Acton Institute Powerblog

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.


  • I am not sure if the Founding Fathers would be that upset about the “New Corporatism.” They believed in preservation of the economic classes to which they belonged and some were afraid of agrarian reform. But this “New Corporatism” is not that new. Chomsky has been writing about how corporations have been transferring public wealth to their own bank accounts for decades. So what is so new about the “New Corporatism.” Neoliberal Capitalism has only increased the intensity at which corporations have been benefitting from and ruling over our government. Part of that results in benefits for the rich insiders and legal impediments being placed on small businesses. But all of this has been going on for a long time.

    Finally, Sheldon Wolin has another term this illicit affair between business and government. He calls it an “inverted totalitarianism.”

    The solutions are not necessarily free market and competition. Both rely on the same energy as the “new corporatism” does. Rather, the best, though certainly not perfect, solution rests on the right combination of democratizing the work place and collectivism. I’m afraid that the Tea Party’s solution only fans the current fire rather than extinguishes it.

    • Sure because more collectivism, i.e., more government control of the economy will lessen the tendency toward corporatism, right? In fact, it will intensify corporatism like it’s on steroids.

      But in your theoretical, non-falsifiable, textbook Chomsky enlightened collectivism, it always looks so promising. Until you actually try it. Venezuela to cite one of many recent examples.

      Oh wait, Curt! You’ll tell us that the Venezuelan elites botched it, right?

      Venezuela Unveils Orwellian Ministry of Supreme Social Happiness

      • John,
        Why associate collectivism with alien control? I say alien here because, too many times, conservatives view government as an alien force working for its own benefit. And it certainly does now because we have a lazy, bipolar democracy. But that is our fault.

        Collectivism can occur in many places besides government. It can occur work as the laborers make sure that all justly rewarded for their efforts.

        Finally, you have no clue as to what I am proposing and what examples you are citing. Venezuela is hardly socialist. It has a socialist leader but there way too much capitalism in the economy to call it a socialist country. Also, you are going to prove a point by citing an example that has many discrepancies with what I support?

        In addition, how do you reckon what we have here is working. Besides the greatest rate of incarceration and wealth disparity, we are second in the world in producing CO2 and our use of resources does not match our population.

        Both before and after WWII, many of our military interventions and wars were over establishing our empire and maintaining our control of the resources of others. Such control contributed to the motivation for the 9-11 atrocities. Do you really think that with how we conduct ourselves, we won’t be attacked again?

        • Again, you object to citing socialist Venezuela and its self proclaimed socialist leadership as truly socialist because it did not result in the complete destruction of private enterprise. Your socialism, which is complete nonsense and an absurdity, would be even more destructive than anything dreamed of in Venezuela.

          CO2 and 9-11? What?

          • John,
            If you go by the definition of socialism, you will find that Venezuela is not socialist. That is what Socialists would say. In fact, Socialists have already commented on this. Socialism isn’t centered around a single leader, socialism is first the redistribution of POWER to workers and stakeholders. With Chavez, you had a socialist leader but that does not make a socialist country. Socialism, is about structure, not individual leaders.

            Second, define my socialism before you call it absurd and nonsense.

            Third, our country is second in CO2 emissions. It was first and China took our place. BTW, have you seen the air quality of a major Chinese city?

            Fourth, one of the reasons for the 9-11 attacks was our support for dictators like Saddam Hussein as well as the sanctions we put on Iraq following the first gulf war. Those sanctions were responsible for the deaths of hundreds of thousands of children.

            Fifth, we could look at the costs of our own methods of producing energy. We could examine the health hazards to those who live in areas where our industry uses mountain top removal to mine coal. Or we look at the water shortages and environmental/health problems where we practice fracting. Or we could look at the oil spills and explosions that are associated with our shipping and extracting oil.

          • Thanks for proving my point.

          • John,

            What did I prove? Is it that capitalism works so well?

            See, in your first response you criticized collectivism and government control as if you equated them. Then you stated that more government control lends itself to corporatism. and then you criticized what was happening in Venezuela.

            First, you don’t have a clue what I mean by collectivism or socialism.

            Second, it is the lessening of government control that has strengthened corporatism. The corporatism was already there in corporate welfare but there were some democratic checks. Those checks are now mostly eliminated and so what we see is a destruction here that far surpasses any destruction in Venezuela, which according to the article you cited was unspecified.

            Third, compare the good and bad in Venezuela (seen here, with that of the US. We have a crumbling infrastructure, increase wealth disparity, and unmanageable debt. And all of that comes with a diminishing gov’t control over business. In short, we have an unsustainable system under either major party’s control.

            So go ahead rejoice in your point. And don’t forget to ignore those facts that go against your beliefs.

          • Playing dumb won’t get you far on this blog, Curt.

          • John,
            You are ignoring details and now calling names. You want to assert that a socialist leader was destroying the country while destroying capitalism? You can only do so by not doing some comparative shopping and by ignoring important facts.

          • Curt: After you and Noam Chomsky set up the Cloud Cuckoo Land of Theoretical Socialism, make sure you guys report back and let us know how it’s working out.

          • John,
            How are you representing the conservatism of Acton when your only response to inconvenient details and questions is to insult?

            BTW, you might want to consult the Bible regarding what greed produces. With greed comes wars and all kinds of strife. And that occurs whether the greed is celebrated by capitalism or some other economy. One of the problems with capitalism is the belief that it can control greed’s toxic emissions while living off of its energy. Realize how this utopia we call America is crumbling and it is doing so because of the greed of those who are trying to consolidate as much wealth as they can regardless of how it affects others.

          • Curt: Your concern about the image of modern conservatism is unconvincing. You have nothing to offer in concrete terms about your economic views but mere theory. You reject its real, historic manifestations, which are destructive of human dignity and deadly in the extreme. You aren’t swaying anyone here.

          • Marc Vander Maas

            Curt – For you, of all people, to accuse a debate opponent of ignoring inconvenient details is quite rich, considering that you regularly either ignore the results of actually existing socialism or simply claim that socialist leaders who see themselves as socialist and implement policies that they believe to be socialist in nature aren’t actually socialist, because, well… who knows. Because you say so, I guess.

            I also remain charmed by your childlike faith in the idea that somehow socialism can do a better job of accounting for human greed than the market (which you also have never adequately explained, by the way).

          • Marc Vander Maas

            It really is a shame that all these non-socialists keep appropriating that name and ruining the reputation of Socialism.

  • “One can only admire the ingenuity of ‘scientific’ socialists when they argue that historical phenomena — phenomena that, moreover, display the irksome habit of repeating themselves with the regularity of astronomical rotations — have no cause. Incarceration camps and prisons, show trials, murderous purges and deliberately induced famines have accompanied each and every Communist regime from beginning to end, without exception. And this unvarying pattern is fortuitous? The true essence of Communism lies in what it has never been and what it has never produced? What, then, is this system, which we are told is the best ever conceived by mankind but which comes with the added supernatural property of never implementing anything, anywhere, but its own opposite, its own perversion?” (p. 79)

    ” … it is very strange for socialists, who should have read Marx more carefully, to think they are justified in distinguishing between the totalitarian systems by stressing the divergences in their ideological superstructures, while they overlook the close parallels in actual practice. For you don’t judge a society by the ideology that serves as its pretext, said Marx, any more than you would judge a person by the opinion he has of himself.” (p. 99)

    — Jean-François Revel, “Last Exit to Utopia” (Encounter, 2009)

  • Marc Vander Maas

    If you want to call the Soviet Union and Red China socialists, it’s a free country though it wouldn’t fit that definition if you use Marx as a standard.

    1) I seriously love it when you say stuff like this.

    2) Does the form of socialism you advocate meet the definition of socialism using Marx as a standard? If not, is it illegitimate to call Marx a socialist, or are you the illegitimate socialist?

    And for the umpteenth time, you do realize that there’s a difference between “authoritarian business” and authoritarian government, right? Go ahead, guess what it is. I’ll wait.

  • Marc Vander Maas

    Rather, you wanted to imply that attempts in socialism end in disaster.

    I’m not implying anything. I’m outright asserting it. No need to tiptoe around it.

    I am not misrepresenting you. You have a long history of posting here. You regularly assert that socialist states are not socialist. You constantly hide behind the assertion that all those supposed socialist revolutions of the 20th century were hijacked by “elites” or “authoritarians” or whatever. This allows you to pretend that your socialist ideal, whatever it is, has not been tarnished beyond saving by actual history. You seem incapable of considering that that elitism or authoritarianism is just the natural outflow of socialism; no, it must be an aberration. Pure socialism must have been “hijacked.” It was all an accident of history. If only the Dutch hadn’t been so dominating in world affairs in the early 20th century, then Lenin wouldn’t have turned out to be such a vile person.

    All one has to do to confirm what I wrote here is to read.

    Yeah, if you only read Chomsky and Chris Hedges. Understand: I have read. I read a lot. I’M NOT STUPID. Don’t patronize me.

    But you prefer to mock which is why I could no longer remain a political conservative. Such is inconsistent with my Christian faith.

    I can’t even see you anymore up there on your high horse.

    Finally, again, you have a monolithic view of socialism.

    Oh lord, this again.

    The Soviet Union style was horrible…

    So glad you’ll acknowledge that.

    …and part of that was it didn’t redistribute power.

    …[blank stare]

    Structurally speaking, a full democracy, both in the workplace and the government, limits the damage greed can do.

    Um, no it doesn’t.

    But democracy without collectivism is incomplete and can be tyrannical just with less power.

    I have no idea why you would say this. But feel free to assert away, if it makes you feel better.

    But I would take democracy with collectivism over the market any day of the week in terms of how to handle greed.

    I see no reason to believe that collectivism is any better check on greed than the market. Is greed coupled with poverty better than greed coupled with wealth? Is it because under a collectivist system, people have less to be greedy with or about?

    Again, the conservative approach believes it can live off of greed’s energy but history and the present show that greed’s toxic emissions are killing us.

    Oooh, swell rhetoric. That’ll score you some points on the socialist message boards. Now, do you want to go round and round again over the question of whether or not greed and self-interest are the same thing, or do you just want to call it a day and go back to purging yourself of any self-interest whatsoever?

    • I guess you don’t know all of the meanings of the word imply, do you? In addition, there is no pretending on my part, there is a refusal on your part to deal with facts and logic that are inconvenient to your case. And the fact that I disagree with “socialist” states of the past should imply to you that not socialists are the same. But that is not what you want people to read. You want a simple, black-white distinction between your group and socialists where your group is good, though not perfect, and my group is wrongheaded or evil. But you have to ignore historical facts, the present, and logic to do so. That is why when I bring elite-centered governments and how they can be capitalist gov’ts or “socialist” gov’t, you scoff at the idea.

      Tell me how your group does not play the role of the Pharisee in the parable of the two men praying? You and John have ignored the partial list of Capitalism’s sins I have posted here. The fact that we are on a collision course with nature because of an unsustainable use of the environment. I already listed how our extraction of resources for fuel contributes to that and so does our consumer use of resources.

      And we are on a collision course with conflicts that will involve WMDs because of our self-righteous adherence to American Exceptionalism seems to be of no concern to you. And the more we exploit others and the internal affairs of other countries, the greater the probability that we will be attacked again.

      Plus, I never said collectivism is a check on the market, I said extended democracy is. With the market, you have a one-dollar, one-vote system so that those with the most wealth rule. In democracy, you have a one-person, one vote system and that gives all an equal voice. And that results in a distribution of power so that if some people are acting out of greed, they are acting with less power. I said that collectivism prevents democracy from becoming tyrannical.

      So why all of the insults and attacks by you? Because what I write angers you? Then I will repeat the logic employed by your side. You want the lessening of gov’t control so people can flourish. Some of that I agree with because corporatism is not just attacking individual liberties, it is using the gov’t to attack smaller businesses. But lessening gov’t control will not solve the problem. It was the lessening of gov’t control that led to our financial institutions use of fraud and laundering of money in the first place. It is the lessening of gov’t control that allows for coal companies to practice Mountain Top Removal, a practice that kills the environment of the area and causes great health hazards to the people. It is the lessening of gov’t control that allows for the abuse of migrant and other workers in agribusinesses.

      In short, there are points on which when you lessen gov’t control, you lessen democratic controls. And when you lessen democratic controls, you consolidate power and wealth, which is what we have now.

      Finally, for a long time, I have always distinguished greed and self-interest by degree, I have never confused them. Ironically, for our discussion, the more other issues and concerns besides self interest are eliminated, the more self-interest becomes greed. And there, the extending of democracy and the maintaining of collectivism prevent other issues besides self-interest from disappearing.

      • Marc Vander Maas

        Let me ask you this, Curt: why do you post here? It’s completely obvious that you fundamentally disagree with Acton on any number of points. It’s also completely obvious that you are making no headway whatsoever with your arguments here. None. What is it that you’re hoping to accomplish?

        • Marc,
          Sorry for the delayed response, I am currently struggling with vertigo. To answer your question, it is simple. If we don’t engage with and read others, these blogs turn into ideological ghettos.

          And as far as what is being accomplished, since I am guessing that not all who read Acton’s blog are the same, there is no telling what is accomplished. If just the exposure to other ideas can be considered an accomplishment, then we all accomplish something when we share on blogs that present different views.

          • Marc Vander Maas

            Sorry to hear about your vertigo – hope you feel better soon.

          • Thank you.

  • Roger McKinney

    FDR set the pattern for corporatism. He admired Mussolini’s socialism and thought is a good alternative to Stalin’s. Large corps bribe politicians with campaing financing and politicians reward them with pork. Someone has estimated that the ROI on campaign contributions is about 2,000%. The only solution is to take power from politicians because politicians will sell any and all power they have to the highest bidder. Adam Smith warned people about this 250 years ago.

  • Becky Chandler

    I m not naming names, but some of you commenters need to read read the article –it is not about socialism, but another collectivist ideology –fascism — or corporatism if you prefer. Socialism, where the government actually owns the means of production, has not been very successful and there is not a great deal of it left. It is no longer the major threat. But fascism now rules, particularly in the form of the “new corporatism” which Mr. Gregg is discussing –and it is every bit as big of a threat as socialism.

  • AcceptingReality

    It’s not that too many Americans undervalue liberty. It’s that most Americans don’t know what it means. Most of them think liberty means the freedom to do whatever they want without consequences. That’s why they are all too willing to empower a government that infringes on religious freedom, promotes social evils such as abortion, so-called same sex marriage and contraception and promises to take care of them when they are ill.

    BTW. “Tea Party Catholic” is a great read. Thank you.

  • cynthia curran

    Not popular with the right but the late Karl Hess once a speech writer for Goldwater might helped the caused. He became a communiarian and welder since he could not earn much money since his income would be taken by the government for opposing the Vietnam War, Johnson did this. Most folks on the right only use the market not volunteer community acts to survive. Hess was into bartering to survive and wrote books. Private Charity or community alternatives or some socialism at the local level is not mention much these days. Private Charity needs to be organized in a way to be more effective to counter the state.

  • cynthia curran

    In the early 1970s, Hess became involved in an experiment with several friends and colleagues to bring self-built and -managed technology into the direct service of the economic and social life of the poor, largely African American neighborhood of Adams-Morgan in Washington, D.C.. It was the neighborhood in which Hess had spent his childhood. Afterward, Hess wrote a book entitled Community Technologywhich told the story of this experiment and its results. According to Hess, the residents had a vigorous go at participatory democracy, and the neighborhood seemed for a time like a fertile ground for the growth of community identity and capability.

    Much of the technological experimentation Hess and others engaged in there was successful in technical terms (apparatus was built, food raised, solar energy captured, etc.). For instance, Hess wrote: “In one experiment undertaken by the author and associates, an inner-city basement space, roughly thirty by fifty feet, was sufficient to house plywood tanks in which rainbow trout were produced at a cost of less than a dollar per pound. In a regular production run the total number of fish that can be raised in such a basement area was projected to be five tons per year.”[9] He taught courses and lectured on Appropriate Technology and Social Change in this period at the Institute for Social Ecology in Vermont. Nonetheless, the Adams-Morgan neighborhood, continuing on what he felt was a path of social deterioration and real-estate gentrification, declined to devote itself to expanding on the technology. Hence, in his view, a needy community got little value from the application of viable technology