The Understanding of Corporatism from Different Perspectives - Literature review Example

Corporatism Student’s Name Instructor’s Name Course Code and Name University Date of Submission Corporatism Introduction Despite the long prevailing subject of corporatism in scholarly fields, the subject of corporativist forms of statehood and political representation remains an elusive concept. Ideological controversies and insufficient definition contribute to this elusive nature. In its most basic meaning, the term corporatism is used to describe the formation of consensus and political power hinging on the operational representation of different professional groups (Streeck 2005, p. 441-460). Associations of different groups of professionals including farmers, lawyers, industrialists or the clergy have an active role in self-governing as well as being intermediaries between them and the government (Hanke & Rhodes 2005, p. 196-228). Political rights and status in this case are attached to group membership as well as occupation, and they, therefore, differ from those attached to equal representation and modern citizenship. The concept delves into an area of politics that has not yet been explored in the study of political rights and representation. This paper will present a literature review guided by the review of three scholarly articles dealing with corporatism. This review aims to highlight the understanding of corporatism from different perspectives. Literature review In the article capitalism vs. corporatism, Edmund S. Phelps presents a view of corporatism vs. capitalism as forms of market economy. The article was published in 2009 in Critical review volume 21 number 4 pages 401 to 414. By highlighting the basic differences between the two market economies, Phelps highlights some of the characteristics of a corporatism market economy. Corporatism is viewed as a private ownership system that is modified by the introduction of certain institutions that are aimed at the protection of social partner and stakeholder interests (Simoneti, Rojec & Gregorič 2004, 224-243). Depending on the country within which the corporatism is taking place, the system often includes most of all the massive components that constitute a corporatist interwar system. These components include monopolistic fires, big unions and big employer confederations. This approach to the market economy is often thought to have many issues that accompany it including being accused of not embracing liberalization. Since the Second World War, there have been successes made in the liberalization of these systems. However, there are still issues cropping up as new corporatist institutions come up (Phelps 2009, p. 401-414). The system is seen to be impeding, blocking or discouraging changes that pertain to the organizations and its workers including being against the relocation to a new firm. According to Phelps, the functionality of the system is characterized by the presence of established organizations and companies and cooperating with national and local banks. Even though these systems are functional and even profitable, they also suffer from a lack of dynamism when compared to other systems such as capitalism. In addition, corporatist economies often suffer from high-level swings. In order to exemplify the path that corporatism has taken to reach its current state, the author uses a chronological description of the development of selected corporatist economies. The chronology follows the historical progress of corporatism in economies of the world (Phelps 2009, p. 401-414). Theorists had explained that the building of massive structures of a corporatist nature, the new system is meant to have greater dynamism that the capitalist economy. This would result in greater productivity levels when dealing with bigger ideas than when dealing with smaller ideas. This means that the effect of a new corporatist economy is not likely to be witnessed in a smaller economic area such as bourgeois entrepreneurs. Phelps develops a systematic manner of informing the reader of the benefits of corporatism by highlighting its possible challenges, then following this with information of the areas where the system is likely to have success. For instance, companies would not have to worry about issues such as fluid market conditions in case they want to develop innovations. On a similar breath, Riner Kattel and Baldur Thorhallson argue that including clear corporatist features in political dynamics is essential for the appropriate response in cases of economic crisis. The paper is titled Neo Liberal small states and economic crisis: lessons for democratic corporatism published in the Journal of Baltic studies in 2012. However, instead of using a chronological representation of facts the authors use a case study of the economic crisis in Estonia and Iceland to highlight the best and worst practices for neo corporatist political structures. The then neo-corporatist and neo-liberal features characterize the responses to the economic crisis in 2008. Thus, the authors argue that better corporatist structures would have yielded better results than those witnessed in the economic crisis. The authors stress that neo-corporatism needs an added perspective if it is to be relevant in solving problems of this era. This implies that corporatism is not a static concept but a dynamic one that changes according to the nature of the situation within which it manifests. The addition of new instructionalist elements to the existing corporatist model helps in improving the comprehension of the political dynamics of the societies that do not have clear corporatist features. These additions often relate to the juxtaposition of simple and compound polices that are the result of a corporatist system. The potential for success of this system is exemplified in the current economies of Iceland and Estonia, which are hailed as success stories in the new and globalized economies that characterize the 21 century (Aidukaite 2009, p. 96-112). However, the new models of corporatism that include modified elements are not necessarily referred to as corporatist models. The authors cite Katzenstein’s classic case studies suggesting that, democratic corporatism is the most effective ways of ensuring that small European states have success in their economies. Using the corporatist model, these countries have developed a comprehensive decision making framework that serves their domestic needs. It has resulted in the flexibility of decisions, which allows responses to the various fluctuations in a globalized international economy. An added advantage is the creation of political stability even in times when the nation is experiencing economic recession. This is because a balance is created between the concerns for maintenance of equality between varying social groups and increasing pressure to achieve economic efficiency. In this context, the state takes deliberate action not to exercise unilateral power. Thus, the authors tell the story of how European corporatism has allowed smaller societies have succeeded in becoming political and economically successful despite fluctuations cause by open economies. Kenworthy also looks at the characteristics of corporatism by highlighting quantitative indicators of corporatism. The article was published in the international journal of sociology volume 33 number 3 pages 10 to 44 in 2003. The article is a presentation of facts in the form of forty two useful and prominent indicators of corporatism that are suggested in the literature. The author goes further to compare the indicators and identifies any correlations between them. This is done in an attempt to underline the important of considering the empirical side of corporatism. Thus, the article provides an inventory of known indicators. This is because the indicators are so many such that they overwhelm researchers (Kenworthy 2003, p. 10-44). The indicators are grouped into four based on their areas of focus including wage setting arrangements, political-economic consensus, interest group organization and the participation of interest groups n decision making processes. Even though the paper highlights the qualities of corporatism, the main aim is to address methodological issues that arise in researching the concept. Quantitative research on the concept has undergone considerable development. However, there are aspects of the topic that are still in their infancy stage. After years of having done research on the subject, there are still areas of it nature that have not been explored using quantitative means. The indicators of corporatism have increased, but they are not without flaws. Given that corporatism is characterized by various types and elements, it follows that they will be measured using different methodologies to get useful results. This indicates that the beginning of understanding corporatism starts with a comprehensive description of the types that exist. However, there is a chance that chaos may arise if all the different measures are proliferated. An organized study will emerge if there is focus to the type of corporatism being studied. Studies have found that there are certain shortcomings that emerge from a global adoption of corporatism (Traxler 2003, p. 194-209). National economies are continuously engaging in business together, and as this happens, the larger organizations often absorb the smaller ones or are put in charge of the smaller ones. Thus, there is a chance that, there will be a visible lack of indicators that identify subnational corporatism. The term subnational is used to refer to local and regional economic organizations and institutions. The authors of the three articles are united in their attempts to increase understanding of the concept of corporatism. They all attempt to increase the reader’s comprehension of the concept by exploring the idea using different arguments. In the first instance, it is compared with other concepts and its characteristics are highlighted, in the second instance, its characteristics are highlighted as well using the format of a case study. The third is a study carried out to explore the correlation of identified elements. The studies reveal that economic institutions are increasingly playing a significant role in the determination of international economic outcomes. Conclusion Corporatism seems to work in situations where there has been a period of economic uncertainty and economic problems. Most of the systems that have transformed to reap positive results have some degree of corporatist thought and reactions. However, the corporatist view needs to be more dynamic and more flexible to accommodate the sure changes that are sure to accompany the global business world. Corporatist reactions to economic and political issues often results in mixed results unless it is specifically modified and directed at particular problems. The three articles that have been reviewed contained both positive and negative results that emerge from corporatism. It is essential to note that the nature of the system depends on the environment or context of its existence. This is why certain types of corporatism yield positive results in some environments and negative in others. However, smaller societies seem to be favored by the system more than others are. The results depend on the type of corporatism, as well. List of References Aidukaite, J 2009, ‘Transformation of welfare systems in the Baltic States: Estonia, Latvia and Lithunia’, in Alfio Cerami and Pieter Vanhuysse (eds.), Post-Communist Welfare Pathways: Theorizing Social Policy Transformations in CEE (Basingstoke: Palgrave Macmillan) 96-112 Baily, MN & Solow, RM 2001, “International Productivity Comparisons Built from the Firm Level”, Journal of Economic Perspectives, vol. 15, no. 3, pp. 151–72. Thorhallsson, B & Kattel, R 2012, “Neo-Liberal Small States and Economic Crisis: Lessons for Democratic Corporatism”, Journal of Baltic Studies, DOI:10.1080/01629778.2012.719306 http://uni.hi.is/baldurt/files/2012/10/Neo-liberal-small-states-Estonia-Iceland-by-Thorhallsson-Kattel.pdf Hanke, B & Rhodes, M 2005, “EMU and Labour Market Institutions in Europe: The Rise and Fall of National Social Pacts”, Work and Occupation, Vol. 32, No. 2, pp. 196-228. Kenworthy, L 2003, “Quantitative Indicators of Corporatism”, International journal of sociology, vol. 33, no. 3, pp. 10-44. http://www.u.arizona.edu/~lkenwor/ijs2003.pdf Mailand, M & Due, J 2004, ‘Social Dialogue in Central and Eastern Europe: Present State and Future Development’, European Journal of Industrial Relations, vol. 10, no.2, pp. 179-97 Phelps, ES 2009, capitalism vs. corporatism, Critical review vol. 21, No. 4, pp. 401-414. http://www.columbia.edu/~esp2/Critical%20Review%20Piece.pdf Simoneti, M, Rojec, M & Gregorič, A 2004, “Privatization, Restructuring, and Corporate Governance of the Enterprise Sector”, in: Mrak, M., Rojec, M. and Silva-Jauregui, C. (eds.), Slovenia, From Yugoslavia to the European Union, Washington, D.C.: The World Bank, pp. 224-243. Streeck, W. in Kenworthy, L 2005, “Theories and Practices of Neocorporatism”, in: The Handbook of Political Sociology, States, Civil Societies, and Globalization, eds. T. Janoski, R. R. Alford, A. M. Hicks and M. A. Schwartz, Cambridge: Cambridge University Press, pp. 441-460. Traxler, F 2003, “Coordinated bargaining: A stocktaking of its preconditions, practices and performance”, Industrial Relations Journal, vol.34, no.3, pp. 194-209. Read More