The Virus of Corporatism

#22-- A not-so-American idea whose time has come again

Forget whether you were reassured or not by Trump's Friday coronavirus press conference ** The identity of the real winner was clear: corporatism.

Corporatism doesn't mean rule by corporations. It means the theory that society is like a body (corpus) with different institutions and people performing different organic roles and maybe having distinct rights and privileges. We have brains (the state and business elite) and eyes and ears (the press!) and arms and legs (the unions).

You don’t change your heart, lungs and liver too often — nor does a corporatist society change its industrial organs. So business tends to be represented by a few big, long-standing national champions. When government -- the brains -- wants to get something done, it calls the leading corporate CEOs and big union leaders around the table and works it out.

That's certainly what Trump seemed to be trying to do at the White House:

"You’re going to be hearing from some of the largest companies and greatest retailers and medical companies in the world. ...  If I could, some of these folks we know; they're celebrities in their own right. They're the biggest business people, the greatest retailers anywhere in the world. And one of them is Doug McMillon from Walmart ...  Richard, please. Walgreens ... Brian Cornell, Target. Thank you, Brian ... Stephen Rusckowski, Quest Diagnostics. Please. Great job. ..."

I'm not faulting Trump's attempt -- this is a dangerous situation and "partnership" with big business might be the last, best way to try to accomplish what government agencies have so far failed to accomplish by themselves (testing for the virus). There’s a dramatic moment in the movie Ford v Ferrari when Henry Ford II, who’d seemed fat and feckless, sets Carroll Shelby straight by pointing to something outside the Ford CEO’s window.

See that little building down there?

In WW2 three out of five US bombers rolled off that line. You think Roosevelt beat Hitler? Think again. This isn't the first time Ford Motor’s gone to war in Europe.

Corporatism can work. ***

But we should maybe keep in mind that it isn't a desirable long-term arrangement, even though there are many pressures pushing us there--e.g. some industries tend to be ineluctably dominated by a handful of big players, who then become too big to fail (see Wall Street, GM, bailout). And environmental protection is so much easier when you can just get all the big players in a room and mandate green practices,without anyone having to worry about enforcing those practices on hundreds of smaller firms who might seek an advantage by cheating (e.g., dumping). Nothing Trump's done comes close to FDR's great 1933 corporatist expriement, the National Recovery Administration, which attempted to write "codes of fair conduct" to govern every industry (i.e. economic organ) in U.S. society -- steel, tires, macaroni makers, even Hollywood. Price floors and wage floors were supposed to preclude "cut throat competition." (The top writer's salary in Hollywood was set at $100,000, which caused some grumbling.)

The problem isn't only that corporatism invariably devolves into price-fixing (the most obvious complaint about the NRA), or that it devolves just as invariably into a form of Putinism (what happens if a big player like Amazon, say, doesn't play ball with the government? If the system is going to work, it has to be punished, no? Everyone in business needs to be friends with the President!)

The main problem is that it's inegalitarian in a very non-American way. Who says reporters get to be the eyes and ears of society, with a special "press privilege" (under one popular consitutional theory) that ordinary citizens don't get? Why do executives at Facebook, say, get included in tripartite talks but not other executives at other websites? Why do they make so much money, anyway? It’s one thing if they've attained their economic status through free and fair competition. It's another if they’re formally granted extra power because they're prosperous at the moment — thereby enabling them, in a corporatist order, to maintain their advantage into the future.

Corporatism inherently seems to create a bias in favor preserving that status quo -- of protecting the big boys in the room, especially if that's an arrangment that’s worked in the past. Is the Trump administration really going to break up Google on antitrust grounds if Google successfully designs the virus-testing website for 350 million people (something Google may or may not actually be doing)? We get all the inequality of capitalism, without the justification that it’s been earned in a market -- and without a competitive market’s ability to automatically adjust to new conditions, invisible handishly. That inequality’s all the nastier because it seems more permanent— reflecting your station in life, your role in the organism. It’s no accident corporatism was the economic model of … well, you know what it was the economic model of.

It's the worst of many worlds. But it seems to be where this world is heading, this week.


** — The stock market, which soared, appears to have been a cheap date. Trump’s performance reminded me of Broadcast News, when William Hurt’s anchorperson barely -- but barely -- gets it together to reassure the nation about a potential military clash.

*** — Though Matt Stoller would argue with you about that.