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Samuel Gregg: ‘Welcome To The New Corporatism’

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features a piece from Acton’s Director of Research Sam Gregg today regarding Americans’ distrust of the federal government. While disdain for politicians is nothing new, Gregg says there is something beyond simple dislike for political shenanigans:

There is, however, another dimension to this problem that’s now receiving more attention. This is the emergence over the past two decades of what the 2006 Nobel Laureate Edmund Phelps calls in his new book, Mass Flourishing, the “new corporatism.” This is a set of political and economic arrangements, Phelps maintains, that’s crippling economic growth while simultaneously creating a new set of “insiders” and “outsiders” in America — with most politicians being firmly in the “insider” category.


Gregg outlines two dimensions of this “new corporatism:”

First, the new corporatism means using the state to radically limit freedom in particular segments of the economy (healthcare and higher education being good examples) while presenting oneself as market-friendly. Think, for instance, of the lengths to which some have gone to present Obamacare (“Welcome to the Marketplace!” proclaims the malfunctioning website) as not being what in fact it is: yet another command-and-control healthcare system.

The second dimension of the new corporatism is the way, Phelps writes, it has facilitated “the creation of a parallel economy” that exists alongside — and feeds off — the market economy. So what does this parallel economy look like? For Phelps, it primarily consists of those “lethargic, wasteful, unproductive and well-connected firms” that are propped up by what he calls a “tripartism” of government, organized business, and organized labor (the third being the weaker of the three in America) at virtually any cost.

Gregg turns to Founding Father Charles Carroll for an historical view:

As was pointed out at the time by the most economically astute of the Signers of the Declaration of Independence, Charles Carroll of Carrollton, many British merchants were terrified of competition from their American counterparts. Why? Because economic freedom threatened the government-licensed monopolies they had secured though their close (and very well-greased) relationships with government ministers and parliamentarians. To Carroll’s mind, however, even worse was that this “ministerial influence and parliamentary corruption,” as he described it in a 1765 letter, indicated that Parliament had forgotten “they are the guardians of sacred liberty, and of our happy constitution.”

Read “Welcome to the New Corporatism” at The American Spectator.

Elise Hilton Communications Specialist at Acton Institute. M.A. in World Religions.

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