Wednesday, February 1, 2012

The rise of corporatism


Now the capitalist system has been corrupted. The managerial state has assumed responsibility for looking after everything from the incomes of the middle class to the profitability of large corporations to industrial advancement. This system, however, is not capitalism, but rather an economic order that harks back to Bismarck in the late nineteenth century and Mussolini in the twentieth: corporatism.
Read it at Project Syndicate
Blaming Capitalism for Corporatism
Edmund S. Phelps and Saifedean Ammous
(h/t Edward Harrison at Credit Writedowns)

They could have written "soft fascism" instead of corporatism.

5 comments:

Greg C. said...

http://www.youtube.com/watch?v=yoZV5jt9puc&feature=player_embedded#!

Please let me know why Mike Norman miscalculated so badly.

Thanks,
Greg

Dan Kervick said...

Yeah, this is the new libertarian line, beloved by all the Rothbardians, Hayekians and other radical laissez faire enthusiasts. They say there is nothing wrong with capitalism itself, just "crony capitalism", which they imagine to be some kind state-directed monstrosity.

It's about 96% pure BS. The state has been getting smaller, not larger. The private sector is less regulated, not more regulated. We turned the financial sector over to libertarian heroes likes Alan Greenspan, and the Ponzi meltdown of 2008 is the result. That has nothing to do with any state-managed corporatism. It was from listening to all of those Randian, Hayekian,libertarian and market fundamentalist tools in the first place that got us into the problems.

Michael Hudson is much more on target. Money manager capitalism, casino capitalism and neo-rentier capitalism are just stages in the evolution of capitalism. They are naturally evolving private sector phenomena, not state engineered phenomena. Capitalism has crisis and instability built right into its DNA. To make sure markets serve public purposes rather than metastasizing into society-destroying monsters, we need a more active public sector, not a less involved one.

DustinM said...

That was not a well thought out article. Besides painting over the child-labor and reduced lifespan of workers during the industrial revolution, he gets the causes wrong.

He does have the symptoms correct, well connected firms getting special treatment. However, he implies that government officials have the power. He is wrong. The private interest who influence them have the power over the officials via campaign donations and so-called "Super PACs".

The problem isn't that the people wanted their government to take control, it's that the private corporations influence the government to deregulate their particular industry or to rewrite the rules in favor of an individual company that has "lobbied" a couple million dollars into Washington.

Tom Hickey said...

DustinM: He does have the symptoms correct, well connected firms getting special treatment. However, he implies that government officials have the power. He is wrong. The private interest who influence them have the power over the officials

Well, who is correct depends on how one frames it. The right frames it in terms of the problem stemming from government, and the left frames it from the POV that corporate interests have captured government.

The evidence seems to point toward the latter IMHO, but my bias is admittedly leftward.

I find it encouraging though that some influential people on the right are saying that the present system is not "capitalism" but corporatism. At least the two sides are sort of on the same page here regarding the fundamental problem. Then they have a basis to argue about the details.

DustinM said...

I agree Tom. I have the same argument with right-wing friends and co-workers. I can't understand how they are so blind to how much influence the large corps have over government.