Tuesday, February 04, 2014

Corporatism really isn’t Capitalism

Every so often, on websites like In These Times, arguments are made that appear to be against Capitalism. The problem is, ever time, the detail of the argument isn’t against Capitalism but is instead against Corporatism. The difference between the two should be immediately evident. Yet no matter how often it is explained, those making the argument insist on conflating the two.

It should be easy to differentiate between the two. Although what follows are not the textbook definitions of various economic systems, they serve as a good way to differentiate the various economic systems.

Capitalism – no government interference in the economy
Monetarism – government interference in the economy through manipulation of the money supply
Keynesianism – government interference in the economy through manipulation of fiscal budgetary policy
Corporatism – government interference in the economy through benefits to the wealthy
Welfarism – government interference in the economy through benefits to the poor
Supply Side – government interference in the economy through stimulating aggregate supply
Demand Side – government interference in the economy through stimulating aggregate demand

Of the seven economic systems listed, one of the stands out as starkly different from the rest. Yet it is often inexplicably lumped with various others, most often Corporatism. There is an actual relationship between Corporatism and Capitalism. It is akin to the relationship between a parasite and a host. A host does not need a parasite, and Capitalism does not need Corporatism. But those making the argument are trying to insist that the host and the parasite are the same thing.

There is an attempt to justify such a conflation by saying that one is the natural outcome of the other, that Capitalism eventually evolves into Corporatism. But that does not justify the attack.
Interestingly, those making that argument seldom argue against freedom in other areas. If their argument on Capitalism is to be believed and extended, then tyranny is late stage liberty. Those making the argument are keen to support other areas of liberty, but to reject it in the case of economics. They could be consistent and say that since they believe liberty to be hopeless they do not support it in any area. Instead they support it in all other areas except economics, and say that since liberty is hopeless in economics they choose a tyranny different from Corporatism to replace the liberty of Capitalism.

Rejecting Capitalism on the grounds that it eventually becomes Corporatism should lead the person making that argument to reject free speech on the grounds that it eventually becomes censorship, reject freedom of religion on the grounds that it eventually becomes a state church, reject the fourth amendment on the grounds that it eventually becomes warrantless searches, reject the sixth amendment on the grounds that it eventually becomes secret courts, etc.

The argument is horribly inconsistent. And, after all these years of people pointing out the difference between Corporatism and Capitalism, there is no excuse for making the argument in the first place.

1 comment:

KN@PPSTER said...

It has always been a mistake for libertarians to try to redefine the term "capitalism" to mean "free markets."

The definition of "capitalism" as coined by Thackeray, popularized by Marx, and widely understood for close to 200 years now, is "a mixed, state-regulated, industrial economy."

Which pretty much corresponds to what you're calling "corporatism."