Corporatism, pluralism
Two different models of group politics

CORPORATISM
Where certain key groups are closely integrated into the formal political process
 

PLURALISM
.Where groups compete in a political marketplace outside formal political institutions to put pressure on decision-making elites
 

THE CORPORATIST MODEL
Grows from a close relationship between the trade union movement and social democratic parties. Even in “pluralist” Britain, economic policy approached the corporatist model in brokering “SOCIAL CONTRACT” between government and unions during the 1974-79 Labour administration.

Often institutionalizes a system of centralized wage bargaining: government and the “social partners” of organized labor and business sit round a table and trash out a national incomes policy.

As a policy-making and implementation system: set of institutional arrangements that entrenches major social groups in the overall management of the national economy and other types of public policies

Definition from Philip Schmitter and Gerhard Lehmbruch: “Corporatism is more than a particular pattern of articulation of interests. Rather, it is and institutionalized pattern of policy-formation in which large interest organizations cooperate with each other and with public authorities not only in the articulation of interests, but… in the ‘authoritative allocation of values’ and in the implementation of such policies”.
 

ORIGINS:
1) Catholic Social Thought -  early decades of the twentieth century, Church leaders were concerned that the role of the church was being undermined by trade unions, and growth of modern state apparatus; wanted to renew social organization represented by medieval craft guilds; advocated enhanced role for self-governing interest groups (the “voluntary” sector”, involved not only in the planning but also in the provision of major social services such as health care and education)
2) Fascist corporation was a system of totalitarian state control of society based on an intimate interpretation of interest groups and the state. Hitler’s Germany, Mussolini’s Italy and Salazar’s Portugal.
 3) post-WW II impulse for “national unity”
sense that industry and labor had to work together in order to rebuild war-torn economies fostered tripartite (i.e., industry , labor and government) cooperation in places such as Austria and Germany.
 
Features of corporatism systems:
-most of the work force is organized into a small number of powerful unions;
- the business community is dominated by a small number of powerful firms, organized in a powerful employers’ federation;
- wage bargaining between unions and employers is centralized;
- state is actively involved in the economy.
- interest groups are comprehensive in their representation of particular sectors of society.
 

Values/behaviors (i.e  political cultural prerequisites) required to make corporatism work:
- consensus on broad social values shared by state, unions and employers;
- a preference for bargained outcomes, rather than those that are either imposed or won through conflict.

Interrelated contextual factors:
- a long tradition of social democratic rule;
- a small, open economy;
- high expenditures on social programs and low expenditures on defense.

Table 14-1 groups countries nto 3 clusters.
BIG THREE CORPORATIST COUNTRIES (Austria, Norway and Sweden),

a group of moderately corporatist (Netherlands, Germany, Denmark, and Switzerland as the most corporatist and as the less corporatist Luxembourg, Iceland and Belgium),

and countries that are hardly corporatist at all (Britain, Ireland, USA, Canada, Portugal, Italy, Spain, Greece, and France). NOTE:  those parts of Europe that are neither Anglophone nor form the Catholic south are likely to be at least somewhat corporatist in their policy-making style discuss why this is the case if one of the origins is in Catholic social thought – previous experiences with Fascism steer them away or perhaps because more solidly Catholic there are other means of building consensus, bargaining?]
.
Also note:  4 of the 5 most corporatist countries – Austria, Norway, Sweden – were the ones with strongest Social Democratic parties/cabinet control over postwar era.

 
CORPORATISM IN AUSTRIA

Austria is usually taken as the classic case of a political system that is characterized by a very high level of corporatist policy making. Austria is a “model generator”.

Important role of CHAMBERS, designed to provide formal representation for the interests, respectively, of labor, commerce, and agriculture.

Statutory position and vital role that they play in decision making. All working citizens in Austria are obliged by law to belong to the appropriate chamber. [discuss how this is perceived from an American point of view]

The chambers have the formal right to be consulted on and represent in a wide range of matters, as well as to nominate members to many other public bodies.

“Peak” trade union organization, the OGB, and the League of Austrian Industrialists, the VOI. The Chamber of Labor must also consider the “public interest”. OGB is highly centralized. SOCIAL PARTNERSHIP.

The Chamber of Labor and the OGB are dominated by the Socialists (SPO), and the Chamber of  Commerce and Chamber of Agriculture are dominated by the conservative Austrian People’s party (OVP).

Interpenetration of interest groups and parliament, and this symbiosis has been identified by many as one of the strengths of Austrian corporatism.

Social partners traditionally have been concerned first and foremost with economic policy making (prices and incomes). Both the negotiation and the implementation of policies on prices and incomes.

Concept of parity: strictly equal membership for representatives of business and labor in all important policy-making bodies.

Success during the affluent 1960s and 1970s.
 The Austrian economy enjoyed steady growth and a record on inflation and unemployment that was much better than the European norm.

Full-fledged corporatism is a comprehensive and deep-rooted decision-making culture rather than just a collection of superficial solutions.

PLURALISM

Pluralism has been used to characterize interest group activity in systems such as Britain, Canada and the USA.

Distinguished from corporatism in a number of respects.
* Interest groups have no formal institutional role in the allocation of resources and the implementation of policy. Interest groups in a pluralist system are assumed to be self-generating and voluntary.
? Although not all groups have equal levels of power or resources, it is nonetheless relatively easy for people to form an interest group and thereby gain at least some access to the level of political power (Smith).
* NEOPLURALIST critique, e.g., Charles Lindblom’s influential book “Politics and markets”. There are some “grand” issues that are effectively removed from the public debate by the combined power of business interests and the state.

**Pluralism assumes there is something important left to be contested in the accessible political arena and outside of or prior to formal legislative decision making. Therefore, pluralism entails applying political pressure to decision-making elites.

Perhaps the single most distinctive feature of the pluralist account of decision making, is that it is characterized by conflict rather than consensus.

Table 14-1 the Mediterranean and English-speaking European democracies are at the “pluralist” end of this spectrum.

PLURALISM IN BRITAIN
 Britain is a key member of the “pluralist” cluster of modern European countries. (1970s: SOCIAL CONTRACT a corporatist exception).

Rather “competitive”, rather than “cooperative” has been the best way of describing interactions between the main social partners in Britain. Trade unions themselves have set great store by their right to “free collective bargaining”, backed up by a strike that is often exercised.
 
After the introduction of government-imposed wage ceilings in 1977.  A  conservative attack was launched on trade union rights and privileges after Margaret Thatcher’s election victory in May 1979. The Conservatives proposed a series of restrictions on trade union power: banning of “secondary” picketing (that is, picketing away from the main scene of an industrial dispute); the restriction of closed shops (which oblige all who work in a particular employment to join a particular union); and the requirement that unions hold secret ballots of those involved before calling strikes.

These attacks on the trade unions were defended on the grounds that trade union power hinders the free play of market forces. A strong belief in the effectiveness of the market.

This is confirmed by research into the British party manifestos of 1997, which for the first time show that Labor was no longer the most left-wing of the mainstream British parties and had moved sharply towards the Conservatives on economic policy.