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Corporatism 101: Definition, Features & More

The social and economic structures of different nations are diverse. While one may aim for socialism, another may try to create a country based on communism. However, as we ride the ultimate wave of globalisation, the fight is mostly between corporatism and capitalism.

Now, it can be challenging to understand the different economic systems considering the clashing ideals while running on the same path.

To make it easier for you to understand corporatism, we have a ready guide for you.

Please go through it to understand how corporatism differs from capitalism or clientelism. Alternatively, you can seek the guidance of 5000+ experts at MyAssignmenthelp.com in a few clicks.

What is Corporatism? Definition and Examples

Corporatism is a form of economy and social construct created in the line of socialism, with similar ideals. Like socialism, corporatism gives the power to produce and distribute goods and wealth to the public instead of private groups. The idea was to stress the positive role of the government in ensuring social justice while people invest in self-interests.

Like socialism, corporatism was a practice that started to stop the wave of capitalism giving private groups complete control over goods and wealth for personal profit. Corporatism propagates that the public should have control over the economy so that everyone is benefitted instead of a few.

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The Role Corporatism in Globalisation

Although the ideals of corporatism are very similar to socialism, there are more defining characteristics to this type of economic system that make it a key player in globalisation. What are they? Let us find out.

1. Public ownership and law

Corporatism believes in the public ownership of all goods while ensuring that people in the society are happy and have reached self-fulfilment due to the presence of rules and regulations.

2. Planned economy

The government is responsible a representative of the people for controlling state projects and planning bigger economic activities like the exchange, distribution and consumption of goods and means of production.

3. A society devoid of classes

Unlike a capitalist society where discrimination is prominent in the shape of upper, middle and lower classes, corporatism aims to create a community of equity - where every person can be equal in terms of economic wealth.

4. Responsibility of the State

In a corporatist society, the State is responsible for providing basic human needs indiscriminately. The six needs are food, shelter, clothing, health, education and employment.

5. Equal opportunity

Corporatism was created as a version of socialism to create a society where everyone has an equal opportunity to get a quality lifestyle based on their skills.

6. No market competition

Market competition does not arise in a corporatist society because the State as a collective group is responsible for state projects like public education, construction and other such main sectors.

7. Pricing mechanism

There are two types of pricing mechanisms in a corporatist society – one is the market price for the consumer goods, and the second is the accounting price for managers to take decisions related to goods production.

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Capitalism vs Corporatism: The Battle of the Opposites

In capitalism, the economic system recognises individual rights, like the possession of goods for an individual’s personal consumption. The key player in capitalism is individuals or groups of individuals who have equal opportunity to compete as buyers or sellers in a free market minus the governmental intervention. Unlike capitalism’s materialistic viewpoint, corporatism is more about attaining self-fulfilment and happiness. This makes corporatism a lot more idealistic than practical, save the proper implementation of rules and regulations.

Here are the differences between the two types of economic systems:

1. Dependency:

Capitalism allows the trading of goods and services as independent actions of individuals, thus eradicating aggression. In a corporatist economy, a political community must help individuals of society attain happiness and self-fulfilment.

2. Equality and Equity:

In a capitalist society, individuals can create unlimited wealth by owning properties and goods they can afford. This results in inequality which idealistically is needed to motivate individuals to work so that they can earn more and catch up with other individuals.

In corporatism, a collectivist society nationalises private property without the operation of law. It lets private businesses operate within limits while prioritising state projects.

3. Individual vs Collectivist

In a capitalist society, the onus is on individuals to take up projects and get them done. However, in a corporatist community, the government as a collective unit creates public ventures for specific projects so that the private sector cannot reap more than is typical from the vast projects.

4. Labour

In terms of labour and division, capitalism allows collective bargaining where the representatives of an organisation’s management sit with the labour union leader to reach an agreement. In corporatism, the collective body organises labour for corporations as negotiate labour issues via representatives.

Both corporatism and capitalism are in practice today, often co-existing in a government to smoothen the economy.

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Corporatism vs Fascism: What are the Differences?

While corporatism and fascism both oppose capitalism banning private property ownership, the goals of both the social systems and how they reach the objectives are in stark contrast.

You can classify the differences under broad categories like:

1. Ideology

Corporatism is much more compatible in any democratic society since it does not infringe on the individualism of people.

Meanwhile, fascism promotes an authoritarian state that denies liberty and freedom to make individualistic choices for the common people.

2. Ownership of resources

Corporatism allows private ownership of personal property. However, all industrial means of production are owned by the people and looked after by the government.

In a fascist society, the government owns and controls economic affairs, and the public has no right to own personal property. 

3. Class distinction

Corporatism aims to blur the prominent lines that distinguish various classes, thus eradicating the concept of economic status to an extent. Corporatism gives everyone an equal opportunity to work hard and earn more.

Fascism abolishes the idea of class altogether, giving the ultimate power to the government.

As you can see, corporatism and fascism differ drastically when it comes to the ideals of the two types of social systems and how they achieve their goals.

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