Theories and Practices of N Eocorporatism

CHAPTER TWENTY-TWO Theories and Practices of N eocorporatism Wolfgang Streeck and Lane Kenworthy The modern territorial state and the capi- Variation among modern types of government, talist market economy superseded a political- - between the utopian extremes of anarcho- economic order that consisted of a plethora syndicalism and Rousseauian radical liberalism, of corporate communities endowed with tradi- rotates around the relationship between terri- tional rights and obligations, such as churches, torial and associative rule (Table 22.1). In the estates, cities, and guilds. Organized collectiv- Standestaat (state of estates) conceived in the ities of all sorts, more or less closely related to constitutional debates of nineteenth-century the economic division oflabar, regulated coop- Germany as a conservative alternative to liberal eration and competition among their members democracy, territorial rule is exercised by dele- and negotiated their relations with each other. gates of corporate groups, which are the princi- While themselves changing under the impact pal constituents of the state. Later, in the twen- of modernization, they often resisted the rise of tieth century, dictatorial state rule often used territorial bureaucratic rule and the spread of state-instituted corporate bodies as transmission market relations, sometimes well into the twen- belts of a governing party; this is what Schmit- tieth century. But ultimately they proved un- ter (1974) referred to as "state corporatism." In able to prevent the victory of the state form of European postwar democracies, by comparison, political organization and of the self-regulating territorial rule, which now took place through market as the dominant site of economic ex- parliamentary representation, shared the public change. Modern liberalism, both political and space with social groups organized on a more economic, in turn aimed at abolishing all forms voluntary basis and entitled to various forms of intermediary organization that intervene be- of collective participation and self-government, tween the individual and the state or the mar- provided they recognized the primacy of par- ket. In the end, however, it failed to eliminate liamentary democracy. This, in essence, is what collectivism and had to accommodate itself to the literature is called in "neocorporatism" or both political faction and economic coopera- "liberal corporatism" (Schmitter, 1974; Lehm- tion. bruch, 1977). Finally, in more strictly liberal po- Twenty-first-century political communities litical systems, organized groups are tolerated are all organized by territorial nation-states. But by the constitutional order on condition that these had to learn to incorporate organized they limit themselves to lobbying the parliament collectivities and elements of a collective-asso- and refrain from claiming rights, however cir- ciative order in their different configurations cumscribed, to authoritative decision making. of bureaucratic hierarchy and free markets. As a type of governance, this configuration of 441 442 Wolfgang Streeck and Lane Kenworthy .. Table 22. I. Type if Government as a Result of Interaction Between 'Territorial State and Associative Order Territorial State Type of Government Associative Order Does not exist Anarcho-Syndicalism Prevents state formation Guild Socialism Constituted by associations Stiindestaat Controls territorial rule Controls associations State Corporatism Constituted by the state Sharing public space with Liberal Corporatism Group self-government under associations N eocorporatism parliamentary democracy Tolerates associations Pluralism Parliamentary lobby Outlaws associations Radical Liberalism Does not exist territorial state and associative order is here re- illegal any intermediary organization that repre- ferred to as "pluralism" (Schmitter, 1974).I sented subsections of the citizenry and thereby Our discussion is divided into five sections. interfered with its direct relationship with the The first describes the origins of neocorpo- state. ratism and its conceptualization in political In the spirit of thinkers such as Rousseau thought, and the second does the same for the (1964) and Madison (1973), nineteenth-century early post-World War II period. The third sec- liberalism remained suspicious of collective or- tion addresses the distinction between corpo- ganization below the nation-state, holding on ratism and pluralism and then discusses corpo- to an atomistic image of political life in which ratist organizational structure, concertation, and autonomous individuals were the only legiti- private-interest government. Section 4 reviews mate constituents of the political order. Sub- theory and research on the impact of corpo- national collectivism of all sorts, including re- ratism on economic performance. In the fifth ligious organization, was suspected of diverting section we address current tendencies that un- loyalty £rom the national state and was seen as a dermine democratic corporatism. threat to both political unity and individual liberty. Similarly in the emerging capitalist market economy, collective organization and coopera- CORPORATISM AND THE POLITICAL tion were perceived as conspiracy against free CONSTITUTION OF MODERN SOCIETY competition. Not surprisingly, the political and economic strands ofliberal anticollectivism eas- In the French Revolution, modern politics be- ily blended into each other. gan as a revolt against a political order that rec- When faced with political or economic or- ognized people, not as individuals, but only as ganization among its citizenry, the liberal state members of established social groups. The revo- felt called upon to suppress factionalism or con- lution abolished the estates and postulated a di- spiracy in restraint of trade. However, state inter- rect, unmediated relationship between citizens vention in the name of political unity, individual and a state conceived as a republic of individuals. freedom and economic liberty, to safeguard the A law passed by the Assembly in 179 I - the Loi proper individualism of the republic and of the Ie Chapelier, named after its author - declared marketplace, may have paradoxical implications. A political doctrine that relies on a strong state to make society fit its premises borders on to- J For a differing use of "pluralism" that encompasses talitarianism. In societies in which collectivism corporatism and specifies the above type of pluralism as "hyperpluralism," see Dahl (I982:chap. 4). On "organi- and factionalism are deeply rooted, enforce- zational pluralism," see Hicks and Lechner (this volume). ment by a strong state of a liberal political and Theories and Practices of Neocorporatism 443 economic constitution may require considerable Korporationen - as the "second moral root" of repression. Not only may this infringe on the the state alongside the family, was read by some very liberty it is claimed to protect, but it may as a call for a return from egalitarian parliamen- also become too demanding on the state and re- tar ism to a corporatist state of estates.Thus Adam sult in an overturn not just of the government, Mueller (1922 [1809]) developed for Metter- but of the republic as well. nich the concept of a Klassenstaat (class state) The paradoxes of liberalism become partic- in which organized groups would jointly reg- ularly obvious where collective organization is ulate production and coordinate their interests related to social class. Working class collectivism through negotiations, in ways radically differ- in nineteenth-century Europe was partly a rem- ent from French liberalism and Adam Smith's nant of premodern feudal society. But it also of- market economy. Although this never became fered protection against a liberal economy that more than a constitutional blueprint, it later pro- subjected sellers oflabor power to the same self- vided the background for a search for a synthe- regulating markets as owners of capital. Trade sis between liberal and traditional elements of unions and mass parties enabled the working political order. Given that countries like Ger- class to take advantage of freedom of contract many had not gone through a radical-liberal and of democracy and share in the benefits of Jacobine revolution, the inclusion in the mod- the new order (Marshall, 1964). That they in- ern state of group-based forms of nonmajori- terfered with the free play of market forces and tarian governance seemed less paradoxical there intervened between the individual and the state than in France, where this required the over- mattered less for them. throw of a revolutionary tradition (Lehmbruch, A state attacking working class organization 2001). in the name of either political individualism or By the end of the nineteenth century, the free labor markets risked being perceived by liberal program was challenged by various sorts a sizeable number of its citizens as an instru- of collectivism in the name of a need for so- ment of class rule. As the nineteenth century cial reconstruction after what was widely re- went on, then, the question became how to garded as a failure of the "liberal experiment" accommodate organized collectivities in a lib- (Polanyi, 1944). To the European Right, a cor- eral polity and free-market economy. Appar- poratist Standestaat remained an alternative to ently national societies were too large and too liberal democracy well into the interwar period heterogeneous for the state to be their only focus of the twentieth century. Corporatist

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