Democratic Corporatism: Building a Pluralist Polity

For too long, politics has been seen in binary terms—a contest of Left versus Right, liberal versus conservative or, more recently, pro­gressive versus populist. Yet opposites can converge and even coincide, as with left-liberal and right-conservative support for free market globalization starting in the 1980s or authoritarian state control over ever more spheres of societal and personal life that has been promoted by progressives and populists alike during the Covid-19 pandemic.

A more sophisticated analysis of today’s politics needs to be quadri­lateral: the axes of communitarian as opposed to individualist/collectivist and pluralist as opposed to statist/capitalist. The reason is that individualism and collectivism as well as statism and capitalism are but two sides of the same coin: unfettered individualism dissolves into mass lawlessness, mob rule, and collectivist power, while free market fundamentalism either relies on state coercion for its expansion or ends up morphing into variants of state capitalism to prop up the interests of capital.

Common to all is the belief that society rests on the individual and the state, with families and intermediary institutions such as trade unions or religious communities seen, in the words of Michael Lind, either as “obstacles to personal fulfilment or the free market or the state interest, or at best as voluntary clubs to be tolerated as long as they are weak.”¹ Underpinning this is a cult of pure individual rights and notions of self-possession that reduce humans to bearers of subjective entitlements who pursue little more than power or wealth.

By contrast, a communitarian and pluralist politics avoids these extremes in favor of the dignity of the person, intermediary institutions, and the reality that we are bound by ties of reciprocity—the recognition of variegated forms of talents and vocations that can enable everyone to contribute to society by fusing their individual fulfilment with mutual flourishing. Against individualism and the absolute sovereignty of the state, communitarian pluralism defends a relational anthropology and a conception of the polity as a nested, interlocking union of persons, families, and communities who are covenanted to one another by social and civic ties—the fabric that weaves society together. Such a politics is personalist, drawing on ethical and anthropological ideas of viewing the soul, relationality, and human dignity as irreducible.

This vision translates into a pluralist state that combines central authority over certain areas with autonomous, democratically self-governing regions and localities according to the principle of subsidiarity (or social federalism), which means distributing powers at the appropriate level in line with the dignity of the person and the common good. Connected with political pluralism is greater economic democracy—greater worker participation in the running of businesses and workplace co-decision in exchange for communal obligations and a commitment to the shared flourishing of entrepreneurs and workers alike.

Far from being protofascist, it is corporatism, with its regard for the intrinsic value of the person and the mediating character of relationships and institutions, that can save democracy and pluralism from the ideological extremes of our age: technocratic neoliberalism allied to the moralistic absolutism of ultraprogressives and demagogic populism combined with libertarian gangster capitalism.² Democratic corporatism emerges as the only constructive alternative to both Western capitalist and Eastern statist models which are increasingly converging toward biosecurity tech authoritarianism and novel forms of fascism.

Why Opposites Coincide

In Dostoevsky’s 1871 novel Demons (Бесы, The Possessed or The Devils), the revolutionary theorist Shigalyov devises a new social system using the tools of science to liberate people from czarist tyranny. Yet by abandoning any ethical limits for the sake of untrammeled freedom, the politics that emerges is a type of tyranny more systematically violent than anything witnessed in the past. Shigalyov himself acknowledges the contradictory nature of his ideology: “I have become entangled in my own data, and my conclusion stands in direct contradiction to the initial idea from which I started. Proceeding from unlimited freedom, I end with unlimited despotism.”³

Dostoevsky’s conclusion is doubly prophetic. He anticipated not only the twentieth-century descent of revolutionary liberation into totalitarian rule but also the twenty-first-century slide from ultraliberalism into increasingly authoritarian control. This is best illustrated by recent attacks on free speech and pluralism, indulgence in groupthink within “safe spaces” to promote ideological uniformity, along with enhanced social engineering based on high-tech surveillance. But what Dostoevsky could not foresee is how authoritarian systems, chief of all China’s current system, embrace liberal globalization and modern science to produce a digital dictatorship. Western surveillance capitalism and China’s tech totalitarianism are today’s prime examples of how opposites converge.⁴

Liberalism and authoritarianism are the dominant ideologies of our age, but neither is hegemonic. By exposing their shortcomings, the pandemic casts doubt on their legitimacy. Some Western liberals privileged the protection of the economy over the survival of persons most at risk—a radicalized utilitarian calculation that would have sacrificed millions among the weakest in society. Others embraced total lockdown before abandoning it in favor of lawless protest in the wake of the George Floyd killing. While enduring racism and police brutality need firm action, the tearing down of statues and online censorship were an attack on core principles of liberality such as free speech and free association. Meanwhile authoritarian strongmen—from Brazil to east­ern Europe and Russia to India and China—offer simplistic slogans and blame foreign forces when their countries need real leadership and international cooperation to be more resilient. Both worldviews promise a better future but are stuck in the past. They clamor for a return to the old normal of liberal technocracy or authoritarian demagogy—opposites that end up coinciding on questions of restricting free speech and free inquiry and exercising biomedical control.

Authoritarian Liberalism

This parallelism by no means entails moral equivalence. Liberalism and authoritarianism differ on fundamental principles and institutions such as freedom of association, equality, the rule of law, or civil society. Nor does it equate all populist politics with authoritarian rule. Nevertheless, really existing liberal and authoritarian models borrow from each other in ways that are complex and collusive.

Contemporary liberalism erodes the liberal tradition in two ways. First, it promotes ever-increasing negative liberty—freedom from restrictions except the law and private conscience—to the point where it flips over into the tyranny of individual choice abstracted from any relational constraints of family, community, or nature. This can be termed ultraprogressivism, a blend of social egalitarianism, cultural individualism, and market fundamentalism that radicalizes the socially liberal turn of the Left in the 1960s and the economically liberal turn of the Right in the 1980s, culminating in their fusion in the late 1990s and early 2000s. In the United States and the UK, this fusion first took shape during the Clinton administration and the Blair government, which sought to advance an agenda of social justice using the “free market” as the main mode of social organization. Modernization combined state bureaucracy with economic exchange: market mechanisms were de­ployed throughout the public sector to deliver key public services, while the state expanded its influence into new areas of the private sector and even the private sphere through novel forms of regulation and surveillance (however supposedly “light-touch”). This fusion led to new, paradoxical phenomena such as the “market-state” that reshapes “autonomous social institutions as bureaucratic replicas of business enterprises.”⁵

Moreover, the idea of emancipation became debased to mean liberation not simply from the prejudiced social exclusion of certain groups and from arbitrary inequalities but also from almost all restrictions on individual choice. As the unleashing of choice always involves new restrictions on the choices of some by the choices of others, it leads to new and draconian restrictions on citizens’ freedoms. Since rival rights and freedoms collide, power decides, such that ultra­progressivism results in an oscillation between release and control—a logic that underpinned the politics of both the George W. Bush and Obama administrations as well as the government led by David Cameron. In the United States today, the fusion does not appear as a single force but rather the combined actions of the two parties: the Democrats are not market fundamentalist while the GOP is not “woke,” but they constrain the political space such that any policy change that is adopted follows this logic of fusion, even though neither party fully represents both poles.

Second, this form of liberalism has given rise to a phenomenon that in some sense is a backlash against it, but in another way intensifies its inner logic: identitarianism. Contemporary identitarianism grows out of ultraprogressive identity politics and elevates all minority norms over majority interests. It is a fusion of elements of revolutionary Marxist thought with cultural egalitarianism and strands in critical race, gender, and queer theory, which undermines free inquiry and free speech on university campuses and beyond.⁶ Insofar as it opposes certain individual rights, identitarian ideology is deeply antiliberal. By radicalizing all aspects of social life in a Manichaean way, it slides into a fanaticism that is authoritarian and illiberal: pitting all the oppressed and exploited minorities against their supposedly racist oppressor majorities. It is both a backlash against ultraprogressivism and an intensification of its inner logic that places in-groups and out-groups in opposition with no possibility of a negotiated compromise. That is why the leadership of Black Lives Matter—with its encouragement of “cancel culture” and its reduction of nearly all social phenomena to “white privilege”—is little more than the mirror image of white supremacism. Older liberals either feel intimidated and are often too scared to oppose this antiliberal identity politics for fear of being branded racist or reactionary, or else they are lone voices who are abused on social media.⁷

Ultraprogressive identitarians threaten liberalism in its best sense—a politics that endeavors to be generous and tolerant. Far from upholding tolerance and pluralism, they seek to enforce a single worldview based on intimidating and demonizing any opposition. What is more, their obsessive self-stylization as the ultimate bulwark against right-wing fascism betokens an ideological absolutism that is ahistorical, Mani­chaean, and gives the politics of ultraprogressivism and identitarianism a rhetorically totalitarian cast.

Identitarians weaponize racial and other injustice to deploy new modes of social control, not least attempted bullying of the majority by way of riots, looting, and frenzied acts of iconoclasm. Paradoxically, what started a century or so ago as the liberal struggle for equality dissolves into mob rule and mass lawlessness. There are multiple campaigns to rewrite school and university curricula, combined with attacks on any dissenters, who are hounded out of classrooms, workplaces, and social media—two recent examples being the philosophy professors Kathleen Stock in the UK and Peter Boghossian in the United States. The irony of imposing a uniform view about everything in the name of equality, diversity, and inclusion seems lost on its advocates.

The ultraprogressive outlook finds one of its most extreme expressions in so-called woke capitalism.⁸ This phenomenon combines corporate crusades on progressive issues with the acceptance of monopolies or other predatory business behavior in ways that fuse virtue signaling with naked self-interest. That is why the U.S. economic establishment—Walmart, Nike, Facebook, Amazon, Apple, major sports leagues, and Ivy League trustees—have supported, for instance, Black Lives Matter protests against racism while opposing legislation against using slave labor in Xinjiang.

Dystopian Dreams

For their part, authoritarians in China and elsewhere fuse statist ideas with liberal hyper-globalization in a manner that atomizes society. The ensuing anarchy is used to legitimate ever-greater control of individuals, who are offered economic freedom in exchange for political oppression. The illusion of infinite consumer choice serves to conceal from view the erosion of political, civic, and human rights.

Even outside of openly nondemocratic countries like China, citizen­ship and democracy are increasingly formal categories detached from a reality of authoritarian consolidation across society. Democratic rhetoric creates a spectacle of political competition where the outcome is predetermined by the dominant party or personal patronage—or both at once.⁹ Rather than simply oppressing opposition parties, the ruling regime seeks to co-opt and corrupt any independent movements. The continued existence of a controlled opposition legitimates the discourse about managed democracy.

Authoritarian leaders periodically invoke socially conservative values, but they fuse moral relativism with absolute political coercion and state capitalist economies. Economic liberalization, far from inau­gurating greater political freedoms, has helped to consolidate centralized power. Liberal globalization will not democratize the likes of Russia or China but instead reinforce their totalitarian temptations—though this specter haunts the latter far more than the former.

Liberalism and authoritarianism not only converge on global capital­ism and novel forms of social control. Both worldviews also bring dystopian consequences. They rest on the utilitarian promise of progress for the greatest number but, in reality, their attempt to restore prosperity and public health promotes a dystopia of disruptive technology and bio-surveillance that benefits only a narrow elite.

In the liberal West, this new class is composed of two “castes.” First, there is an old establishment and a new elite that together form an oligarchy of finance and high tech: Wall Street and Silicon Valley. Oligarchs rule together with what the English poet and philosopher Samuel Taylor Coleridge called the clerisy, the second caste of professionals.¹⁰ Today this takes the form of a sham clerisy who dominate much of the media, education, and the civil service. “The nexus between the clerisy and the oligarchy lies at the core of neo-feudalism,” argues Joel Kotkin, and “[o]n the whole they share a common worldview and are allies on most issues.”¹¹ Both “castes” are examples of how new classes radicalize certain trends in the old elites: the monopolizing tendencies of the corporate captains of industry and cultural condescension on the part of the upper-middle class.

These two castes are similar to French economist Thomas Piketty’s distinction between the Brahmin Left and the Merchant Right.¹² They represent, respectively, social progressives and economic liberals, but either way they do not trust the third estate: the “people.” To these castes we must add a fourth, the legion of low-skilled migrant workers who form the urban untouchables in most Western cities and who are joined in their precarious condition by growing numbers of the indigenous postindustrial working class and, increasingly, the lower-middle class, too.¹³

The distrust of the people is shared by authoritarian regimes. Such systems are plutocracies with two complementary classes. One is the class of oligarchs, who tend to dominate extractive industries and exploit power structures via a complex system of state banks and shadow banks.¹⁴ China’s Communist Party has created an entire ecosystem of crony capitalism built around a Red Nobility who amass billions even as their relatives are members of the Politburo pledging to be at the service of the people. The other is the class of “political technologists,” who are arguably the authoritarian equivalent of the West’s sham clerisy. Political technology is a phenomenon that first emerged in 1990s post­communist Russia to describe the use of both old and new media in military-style strategies of deception. To maintain a semblance of demo­cracy, the ruling party combines top-down governance and practices of co-opting anti-regime actors with techniques taken from television, advertising, public relations, and—in recent decades—the internet in order to generate a managed debate.¹⁵

In reality, oligarchs and political technologists conspire to control all forms of political discourse and prevent any independent movements from taking root. They also collude in exploiting precarious workers and the class of urban outcasts, who include those trapped in indentured labor, debt bondage, or domestic servitude, which still exists in many places, including parts of the liberal West where the scourge of modern slavery is bound up with the exploitative practices of global capitalism.¹⁶

Plutocracy and Proletariat

The apparent opposites of liberalism and authoritarianism coincide in their erosion of both working and middle classes as well as the weakening of cross-class coalitions. In Western liberal democracies, the working classes have splintered into the precariat, the postindustrial working class, and parts of the lower-middle class. The middle classes are divided between the professional-managerial class and an increasingly proletarianized lower-middle class that struggles to make ends meet. In authoritarian systems, the emergence of a new middle class is likely going into reverse after the end of the pandemic as lower economic growth depresses both wages and house prices while state spending cannot compensate for the lack of private consumption.

The contemporary coincidence of opposites is possibly most striking in the United States. It remains the world’s first superpower in terms of economic wealth, military might, political influence, technological inno­vation, and global cultural appeal. “Yet at its centre,” writes the British commentator Aris Roussinos, “the US echoes post-Soviet Russia in its epidemics of death by drug overdose, in its collapsing middle class, its worsening health outcomes and declining life expectancies, the capture of the state and economy by rapacious oligarchs, and in the occasional bouts of interethnic violence leading to demonstrations, riots and broader political dysfunction.”¹⁷ This ignores some of America’s core strengths, including its young populations, but the protracted crisis of the U.S. model at home and abroad has been exposed by Covid-19.

Despite deep differences, liberal and authoritarian ideologies end up converging around forms of capitalism that divide societies into oligarchic or plutocratic elites and a proletarianized populace—with the middle and working classes ever more eroded. It means that many people are resigned to a modicum of comfort and passive entertainment, together with routinized and uncreative work, and facing poor prospects. Alongside the corrosion of character and the erosion of older virtues of craftmanship, it leaves a feeling of uselessness among manual workers and younger professionals whose jobs are threatened by automation. Without social recognition, the entire edifice of national politics has become unglued, leaving a void filled by demagogues who are variously ultraprogressive or antiliberal.

Both worldviews claim to be on the “right side of history” and put their faith in material progress, but neither anticipates the future with hope, thus precipitating a crisis of purpose and meaning. Starting with ultraprogressivism, its anthropological pessimism and superficial technoscientific optimism get reality the wrong way round. Humans are not by nature selfish, greedy, distrustful of others, prone to violence, and in need of salvation based on the progress of science or technology. Instead, to recognize that humans are capable of virtue, not just vice, is to run with the grain of our nature, as the British philosopher Mary Midgley has argued.¹⁸ But for the very reason that humans are weak and prone to vice, we need to be skeptical about the power of science and technology in human hands. This raises questions about both the material and ideational foundation of liberalism: the power of money and of technology as well as the appeal to abstract ideals. The fusion of woke capitalism with extreme identity politics radicalizes contemporary liberalism to the point where it descends into an outright authoritarianism always lurking in the liberal logic.

Despotic Demons

Besides oligarchic capitalism, liberal and authoritarian ideologies also resemble each other in creating a system of bio-surveillance in which the whole population is tracked and people’s individual health conditions are centrally monitored all the time. It is not just intrusive online ads or gig workers under permanent pressure to get top ratings from their customers. Tech platforms deploy new means of behavior modification by mining data from the most intimate recesses of our selves which were once private. As personal experience is monetized in the interest of global capital, liberty turns into unfreedom.

Technologies of monitoring and social control are able to manipulate us to the point where we freely yet unconsciously surrender our humanity to the clutches of surveillance capitalism—prisoners of the global online panopticon in which Facebook algorithms and Google’s artificial intelligence know more about us than we do about ourselves. Like Jeremy Bentham’s Panopticon, bio-surveillance is the contemporary expression of a sacrificial utilitarian calculus that dispenses with the dignity of the person for the “greater good” of the masses and their masters. China already deploys facial recognition technology that can detect elevated temperatures in a crowd or flag citizens who are not wearing a face mask. Another element of China’s surveillance state is the social credit system, a government ranking of citizens’ behavior using both public and private systems, which can strip people of rights and freedoms in case of noncompliance.

The Chinese journalist Liu Hu, who writes about official corruption and censorship, found himself added to a “List of Dishonest Persons Subject to Enforcement by the Supreme People’s Court,” which disqualified him from buying a plane ticket, booking certain trains, purchasing property, or taking out a loan—without any evidence or trial. “There was no file, no police warrant, no official advance notification. They just cut me off from the things I was once entitled to,” he says. “What’s really scary is there’s nothing you can do about it. You can report to no one. You are stuck in the middle of nowhere.”¹⁹

Beijing’s surveillance system is ultimately inspired by the French founding father of positivism Auguste Comte and his vision of a society in which humans are mechanical systems ruled by the laws of science. But as with all utopian projects, today’s revolutionaries have demons of their own. Possessed by fantastical ideas of ever-greater prosperity and public health, they end up inflicting misery and deadly viruses on people. It is not particular elites who are evil but certain ideas to which they are enslaved, such as the dangerous ideal of technologically enhanced humanity. What advertises itself as unfettered freedom, as Dostoevsky’s Demons warns, will lead paradoxically yet inexorably to total tyranny.

The Alternative of Corporatism

The alternative to this convergence and coincidence of opposites is a pluralist polity built on the associative ties of corporate bodies. This is emphatically not the same as the state corporatism of 1930s and 1940s totalitarian systems, which absorbed all intermediary institutions into the central state in the service of coercion and total war. As Lenin infamously said, in Communism trade unions are “transmission belts between the party and the people.” The same applied to fascism and National Socialism, which fused variants of state capitalism with collectivist control of society.

In constitutionally plural systems, by contrast, intermediary institutions are independent of both the central state and the free market. Democratic corporatism is about the sharing of power and wealth across society. Corporate bodies that are democratically governed, including professional associations, universities, and local community organizations, play a key role in giving people a voice and collective action in a world dominated by the impersonal forces of the central state and global market.

As Gladden Pappin has argued, today “many of our group interests go unrepresented. Our system is one of dilapidated corporatism—corporatism for me but not for thee.”²⁰ A corporatism that is substantively (and not just procedurally) democratic and pluralist is vital to addressing two pressing problems: first, the hyper-segmentation of society following decades of unfettered individualism and, second, saving the state from itself.

On the first problem, there is little doubt that forty years or so of cultural and economic liberalism have left societies fragmented, with high and rising levels of loneliness as well as “deaths of despair.”²¹ Most traditional forms of social organization, such as labor unions, guilds, and civic associations or community groups have given way to individualized transactions and networks, even as some of these combine profit with social purpose.

On the second problem, unmediated state sovereignty on the model of Machiavelli’s Prince or Hobbes’s Leviathan risks engendering authoritarian control at home and anarchy abroad.²² Only autonomous, intermediary institutions can uphold a plural democracy. As if he was anticipating the Covid-19 pandemic, David Marquand wrote in 1999 that “Thomas Hobbes, the philosopher of absolute sovereignty, famous­ly compared such collectivities to ‘worms in the entrails of a natural man.’ Pluralists see them as antibodies protecting the culture of demo­cracy from infection.” Only by renewing the institutions and relationships of civic society will countries become resilient to the pandemics of the future.

Rather than being ruled by state power, a corporatist polity is meant to constrain it within a balanced institutional ecology. New trade unions in the “gig economy” are just as vital as decentralized democracy and laws to break up corporate monopolies, beginning with the big banks and the tech platforms. Otherwise, U.S. libertarian market fundamentalists or Chinese state capitalists will take over weakened businesses everywhere. A more interventionist state alone will not be able to resist this. On the other hand, if a plural and democratic corporatism between estranged interests can be negotiated within nations, then confederal cooperation across borders is equally possible.

And if relationships and institutions trump individualism, then the nation-state is surely part of a nested network of peoples and nations and not absolutely sovereign as simply the individual writ large. Democratic nations need to nurture together an international settlement of what Michael Lind calls “wards in the realm of government, guilds in the realm of the economy, and congregations in the realm of culture”²³—each being membership institutions with countervailing power on behalf of citizens against vested interests.

Hope for a more democratic future cannot rest on unforeseen crises that undermine the dominant ideologies of our age. Nor should societies place all their faith in protective states. Adjusting laws in times of crisis, as we have seen during the pandemic, can harden into new norms after the emergency has ended. Unmeditated state sovereignty risks authoritarian control at home and anarchy abroad—a Hobbesian war of all against all, as Christopher Lasch feared.

Instead of returning to the politics of the past, societies should look to democratic corporatism as a model for the political future. To protect citizens from the pressures of both state and market power, the inter­mediary institutions that help constitute society need to be strengthened. These include trade unions, local educational institutions and trade schools, local authorities, business associations, faith communities, as well as other places of exchange and association, such as bars and bank branches, cafés and civic halls, restaurants and sports clubs. Such institutions pluralize state and market, thereby upholding democracy against a concentration of capital or bureaucracy. Only by renewing democratic pluralism will societies achieve greater social solidarity and humanity.

Renewing Corporatist Traditions

In Britain and other Western countries, the response to Covid-19 has already inspired a new impetus to corporatist bargaining between the state, business, trade unions, and the so-called third sector—negotiating state subsidy of wages and emergency loans to both companies and charities. But this new corporatism depends too much on the will of the executive and on central government resources, and not enough on a decentralized form of democracy. A corporatist polity is meant to constrain state and market power within a balanced institutional arrangement.

That requires the devolution of resources and power across the country, not just the delegation of responsibilities to city-regions, which in the critical fight against the pandemic lacked authority and depended on central government funds. Covid-19 has shone a cold light on just how broken Britain’s overcentralized unitary state is compared with the more corporatist polities of Germany or South Korea.

Here there are lessons to be learned from the postwar settlement for the renewal of democratic corporatism today. First of all, the new individual rights after the Second World War were linked to corresponding duties and obligations, based on the principle of reciprocity not only between citizen and state but also among citizens across classes and generations. Britain’s welfare state as originally envisioned by William Beveridge was founded on the idea of mutual insurance, which the working class and the labor movement had pioneered beginning in the middle of the nineteenth century. Accordingly, welfare benefits rested on the notion of rewards received for contribution to society—mainly through work but also the war effort, which depended so critically on women working in factories and caring for the injured.

The former Labour member of Parliament Frank Field puts this well: “Beveridge saw his welfare proposals as a means of molding an active, independent citizenry that practiced the virtues of hard work, honesty and prudence. His fundamental principle was that receipt of welfare was to be dependent on what a person had paid into the scheme.”²⁴ The postwar welfare state grew out of the solidarity experienced during two world wars and reflected a sense of national belonging to a plural polity composed of corporate bodies.

Second, the practice of reciprocity characterized relations both within and across countries.²⁵ The institutions of Bretton Woods conceived by John Maynard Keynes helped to constrain global capital and directed it to largely productive activities as the peoples of the West began the process of reconciliation and reconstruction. The new settlement sought to balance fairer trade with a measure of “mutual protectionism”: sheltering agriculture, coal, and steel as well as other critical industries from cutthroat competition. Catholic social thought, with its emphasis on a “third way” between totalitarian state communism and laissez-faire free market capitalism, played a decisive role in forging both Christian and social democracy on the European continent.

Third, the post-1945 order really did chart an alternative to both individualism and statism by developing a corporatist settlement in a more plural direction.²⁶ This involved a negotiated compromise between groups of society rather than a contractual agreement among individuals (as for liberals) or a diktat imposed by the central state (as for technocratic, Fabian-style planning). These groups were not only government and business but also organized labor, which included the trade unions but also the cooperative movement (both of which were influenced by various Christian traditions, not least nonconformists). These corporate bodies came to agreements on working conditions, wage bargaining, and employment standards—a process facilitated by government but with­out the use of state coercion. Plural corporatism took the form of reconciling estranged interests, with both business and the unions being given greater economic duties toward their members and society at large in exchange for more political influence.

Fourth, there was a marked difference between the federal polities of Germany and the United States, on the one hand, and the more centralized, unitary states of postwar Britain and France—even if the latter has always been less capitalistic than its ally across the Channel or the Atlantic. In the German and American cases, a vast array of civil associations and corporate bodies contributed both to the political process and to economic decision-making. A blend of more virtuous elites and greater popular participation (compared with the interwar period and post-1980s neoliberal settlement) ensured a degree of eco­nomic democracy.

Yet it must be stressed that Germany’s model of a social market economy with co-decision and worker representation on company boards owed much to the work of people like Allan Flanders, a former Oxford economist and democratic socialist who together with other British civil servants working in postwar Germany designed many of the institutions—including a vocational labor market model in relation to craft and a banking system based upon regional and sectoral endowment.²⁷

Building a Corporatist Polity

Today, many of these institutions are needed if America and Britain are to achieve any national renewal anchored in the political and civic inheritance of self-governing institutions. The impact of the pandemic shows how both the body politic and the national economy require a transformation that links growth and productivity to the skill, knowledge, and character of the workforce. That involves not just a rebalan­cing between university education and vocational education but also a profound renewal of universities and vocational and technical colleges—many of which lack autonomy, ethos, and genuine excellence.

At the same time, Covid-19 foreshadows a new corporatist settlement. Government, business, the trade unions, and voluntary associations have come together to bargain and agree on job retention schemes and emergency loans to nonstate institutions. Civil society organizations and mutual aid societies have stepped in to provide critical support for health, welfare, and mental health. We have witnessed the beginnings of a revival of corporate bodies and reciprocal bonds.²⁸

Yet the evolution of the economy as a whole undermines the dignity of labor. The power of monopolistic or oligopolistic markets is further increased by the decline in workers’ bargaining power. Trade unions represent only about 6 percent of America’s workforce in the private sector. There is a close connection between corporate concentration, on the one hand, and rising income and asset inequality, on the other—with profits flowing upwards and precariousness engulfing the “bottom” 80 percent. Greater bargaining power for workers is therefore a vital condition to rebalance the interests of capital and labor.

Besides bargaining in its various forms (traditional trade unions, co-determination, wage boards, or sector-wide bargaining), labor power also needs to be strengthened through changes to corporate governance, for example by introducing workers’ representatives on company boards to improve employment conditions and counterbalance the power of top executives and institutional shareholders. Under the aegis of local or state government, organized labor and business would agree on pay and other key aspects in negotiated settlements that reflect the plural character of democratic corporatism.

Yet faced with the forces of global capitalism and technology, no country can do this on its own. Democratic and plural associations are also needed internationally to enable workers to resist the dehumanization and exploitation of the world economy. The alternative to hyper-capitalism and authoritarian nationalism is a renewed democratic corporatism that can combine a protective state with international cooperation to serve the common good.

For this reason, we require cross-border, rather than merely national, restrictions on globalization. A renewed model of democratic corporatism can potentially outflank both Anglo-Saxon free market fundamentalism and Chinese state capitalism. A good start would be to expand corporatist bargaining at national levels between the state, business, trade unions, and voluntary associations to include international markets. Governments should champion cross-border deals that link workers and civic groups, thereby protecting them from the homogenizing pressures of bureaucratic and market power. This could be partially achieved via a commitment to pay workers of international businesses the “living wage” of the country where they work—especially in the most precarious sectors such as care, cleaning, and delivery.

Together with regional authorities and local government, national leaders should also support the reform of trade unions to give workers proper representation (especially in under-unionized sectors) and to promote workplace democracy—including for those working in multinational corporations. Internationally, cooperation between demo­cratic nations needs to include a certain amount of required fiscal parity in order to restrain the urge to attract the most unscrupulous international operations. Without this carapace, individual countries on their own will not be able to resist the lure of global capitalism and the tech oligarchy.

The Covid-induced cataclysm should rule out a return to the ideological status quo before populism. Both the EU and the United States under President Biden will have to break with the technocratic centrism that created the conditions for the populist insurgency while also fending off the ultraprogressive Left. Democratic corporatism, underpinned by a pluralism that focuses on the dignity of the person, can help chart a new settlement: a politics and an economics of the common good. As the Italian economist Stefano Zamagni rightly remarks, “a society in which democracy applies only to politics will never be fully democratic. A good society to live in will not force its members into uncomfortable dissociations: democratic as citizens and voters, undemocratic as workers and consumers.”²⁹

This article originally appeared in American Affairs Volume VI, Number 1 (Spring 2022): 107–123.

Notes