WEBVTT NOTE Quasi-Corporatism: America's Home-grown Fascism 1 00:00:00.000 --> 00:00:12.800 I'm going to be speaking here this afternoon on something I've called quasi-corporatism, America's homegrown fascism. 2 00:00:12.800 --> 00:00:25.840 And these remarks are drawn from a much longer discussion with a different title, but also one with the term quasi-corporatism in it, 3 00:00:25.840 --> 00:00:34.840 which composes a chapter 25 in this collection published last year of mine called Against Leviathan. 4 00:00:34.840 --> 00:00:44.840 Originally I prepared that paper in the late 1980s for a conference held in the Netherlands on corporatism. 5 00:00:44.840 --> 00:00:51.840 And so I'm not going to be talking so much about fascism, although I'll keep referring to it 6 00:00:51.840 --> 00:01:00.840 to it because corporatism is, as it were, the economic aspect of fascism. 7 00:01:00.840 --> 00:01:09.360 Most people now think of fascism as involving goose-stepping troops and death camps and 8 00:01:09.360 --> 00:01:21.160 Dictators in Funny Hats, things like that but corporatism, the economic program of fascism 9 00:01:21.160 --> 00:01:31.000 actually had a much longer life than the death camps and the dictators in funny hats, at 10 00:01:31.000 --> 00:01:37.080 least in Europe and elements of it have shown up in many different parts of the world and 11 00:01:37.080 --> 00:01:43.340 continue to show up and even to thrive and oddly enough in the United States 12 00:01:43.340 --> 00:01:51.780 what I call quasi corporatism has thrived, continues to thrive. Although 13 00:01:51.780 --> 00:01:59.660 the US Constitution made no provision for formal economic representation, the 14 00:01:59.660 --> 00:02:05.920 politicians and organized private groups proceeded to establish de facto what the 15 00:02:05.920 --> 00:02:11.240 The framers of the Constitution had hoped to prevent. 16 00:02:11.240 --> 00:02:18.240 In the late 19th century, as the national economy became more tightly integrated, national 17 00:02:18.240 --> 00:02:26.680 economic groups, manufacturers, railroad companies, investment bankers, farm organizations, labor 18 00:02:26.680 --> 00:02:34.360 unions, reallocated their lobbying efforts from the states to the national government. 19 00:02:34.360 --> 00:02:43.360 By the early 20th century, the influence of these broad economic factions on policymaking could be clearly discerned. 20 00:02:43.360 --> 00:02:54.360 Certain progressive intellectuals, most notably Herbert Crowley, argued that effective government required a reorganized structure 21 00:02:54.360 --> 00:03:04.360 would recognize and deal directly with powerful private actors in the modern, highly organized economy. 22 00:03:04.360 --> 00:03:15.360 And proposals proliferated for some kind of formal cooperation or partnership of business, labor, and the public. 23 00:03:15.360 --> 00:03:37.360 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. 24 00:03:37.360 --> 00:03:42.360 During the past century, such proposals have never ceased. 25 00:03:42.360 --> 00:03:51.360 In 1988, for example, just before I was on my way to the Netherlands to give my speech over there, 26 00:03:51.360 --> 00:03:58.360 I noticed the New York Times had surveyed the leaders of several major economic organizations 27 00:03:58.360 --> 00:04:04.360 to ascertain what economic policies they thought the next president should adopt. 28 00:04:04.360 --> 00:04:14.360 The president of the Steelworkers Union, Lin Williams, expressed a long-standing proposal when he responded that the next president should, quote, 29 00:04:14.360 --> 00:04:28.360 take the lead in setting up tripartite institutions for each economic sector, like steel, to bring together government, industry and labor, end quote. 30 00:04:28.360 --> 00:04:45.360 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. 31 00:04:45.360 --> 00:04:56.360 In Western Europe, where similar economic development has occurred, the political response has often taken the form of various corporatist arrangements. 32 00:04:56.360 --> 00:05:13.360 These provide, sometimes by constitutional authority, sometimes by law, sometimes by informal deals, for the extra-parliamentary representation of functional economic interests in policymaking. 33 00:05:13.360 --> 00:05:18.360 Corporatism faces the problem of factions directly. 34 00:05:18.360 --> 00:05:25.460 In effect, it resolves the problem of the people versus the interests by forthrightly 35 00:05:25.460 --> 00:05:34.500 declaring that the interests, when properly organized and channeled, are the people. 36 00:05:34.500 --> 00:05:38.300 Americans have never been willing to make such a declaration. 37 00:05:38.300 --> 00:05:44.120 To do so would too blatantly belie the nation's political mythology. 38 00:05:44.120 --> 00:05:49.780 But without ever facing up to what has actually been done, they have come closer to the European 39 00:05:49.780 --> 00:05:58.320 practice than they care to admit. If the Europeans have developed first corporatism and then 40 00:05:58.320 --> 00:06:13.400 Neocorporatism, the Americans have developed quasi-corporatism. 41 00:06:13.400 --> 00:06:20.320 A full-fledged corporatism as a system for organizing the formulation and implementation 42 00:06:20.320 --> 00:06:28.300 of economic policies requires the replacement of political representation according to area 43 00:06:28.300 --> 00:06:35.540 of Residence by Political Representation According to Position in the Socioeconomic Division 44 00:06:35.540 --> 00:06:37.840 of Labor. 45 00:06:37.840 --> 00:06:43.200 The citizen of a corporate state has a political identity not as a resident of a particular 46 00:06:43.200 --> 00:06:50.020 geographical district, but as a member of a certain occupation, profession, or other 47 00:06:50.020 --> 00:06:52.460 economic community. 48 00:06:52.460 --> 00:07:01.800 He will probably be distinguished according to whether he is an employer, an employee, or self-employed. 49 00:07:01.800 --> 00:07:07.860 One who looks for information about corporatism is frequently referred to fascism. 50 00:07:07.860 --> 00:07:13.220 In the International Encyclopedia of the Social Sciences, for example, the entry for corporatism 51 00:07:13.220 --> 00:07:19.960 reads simply, see fascism. 52 00:07:19.960 --> 00:07:28.100 And by the way, that article in the Encyclopedia of the Social Sciences on fascism was written 53 00:07:28.100 --> 00:07:36.760 by the same Italian, Inaudi, that Ralph Reiko referred to a while ago. 54 00:07:36.760 --> 00:07:42.960 Indeed, the corporatist ideal achieved its fullest historical expression in Italy under 55 00:07:42.960 --> 00:07:46.120 Mussolini's regime. 56 00:07:46.120 --> 00:07:54.840 There, workers and employers were organized into syndicates based on local trades and occupations. 57 00:07:54.840 --> 00:08:00.720 Local syndicates joined in national federations which were grouped into worker and employer 58 00:08:00.720 --> 00:08:07.800 confederations for broad economic sectors such as industry, agriculture, commerce, banking 59 00:08:07.800 --> 00:08:10.200 and insurance. 60 00:08:10.200 --> 00:08:17.860 In 1934, the government made peak associations part of the apparatus of state with one corporation 61 00:08:17.860 --> 00:08:21.840 for each of 22 economic sectors. 62 00:08:21.840 --> 00:08:28.160 The corporations received authority to regulate economic activities, to fix the prices of 63 00:08:28.160 --> 00:08:34.400 goods and services, and to mediate labor disputes. 64 00:08:34.400 --> 00:08:41.760 In practice, the Italian corporate state operated not as a grand compromise among economic interest 65 00:08:41.760 --> 00:08:49.240 groups, but as a collection of sectoral economic authorities organized and dominated by the 66 00:08:49.240 --> 00:08:55.040 government in the service of the dictatorship's aims. 67 00:08:55.040 --> 00:09:02.960 Neither capitalists nor laborers enjoyed autonomy or private rights defensible against the fascist 68 00:09:02.960 --> 00:09:14.700 Regime. Other fascist regimes in Europe and Latin America operated similarly. As, again, Ralph 69 00:09:14.700 --> 00:09:25.600 Raico mentioned for the German case, it was not so much grand cartelization run by big businessmen 70 00:09:25.600 --> 00:09:31.600 as it was a fraud of that in which government officials actually dictated ultimately what 71 00:09:31.600 --> 00:09:46.600 In light of this experience, one might judge fascist corporatism to have been something of a fraud. 72 00:09:46.600 --> 00:09:56.600 The appearance of rationalized popular participation in government failed to mask the dictatorial character of the system. 73 00:09:56.600 --> 00:10:06.600 Not surprisingly, after World War II, fascism became a dirty word and full-fledged corporatism a discredited program. 74 00:10:06.600 --> 00:10:17.600 Nevertheless, arrangements bearing some similarity to fascism's corporate state developed in the democratic countries of Western Europe, 75 00:10:17.600 --> 00:10:27.500 Most notably in Scandinavia, Austria, and the Netherlands, but also to some extent in other countries. 76 00:10:27.500 --> 00:10:37.240 No one describes these arrangements as fascist. Most commonly, they are called neocorporatist. 77 00:10:37.240 --> 00:10:46.720 Neocorporatism, also known as liberal, social, or societal corporatism, sometimes as tripartism, 78 00:10:46.720 --> 00:11:00.600 shares with fascist corporatism the preference for representation according to membership in functional economic groups rather than according to geographic location. 79 00:11:00.600 --> 00:11:12.600 It disavows, at least rhetorically, fascism's totalitarian aspects and its suppression of individual civil and political rights. 80 00:11:12.600 --> 00:11:32.600 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. 81 00:11:42.600 --> 00:11:49.600 Political scientists have concluded correctly that the United States is not a corporate state. 82 00:11:49.600 --> 00:11:54.600 Certainly not a corporate state comparable to modern Sweden or Austria. 83 00:11:54.600 --> 00:11:59.600 American interest groups have been too partial in their membership. 84 00:11:59.600 --> 00:12:05.600 Normally the government power they hope to seize has itself been fragmented, 85 00:12:05.600 --> 00:12:10.600 divided at each level among executive, legislative and judicial branches, 86 00:12:10.600 --> 00:12:18.600 and dispersed among the national, state and local levels in a Federalist constitutional system. 87 00:12:18.600 --> 00:12:24.600 Residual allegiance to liberal ideology and its political norms and practices, 88 00:12:24.600 --> 00:12:29.600 including limited government and territorial representation in the legislature, 89 00:12:29.600 --> 00:12:34.600 also impeded the development of corporatism in this country. 90 00:12:34.600 --> 00:12:41.320 country. The American economy is vast and complex to bring it within the effective 91 00:12:41.320 --> 00:12:47.840 control of a few hierarchical non-competitive peak associations as the 92 00:12:47.840 --> 00:12:55.160 fascists tried or pretended to do in interwar Italy is almost unthinkable 93 00:12:55.160 --> 00:13:00.520 here. The closest peacetime experiment under the National Industrial Recovery 94 00:13:00.520 --> 00:13:12.520 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. 95 00:13:12.520 --> 00:13:22.520 Nevertheless, during the past century, American history has brought forth a multitude of little corporatisms. 96 00:13:22.520 --> 00:13:29.520 Arrangements within subsectors, industries and other partial jurisdictions. 97 00:13:29.520 --> 00:13:34.520 They have drawn on both national and state governmental powers. 98 00:13:34.520 --> 00:13:41.520 They operate effectively in the defense sector, in many areas of agriculture, 99 00:13:41.520 --> 00:13:46.520 in many professional services such as medicine, dentistry and hospital care, 100 00:13:46.520 --> 00:13:53.520 and in a variety of other areas such as fishery management and urban redevelopment. 101 00:13:53.520 --> 00:14:05.520 These abundant iron triangles, as the political scientists call them, normally involve well-organized private interest groups, 102 00:14:05.520 --> 00:14:19.520 government regulatory spending or lending agencies, and congressional subcommittees charged with policy oversight or appropriations. 103 00:14:19.520 --> 00:14:31.520 A political economy in which such arrangements predominate, as they do in the United States, is commonly called interest group liberalism or neo pluralism. 104 00:14:31.520 --> 00:14:39.520 Elsewhere, I've followed Charlotte Twight in calling this system participatory fascism. 105 00:14:39.520 --> 00:14:45.520 That's the term I used in my book Crisis in Leviathan. 106 00:14:45.520 --> 00:14:48.520 I think it's a good term. 107 00:14:48.520 --> 00:14:53.520 Charlotte's never had much luck selling it and I haven't either. 108 00:14:53.520 --> 00:14:59.520 But the fascism applies to the economic arrangements 109 00:14:59.520 --> 00:15:05.520 and invariably people dismiss it because we don't have an Auschwitz here yet. 110 00:15:05.520 --> 00:15:12.520 But the fascism is real enough in this country when it comes to economic arrangements. 111 00:15:12.520 --> 00:15:26.920 And the participatory part is an acknowledgement of the trappings of democracy that are used here to lend legitimacy to all of these arrangements. 112 00:15:26.920 --> 00:15:31.120 As long as people get out and vote, then, you know, you can do anything to them. 113 00:15:31.120 --> 00:15:34.200 They've had their say, right? 114 00:15:34.200 --> 00:15:40.120 But it might as well be called disaggregated neocorporatism or quasi-corporatism. 115 00:15:40.120 --> 00:15:52.120 Under crisis conditions, all the forces normally obstructing the development of U.S. corporatism diminish. 116 00:15:52.120 --> 00:16:06.120 Since the early 20th century, in the national emergencies associated with war, economic depression, rapid and accelerating inflation, or large-scale labor disturbances, 117 00:16:06.120 --> 00:16:13.040 Conferences, the national government has responded by adopting policies that consolidate power 118 00:16:13.040 --> 00:16:18.460 at the top and extend the scope of its authority. 119 00:16:18.460 --> 00:16:25.400 With power more concentrated and more actively employed, the incentive is greater for latent 120 00:16:25.400 --> 00:16:31.960 private interest groups to organize, increase their membership, suppress their internal 121 00:16:31.960 --> 00:16:38.960 Disputes and Demand of Voice in Policymaking. 122 00:16:38.960 --> 00:16:46.320 Far from resenting such a private coalescence of interests, the government usually approves, 123 00:16:46.320 --> 00:16:51.880 encourages, and sometimes even sponsors it. 124 00:16:51.880 --> 00:16:58.720 In a crisis, swift action is imperative, and the government needs private interests 125 00:16:58.720 --> 00:17:05.980 with whom it can deal quickly while preserving the legitimacy that comes from giving affected 126 00:17:05.980 --> 00:17:13.680 parties a role in policy making. When the government is imposing unusual restrictions 127 00:17:13.680 --> 00:17:21.240 or requirements on the citizens, as it always does during major emergencies, it needs to 128 00:17:21.240 --> 00:17:35.240 to create the perception, if not the reality, that these burdens have been accepted, better yet, proposed and chosen by those who bear them. 129 00:17:35.240 --> 00:17:48.240 National emergencies create conditions in which government officials and private special interest groups have more to gain by striking political bargains with one another. 130 00:17:48.240 --> 00:18:02.240 The government gains the resources, expertise and cooperation of the private parties, which are usually essential for the success of its crisis policies. 131 00:18:02.240 --> 00:18:12.240 Private special interest groups gain the application of government authority to enforce compliance with their cartel rules, 132 00:18:12.240 --> 00:18:23.240 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. 133 00:18:23.240 --> 00:18:30.240 And I might add, of course, there's often a great deal of money to be made in the process. 134 00:18:30.240 --> 00:18:43.240 Crisis promotes extended politicization of economic life, which in turn encourages additional political organization and bargaining. 135 00:18:43.240 --> 00:18:54.240 In U.S. history, quasi-corporatism has risen and fallen over the course of national emergencies, but each episode has left legacies. 136 00:18:54.240 --> 00:19:02.240 Accretions of corporatism embedded in the party-elitist, part-pluralist structure of American government. 137 00:19:02.240 --> 00:19:11.240 By now, these accretions, taking the form of disaggregated, neo-corporatist arrangements scattered throughout the economy, 138 00:19:11.240 --> 00:19:16.240 add up to a significant part of the political economy. 139 00:19:16.240 --> 00:19:31.640 By far the most significant of these developments is the quasi-corporatism of the military economy. 140 00:19:31.640 --> 00:19:38.680 Consuming resources at an enormous rate, total U.S. military related spending for example 141 00:19:38.680 --> 00:19:46.780 is now roughly equivalent to the combined GDPs of the Russian Federation and Austria. 142 00:19:46.780 --> 00:19:53.320 The national security sector manifests most clearly the association between national emergency 143 00:19:53.320 --> 00:19:56.660 and quasi-corporatist arrangements. 144 00:19:56.660 --> 00:20:01.720 In defense spending, the lines separating the public sector and the private sector have 145 00:20:01.720 --> 00:20:04.840 been almost completely obliterated. 146 00:20:04.840 --> 00:20:10.400 Even where they seem to remain, as in the private ownership of the contracting firms, 147 00:20:10.400 --> 00:20:13.560 the appearance has little substance. 148 00:20:13.560 --> 00:20:19.360 Government involvement infuses every aspect of the operation of these firms. 149 00:20:19.360 --> 00:20:24.760 Working from the other direction, the firms have employed a variety of devices, from advisory 150 00:20:24.760 --> 00:20:32.400 committees to extensive rotation of executive personnel, to penetrate the decision-making 151 00:20:32.400 --> 00:20:38.400 agencies of the Pentagon. No one has a stronger voice in setting the defense 152 00:20:38.400 --> 00:20:45.040 production agenda and sometimes the strategic commitments as well and in 153 00:20:45.040 --> 00:20:52.360 directing the R&D that presages future weapons and battlefield scenarios. Other 154 00:20:52.360 --> 00:20:58.620 members of the military industrial congressional complex crowd in for their 155 00:20:58.620 --> 00:21:04.780 Their Shares of the Money and the Power. Persons and groups outside this tight circle have 156 00:21:04.780 --> 00:21:13.360 little hope of exerting influence on the defense sector. Secrecy and old-boy networks deprive 157 00:21:13.360 --> 00:21:21.140 outsiders of information, and their lack of expertise, credentials and security clearances 158 00:21:21.140 --> 00:21:29.860 ensures that those who would rock the boat will never be allowed on board. 159 00:21:29.860 --> 00:21:38.000 To conclude, in the American experience, most quasi-corporatist policymaking has arisen 160 00:21:38.000 --> 00:21:41.220 from national emergencies. 161 00:21:41.220 --> 00:21:47.220 The present crisis associated with the government's responses to the 9-11 attacks and the US wars 162 00:21:47.220 --> 00:21:55.020 in Afghanistan and Iraq, has fit the pattern established during the past century. 163 00:21:55.020 --> 00:22:01.300 And at this point I might want to say that I have another book that just came off the 164 00:22:01.300 --> 00:22:07.060 press in the last few days called Resurgence of the Warfare State in which I have much 165 00:22:07.060 --> 00:22:14.460 more to say about the events of the past four years and I believe provide some evidence 166 00:22:14.460 --> 00:22:23.460 for my statement here that in the current crisis we followed the same pattern witnessed in previous national emergencies. 167 00:22:23.460 --> 00:22:35.460 Note in particular the government's increased collaboration with the airline industry through something called the airline, excuse me, the Air Transportation Stabilization Board 168 00:22:35.460 --> 00:23:00.460 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. 169 00:23:00.460 --> 00:23:14.460 Should the future bring new crises, as it almost certainly will, we may confidently expect to witness the flowering of still more quasi-corporatism. 170 00:23:14.460 --> 00:23:16.460 Thank you very much.