Joseph Schumpeter, 1942
Thomas Sowell
Samuel Francis
Pastor,
Can you explain what the differences are between Capitalism and Corporatism?
Morgan
Hello Morgan,
The basic difference between the two is that Capitalism believes that the market exists and so should serve the particular people group it is in service of and not that the particular people group exists for the sake of the market. In the former people are the servants of the Corporate monetary structures while in the latter the economic structures are to serve the people. So, for example, while Capitalism would say that even though immigration might help increase the Gross Domestic Product (GDP) it still should not be embraced because immigration would and does hurt the particular people group that the market is supposed to be serving. This is what Thomas Sowell was getting at in his quote above.
Another, similar example of Corporatism vs. Capitalism is that inasmuch as Corporatism only cares about profit, it will sacrifice all other principles in the pursuit of economic gain. Corporatism only sees the bottom line of profit and loss in terms of finances whereas Capitalism, at its best, understands that it private markets must serve a larger end. So, for example, if the Corporatist can make more money by feeding women into the labor force to compete with men, therefore increasing the labor force in terms of numbers with the result that lesser wages can be paid since there are more people available to do the same amount of work, meaning that the Corporations will have a larger profit because their labor expense will be reduced that is was Corporatism will do. This is what Samuel Francis’ quotes above are getting at. Corporatism only see the bottom line in terms of profit. Capitalism at its best understands that it is not its own end or purpose.
Corporatism, unlike Capitalism, has no problem with what is called “creative destruction.” Corporatism is prone to constant change and social revolution since it is constantly asking, “What can be changed so that we, as Corporate Owners, can make even more money.” This means that Corporatism eats tradition, in pursuit of profitable innovation. Capitalism, on the other hand, in its best expression, served tradition by providing goods at just prices giving out just wages. It’s reason for existence was not the bottom line, but was the health and good of the community wherein it existed. We are living through an example of this wherein we are being told that for the sake of profit the State will give out a universal basic income as the Corporations rake in their Billions of dollars.
Another distinction between Corporatism and Capitalism is that in Corporatism you have an alliance between Government, Big Labor, Big Banks, and Big Business with the purpose of controlling how the financial machine of the social order works. In older parlance they are “in cahoots” (or in bed) with one another. The person left out of this arrangement is the small business owner, the small craftsmen, and the private entrepreneur – these people make up a substantial number of the population.
So, you see Morgan, that Capitalism is a more decentralized economic system that promotes private innovation through local competition. Corporatism, on the other hand, is not so interested in innovation but prefers top down planning that gives an even product as dictated and controlled by the mega banking, government, labor, and business interests in a nation. Because of this difference capitalism can more easily adjust to and provide the goods for new demands. Corporatism on the other hand, because it is centralized and top down plan oriented does not adjust well to meeting unexpected changes in terms of sudden new demands in the marketplace.
The important thing to keep in mind is that Corporatism is more of a top down economic structure that seeks to control the market for the good of the profiteer (pirate?) class in the social order. Capitalism, on the other hand, is decentralized and sees the states only role as enforcing private contracts and insuring a level economic playing field wherein all can compete. Capitalism insisted that the State governs best in economics where it governs least. Corporatism insists that a nation’s economics needs the State’s guiding and involved (menacing?) hand. At the end of the day corporatism and capitalism as competing systems shape how wealth is distributed, how economic decisions are made, and consequently how social orders function.
Clearly, while at one time we may have had a Capitalist system, it has been decades (since the arrival of the Federal Reserve in 1913) since Corporatism took over our economic landscape. Big Banks (Federal Reserve – which is NOT Federal and has no Reserves), Big Business (Wall Street), Big Government (Federal Government), and Big Labor (Labor Unions) now shape our economic system. This means that we are really no longer a people conversant with Liberty.
Another thing that should be noted before signing off here Morgan is that Communism and Corporatism in history have often worked hand in glove. It is true that Communism is opposed to genuine Capitalism but it is NOT true that Communism is opposed to Corporatism. In point of fact the economic cooperation between the USSR and the USA during the Cold War is evidence of this truism. This cooperation preexist the Cold War as well as Antony Sutton’s trilogy of books reveal.
Wall Street & The Rise of Hitler
Wall Street & The Rise of FDR
Wall Street & the Bolshevik Revolution
Morgan, even if your great grandparents were alive they would not remember a time when Corporatism and not Capitalism was the economic structure of our nation.
Much more could be said here but this gives you a start on the differences between Corporatism and Capitalism.
https://timesexaminer.com/guest-columns/11288-christian-society-and-the-failure-of-capitalism-and-communism
“capitalism is being killed by its achievements”
Devout Protestants had pioneered greatly in the development of Western capitalism, but Robert Dabney could mercilessly show its spiritual downside:
https://www.romans45.org/dabney/popery.htm
“(4.) The best argument for any creed is the godly living of its professors. Protestantism used to have a grand and victorious advantage on that point. She is ceasing to wield it. The wealth begotten by her very virtues of industry, thrift, and probity has debauched many of her children. “Jeshurun has waxen fat, and kicked.” An unbounded flood of luxury sweeps Protestant families away. ”
And as Noam Chomsky pointed out, capitalistic materialism goes easily with the worldview of total interchangeability, or egalitarianism:
https://books.google.fi/books?id=huNjDwAAQBAJ&lpg=PP1&hl=fi&pg=PA89#v=onepage&q&f=false
“See, capitalism is not fundamentally racist – it can exploit racism for its purposes, but racism isn’t built into it. Capitalism basically wants people to be interchangeable cogs, and differences among them, such as on the basis of race, usually are not functional. I mean, they may be functional for a period, like if you want a super exploited workforce or something, but those situations are kind of anomalous. Over the long term, you can expect capitalism to be anti-racist – just because it’s anti-human. And race is in fact a human characteristic – there’s no reason why it should be a negative characteristic, but it is a human characteristic. So therefore identifications based on race interfere with the basic ideal that people should be available just as consumers and producers, interchangeable cogs who will purchase all the junk that’s produced – that’s their ultimate function, and any other properties they might have are kind of irrelevant, and usually a nuisance.”
“Capitalism is a more decentralized economic system that promotes private innovation through local competition. … is decentralized and sees the state’s only role as enforcing private contracts and ensuring a level economic playing field wherein all can compete. Capitalism insisted that the State governs best in economics where it governs least.”
So goes the theory. The reality plays out far otherwise. Woodrow Wilson, in a perhaps unguarded moment of extreme candor, wrote about this ‘New Freedom’ of capitalism in America:
“It is the mere truth to say that the financial resources of the country are not at the command of those who do not submit to the direction and domination of small groups of capitalists who wish to keep the economic development of the country under their own eye and guidance. The great monopoly in this country is the monopoly of big credits. So long as that exists, our old variety and freedom and individual energy of development are out of the question. A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom. … We have become one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world … no longer a government of free opinion … but a government by the opinion and duress of small groups of domineering men.”
Woodrow Wilson, ‘The New Freedom’ (1913)
Donald Day also remarks on the change that has taken place since the colonial era:
“Some windy sage once remarked that the best government is the least government. This no longer holds true. Life has become too complex. It is just as necessary for nations to protect themselves from rapacious organizations as it is to preserve society from the onslaught of criminals.”
Donald Day, ‘Onward Christian Soldiers’