The New Corporatism (updated 12/16/13)

From The American Spectator (emphasis added):

Il_ObamaThis 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….

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.

For those who want evidence of the parallel economy, Phelps underlines just how great the costs of this new corporatism are. Among other things, they include: the bailing-out of dysfunctional corporations and banks; the low economic growth associated with shifting incentives away from entrepreneurial risk-taking and towards lobbying politicians; governments trying to borrow, tax, and spend their way towards the impossible-to-realize goal of economic-security-for-all via state-fiat; and, especially worryingly, the “increasing concentration of wealth in the hands of those connected enough to be on the right side of the corporatist deal.”

This goes a long way toward explaining the particular form that American statism has lately been taking–neither socialism nor fascism, but with a distinct flavor of the latter in the “trapartism” that I have previously described as a self-serving alliance of Big Government, Big Business, and Big Labor.


Update, 12/16/13:

Obama a ‘corporatist’ says ex-Montana Gov. Schweitzer

Former Montana Gov. Brian Schweitzer (D) has labeled President Obama a “corporatist”

In an interview, Scheweitzer criticized Obama for moving to the right as president, saying that for much of the last five years he had been a corporatist.

He also warned that Hillary Clinton could do the same thing if she becomes president.

“The question that we have is, will it be the Hillary that leads the progressives? Or is it the Hillary that says, ‘I’m already going to win the Democratic nomination, and so I can shift hard right on Day 1,'” Schweitzer said in an interview with The Weekly Standard.

“We can’t afford any more hard right. We had eight years of George Bush. Now we’ve had five years of Obama, [who], I would argue, in many cases has been a corporatist,” the former governor said….

He’s right. Kinda sorta.

Of course, the idea that governing as a corporatist ergo means moving to the right is rather amusing, and shows how muddled political labels have become (largely because the Left purposefully muddles them).

In point of fact, self-styled Progressives invariably govern as corporatists; their socialist/collectivist rhetoric is a thin veneer for self-dealing elites enriching themselves at the expense of the citizenry.

While the U.S. Chamber of Commerce still lines up with the Republican Party in many instances, its individual members, especially the largest ones, are increasingly forming alliances with the Democratic Party. A number of prominent CEOs have been strong and visible backers of President Obama. While this might simply be a result of their private political views it seems much more likely that the rationale is the hope that such open support will be rewarded with politically bestowed favors that translate into millions or billions of dollars of corporate profit.

President Obama and the Democratic Party are committed to income redistribution and are openly hostile to the rich in principle. In practice, they are happy to help the rich prosper if those partnerships lead to political victories for them in other arenas. This symbiotic relationship has paid off in record corporate profits. Big business has switched its support to the Democrats and that move already has paid impressive dividends.

See also Jonah Goldberg, “‘Big Business’ Democrats.”

The Bush trope is getting old, Governor Schweitzer. Corporatism dates back at least to FDR–who last I looked was not a Republican.


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