Corporatist Perspective on Distribution of Power

The corporatist theory relates to organized interests and their participation in the decisionmaking process. In a way, it focuses on the decision-making process that involves various groups. Dahl and Rose’s study mentioned above, adopted the decision-making approach. However, corporatism especially focuses on organized capital and labour and how the industrial relations between employer and trade union are mediated by the intervention of the state. This means the corporatist model of power distribution deals with incorporation of certain organized interest, mainly employer and labour, into the process of decision-making and government. Alan Ball while recounting mutual benefit to be drawn out of this says, ‘the state benefits from the co-operation and expertise of groups such as industrialist and trade unions in the implementation of political decisions, while the groups gain from a share in political power and the recognition of their monopoly as representatives of certain societal sectors.’64 Unlike pluralism, corporatism does not look at interest groups as mere voluntary groups, rather they are viewed as organized interest groups with heavy centralization. For example, trade union groups, on the one hand, and industrial and merchant-commercial interests, on the other, present highly organized and centralized groups.

Corporatism is mainly concerned with three power centres—the state, employer and trade union. The state is seen as ‘resolving and institutionalising industrial relations at its own level’.65 This means participation of the organized groups is not incidental and based on whims of the government, rather it is established as an institutional mechanism in the form of a ‘tripartite negotiation’. However, the British Labour government’s efforts to ‘secure social contract with the unions’ is also considered as corporatist power distribution. The corporatist model of power distribution has three distinct implications. Firstly, incorporation of two organized groups, namely the industrial and commercial employers on the one hand and the trade unions on the other, takes away many issues from the conflict and competition zone. This way, large number of issues become depoliticized so to say. Secondly, in addition to the territorial representation, ‘centrality of functional representation and corporate power’ is recognized and their interests incorporated. Thirdly, mechanism of tripartitism develops in which representative bodies of government, business and trade unions are established as a consultative mechanism. In UK, the government, the Confederation of British Industry (CBI) and the Trade Union Congress (TUC); in the USA, the government, the National Association of Manufacturers and the American Federation of Labour Congress of Industrial Organisations (AFL~CIO), for example, provide a tripartite set-up. However, it should be noted that this demotes and devalues the activities of consumer and other interest groups, as they lose any formal consultative mechanism.

Corporatism has been a stable mechanism in many countries to allow various organized interests to influence formulation and implementation of public policy. Heywood mentions that the corporatist model of economic management and public policy is said to be practised in many countries such as Austria, Sweden, the Netherlands, Germany and Japan. He further mentions that it is also seen as a mere symbiotic relationship between organized interests and the state where both benefit from incorporation. However, we must differentiate the neo-corporatism from corporatist economy that fascist regimes propagated before the Second World War. Neo-corporatism emerged in the 1960s and 1970s in liberal–capitalist democracies, which stands for incorporation of certain organized and privileged groups in governments’ policy formulation and power sharing in decision-making through an institionalized mechanism. Participation of these organized groups such as trade unions, industrial chambers and commercial chambers in policy and decision-making by the state is a matter of an established consultative set-up. However, Fascist corporatism means state becoming an economic actor and disallowing independent trade union activities, while threatening industry.

If decision-making is one of the criteria of measuring distribution and exercise of power, corporatism provides three bases of power—state, trade union and industrial and commercial chambers. However, corporatism has been criticized from various sides. New Right has attacked it as it gives chance to the trade unions to bring their demands, which the state cannot escape. They feel this will result in overload of demands that the state will be unable to handle. Supporters of democratic accountability feel that the corporatist consultative mechanism falls outside the public scrutiny. Hence, it is against the dictum of parliamentary control and public scrutiny. Marxian theorists have attacked the corporatist model as the state’s strategy which is meant to dupe the unions and give a false sense of social recognition. Lenin’s view on trade union econo-mism may be relevant in the context of corporatism. Lenin has warned against trade union comprises on small concessions. The Marxian perspective would treat the corporatist mechanism as states’ strategy to protect the interests of the capitalist class by incorporating the trade unions and thereby doing away with the rigour of class exploitation and antagonism.

However, some observers have hinted at alternative possibilities for socialist transition through corporatist mechanism. Can corporatism, through the institutionalized participation of the working class, open chances for them to dominate the state and effect peaceful transition to socialism? At least two writers, J. D. Stephens (The Transition from Capitalism to Socialism) and W. Korpi (The Democratic Class Struggle) have taken up the issue and have discussed such possibilities in the medium term. It has been argued that a form of corporatism that has prevailed in Sweden has ‘enabled the working class to become entrenched in economic and political life to the extent that from such a basis, a peaceful transition to socialism can be launched over the medium term’.66 However, it is still speculative whether state in a capitalist system would allow such a takeover. There may be an environment when the tripartite consultative mechanism combines with labour dominated political party forming a government. Nevertheless, the corporatist model, as it prevails, does not allow any such possibility of peaceful transition to socialism. In fact, it very well fits in the liberal notion of the state as a reconciler of interests including even that of the labour class. One may treat it as an engineering consent on behalf of the capitalist class.

In the Indian condition of mixed economy, planning and public sector undertakings, the state is not only a political power, but also an economic actor. Private business and trade union activities also exist. However, trade unions draw their major strength from labours employed in public sector undertakings owned by the state. In such a scenario, the state in addition to becoming a mediator also becomes an interested party. Trade unions in India generally operate through their affiliations to particular political parties and influence governmental policies. Indian National Trade Union Congress (INTUC) is associated with the Congress party, All India Trade Union Congress (AITUC) with CPI, Centre for Indian Trade Unions (CITU) with CPI-M, Bhartiya Mazdoor Sangh (BMS) with Bhartiya Janata Party. Industrial and commercial chambers such as Confederation of Indian Industries (CII), Federation of Indian Chambers of Commerce and Industries (FICCI), and ASSOCHAM influence government’s decision-making in a variety of ways. It is understood that they contribute to party funds, bear election expenditures, lobby through legislators and influence by controlling media (e.g. Times of India, Hindustan Times, etc., belong to big industrial houses). Though certain decision areas, such as budget-making of the government, are open to wide consultation including the business and trade union concerns, this is not an institutional and formal consultative process. As such, in India there is no formal corporatist model of power sharing at a tripartite forum where the government, the business and the trade union consult.


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