A Brief History of “Corporatism”

by | Jun 23, 2023 | History

Corporatism abolishes the competitive dynamic of competitive capitalism and replaces it with cartels run by oligarchs.

It’s not capitalism. It’s not socialism. The new word we are hearing these days is the right word: corporatism. It refers to the merger of industry and state into a unit with the purpose of achieving some grand visionary end, the liberty of individuals be damned. The word itself predates its successor, which is fascism. But the eff word has become totally incomprehensible and useless through misuse so there is clarity to be gained by discussing the older term.

Consider, as an obvious example, Big Pharma. It funds the regulators. It maintains a revolving door between corporate management and regulatory control. Government often funds drug development and rubber stamps the results. Government further grants and enforces the patents. Vaccines are indemnified from liability for harms. When consumers balk at shots, government imposes mandates, as we have seen. Further, pharma pays up to 75 percent of the advertising on evening television, which obviously buys both favorable coverage and silence on the downsides.

This is the very essence of corporatism. But it is not only this industry. It ever more affects tech, media, defense, labor, food, environment, public health, and everything else. The big players have merged into a monolith, squeezing out the life of market dynamism.

The topic of corporatism is rarely discussed in any detail. People would rather keep the discussion on abstract ideals that are not really operational in reality. It’s these ideal types that split right and left; meanwhile the really existing threats sail under the radar. And that is strange because corporatism is much more of a living reality. It variously swept through most societies in the world in the 20th century, and vexes us today as never before.

Corporatism has a long ideological history stretching back two centuries. It began as a fundamental attack on what was then known as liberalism. Liberalism began centuries earlier with the end of the religious wars in Europe and the realization that permitting religious freedom was overall good for everyone. It lessens violence in society and still retains the opportunity for the vigorous practice of faith. This insight gradually unfolded in ways that pertained to speech, travel, and commerce generally.

By the early 19th century, following the American Revolution, the idea of liberalism swept Europe. The idea was that the state could do no better for societies under its rule than to let them develop organically and without a teleocratic end state. A teleocracy is characterized by a centralized authority that seeks to achieve a specific goal or purpose, often seen as a greater good or common end that justifies the restriction of individual liberties. In the liberal view, in contrast, liberty for all became the sole end state.

The intellectual roots and development of corporatist thinking

Standing against traditional liberalism was Georg Wilhelm Friedrich Hegel (August 27, 1770 – November 14, 1831), the German philosopher who explained the loss of territory at the end of Napoleonic wars as merely a temporary setback in the German nation’s historical destiny. In his vision of politics, the nation as a whole needs a destiny that is consistent with his postulated laws of history. This holistic view was inclusive of church, industry, family, and individuals: everyone must march in the same direction.

The whole reaches its pinnacle in the institution of the state, he wrote in Philosophy of Right, which “is the actuality of the ethical idea, “the rationality of the ethical whole,” the “divine idea as it exists on earth,” and a “work of art in which the freedom of the individual is actualized and reconciled with the freedom of the whole.”

If all of that sounds like mumbo-jumbo to you, welcome to the mind of Hegel, who was trained in theology foremost and somehow came to dominate German political philosophy for a very long time. His followers split into left- and right-wing versions of his statism, culminating in Marx and arguably Hitler, who agree that the state is the center of life while only arguing about what it should do.

Corporatism was a manifestation of the “right-wing” version of Hegelianism, which is to say that it did not go so far as to say that religion, property, and family should be abolished, as Marxism later suggested. Rather each of these institutions should serve the state which represents the whole.

The economic element of corporatism gained steam with the work of Friedrich List (August 6, 1789 – November 30, 1846) who worked as an administrative professor at the University of Tübingen but was expelled and went to America where he became involved in the establishment of railroads and championed an economic “National System” or industrial mercantilism. Believing that he was following up with the work of Alexander Hamilton, List advocated national self-sufficiency or autarky as the proper managerial trade for trade. In this, he stood against the entire liberal tradition that had long rallied around the work of Adam Smith and the doctrine of free trade.

In the UK, the Hegelian vision of the state was realized in the writings of Thomas Carlyle (December 4, 1795 – February 5, 1881), a Scottish philosopher who wrote books such as On Heroes, Hero-Worship, The Heroic in History, and The French Revolution: A History. He was a defender of slavery and dictatorship, and coined the term “the dismal science” for economics precisely because economics as it had developed had passionately inveighed against slavery.

The Tories got into the act by following the work of John Ruskin (February 8, 1819 – January 20, 1900) who was the leading English art critic of the Victorian era, a philanthropist, and became the first Slade Professor of Fine Art at Oxford University. He founded the Guild of Saint George in opposition to commercial capitalism and mass production for average people. In his work, we could see how anti-consumerism generally meshed well with the aristocratic longing for a class-based society that prioritized wealth for the future over liberal egalitarian impulses.

In America, the work of Charles Darwin came to be abused in the form of eugenics in the 1880s and following, wherein one of the tasks of the state became the curation of the quality of the population. This movement also took hold in Europe. It was seen as utter chaos to allow human procreation to be left to whims of human volition. The American Economic Association together with many other academic societies threw themselves into the task to the point that eugenic theorizing became part of mainstream academia. This was true only 100 years ago.

In Europe following the Great War, a new form of Hegelianism was taking hold that combined eugenics, autarky, nationalism, and raw statism into a single package. British-German philosopher Houston Stewart Chamberlain (September 9, 1855 – January 9, 1927) traveled around Europe and became highly enamored of Wagner and German culture, and then a leading Hitler champion. He advocated blood-thirsty anti-Semitism and wrote The Foundations of the Nineteenth Century, which emphasized Europe’s Teutonic roots.

Other star players in the corporatist lineup included:

  • Werner Sombart (January 18, 1863 – May 18, 1941) German academic, historical school economist and sociologist, who easily slid from being a proponent of communism to becoming a top champion of Nazism.
  • Frederick Hoffman (May 2, 1865 – February 23, 1946) was born in Germany, became a statistician in America, and wrote The Race Traits and Tendencies of the American Negro characterizing African-Americans as inferior to other races, but casting aspersions on Jews and non-caucasians.
  • Madison Grant (November 19, 1865 – May 30, 1937) graduated from Yale University and received a law degree from Columbia Law School, after which his interest in eugenics led him to study the “racial history” of Europe and write the popular hit book The Passing of the Great Race. He was a leading environmentalist and a champion of nationalized forests, for strange eugenic reasons.
  • Charles Davenport (June 1, 1866 – February 18, 1944) was a professor of zoology at Harvard who researched eugenics, wrote Heredity in Relation to Eugenics, and founded the Eugenics Record Office and International Federation of Eugenics Organizations. He was a major player in the construction of the eugenic state.
  • Henry H. Goddard (August 14, 1866 – June 18, 1957) was a psychologist, a eugenicist, and the Director of Research at the Vineland Training School for Feeble-Minded Girls and Boys. He popularized IQ studies and turned them into a weapon used by the state to create a planned society, creating hierarchies determined and enforced by public bureaucrats.
  • Edward A. Ross (December 12, 1866 – July 22, 1951) received a Ph.D. from Johns Hopkins University, was part of the faculty at Stanford, and became a founder of sociology in the United States. Author of Sin and Society (1905). He warned of the dysgenic effects of permitting women freedom of choice to engage in commercial work and pushed laws to prohibit women’s work.
  • Robert DeCourcy Ward (November 29, 1867 – November 12, 1931) was a professor of meteorology and climatology at Harvard University and co-founded the Immigration Restriction League, fearing the dysgenic effects of Slavic, Jewish, and Italian intermarriage. His influence was key to the closing of borders in 1924, trapping millions in Europe to be slaughtered.
  • Giovanni Gentile (May 30, 1875 – April 15, 1944) was an Italian neo-Hegelian idealist philosopher, who provided an intellectual foundation for Italian Corporatism and Fascism and helped write The Doctrine of Fascism with Benito Mussolini. He was briefly beloved by the American press for his intellect and vision.
  • Lewis Terman (January 15, 1877 – December 21, 1956) was a eugenicist who focused on studying gifted children as measured by IQ. With a Ph.D. from Clark University, he became a member of the pro-eugenic Human Betterment Foundation, and was president of the American Psychology Association. He pushed strict segregation, coerced sterilization, immigration controls, birthing licenses, and a planned society generally.
  • Oswald Spengler (May 29, 1880 – May 8, 1936) graduated from Halle University in Germany, became a teacher, and in 1918 wrote Decline of the West on historical cycles and changes that sought to explain Germany’s defeat in the Great War. He urged a new Teutonic tribal authoritarianism to combat liberal individualism.
  • Ezra Pound (October 30, 1885 – November 1, 1972) was an expat modernist poet from America who converted to national socialism and blamed WWI on usury and international capitalism and supported Mussolini and Hitler during WWII. A brilliant but deeply troubled man, Pound used his genius to write for Nazi newspapers in England before and during the war.
  • Carl Schmitt (July 11, 1888 – April 7, 1985) was a Nazi jurist and political theorist who wrote extensively and bitterly against classical liberalism for the ruthless wielding of power (The Concept of the Political). His view of the state’s role is total. He admired and celebrated despotism, war, and Hitler.
  • Charles Edward Coughlin (October 25, 1891 – October 27, 1979), was a massively influential Canadian-American priest who hosted a radio show with 30 million listeners in the 1930s. He despised capitalism, backed the New Deal, and plunged into hard anti-Semitism and Nazi doctrine, publishing speeches by Goebbels under his own name. His show inspired thousands to protest in the streets against Jewish refugees.
  • Julius Caesar Evola (May 19, 1898 – June 11, 1974) was a radically traditionalist Italian philosopher who focused on history and religion and worshiped violence. He was admired by Mussolini and wrote adoring letters to Hitler. He spent a lifetime advocating for the subjugation of women and holocaust for Jews.
  • Francis Parker Yockey (September 18, 1917 – June 16, 1960) was an American attorney and dedicated Nazi who wrote Imperium: The Philosophy of History and Politics, which argues for a culture-based, totalitarian path for the preservation of Western culture against the influence of the Jews. He said the fall of the Third Reich was a temporary setback. He killed himself in prison where he was being held for passport fraud. It was Yockey who had a powerful influence on Willis Carto (1926-2015), the postwar proponent of Nazi theory.

Such is a brief look at the intellectual roots and development of corporatist thinking, complete with its most noxious ideological elements. The focus on a teleocratic nationalism in each case comes through dividing and conquering the nation, usually by a “great man,” and allowing the “experts” to run roughshod over the desires of the common people for peace and prosperity.

The corporatist model was deployed in most countries during the Great War, which was the largest experiment in central planning in cooperation with munitions manufacturers and other large corporations. It was deployed in combination with conscription, censorship, monetary inflation, and a large-scale killing machine. It inspired an entire generation of intellectuals and public managers. The US New Deal, with its price controls and industrial cartels, was largely managed by people such as Rexford Tugwell (1891-1979) who was inspired to rally around corporatism by his experience in this war. The same pattern repeated in the Second World War.

Corporatism in the late 20th century

This brief genealogy only takes us only to the middle of the 20th century. Today corporatism takes a different form. Rather than national, it is global in scope. In addition to government and large corporations, today’s corporatism includes powerful non-government organizations, nonprofits, and huge foundations built by huge fortunes. It is as much private as it is public. But it is no less divisive, ruthless, and hegemonic than it was in the past.

It has also shaved off most of its egregious (and embarrassing) teachings, leaving in place only the ideals of world governments working directly with the largest corporations in media and tech to forge a single vision for humanity on the march, such as spelled out daily by the World Economic Forum. With that comes censorship and restrictions on commercial and individual liberty.

That is only the beginning of the problems. Corporatism abolishes the competitive dynamic of competitive capitalism and replaces it with cartels run by oligarchs. It reduces growth and prosperity. It is invariably corrupt. It promises efficiency but yields only graft. It expands the gaps between rich and poor and creates and entrenches deep fissures between the rulers and ruled. It dispenses with localism, religious particularism, rights of families, and aesthetic traditionalism. It also ends in violence.

Corporatism is anything but radical. The word is a perfect descriptive of the most successful form of statism of the 20th century. In the 21s century, it has been given new life and an ambition that is global in scope. But as regards the highest American ideals and enlightenment values of freedom for all, it really does represent the opposite.

It is also the single most vexing problem we face today, far more of a going concern than old archetypes of socialism and capitalism. Also in the American context, corporatism can come in forms that masquerade as both left and right. But make no mistake: the real target is always liberty traditionally understood.

For more of my writings on this topic, see Right-Wing Collectivism. Made available by the Brownstone Institute.

Jeffrey A. Tucker is Founder and President of the Brownstone Institute and the author of many thousands of articles in the scholarly and popular press and ten books in 5 languages, including Liberty or Lockdown. He is also the editor of The Best of Mises. He speaks widely on topics of economics, technology, social philosophy, and culture. Follow him at @jeffreyatucker .

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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