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Defining Corporatism and Examples in America

Defining Corporatism

Corporatism is a relatively new term for me and perhaps some of you readers as well. Wikipedia defines corporatism as “a practice whereby a state, through the process of licensing and regulating officially-incorporated social, religious, economic, or popular organizations, effectively co-opts their leadership or circumscribes their ability to challenge state authority by establishing the state as the source of their legitimacy, as well as sometimes running them, either directly or indirectly through corporations.”

Not a bad definition, but let me put it in a little plainer English. Corporatism is the collusion of big corporations and big government. Democrats call it right-wing when corporations exert undue influence on government. Republicans call it left-wing when government exert undue influence on corporations. But whether it comes from the right or from the left, corporatism stinks of progressivism and fascism.

Examples of Corporatism in America

Jonah Goldberg provides numerous examples of corporatism in his book, Liberal Fascism. In each case of corporatism, government power and influence grows while individual freedom shrinks. Corporatism gives more power to government and corportate bureaucrats and does so under the guise of helping the little people. Here are just a few examples:

  • During FDR’s administration, corporatism reached new heights as the government began imposing strict regulations on business. “The New Dealers invited one industry after another to write the codes under which they would be regulated…It was not only inevitable but intended for big business to get bigger and the little guy to get screwed…In business after business, the little guy was crushed or at least severely disadvantaged in the name of ‘efficiency’ and ‘progress.'” (p. 293)
  • In this same time period, “the meatpacking conglomerates knew that federal inspection would become a marketing tool for their products and, eventually, a minimum standard. Small firms and butchers who’d earned the trust of consumers would be forced to endure onerous compliance costs, while large firms not only could absorb the costs more easily but would be able to claim their products were superior to uncertified meats.” (p. 291)
  • A more recent example of corporatism is the ‘Big Tobacco’ settlement with the government. “Why would the tobacco companies agree to a settlement that cost them so much money and that forced them to take out ads disparaging their own product and pay for educational efforts to dissuade children from ever becoming their customers? The reason, quite simple, is that it was int heir interests. The tobacco companies not only had their lawsuits settled; they bought government approval of a new illegal cartel. ‘Big Tobacco’ raised prices above costs imposed by the settlement, guaranteeing a tidy profit. Smaller companies who did not agree to the settlement are still forced to make large escrow payments…The government in effect enforces a system by which small businesses are crushed in order to maintain the high profits of ‘Big Tobacco.'” (p. 308)
  • So-called campaign finance reform laws, such as the McCain-Finegold bill passed a few years ago, are also corporatist in nature. “Speech regulations in turn give an unfair advantage to some very big business–media conglomerates, movie studios, and such–to express their political views in ways exempt from government censorship…The New York Times is pro-choice and supports pro-choice candidates–openly on its editorial pages, more subtly in its news pages. Pro-life groups need to pay to get their views across, but such paid advertising is heavily regulated, thanks to McCain, at exactly the moment it might influence people–that is, near Election Day.” (p. 313)
  • Efforts to force private companies to produce “environmentally friendly” products, like efforts Obama is proposing to force car makers to produce “green” cars, is also corporatist because it imposes “technologies the government was smart enough to pick even though the market wasn’t.” (p. 342)

Corporatism on the Rise

With the bailouts of financial giants (like Citi Bank), insurance companies (like AIG), automakers, and home mortgage companies (Fannie Mae and Freddie Mac), it is becoming increasingly more difficult to tell where the private sector ends and government begins. Many companies that were once proudly free-market can suddenly find themselves making arguments in favor of protectionism and corporatism.

Some companies have fought the onslaught of government but it seems to be a losing battle. Take the example of Wal-Mart and Microsoft, again quoting from Jonah Goldberg’s Liberal Fascism. “For years both Wal-Mart and Microsoft boasted that they had no interest in Washington. Microsoft’s chief, Bill Gates…had one lonely lobbyist hanging around the nation’s capital. Gates changed his mind when the government nearly destroyed his company. The Senate Judiciary Committee invited him to Washington, D.C., to atone for his success, and the senators, in the words of the New York Times, ‘took a kind of giddy delight in making the wealthiest man in America squirm in his seat.’ In response, Gates hired an army of consultants, lobbyists, and lawyers to fight off the government. In the 2000 presidential election, Wal-Mart ranked 771st in direct contributions to federal politicians. In the intervening years, unions and regulators began to drool over the enormous target the mega-retailer had become. In 2004 Wal-Mart ranked as the single largest corporate politcal action committee.” (p. 303-304)

Corporatism, A Word You’ll Be Hearing More Often

Hillary Clinton, a high-profile member of Barack Obama’s new cabinet, has long been a fan of corporatist fusion of big government and big business. In her book, It Takes A Village, she states her belief that “socially minded corporate philosophies are the avenue to future prosperity and social stability.” Clinton further lauds the fact that “a number of our most powerful telecommunications and computer companies have joined forces with the government.”

I have long thought that the left’s stance regarding business was to have government regulate it to within a inch of its life. And while that is often the effect, I now see that they don’t want to kill business, they want to harness it for their own political purposes. And with liberal Democrats controlling both the executive and legislative branches of the federal government now, we can all, unfortunately, look forward to a lot more of the kind of socialism inherent in corporatism.

Reagan’s Four Essential Economic Freedoms Contrasted to Obama’s Economic Plan

I have often thought that political freedoms and economic freedoms are connected: you can’t have one without the other, or at least, not for long. On this very subject, I recently came across a speech by Ronald Reagan from July 3rd, 1987:

Inextricably linked to these political freedoms are protections for the economic freedoms envisioned by those Americans who went before us. While the Constitution sets our political freedoms in greater detail, these economic freedoms are part and parcel of it. During this bicentennial year, we have the opportunity to recognize anew the economic freedoms of our people and, with the Founding Fathers, declare them as sacred and sacrosanct as the political freedoms of speech, press, religion, and assembly. There are four essential economic freedoms. They are what links life inseparably to liberty, what enables an individual to control his own destiny, what makes self-government and personal independence part of the American experience.

First is the freedom to work — to pursue one’s livelihood in one’s own way, to choose where one will locate and what one will do to sustain individual and family needs and desires.

Second of those freedoms is the freedom to enjoy the fruits of one’s labor — to keep for oneself and one’s family the profit or gain earned by honest effort.

Third is the freedom to own and control one’s property — to trade or exchange it and not to have it taken through threat or coercion.

Fourth is the freedom to participate in a free market — to contract freely for goods and services and to achieve one’s full potential without government limits on opportunity, economic independence, and growth.

Source: http://www.villagesoup.com/Forums/letters.cfm?TopicID=10748

I thought it would be fun to contrast Reagan’s economic principles with those of Barack Obama. Each of the following comes directly from Obama’s Web site.

Reagan’s Economic Principles Obama’s Economic Plan
The freedom to work “Extend and Expand Unemployment Insurance.” More incentives to NOT work.
The freedom to enjoy the fruits of one’s labor “$20 billion in new tax rebates.” Money for nothing. If the rebate went to actual tax payers, 97% of it would have go to the rich. But Obama’s proposal is to give this money to “America’s workers” He doesn’t clarify exactly who that is, but it sounds like a big redistribution of wealth, i.e. enjoying the fruits of someone else’s labor.
The freedom to own and control one’s property “Barack Obama’s Plan to Jumpstart the Economy”: $50 billion in new government spending. And bigger government, of course, means less control you and I have over our own property, including our income, which Obama will be taking more of to pay for his big government programs.
The freedom to participate in a free market “a $10 billion Foreclosure Prevention Fund” and “$10 billion in Relief for State and Local Governments Hardest-Hit by the Housing Crisis.” This is more meddling by the government and anything but free market economics.

Wow, what a contrast! It’s too bad the Republicans didn’t nominate a candidate with Reagan’s views on economics. I guess John McCain will have to do; he is certainly much better on economics than Barack Obama.

The Race for President: My Selection Criteria

The first presidential primaries and caucuses will begin in just over a month (Iowa on Jan 3, 2008 and New Hampshire on Jan 8, 2008), and within three months, the Republican and Democrat presidential nominees will be known. While still early in the process, I want to let my presidential selection criteria be known and analyze how some of the major candidates measure up. In this post, I will lay out the criteria; in future posts, I will analyze how well prominent candidates’ policy and action meet those requirements.

1. Strengthening the Family A president who will enact policies and make decisions that will strengthen the Family is the most important issue to me because, as you have seen in my previous posts, I believe that most of societal ills can be rooted back to a break down in traditional family values.
1A. Pro-Life/Anti-Abortion I want to elect a president who shares my belief that life is sacred from the moment it is conceived. Right now, the abortion policy in America is governed by the Supreme Court’s 1973 Roe v Wade decision, which I believe is bad law in itself and morally wrong as well. The way in which a president can influence this policy is through appointments to the Supreme Court.
1B. Pro-Traditional Marriage A major part of strengthening families is defending the traditional family structure: father, mother, children. Marriage, as defined by one man and one women, is under attack in America and certain government policies and programs, like welfare, have been known to undermine the role of the father in the home. A president who will defend the institution of marriage is critical.
2. Defending Our Country To “provide for the common defense” is one of the constitutionally endowed duties of the federal government. A strong military and political sovereignty are necessary to do this. The president, who is also commander in chief of our armed forces, must have shown through word and deed, their ability to lead the defense of our nation.
2A. Defeating Terrorists The fight against global terrorism is an extremely important issue at this time. George Bush has done an excellent job in leading this war on many fronts: in Afghanistan, in Iraq, in de-funding terrorist organizations around the world. We need the next president to be equally tough and continue to fight and win this war.
2B. Protecting Our Borders Bush’s record on border security is, on the other hand, abysmal and we need our next president to take serious steps to secure our borders. Illegal immigrants, many of whom have criminal records and links to drug cartels and terrorist organizations, are pouring across our borders at the rate of nearly a million a year. Our nation cannot remain sovereign and secure if this influx continues.
3. Free Market Economic Policy I’m not sure when the president of the United States became chief economist (maybe it was Bill Clinton’s “it’s the economy, stupid” comment in the 1992 presidential race), but regardless, the president is held accountable by the American people for economic policy and its success. I want to elect a president who believes, as I do, in free market economies and that capitalism works.
3A. Lower Taxes A key component of economic policy that I endorse is lowering taxes. Keeping taxes low is both morally right (not taking an individual’s hard earned money) and economically right (it spurs economic activity and fosters growth). It is important to elect a president who will support legislation to lower Americans’ tax burden, which now averages about 33% of their total income.
3B. Smaller Government Integral with economic policy and lower taxes is the need for smaller government. As the size of government shrinks, personal liberty increases. Having a government that is as small and un-intrusive as possible without also being impotent was a key issue for our founding fathers. Since that time, our government has grown to the point that it consumes more than 20% of our nation’s GDP. Now this is a tall order, but we need a president like Ronald Reagan who believes that “government is not a solution to our problem, government is the problem.”

So in the next few days and weeks, I will analyze each of the major presidential candidates, their policies and actions in the areas outlined above. I will objectively score them against these criteria and in the process determine who I would select to receive my vote for the next president of the United States.

Please note that the list of criteria above is not meant to be exhaustive. If additional issues arise that I deem vitally important, I reserve the right to amend and update the list. If you, the reader, notice any gaping holes in my presidential selection criteria, please feel free to contact me.