Chapter 33, Syndicalism and Corporativism
1. The Syndicalist Idea
The term syndicalism is used to signify two entirely different things.
Syndicalism as used by the partisans of Georges Sorrel means special revolutionary tactics to be resorted to for the realization of socialism.
Labor unions, it implies, should not waste their strength in the task of improving the conditions of wage earners within the frame of capitalism.
They should adopt action direct, unflinching violence to destroy all the institutions of capitalism.
They should never cease to fight, in the genuine sense of the term, for their ultimate goal, socialism.
The proletarians must not let themselves be fooled by the catchwords of the bourgeoisie, such as liberty, democracy, representative government.
They must seek their salvation in the class struggle, in bloody revolutionary upheavals, and in the pitiless annihilation of the bourgeois.
This doctrine played and still plays an enormous role in modern politics.
It has provided essential ideas to Russian Bolshevism, Italian Fascism and German Nazism.
But it is a purely political issue and may be disregarded in a catallactic analysis.
The second meaning of the term syndicalism refers to a program of society's economic organization.
While socialism aims at the substitution of government ownership of the means of production
for Private Ownership.
Syndicalism wants to give the ownership of the plants to the workers employed in them.
Such slogans as the railroads to the railroad men, or the mines to the miners, best indicate
the ultimate goals of syndicalism.
The ideas of socialism and those of syndicalism in the sense of action direct were developed
by intellectuals, whom consistent adepts of all Marxian sects cannot help describing as
bourgeois.
But the idea of syndicalism as a system of social organization is a genuine product of
the proletarian mind.
It is precisely what the naive employee considers a fair and expedient means for improving his
own material well-being.
If one were to take these plans seriously, one would not have to deal with them in a
discussion of the problems of interventionism.
One would have to realize that syndicalism is neither socialism, nor capitalism, nor interventionism,
and a system of its own, different from these three schemes.
However, one cannot take the syndicalist program seriously, and nobody ever has.
Nobody has been so confused and injudicious as to advocate syndicalism openly as a social
system.
Syndicalism has played a role in the discussion of economic issues only as far as certain
and programs unwittingly contained syndicalist features.
There are elements of syndicalism in certain objectives of government and labor union interference
with market phenomena.
There are, moreover, guild socialism and corporativism, which pretended to avoid the government omnipotence
inherent in all socialist and interventionist ventures by adulterating them with a syndicalist
Admixture 2.
The Fallacies of Syndicalism
The root of the syndicalist idea is to be seen in the belief that entrepreneurs and
capitalists are irresponsible autocrats who are free to conduct their affairs arbitrarily.
Such a dictatorship must not be tolerated.
The liberal movement, which has substituted representative government for the despotism
The system of hereditary kings and aristocrats must crown its achievements by substituting industrial democracy for the tyranny of hereditary capitalists and entrepreneurs.
The economic revolution must bring to a climax the liberation of the people which the political revolution has inaugurated.
The fundamental error of this argument is obvious.
Entrepreneurs and capitalists are not irresponsible autocrats.
They are unconditionally subject to the sovereignty of the consumers.
The market is a consumer's democracy.
The syndicalists want to transform it into a producer's democracy.
This idea is fallacious, for the sole end and purpose of production is consumption.
What the syndicalist considers the most serious defect of the capitalist system, and disparages
as the brutality and callousness of autocratic profit-seekers, is precisely the outcome of
the supremacy of the consumers.
Under the competitive conditions of the unhampered market economy, the entrepreneurs are forced
to improve technological methods of production without regard to the vested interests of
of the Workers.
The employer is forced never to pay workers more than corresponds to the consumer's appraisal
of their achievements.
If an employee asks for a raise because his wife has born him a new baby and the employer
refuses on the ground that the infant does not contribute to the factory's effort, the
employer acts as the mandatory of the consumers.
These consumers are not prepared to pay more for any commodity merely because the worker
has a large family.
The naivete of the syndicalists manifests itself in the fact that they would never concede
to those producing the articles which they themselves are using, the same privileges
which they claim for themselves.
The syndicalist principle requires that the shares of every corporation should be taken
away from absentee ownership and be equally distributed among the employees.
Payment of interest and principal of debts is to be discontinued.
Management will then be placed in the hands of a board elected by the workers, who are
now also the shareholders.
This mode of confiscation and redistribution will not bring about equality within the nation
or the world.
It would give more to the employees of those enterprises in which the quota of capital
invested per worker is greater, and less to those in which it is smaller.
It is a characteristic fact that the syndicalists in dealing with these issues always refer
to Management and never mention entrepreneurial activities.
As the average subordinate employee sees things, all that is to be done in the conduct of business
is to accomplish those ancillary tasks which are entrusted to the managerial hierarchy
within the frame of the entrepreneurial plans.
In his eyes, the individual plant or workshop as it exists and operates today is a permanent
Establishment. It will never change. It will always turn out the same products. He ignores
completely the fact that conditions are in a ceaseless flux, and that the industrial
structure must be daily adjusted to the solution of new problems. His world view is stationary.
It does not allow for new branches of business, new products, and new and better methods for
for Manufacturing the Old Products.
Thus the syndicalist ignores the essential problems of entrepreneurship, providing the
capital for new industries and the expansion of already existing industries, restricting
branches for the products demand for which drops, technological improvement.
It is not unfair to call syndicalism the economic philosophy of short-sighted people, of those
Adamant conservatives who look askance upon any innovation and are so blinded by envy
that they call down curses upon those who provide them with more, better and cheaper
products.
They are like patients who grudge the doctor his success in curing them of a malady.
3.
Syndicalist elements in popular policies.
The popularity of syndicalism manifests itself in various postulates of contemporary economic
policies.
The essence of these policies is always to grant privileges to a minority group at the
expense of the immense majority.
They invariably result in impairing the wealth and income of the majority.
Many labor unions are intent upon restricting the number of workers employed in their field.
While the public wants more and cheaper books, periodicals and newspapers and would get them
under the conditions of an unhampered labor market, the typographical unions prevent many
newcomers from working in printing offices.
The effect is, of course, an increase in the wages earned by the union members.
But the corollary is a drop of wage rates for those not admitted, and an enhancement
in the price of printed matter.
The same effect is brought about by union opposition to the utilization of technological
improvements and by all sorts of feather-bedding practices.
Radical syndicalism aims at entirely eliminating payment of dividends to shareholders and of
interest to creditors.
The interventionists, in their enthusiasm for middle-of-the-road solutions, want to
appease the syndicalists by giving the employees a part of the profits.
Profit-sharing is a very popular slogan.
There is no need to enter anew into an examination of the fallacies implied in the underlying
philosophy.
It suffices to show the absurd consequences to which such a system must lead.
It may sometimes be good policy for a small shop or for an enterprise employing highly
skilled workers to grant an extra bonus to employees if business is prosperous.
But it is a non sequitur to assume that what under special conditions may be wise for an
individual firm could work satisfactorily as a general system.
There is no reason why one welder should make more money because his employer earns high
profits and another welder less because his employer earns lower profits or no profits
at all.
The workers themselves would rebel against such a method of remuneration.
It could not be preserved even for a short time.
A caricature of the profit-sharing scheme is the ability-to-pay principle as recently
introduced into the program of American labor unionism.
While the profit-sharing scheme aims at an allocation to the employees of a part of profits
already earned, the ability-to-pay scheme aims at a distribution of profits which some
external observers believe the employer may earn in the future.
The issue has been obfuscated by the fact that the Truman administration, after having
accepted the new union doctrine, announced that it was appointing a fact-finding board,
which would have the authority to examine the books of the employers in order to determine
their ability to pay an increase in wages.
However, the books can provide information only about past costs and proceeds, and past
profits and losses.
Estimates of future volume of production, future sales, future costs, or future profits
or losses are not facts, but speculative anticipations.
There are no facts about future profits.
There cannot be any question of realizing the syndicalist ideal, according to which the
proceeds of an enterprise should completely go to the employees, and nothing should be
left for interest on the capital invested and profits.
If one wants to abolish what is called unearned income, one must adopt socialism.
4. Guild Socialism and Corporativism
The ideas of Guild Socialism and Corporativism originated from two different lines of thought.
The eulogists of medieval institutions long praised the eminence of the guilds. What was
needed to wash away the alleged evils of the market economy was simply to return to the
The Well-Tried Methods of the Past However, all these diatribes remained sterile.
The critics never attempted to particularize their suggestions or to elaborate definite
plans for an economic reconstruction of the social order.
The most they did was to point out the alleged superiority of the old quasi-representative
Assemblies of the type of the French Etat-Generaux and the German Ständische Landtagge as against
the modern parliamentary bodies.
But even with regard to this constitutional issue, their ideas were rather vague.
The second source of guild socialism is to be found in specific political conditions
of Great Britain.
When the conflict with Germany became aggravated and finally in 1914 led to war, the younger
British socialists began to feel uneasy about their program.
The state idolatry of the Fabians and the glorification of German and Prussian institutions
was paradoxical indeed at a time when their own country was involved in a pitiless struggle
against Germany.
What was the use of fighting the Germans when the most progressive intellectuals of the
country longed for the adoption of German social policies?
Was it possible to praise British liberty as against Prussian bondage, and at the same
time to recommend the methods of Bismarck and his successors?
British socialists yearned for a specifically British brand of socialism, as different as
possible from the Teutonic brand.
The problem was to construct a socialist scheme without totalitarian state supremacy and omnipotence,
an individualistic variety of collectivism.
The solution to this problem is no less impossible than that of the construction of a triangular
square.
Yet the young men of Oxford confidently tried to solve it.
They borrowed for their program the name Guild Socialism from the little-known group of the
by the eulogists of the Middle Ages. They characterized their scheme as industrial self-government,
an economic corollary of the most renowned principle of English political rule, local
government. In their plans, they assigned the leading role to the most powerful British
pressure group, the trade unions. Thus, they did everything to make their device palatable
to their countrymen.
However, neither these captivating adornments nor the obtrusive and noisy propaganda could
mislead intelligent people.
The plan was contradictory and blatantly impracticable.
After only a few years it fell into complete oblivion in the country of its origin.
But then came a resurrection.
The Italian fascists badly needed an economic program of their own.
After having seceded from the international parties of Marxian socialism, they could no
longer pose as socialists.
Neither were they, the proud scions of the invincible Roman legionaries, prepared to
make concessions to Western capitalism or to Prussian interventionism, the counterfeit
are ideologies of the barbarians who had destroyed their glorious empire.
They were in search of a social philosophy purely and exclusively Italian.
Whether or not they knew that their gospel was merely a replica of British guild socialism
is immaterial.
At any rate, the Stato Corporativo was nothing but a re-baptized edition of guild socialism.
The differences concerned only on important details.
Corporativism was flamboyantly advertised by the bombastic propaganda of the fascists,
and the success of their campaign was overwhelming.
Many foreign authors exuberantly praised the miraculous achievements of the new system.
The governments of Austria and Portugal emphasized that they were firmly committed to the noble
ideas of corporativism.
The Pope's encyclical, Quadra Gessimo Anno, 1931, contained passages which could, but
need not, be interpreted as an endorsement of corporatism.
At any rate, Catholic authors supported this interpretation in books which were published
with the imprimatur of the Church authorities.
Yet neither the Italian fascists nor the Austrian and Portuguese governments ever made any
Any Serious Attempt to Realize the Corporativist Utopia.
The Italians attached to various institutions the label corporativist and transformed the
university chairs of political economy into chairs of economia politica e corporativa.
But never was there any question of the much talked about essential feature of corporativism,
of Government of the Various Branches of Trade and Industry
The fascist government clung first to the same principles of economic policies which all not outright socialist governments have adopted in our day, interventionism.
Then, later, it turned step by step toward the German system of socialism, that is, all-round state control of economic activities.
The fundamental idea both of guild socialism and of corporativism is that every branch
of business forms a monopolistic body, the guild or corporazione.
This entity enjoys full autonomy.
It is free to settle all its internal affairs without interference of external factors and
of people who are not themselves members of the guild.
The mutual relations between the various guilds are settled by direct bargaining from guild
to guild, or by the decisions of a general assembly of the delegates of all guilds.
In the regular course of affairs, the government does not interfere at all.
Only in exceptional cases, when an agreement between the various guilds cannot be attained,
is the state called in.
In drafting this scheme, the guild socialists had in mind the conditions of British local
government and the relation between the various local authorities and the central government
of the United Kingdom.
They aimed at self-government of each branch of industry.
They wanted, as the webs put it, the right of self-determination for each vocation.
In the same way in which each municipality takes care of its local community affairs
and the National Government handles only those affairs which concern the interests of the
whole nation, the Guild alone should have jurisdiction over its internal affairs, and
the Government should restrict its interference to those things which the Guilds themselves
cannot settle.
However, within a system of social cooperation under the division of labor, there are no
No such things as matters of concern only to those engaged in a special plant, enterprise,
or branch of industry, and of no concern to outsiders.
There are no internal affairs of any guild or corporazione, the arrangement of which
does not affect the whole nation.
A branch of business does not serve only those who are occupied in it.
It serves everybody.
If within any branch of business there is inefficiency, a squandering of scarce factors
of production, or a reluctance to adopt the most appropriate methods of production, everybody's
material interests are hurt.
One cannot leave decisions concerning the choice of technological methods, the quantity
and quality of products, the hours of work, and a thousand other things to the members
of the Guild because they concern outsiders no less than members.
In the market economy, the entrepreneur in making such decisions is unconditionally subject
to the law of the market.
He is responsible to the consumers.
If he were to defy the orders of the consumers, he would suffer losses and would very soon
forfeit his entrepreneurial position.
But the monopolistic guild does not need to fear competition.
It enjoys the inalienable right of exclusively covering its field of production.
It is, if left alone and autonomous, not the servant of the consumers, but their master.
It is free to resort to practices which favor its members at the expense of the rest of
the people.
It is of no importance whether within the Guild the workers alone rule or whether and
to what extent the capitalists and the former entrepreneurs cooperate in the management
of affairs.
It is likewise without importance whether or not some seats in the Guild's governing
board are assigned to representatives of the consumers.
What counts is that the Guild, if autonomous, is not subject to pressure that would force
It is free to give the interests of its members precedence over the interests of consumers.
There is in the scheme of guild socialism and corporatism nothing that would take into
account the fact that the only purpose of production is consumption.
When the American New Deal embarked upon the National Recovery Administration Scheme, the
government and its brain trust were fully aware of the fact that what they planned was
merely the establishment of an administrative apparatus for full government control of business.
The short-sightedness of the guild socialists and corporativists is to be seen in the fact
that they believe that the Autonomous Guild, or corporazione, could be considered a device
for a working system of social cooperation.
It is very easy indeed for each guild to arrange its allegedly internal affairs in such a way
as to satisfy its members fully.
hours of work, high wage rates, no further improvements in technological methods or in
the quality of the products which could inconvenience the members, very well.
But what will the result be if all guilds resort to the same policies?
Under the guild system there is no longer any question of a market.
There are no longer any prices in the catallactic sense of the term.
There are neither competitive prices nor monopoly prices.
Those guilds which monopolize the supply of vital necessities attain a dictatorial position.
The producers of indispensable foodstuffs and fuel and the suppliers of electric current
and of transportation can with impunity squeeze the whole people.
Does anybody expect that the majority will tolerate such a state of affairs?
There is no doubt that any attempt to realize the corporativist utopia would in a very short
time lead to violent conflicts if the government did not interfere when the vital industries
abused their privileged position.
What the doctrinaires envisage only as an exceptional measure, the interference of the
government, will become the rule.
Guild Socialism and Corporativism will turn into full government control of all production activities.
They will develop into that system of Prussian zwangswirtschaft, which they were designed to avoid.
There is no need to deal with the other fundamental shortcomings of the Guild scheme.
It is as deficient as any other syndicalist project.
It does not take into account the necessity of shifting capital and labor from one branch to another, and of establishing new branches of production.
It entirely neglects the problem of saving and capital accumulation. In short, it is nonsense.