CAN A CORPORATIST STATE BE DEMOCRATIC

Introduction

Corporatist states are those ones in which there is a merger between the civil elements of society and state. Corporatism has been particularly associated with a number of countries and many of them have different ways of implementing this phenomenon. However, in order to gain a deeper understanding of this issue, the paper shall place more emphasis on its implementation in Mexico and Western Europe as case studies.

Definition of terms
Corporatism is derived from a Latin word which in essence refers to anything that is collective in nature. In other words, the term was borrowed from a medieval understanding of corporations; where different categories of life in society could be merged to better people’s ways of lie. These categories included monasteries, universities and even guilds. (Kenworthy & Streeck, 2005)

Given this background, corporatism refers to a system (that may be either economic or political in nature) in which power is in the hands of civic groups. These groups may encompass professionals, cultural representations, social memberships, agrarian, industrial or economic groups. The latter assemblies are usually referred to as corporations. However, care should be taken not to confuse the use of corporations in the business sense to this application.

Corporations in this paper refer to bodies that have not been elected formally and they usually consist of internal hierarchical systems. Their main goal is to place some control on economic and social aspects of society. Taking the example of a corporation based on the steel industry; such a corporation would be made up of a group of business leaders who deal with all the issues in the steel industry. This team is usually regarded as a cartel and most of their functions centre around the creation of common policies about wages and prices within their areas of interests. In other words, if a state has so many groups of such a nature, and if those groups control the way things happen in the rest of society, then such a state can be called a corporatist state.

Democracy may be defined as a condition in which people who are being governed within society have the ability to make decisions about issues that concern them. This is usually reflected by those people’s ability to participate in political entities. Usually, a democratic state is one in which political leaders are elected by the people. Also, the public is given the right to participate in political parties or to vie for political office. Democratic states are characterized by leaders who look out for the interests of this electorate. Usually, policies are made to serve their interests rather than the selfish needs of their representatives. Additionally, democratic states allow elimination of non performing leaders. People have a right to question policies about their lives and issues such incarceration, arrest without trial or torture is unheard of in such states. Additionally, elections are normally conducted freely and fairly in such states and this makes them at peace with their political entities. (Glinski, 2006)

When corporatism emerged
In the early twentieth century; around the nineteen thirties, corporatism began emerging in medieval times. The reigning Pope began proposing this idea when he realized that there was excessive power in the hands of the trade unions. These trade unions were founded upon socialist principles and ideologies. Consequently, the Pope felt that if he introduced a system in which there was increased class cooperation through catholic owned trade unions, then this would counter the negatives that emanated from class conflicts at that time.

Italy was also quite influential in the emergence of corporatism during earlier times. This was because of corporation such as professional employees, business owners, trade people etc. In fact during those earlier times, Italy was organized into twenty guilds that represented the latter mentioned corporations. Those guilds were given representation in the country’s legislative body. Consequently, a large share of these individuals ended up having greater levels of influence within the fascist regime.

Other areas in Europe were also open to the idea of Corporatism and they included Austria and Portugal. In Austria, there was a point in their history where they had a dictator known as Doolful. This individual adopted a similar corporatism model as the one applied in Italy. Portugal also took up another system of governance in the year 1933. At that time, this country chose to write a constitution that was founded on the principle of corporatism. This system focused on the issue of moral renewal for individuals within its society. This country was actually the first one in the world to formalize their corporatism status through their constitution.

Whether democracy and corporatism can co-exist
In the nineteenth century, corporatism was adopted in order to neutralize class conflict that arose out of a capitalist society. It encouraged functional representation from these particular groups. Additionally, it ensured that there was a merger between labor and capital. The major idea behind corporatism at that time was to create an organic society in which the obligations and mutual rights of its people could be catered for. It should be noted that most countries that exclusively adopted corporatism were fascist regimes such as those ones in Mexico, Italy, Spain and France. (Stevens, 2007)

In Mexico, prior to the nineteen seventies, corporatism was a decorative name. It was used as a tool that would cover up authoritarian rules. In other words, the issue of democracy was a forgotten one in that corporatist state. The state was used to repressing the rights of trade unionists; this was their motive from the very start and in the end, this is exactly what they achieved.

In light of the failure of corporatism prior to that time in Mexico and other countries, many individuals felt that there was no place for such a phenomenon in modern societies. However, certain social scientists acknowledged the fact that there were small elements of corporatism in certain political arrangements. This was the case in countries in which the institutional framework had certain aspects in the functional representation of such systems.

In Western Europe, the issue of corporatism was democratic in a sense because business federations and trade unions worked hand in hand with the state in order to plan and instate favorable policies for the electorate. The purpose of adopting corporatism in such countries was to sustain a welfare state in which these governments wanted to encourage greater productivity level while at the same time curbing inflationary tendencies. (Stevens, 2007)

In the latter mentioned countries, corporatism was something that came after capitalism and it was an avenue that governments could use to control an economy that was still owned by private entities. Consequently, many social scientists believed that this system was democratic because the public’s best interests were covered not by hierarchical political systems but by a system in which labor, governments and businesses were joined together. These social scientists felt that the latter system was more effective than the traditional political representation owing to the fact that there were no pressure groups or lobbying that ended up placing too much power in the hands of the state. Instead, in the corporatist system, the state could influence this group while at time, the latter group (made of representatives from different economic and social interests) could also influence government.

While corporatism seemed to be working in Western European countries, one cannot ignore the fact that most of the countries that adopted this system were actually not fully corporatist. In fact, corporatist structure merely supplemented the parliamentary system but they did not replace it. The latter structures were restricted only to relations involving the following groups;
• Government
• Labor
• Big business

In other words, these corporatist structures were not regarded as the centers of the political system; instead capitalism still was.
However, when one places emphasis on Mexico as a corporatist state, one can see that there was a purer form of this kind of governance in their country. In the latter country corporatism was manifested in rather negative light. This was especially the case prior to the political regime when Lopez Obrado took over power. At that time, this leader was interested in breaking down corporatist structures because of the negatives that they had caused in society. First of all, this leader had to deal with many monopolies and oligopolies within their economy. The telecommunication sector, the processed food industry, cement manufacture (construction industry), transportation and many other parts of the economy were controlled by these monopolies in the corporatist regime. The country’s trade and industry systems were inherently weak owing to the fact that the principles of economics did not apply to them; this led to dilapidation. (Rodriguez, 2003)

Mexico was also characterized by a series of private conglomerates. Most of them did not have clearly defined functions. Consequently, their contribution to the economy was not well understood and most of them ended up being highly influential in the process of dealing with this matter. It also meant that the nation had given too much power to a group that did not really need it.

It was also imperative to realize that in Mexico, these cartels were regarded as Goliaths. Most of them were impeding greater levels of efficiency within the country. Also, most of them were very poor at ensuring that productivity was kept at its maximum. This also meant that there was very little competition in these economies. Most of them could not carry out their respective duties and this ended up harming the general public.

Lastly, corporatism in Mexico was not an effective system because only two major parties were considered in the decision making process; these were the private conglomerates or business entities and the government. It seems as though the public had been left out of this systems; policies would be approved by government only of it seemed that it would benefit their favored groups.

Conclusion
Corporatism can only co-exist with democracy if capitalism complements corporatism as was the case in Western Europe. However, if this is the sole centre of power, then the public tends to be forgotten and only the interests of the government and its corporations are accounted for. This was the case in Mexico.

Reference

Kenworthy, L. & Streeck, W. (2005): Theories and Practices of neo-corporatism; Cambridge University Press, p 441
Glinski, D. (2006): The strengthening of the privatized state; Center for international studies and strategic management, 19, 2, 288
Rodriguez, L. (2003): Liberalism, Corporatism and professionalism in Europe, Journal of Accounting Historians, 34, 6, 96-101
Stevens, E. (2007): Mexico PRI- The institutionalization of corporatism; Pittsburgh University Press, p 231

The author of this article is a holder of Masters in Business Administration (MBA) from Harvard University and currently pursing PhD Program. He is also a professional academic writer. SuperiorWriters.Com>