sense of the word, corporatism is also termed corporatocracy. If there is substantial military-corporate collaboration it is often called militarism or the military-industrial complex.
Corporatism is often used today to describe a condition of corporation-imbued globalism. Points enumerated by users of the term in this sense include the prevalence of very large, multinational corporations that freely move operations around the world in response to corporate, rather than public, needs; the push by the corporate world to introduce legislation and treaties which would restrict the abilities of individual nations to restrict corporate activity; and similar measures to allow corporations to sue nations over "restrictive" policies, such as a nation's environmental regulations that would restrict corporate activities.
Free Market theorists like Ludwig von Mises would describe corporatism as anathema to their vision of capitalism. In the kind of capitalism such theorists advocate, what has been called the "night-watchman" state, the government's role in the economy is restricted to preventing force or fraud from disrupting the autonomous operation of the free market. The market is trusted to provide. Under corporatism, it is not, instead being systematically manipulated to deliver goods to political constituencies.
In the United States, some argue that Franklin Delano Roosevelt’s New Deal programs were an unprecedented jump towards a corporate state. However, this ignores the long history of narrow economic interests controlling the democratic decision-making process in America. In recent times, the profusion of lobby groups and the increase in campaign contributions has led to widespread controversy and the McCain Feingold act. American corporatism is evidenced in the close ties between members of the Bush Administration and many large corporations, such as Halliburton.
John Ralston Saul argues that most Western societies are best described as corporatist states, run by a small elite of professional and interest groups, that exclude political participation from the citizenry.
Critics of capitalism often argue that any form of capitalism would eventually devolve into corporatism, due to the concentration of wealth in fewer and fewer hands.
A permutation of this term is corporate globalism.
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