Corporatism vs. Capitalism

When people point to the problems they observe with capitalism, they are most often thinking of things they notice in corporatism. Corporatism is a form of society and governance in which large institutions directly make agreements with the government rather than the intermediaries of the people. This has become much more common as the size of the nation has increased along with the cost of political coordination. Large corporations also have more means of coordinating and lobbying than they ever have before. Corporatism is responsible for heavy regulatory burdens that favor the state and large corporations, as well as the increasing feeling that people have of being caught in a network of institutions that reduce people to faceless entities to be utilized. A truly classically liberal government protects the rights of the individual and maintains a small enough government to mitigate the threat of corporatism. Our government has increasingly succumbed to it, and we must fight against it if we hope to shrink the size of the government, the commercial power imbalance, and restore the rights of the individual.

People feel helpless; they feel as though they are being taken advantage of by big business and that the government is unwilling to do anything about it. Consumer sentiment is extremely negative due to the constant everyday worries about homeownership and rising daily necessity prices. The relative economic power of the individual feels smaller than it has been in recent memory. While this may not necessarily be true, the cultural psyche is reflecting the truth of a lack of agency for most people. Although some individuals are creative enough to escape the system and create impact, most people are functionally lacking this agency. While this situation is far superior to being in active fear for the safety of one’s life, it is still far from what most people would wish for their lives. People are raised in schools that reward conformity and work for businesses that do the same. They don’t have the intellectual framework to understand why it all feels so unfulfilling. However, people can sense a stagnant world and resent it. Whether or not they’re truly being taken advantage of by large businesses, people can’t understand that almost nothing they do could possibly alter the daily operation of one of these behemoths that is integral to our society and government.

No big business would present an existential threat to regular people if it did not have tacit governmental approval for domination. While banks are often termed, “too big to fail,” many industries have started to receive this privileged status from the state. A large and extremely efficient business could grow and overtake an entire industry without exerting any control over anyone. However, for many businesses, people can feel that this path was not taken to achieve their massive sizes. A much more common story is a moderately successful business utilizing lobbying and other methods to effectively crystallize their industry and protect against competition, either from other businesses or other countries. While businesses rarely strip people of their freedom explicitly, they continually do so implicitly through the restructuring of society and conjunction with the government. Regulations intended to increase the competitiveness of industries and protect consumers usually end up enshrining a certain subset of businesses as having some sort of government given advantage.

Paradoxically, we must reject the current paradigm for industrial regulation if we are to reduce the power of corporatism. We must have firm protections for individual rights without attempting to reshape industries from the top down. If laws are placed to protect individual freedoms and they are enforced, business cannot meaningfully take advantage of them. We must avoid attempting to view industries as steady states that can be regulated into compliance. We must make regulation that gets to the root of our concern rather than approaching it in the roundabout method of business regulation. We must enforce strong ownership and protection against coercion and enable charities and other forms of altruism to ensure that no one falls through the cracks. Trying to regulate industries allows former executives from certain industries to put their hands into government, and whether with goodwill or not, they will end up reshaping the state based on their understanding of the world that was formed in that industry. Corporatism can only be defeated through smaller government, less regulation, and vigorously enforced laws that protect the individual, both their freedoms and entitlements. Big business can be both helpful and damaging to the common good, but letting business heavily influence government is almost always a bad thing.