Philippe C.

Schmitter

Corporatism is Dead! Long Live

Corporatism!
The Andrew Shonfeld Lectures (ZV)

ANDREW SHONFIELD DID NOT DISCOVER THE HIDDEN AFFINITY

between modern corporatism and modern capitalism. John May-
nard Keynes should probably be credited with that insight, even if
p ! .
it is contained in just a paragra h cited in part by Shonfield) in his
essay: The End of Laissez-Faire. Mihail Manoilesco, an economist of
lesser renown and much less reputable politics, was probably the
first to offer a systematic argument to this effect, but he located its
site on the periphery of European capitalism and (mistakenly)
believed that it could only be brought into existence through
imposition from above, either by the state bureaucracy or by ‘un
parti unique’.’ For a while, Mussolini’s corporativismo seemed to
prove him right. With its ignominious collapse, the concept disap-
peared from respectable political discourse-except as an insult to
throw at one’s opponents.
Re-reading his magisterial Modern Capitali~m,~ it is possible to
discover why -when corporatism was restored to academic re-
spectability by political scientists and sociologists in the mid-1970s
-Andrew Shonfield was denied his share of paternal rights to the
concept. Most of the themes which subsequent hordes of ‘neo-
corporatists’ took several years to discover can be already found
there, but they are scattered about in the discussion of several cases.
Causes, defining conditions and consequences are jumbled together.
Important insights are covered in a single phrase, sometimes a

1John Maynard Keynes, The End of Laisser-Faire, London, Hogarth Press, 1926.
2Mihail Manoilesco, Le Si2cle du Corporalisme, Paris, Alcan, 1934; Le Parti Unique, Paris,
Alcan, 1936.
3Andrew Shonfield, Modern Capitalism: The Changing Balance of Public and Private
Power, Oxford, Oxford University Press, 1965.
 C O R P O R A T I S M IS DEAD! 55

whole sentence, but rarely an entire paragraph. All of these are signs
of someone with too much to say and no clear, i.e. theoretically
self-conscious, priority for developing his observations further. For
example, at one point, he raises the tantalizing prospect that little
and forgotten Austria might provide ‘a model, in an extreme form,
of the destination towards which several of the democracies of
Western Europe are now heading’,4 but then backs away from such
an audacious claim by referring to its special features, including a
political culture which makes that form of organization ‘almost
second nature to the Austrians’. One finds the same response in his
discussion of British planning and incomes policies where he begins
with a structural argument about why these efforts require some-
thing like corporatism to be effective, and then dismisses it by
bringing in an essentially ideological or cultural observation, name-
ly, ‘the difficulty [the British] found in mingling government
authority with private economic power and making use of the
amalgam’.5 Both of these qualifying observations may be well
taken, but they do serve to undermine the consistency of his central
argument with respect to the importance of corporatist arrange-
ments in modern capitalism.
It is, nonetheless, worth recalling Shonfield’s many insights, if
only to provide a flavour of its themes for those readers who are not
familiar with the subsequent literature on neo-corporatism, and to
give those who do know that literature a sense of how much
Shonfield anticipated its principal arguments.
The causes (not clearly identified as such) Shonfield found in three
general, but interrelated, phenomena: 1) the decline in efficacy of
informal and collusive, club-like, arrangements for collective class
action and their replacement by permanent organizations; 2) the
quantitative expansion and qualitative shift in public policy objec-
tives during the postwar period; and 3) the declining role of
parliament in decision-making. To these later scholars would add
such factors as the impact of wartime mobilization, the ideology
and alliance strategies of social democratic parties, the increase in
international competitiveness -especially in smaller, more vulner-
able economies -and the importance of containing inflationary
pressures under conditions of full employment.

aibid., p. 194.
sibjd., p. 160.
56 G O V E R N M E N T AND OPPOSITION

The deflning conditions (dispersed through several case studies)

seem to have been the following for Shonfield: 1) the establishment
of functional assemblies with participation restricted to a few
designated and privileged representatives; 2) the need for these select
peak associations to have a centralized internal structure capable of
ensuring a coordinated response across large categories of interests
(especially important, he thought, for labour since capitalist interests
could be coordinated through the action of a few large firms); 3)
the importance of proportionality (Proporz in the Austrian jargon,
cited by Shonfield) in both the distribution of representative posts
and subsequent benefits; 4) the secondary role played overtly by
state representatives, but their key indirect importance in granting
semi-public status to the associations, in encouraging compliance
through the state’s own discriminatory policies of public credit,
state purchasing, budgeting priorities, fiscal exemptions, wage in-
creases for civil servants and, just generally, ‘in putting something
in the pot along with the rest’;6 5) the possible role of compulsory
arrangements to require members to join or to pay contributions,
as well as those designed to ensure prior and exclusive consultation
with policy-makers for selected organizations; 6) the centrality of
direct bargaining among representatives of capital and labour with
compromise as the mutually desired outcome; 7) the critical impor-
tance of secrecy in deliberations, coupled with voluntarism in the
willingness of groups to participate- and to defect.
It is hard to believe that all these elements of what, ten years later,
became the neo-corporatist assault on pluralist orthodoxy were
already present -admittedly only in embryo -in Modern Capital-
ism! About all one would have to add is greater attention to the
(sensitive) issues of monopolies of representation, of hierarchic
relations among interest associations, of the necessity for exercising
control over member behaviour (and not just ‘moral suasion’ as
Shonfield put it), and of private associational responsibility for the
implementation of public policy.
The consequences of corporatism (again, not labelled as such)
Shonfield felt were largely, if not exclusively, beneficial: first, most
importantly, they made planning and the negotiation of incomes
policies possible and, secondly, they also allowed collective action
on a wide range of policies to be less visible (but no less consequen-

aibid., p. 164.
 C O R P O R A T I S M IS D E A D ! 57

tial) than would have been the case if they were submitted to
parliamentary deliberation. He was by no means unaware of cor-
poratism’s precarious relationship with democracy -and not just
because of its past association with fascism. Here he is worth
quoting at some length:
The term ‘corporatist’ is not to be understood in a pejorative sense. All planning
of the modern capitalist type implies some measure of corporatism in political
organization: that follows from basing the conduct of economic affairs on the
deliberate decisions of organized groups of producers, instead of leaving the
outcome to the clash between individual competitors in the market. It is,
however, a matter for concern when the new corporatist organizations bypass the
ordinary democratic process -neither throwing their own deliberations open to
the public nor subjecting the bargains struck between the centres of economic
power to regular parliamentary scrutiny. After all, many of these bargains, which
are sought precisely because of their long-term implications, will affect the life
of the average person more than a lot o f the legislation which parliament subjects
to close and protracted scrutiny.’

This is an eloquent and concise statement of the problematic

consequence of corporatism’s gradual and surreptitious infiltration
of the policy matrix (and it echoes an earlier preoccupation of
Keynes), but it does not go very far in resolving political dilemma.
Shonfield toys with the idea of establishing a second ‘functionalist’
chamber (echoing a suggestion once made by Pierre Mend&
France) and repeatedly calls for greater public ‘surveillance’ and
‘transparency’, even if both of these qualities are at odds with certain
key defining properties of the arrangement, e.g. the need for secrecy
in deliberations, for selective participation and for a secondary role
to be played by state authorities.
Latter-day students of neo-corporatism have tended to be much
less ‘enthusiastic’ about its social and economic consequences. In
particular, quite early in their debates they posed the crucial ctri bono
question- without, it must be said, providing an unambiguous
response to it. The initial presupposition of some commentators that
such arrangements were, literally by definition, asymmetrically
favourable to capital -indeed, represented a deliberate effort by it
to subordinate labour,’ -has given way to a more cautious assess-
7ibid., p. 161.
sLeo Panitch, ‘The Development of Corporatism in Liberal Democracies’, in P.
Schmitter and G. Lehmbruch (eds), Trends Toward Corporatist Intermedialion, London,
Sage, 1979, pp. 119-46.
58 G O V E R N M E N T AND O P P O S I T I O N

ment which makes the outcome contingent upon the evolution of

the business cycle and the nature of the party in power.
Subsequent students have also been even more sceptical than
Shonfield about the compatibility of neo-corporatism with demo-
cracy and, therefore, about its longer-term legitimacy. While inn-
umerable multiple regressions with neo-corporatism as a dummy or
ordinal variable have come up with relatively significant and fa-
vourable ‘weights’ for its impact, there is little evidence that this
success in aggregate economic performance has been translated into
enduring normative approval that would make its arrangements
acceptable to the citizenry -especially if they were momentarily
not to produce such materially desirable outcomes.
When Andrew Shonfield returned to the subject of corporatism
almost twenty years later, for instance in his In Defence ofthe Mixed
he undoubtedly encountered the enormous literature
that had grown up around the concept in the meantime. To an
extent this is reflected in his greater concern with such institutional
issues as the hierarchy (the ‘pecking order’, he called it) of associa-
tions, the problem of ensuring member compliance, the need for
self-regulation and the role of delegated powers, and in his greater
sensitivity to the political issues of legitimation, party connection,
monopoly powers and parliamentary or judicial control. Neverthe-
less, it is striking and disappointing that he makes no concerted
effort in his later work at defining what he means by corporatism.
The closest is a statement indicating that it involves ‘a systematic
dialogue between interest groups both public and private . .. [with]
the ultimate aim of moderating and mediating conflicts between the
needs, as irations and claims of the various competing interest
groups’.lpNot only does this fail to distinguish corporatism from a
wide variety of other configurations of organized interests and
policy-making, e.g. pluralism or syndicalism, it also raises new (and
controversial) issues about the intent or motive behind such arr-
angements -and whether this is shared by all who participate in
them. Apparently, the intense discussion among political scientists
and sociologists from 1974 to 1984 on the subject of neo- or liberal
or societal or bargained corporatism did not improve on Shonfield’s
conceptual vision already formed in 1965. If anything, it became
even less clear what corporatism was (for him) and why it produced
the positive benefits that he unhesitatingly attributed to it.
9 I n Defence ofthe Mixed Economy, Oxford, Oxford University Press, 1984.
loibid., p. 127.
 C O R P O R A T I S M IS DEAD! 59

CORPORATISM I N J A P A N

There can be no equivocation on this score. With the passage of

time, Shonfield became even more convinced than in Modern
Capitalism that corporatism was a good thing; indeed, in his later
work he attributed ‘relative success’ exclusively to it in both ec-
onomic and social performance.” In his usual tantalizing fashion, he
hints at two different routes to this benevolent set of institutions and
practices: first, those countries ‘that deliberately have made room
for it’ and secondly, those ‘that slowly evolve toward it’.12 It is not
clear which of these routes is to be preferred, or whether it makes
any difference in outcome whether the effort has been more or less
consciously contrived. No country is mentioned as an exemplar of
type one (it seems likely he had Austria or Sweden in mind), but
very prominently displayed as a case of the second type of cor-
poratization is Japan.
In one sense, this is hardly surprising. Japan has been strikingly
successful in economic and social performance in the postwar
period -by almost everyone’s criteria. It must seem, therefore,
especially important to have that country ‘on your side’ in whatever
favourable explanation you propose. Indeed, in the notes for his
unfinished The Uses $Public Power,13 there is a cryptic reference to
Japan as ‘most advanced corporatism’. Leaving aside the fact that
this clashes somewhat with Shonfield’s notion of a slow (and
presumably less conscious) pattern of evolution in that country,
what is particularly striking is the absence of any demonstration that
Japan does indeed conform to some generally applicable model of
corporatism. There is a reference in a footnote to the embarrassing
absence of labour in its policy-making deliberations at the macro-
level. This, he argues, is ‘compensated for’ by some exchanges at the
micro-level involving management and enterprise unions and by
the way organized labour acts in unison during the so-called ‘spring
wage offensive^'.'^
Neither of these arguments is convincing and both are quite ad
hoc. Shonfield simply cannot argue that modern corporatism must
involve direct bargaining -‘a systematic dialogue’, he called it,
Ilibid., p. 127, 134.
12ibid.
13Oxford, Oxford University Press, 1982, p. 102
Idibid., p. 152.
60 G O V E R N M E N T AND OPPOSITION

between peak class associations of capital and labour with only an

indirect presence of the state and voluntary surrender of autono-
mous organizational power in return for delegated powers of policy
implementation from the state -and make that minimalist defini-
tion fit Japan. He is not alone in trying to place Japan in the
corporatist corner. Indeed, several recent regression-based analyses
of the OECD universe have also given it a ‘high’ score on that
independent variable (often with some contorted footnote or severe
definitional stretching) and, thereby, have improved the signifi-
cance and benevolent direction of the subsequent findings. l 5 In
Ronald Dore’s Flexible Rigidities,I6 Japan is also given a ‘corporatist
reading’ and again the conceptual grounds seem obscure. Even if
one accepts the notion of ‘corporatism without labour’’’ and shifts
to the meso-level of bilateral sectoral ‘dialogues’ exclusively bet-
ween industries and state agencies (or, better, a state agency, MITI),
it is by no means clear that the Euro-centric model fits. Two essays
written by Japanese MA students at the University of Chicago,
Hideko Magara and Ido Masanobu, on the automobile and chemi-
cal industries, indicate that there has been a great deal of variation
over time in MITI’s strategy. At times it has preferred to deal with
associational intermediaries; at other times it has dealt directly with
leading firms; occasionally, it has simply called the principals in and
unilaterally told them what policy was. At best and in a very
restricted way that makes comparison between patterns in Japan
and Western Europe hazardous. One might best describe the former
as a case of ‘occasional corporatism’, much more state-inspired than
societally driven in both inspiration and execution.
This brief digression on Japan was intended to drive home a
central point: corporatism -with or without a qualifying prefix or
adjective-cannot be all things to all people. It should not be
twisted and stretched to explain away particular cases, but must be
defined in consistently generic terms if we are to evaluate its

15 Cf. Manfred Schmidt, ‘Does Corporatism Matter? Economic Crisis, Politics and Rates
of Unemployment in the Capitalist Democracies in the 1970s’, in Gerhard Lehmbruch and
Philippe C. Schmitter (eds), Pattern3 of Corporatist Policy-Making, London, Sage, 1982, pp.
237-58.
I6Stanford, Stanford University Press, 1987.
17T.J. Pempel and K. Tsunekawa, ‘Corporatism without Labour? The Japanese Anoma-
ly’, in Philippe C. Schmitter and Gerhard Lehmbruch (eds), Trends Toward Corporatist
Intermediation, London, Sage, 1979, pp. 231-70.
 C O R P O R A T I S M IS DEAD! 61

consequences comparatively. It must be recognised as but one of

several possible patterns of interest politics that can be found in
advanced capitalist societies. This in turn should alert analysts to the
fact that it is not a necessity, but a choice-albeit a highly com-
plicated and contingent one. Under these conditions, it seems quite
unlikely that it alone can ensure ‘relative success in economic and
social performance’. Equifinality is the most probable circumstance:
different ways of dealing with organized interests, even culturally
stri generis forms, may lead to similar aggregate outcomes. More-
over, once it has been identified and its presence confirmed, nothing
ensures that it will persist. Shonfield was cautious in calling it
‘probably irre~ersible’,’~ but it would be better to be even more
prudent. Like all institutions, once installed, corporatism will be
‘sticky’, i.e. generate habits and vested interests which will resist its
demise, even when it is no longer meeting the needs and expecta-
tions that were initially lodged in it. Nevertheless, the evidence is
overwhelming that its viability and impact vary with the business
cycle and with various political contingencies. At times, Shonfield
comes perilously close to identifying it (whatever he thought ‘it’ is)
with ‘the face of the future’. Most students of the phenomenon
would respectfully disagree with that optimistic assessment.

DEFINING C O R P O R A T I S M A N D PLACING IT WITHIN

T H E FIELD OF P O L I T I C A L E C O N O M Y

The ‘corporatist approach’ is one sub-species of a much broader

genus of theorizing in political economy which can be labelled as
‘institutionalist’. Here, the central claim is that behaviour -ec-
onomic, social or political -cannot be understood exclusively
either in terms of the choices and preferences of individuals or in
terms of the impositions and identities of collectivities. In particular,
this view rejects the currently fashionable assumption that every-
thing can be reduced, methodologically or empirically, to the
rational calculations of competing individuals. However, it is equ-
ally hostile to the inverse fallacy, especially prominent in earlier
-one is tempted to say, Germanic, thought -given the contribu-
tions of Hegel, Marx, and von Gierke, that holistic entities: tribes,
communities, classes, nations, ‘systems’, etc. can explain outcomes.
i*ln Dgence of the Mixed Economy, p. 131.
62 G O V E R N M E N T A N D OPPOSITION

In a more positive vein, institutionalism suggests that somewhere

between markets and states lie a large number of recurrent patterns
of collective behaviour. Confusing and, at times, contradictory as
these may be, individuals and collectivities rely on them more or
less habitually to structure their mutual expectations about each
other’s behaviour and to provide ready-made solutions for their
problems. These ‘standard operating procedures’ may seem, from
an abstract and external point-of-view, sub-optimal in their perfor-
mances, but they save considerably on search and information costs,
while supplying a psychologically reassuring familiarity to those
who rely on them. They also tend to acquire elaborate ideologies
justifying their existence on cultural or ethical grounds. Persons
may even come to value intrinsically their participation in these
institutions quite independently of the extrinsic benefits they may
procure. Moreover -and this is especially important for the cor-
poratist sub-species -their operation demands specialized person-
nel. Those who come to occupy such positions develop a vested
interest, not just in the maintenance, but also in the further develop-
ment of institutional activities. Some of the dues, rents and subsidies
they extract from members and interlocutors can be ‘invested’ in
further legitimation and task expansion. In other words, the evolu-
tion of this institutional, i s . non-market and non-state, sector may
not be just a passive reflection of the demand for its services by
individuals or authorities, but may have a dynamic of its own.
The analysis of these institutions -whatever their sub-species
-rests on one crucial property of theirs, namely, their intermediate
position between two sets of autonomously constituted and re-
sourceful actors: individuals (which may include families and firms)
and authorities (some of which may be private as well as public).
They must draw their resources from both -in varying mixtures
according to type. They depend on the former for membership
(which includes not just their financial contributions, but also their
voluntary compliance with institutional norms); they depend on the
latter for recognition (which includes not just legal status, but may
also involve varying degrees of assured access, fiscal exemption and
budgetary subsidization). Hence, the analysis of such intermediaries
cannot ignore the preferences and calculations of individuals, any
more than it can ignore the exactions and commands of state
agencies and other powerful interlocutors -but it is reducible to
neither. In our design for comparative research on one particular
 C O R P O R A T I S M IS DEAD! 63

type of institution, the business association, Wolfgang Streeck and

I conceptualized this in terms of two distinct, and at times compet-
ing, logics: one of ‘membership’ and another of ‘influence’. We
further hypothesized that, depending on the historical evolution and
current conjuncture of these two logics, business associations would
adapt their structures and activities in different ways across countries
and across industrial sectors.’’
In the generic sense, Andrew Shonfield was certainly an ‘in-
stitutionalist’. He may never have openly identified himself as such,
but Zuzanna Shonfield in her introduction to In Defence ofthe Mixed
Economy rightfully stresses the emphasis he placed upon ‘the pri-
macy of national and international institutions over policies’.’’
Whether he would have gone further to claim their primacy over
the functioning of market forces would be a much more heretical
statement for an economist to make, and one cannot be sure that
he would have agreed with it. She attributes his theoretical stance
to his personal ‘optimism’-a somewhat surprising conclusion
since institutionalists are often quite pessimistic, not to say full of
despair, about the prospect that ‘their’ particular institution will
ever be able to reform itself or even to perform adequately.
Shifting now to the sub-species of corporatism, Shonfield was
repeatedly ambiguous on one key point, namely, the nature of the
actors that were to be involved in the ‘systematic dialogue’ he
described (and advocated). He referred indifferently to the par-
ticipation of firms and associations, and might not even have
objected to incorporating prominent individual capitalists into the
process. For the corporatist analyst, these differences are crucial. It
is only when specially organized intermediaries are involved -
only when the process of deliberation effectively empowers them to
represent the collective interests of some group and to take subse-
quent responsibility for any decisions made -that one can speak of
corporatism strictu sensu. It is not the same thing as mere consulta-
tion and it is not open to participation by anyone. The core of the
whole process of interest conflict and compromise is well captured
by Shonfield’s concept of ‘active assent’, but this is a property which
under corporatism is produced and implemented by a special type
of institution: the association representing class, sectoral or profess-
lyphilippe C. Schmitter and Wolfgang Streeck, A Research Design for the Study .f
Businers Associations, Berlin, Wissenschaftszentrum-IIM, 1981.
zap. v1.
64 G O V E R N M E N T AND OPPOSITION

ional interests. (There is an embryonic literature dealing with

corporatist arrangements for handling consumer, gender, environ-
mental and other issues, but this need not concern us here.) In its
most extreme form, this may even result in the creation of what
Wolfgang Streeck and I have called 'private interest governments'
which have a great deal of autonomy from and authority over both
members and interlocutors in the way in which they allocate
resources.21
Corporatist analysts argue that, if active assent is to emerge from
conflicts of class, sectoral and professional interest, the institutions
and processes most centrally involved must be configured in par-
ticular ways. Despite the initial proliferation of definitions, subse-
quent discussions have narrowed attention to two, logically and
empirically interrelated -but nonetheless not necessarily co-
variant -sets of properties: first, those which refer to the ways in
which interests are organized; and secondly, those which refer to the
ways in which decisions are made and implemented. To avoid
confusion between corporatism 1 and corporatism 2, I once
proposed restricting use of the term to the former (and contrasting
it with its logical opposite: pluralism), and referring to the mode of
decision-making as concertation -in juxtaposition to its inverse:
pressure.22Needless to say, I was not followed in this quest for
terminological exactitude and the literature continues to use the
same concept to cover both meanings -as does Shonfield.
This is not the place to go into detail concerning the specific
properties that differentiate corporatist associability and concer-
tative policy-making. Suffice it to say that, in the former, one is
looking for such characteristics as: monopoly of representation;
hierarchic coordination across associations; functional differentia-
tion into non-overlapping categories; official recognition and semi-
public status; involuntary or quasi-compulsory membership; and
some degree of heteronomy with regard to the selection of leaders
and the articulation of demands. The ideal-typical components of
concertation in policy-making are regular interaction in function-
ally specialized contexts; privileged, even exclusive, access; consulta-
21 Wolfgang Streeck and Philippe C. Schmitter (eds), Private Interest Government: Beyond
Market and State, London, Sage, 1985.
22'Reflections on Where the Theory of Neo-Corporatism Has Gone and Where the
Praxis of Neo-Corporatism May Be Going', in G. Lehmbruch and P. Schmitter (eds),
Patterns .f Corporatist Policy-Making, London, Sage, 1982, pp. 259-90.
 C O R P O R A T I S M IS DEAD! 65

tion prior to legislative deliberation; parity in representation; con-

current consent, not majority vote, as the usual decision rule; and
devolved responsibility as the usual mode of policy implementation.
Needless to say, in the real world of experimentation and opportun-
ism -not to mention fortuitous occurrences -these traits do not
always cluster together: e.g. monopolies of representation are gran-
ted (often defacto) to associations without much public control over
leadership or the nature of demands; functional councils are esta-
blished within the administration or higher executive office, but
legislatures refuse to accept their status, much less to allow them to
consider and amend proposals beforehand.
Nor have the structure of interest organization and the mode of
policy-making always co-varied appropriately. The strong hypoth-
esis would be that concertation cannot work without monopolistic,
hierarchically ordered, officially recognised, clearly delimited ass-
ociations and that, inversely, once concertation is established it must
encourage the development of these properties in collaborating
interest organizations. Sometimes, the incongruencies are tempor-
ary when, for example, negotiations for the annual or biannual
‘social contract’ break down momentarily over a specific issue and
yet the basic structure of intermediation remains unchanged, or
when negotiations concerning macro-economic policies persist bet-
ween peak class associations, despite the fact that one or another of
them has suffered a ‘defection’ by a faction which opts for exerting
pressure through another channel. More challenging for the analyst
(and the practitioner) are those situations where great efforts are
expended to bring about a concerted outcome despite the
prevalence of class, sectoral and professional interests which are
‘incorrectly’ organized -if they are organized at all. Great Britain
during the 1970s was an apposite case and, in reading Shonfield, one
can sense the difficulty he had in coping with its incongruities.
More recently, theoretical discussion has shifted to the question
of the ‘level’ of corporatism. Shonfield in Modern Capitalism and
those who ‘reinvented the wheel’ in the mid-1970s naturally fixed
on what then seemed to be the outstanding novelty, namely the
‘systematic dialogue’ which had developed between comprehensive
class associations and state authorities over macro-economic poli-
cies. Prefigured in the late 1930s in a few countries, these spread
more widely throughout the smaller European democracies after
the war and even appeared in West Germany during the Konzer-
66 GOVERNMENT AND OPPOSITION

tierte Aktion period and in Great Britain during repeated efforts at

drafting a national incomes policy or ‘Social Pact’. When, for
reasons to be discussed below, these macro-efforts began to falter,
students of neo-corporatism stubbornly refused to see their par-
adigm go out of business and shifted their research efforts to the
meso-level of analysis where they found considerable evidence of
what they were looking for. For some, this meant examining the
lower levels of territorial aggregation, hence, the new label: ‘local
corporati~m’.~~ For most, the new site of associative action and
policy-making was the industry or branch of the economy, hence,
~ shift is
the burgeoning references to ‘sectoral c o r p ~ r a t i s m ’If. ~this
not merely an opportunistic response of academic entrepreneurs
(and I am convinced it is not), the implications for an institutional
understanding of the political economy of modern capitalism could
be quite substantial. When Shonfield rediscovered corporatism in
the early 1980s, he did not pick up this intervening paradigm shift.
For him, the phenomenon was resolutely ‘macro’ by its very nature;
indeed, the reasons why he believed that it was so imperative are
all linked to the need for a national/comprehensive/Gesamtwirt-
schaftlicher approach to economic planning, incomes policy and the
management of the economy.

T H E F U T U R E O F C O R P O R A T I S M IN T H E P R E S E N T
CONTEXT

The logic behind Shonfield’s optimism about the future of corpora-

tism was functionalist. The argument can be simply stated: planning
is an imperative of modern capitalism; planning requires an effective
incomes policy; planning and, especially, incomes policy depend
upon the voluntary and active assent of the groups most directly
affected; this assent can only be obtained through a systematic
dialogue among these private and public interests; such a dialogue
is necessary in order to moderate and mediate the conflicts which
are bound to arise between differing needs, aspirations and claims
-and to legitimate the ensuing compromises. Shonfield clearly
23Gudmund Hernes and A. Selvik, ‘Local Corporatism’ in S. Berger (ed.), Organizing
Interests in Western Europe, Cambridge, Cambridge University Press, 1981, pp. 10S19.
24 Alan Cawson (ed.), Organized Interem and the State: Studies in Meso-Corporatism,

London, Sage, 1985.

 C O R P O R A T I S M IS DEAD! 67

recognised that the economies he had studied had adapted to the

corporatist imperative to differing degrees, but presumably the
implacable logic of international competition would eventually
force the laggards to face up to the necessary institutional adjust-
ments.
Virtually every one of these linkages is questionable, beginning
with the first, namely, that some form of planning is necessary for
the survival of advanced capitalism and ending with the last that
only incorporation of affected interests withip the policy process can
produce compromises and provide legitim cy.
1
Most contemporary thinking about corp ratism is more contin-
gent than functional. It supposes that the likelihood of this mode of
organizing interests/making decisions depends on the institutional
heritage of the past and the power calculations of the present. Its
emergence is not imperative. There are many ways of handling
these problems of conflicting interests and policy compromise in
capitalist societies and none is a priori necessarily more efficient than
the others. What may work well in one country because it has a
particular history of class self-organization or a particular contem-
porary balance of class forces, may not do so well for its next-door
neighbour. Moreover, in those countries which are liberal and
democratic, the corporatist mode suffers from a severe legitimacy
deficit of its own.
Seen from this perspective, Shonfield’s evolutionary approach is
suspect. N ot only are countries unlikely to converge toward a
similar set of intermediary institutions and practices, but the same
country may be subject to considerable variation over time, with
the viability of corporatism waxing and waning according to shifts
in the relative power capabilities of its class, sectoral and professional
associations. Indeed, the most likely pattern for the foreseeable
future may be cyclical, rather than linear.
A quick glance into the past would seem to confirm this im-
pression. Certainly, the ‘fashion’ for corporatism has had a marked
tendency to come and go-even at fairly regular intervals. Its
modern ideological revival can be conveniently traced to the papal
encyclical, Rerurn Novarum, in 1891-although the resuscitation
and extension of the Chamber system for artisans, industry and
commerce and even for agriculture in some parts of Central Europe
had begun some twenty years earlier. The concept re-emerged after
the First World War, this time in a more sFcular and statist guise,
68 G O V E R N M E N T AND OPPOSITION

and found its most public expression in the corporazioni of Fascist

Italy, followed by imitators in Portugal, Spain, Brazil, Vichy
France, etc. We have seen that several of the smaller European
democracies began practising something analogous during the 1950s
and 1960s-although they carefully avoided the label, ‘corpora-
tism’. A recent article in the Financial Times2’ reminded readers that
Britain’s National Economic Development Council (Neddy) was
founded in 1962-and had just recently been demoted by the
Thatcher government. All this puts the ideology/practice of the
phenomenon on a roughly twenty- to thirty-year cycle -with
lags for particular countries and exemptions for particular sectors.
Agriculture, for example, seems to have had a special propensity for
corporatist arrangements for some time. Instead of coming and
going, they have tended to accumulate and to multiply in level for
this sector, with the European Community’s Common Agricultural
Policy providing the capstone for the whole edifice of policies.
Similarly, corporatist practices regulating (and protecting) certain
professions and artisan groups have led a stable, if barely visible,
existence at the national level in most European countries.
All this is, of course, very impressionistic. For it to acquire the
status of plausible theory, one would have to come up with a set
of variable and contingent conditions which ‘drive’ actors to shift
their preference from corporatist/concertative solutions to those
determined by pluralist competition and pressure politics -and
.then back again in the future. The most obvious candidate for such
a task is the business cycle. The fact that its periodicity, or better,
its periodicities do not quite seem to correspond to those of corpora-
tism can be dismissed on grounds that institutions are ‘viscous’.
They take time to learn the new context, to reflect the new balance
of forces and to overcome the resistance of their internally vested
interests. And there is growing evidence that changes in economic
performance, especially in the level of employment, have a differen-
tial effect on capital and labour which makes them more or less
attracted to engaging in a ‘systematic dialogue’. When the labour
market is tight, capitalists see formerly hidden virtues in corporatist
compromises which encourage wage restraint; inversely, when it is
loose, trade unions find that they can use these same arrangements
to protect the concessions they managed to extract previously. The
temptation to defect is greatest for both at the zenith and nadir of
254 July 1987.
 C O R P O R A T I S M IS DEAD! 69

the cycle. Presumably, what makes extreme fluctuations in in-

stitutional response infrequent is not just the aforementioned ‘vis-
cosity’, but also the development of trust among the bargaining
class associations which leads to underexploitation of momentary
advantage in return for future concessions, or the rational calcula-
tion that once the cycle reverses itself those presently disadvantaged
will reap their revenge in the future in even more damaging terms.
Whatever the sentiment of calculus behind it, the notion that the
fate of corporatism might be tied to the fortune of the business cycle
could have appealed to Shonfield, especially in the contemporary
political context when his ‘functionalist’ expectations seem to have
been so thoroughly frustrated. Presumably, once full employment
returned and the capitalist offensive against planning, incomes
policy, corporatist arrangements and, at least in a few countries,
trade unionism in general was weakened, his preferred outcome
would be assured of a return to the political agenda. As the article
by John Elliot, ‘Don’t dance on Neddy’s Grave’, in the Financial
Times26 put it, ‘... the pendulum will one day swing back and
someone in Downing Street will echo the sentiments of Edward
Heath who [said] ... “We have to find a more sensible way of
settling our differences” ’. Moreover, to the extent that some in-
stitutional learning occurred from one cyclical experience to the
next, the extremes of interest conflict could gradually be avoided
-perhaps even converging asymptotically toward a set of practices
which would be less sensitive in the future to cyclical variation and
more tolerant of each group’s needs and aspirations.
In my view, this will not suffice. (Neo-)corporatism may well
have within it a component which is sensitive to the business cycle,
but that may be insufficient to predict its present viability, much less
to ensure its future persistence. It seems doubtful that an eventual
return to full employment (and, even, social democratic political
prominence along with it) will usher in a new era of corporatism
-least of all, the sort of macro-corporatism envisaged by Shon-
field and others. The reason for such scepticism lies in the qualitative
changes in production processes, employment relations and citizen
concerns which seem to be going on behind the quantitative shift
in growth rates, employment levels, prices, international trade and
so forth which have been occurring since roughly 1973. This is not
the place to review the literature on these trends in any detail, but
z6ibid.
70 G O V E R N M E N T AND O P P O S I T I O N

several analyses lead to the following (speculative) observations

-none of which are favourable to corporatist solutions:
The first is that negotiations aimed at establishing standard
national macro-economic parameters are of decreasing relevance,
and at times may even be counterproductive, when what is deman-
ded are policies tailored to improve the productivity and interna-
tional competitiveness of specific sectors, discrete branches of
production and even individual enterprises; the second observation
is that the role of intermediary institutions, especially trade unions
and employer associations, has changed from the point of view of
members and interlocutors, both of whom are searching for more
differentiated categories of representation; and the third is that the
substantive content of interest conflicts (and, hence, an important
measure of policy attention) has shifted away from class-based lines
of cleavage towards a panoply of discrete issues focusing on con-
sumer protection, quality of life, gender, environmental, ethical and
other problems, each with their respective movements.
At first, the problem for macro-corporatism seemed to be just
the lower growth rates and slack labour markets, along with the
fiscal crisis of the state. The surplus was simply not there to make
the sort of side-payments which had facilitated compromises in the
past, and intermediaries were noticeably reluctant to share respon-
sibility for the management of declining resources. Gradually,
however, other difficulties emerged which suggested that the rever-
sal of the above conditions might not result in a return to the statu
quo ante. The displacement of employment from the traditional
‘hard-core’ of manufacturing to the services and, in some cases, to
public employment has had a serious impact on the recruitment of
union members. In those countries which already had more cor-
poratist structures, representativity did not decline, so much as a
change in ‘character’ began when public employees and service
unions became the largest units within national confederations. The
large standardized groups of skilled and semi-skilled workers, e.g.
those in the metallurgical sector who had played a leading role in
collective negotiations, have been hard hit by de-industrialization
and their ‘replacements’-where they joined unions at all -are
employed in more scattered sites with much more individuated
tasks to perform under even more ambiguous hierarchies of author-
ity and remuneration. The very categories upon which macro-
corporatist compromises were built have become disaggregated and
 C O R P O R A T I S M IS DEAD! 71

dispersed. Centralized negotiations concerning wages, benefits and

working conditions came under severe pressures. In some cases (e.g.
Sweden), the system only survived by shifting to a sectoral level.
Moreover, new production technologies based on micro-elec-
tronics are cutting across traditional job classification systems and
professional categories, and creating possibilities for flexible produc-
tion in relatively small units. In one sense, these processes increase
the need for ‘active assent’ on the part of workers -and, therefore,
the need for capitalists to bargain with them over the quality as well
as the quantity of their contribution- but, in another sense, this is
occurring in highly differentiated settings not easy to reduce to a
standard contract and difficult for intermediaries to control. Both
trade unions and employer associations find themselves increasingly
shut out from these deliberations.
Sharpened international competition (and greater international
mobility of capital) lay behind many of these developments, but
also play a more direct (and menacing) role. The overt threat to
move to another site or to discontinue production altogether puts
great pressure on workers to make concessions at the level of the
enterprise, thereby undermining what had previously been nego-
tiated at the national or sectoral level. Similarly, the heightened
competition between firms makes unified responses and commit-
ments from business associations more difficult. Governments and
state agencies, sensitive to these trends in the international environ-
ment through the balance of payments as well as to the direct
pressure from those involved, multiply the subsidies and exemp-
tions designed to benefit specific sectors -and sometimes even
individual firms.
The upshot of these trends, as seen from the corporatist perspec-
tive, has been a shift from the macro- to the meso-level of aggrega-
tion. The principal question has become whether it will stop there
or go even further until the only ‘systematic dialogues’ will be
taking place at the level of individual firms or discrete localities.
Contrary to the expectations of both liberals and Marxists, the
capitalist economy is not moving inexorably to more-and-more
integrated national markets with similar factor costs across sectors
of production and across territorial units. Political interventions of
great variety from multiple sources have been ‘sectoralizing’ and
‘regionalizing’ these costs -in response to international com-
petition and technological innovation. Whether in the name of
72 G O V E R N M E N T A N D OPPOSITION

industrial policy’ or ‘regional development’, this can involve a

6.

great deal of concertation among interests over financial and fiscal

incentives-not to mention direct provision of infrastructure,
training, etc. What is not clear is where this bargaining will take
place: whether it will focus on multi-firm agreements covering
whole sectors of production, or intermediate levels of governance
such as the region or the province. Trade unions and business
associations (especially, the latter) have begun to adjust their internal
structures to these new realities, but below a certain scale of
interaction their mediating skills and capacity to produce collective
assent are irrelevant.*’ Interorganizational corporatist concertation
becomes unnecessary; interpersonal dynamics and small group bar-
gaining take over.

BY W A Y OF C O N C L U S I O N

‘Corporatism is dead! Long live corporatism!’ was the theme I

began with, meaning to hint at its dynastic continuity punctuated
by periodic demise and subsequent resurrection. This was not
incompatible with Shonfield’s apparent conviction that ‘the century
of corporatism’ was still en vigueur, but the emphasis was different.
In the course of summarily exploring its recent vicissitudes and
transformations, I have become less and less convinced that corpora-
tism -with or without one of its multiple prefixes or adjectives
-will survive, much less be as much an imperative for the future
of capitalism as Shonfield thought. Especially when viewed from
the macro- or national-level, it looks too small in scale to have
much influence over transnational forces and too large in scale to be
of much help in the restructuring of sectoral and regional patterns.
The notion of setting up a new neo-corporatist dynasty at the
global- or meta-level is positively frightening, given the transaction
costs involved and the potential decisional perversities.*’ The Com-
mon Agricultural Policy of the European Community is the closest
approximation we have to such a monstrosity -and it is difficult
to imagine anyone deliberately advocating a repetition of that! The
27Philippe C. Schmitter and Luca Lanzalalco, ‘L’organizzazione degli interessi empren-
ditorali a h e l l o regionale’, Sfclto e Mercafo, No. 22, 1988, pp. 63-96.
28 Fritz Scharpf, ‘Die Politikverflechtungsfalle: Europaische Integration und deutscher
Foderalismus im Vergleich’, Politische T/iertehahresschr$, 26, December 1985, pp. 32356.
 CORPORATISM IS DEAD! 73

prospect of a proliferation of meso-corporatisms seems less thrilling,

but also a good deal less threatening.
Andrew Shonfield was an optimist. We have Zuzanna Shon-
field’s very knowledgeable word on it. He was convinced, not just
that institutions could control policies (and perhaps even market
processes), but also that they could be designed and used for public
purposes. He thought that corporatism would lead to better policies
-policies that would, in his words, be ‘selective’, ‘balanced’ and
‘tran~parent’.’~ To achieve selectivity, we have seen that it may be
necessary to shift such arrangements to the sectoral or regional level.
If, however, this is done, what will subsequently guarantee that the
outcome of these fragmented concertations will not be imbalanced
in favour of those sectors or regions with the most clout -or the
capacity to disrupt the country as a whole? As for transparency, that
is a property virtually antithetic to the complex and secretive
deliberations involved in effective concertation. In my view, the
only answers to these difficult issues of building better public
purposes into the political economy of modern capitalism must be
sought elsewhere, namely, in those institutions of territorial and
partisan representation which are compelled by the logic of electoral
competition to offer ‘balanced programmes’ to the widest possible
clientele and by the mechanism of parliamentary deliberation and
inquiry to make their selections transparent to the general public.
Alas, I do not believe that the dominant themes of future political
economy will be selectivity, balance and transparency. For the
foreseeable future, the preoccupations will be with ‘flexibility’,
‘self-discipline’ and ‘competitiveness’. Corporatism, if configured at
the appropriate level, can contribute to these ends and, therefore, to
a more materially successful political economy -but not necessari-
ly to an ethically superior political economy, as Andrew Shonfield
would have hoped.

2qIn Defence o f t h e Mixed Economy, p. vi.