Corporatism in the 1930s and 1940s

The idea of corporatism was radically conditioned by the fact that during the 1930s and 1940s, corporatist economic policies were widely adopted by authoritarian regimes. Corporatist economic organisations were claimed to be limited to specific experiences such as these and were identified exclusively with an authoritarian use of power.

Between 1930 and 1945, while in certain areas the corporatist doctrine became the official economic policy of illiberal regimes, many fundamental corporatist principles were also applied on a large scale to the economic programmes of nearly every country in the Western world. Severe criticism of the market system was widespread in mainstream economics (Akerman 1936: 99-101). The economic concept of corporatism reached wide consensus among intellectuals and was even well received in those countries not politically in favour of it. There is proof of this in the acclaimed book, eloquently entitled Le Siecle du corporatisme, written by the governor of the National Bank of Romania, Mihail Manoilesco and published in France in 1938. In Montreal on 19 November 1945, Joseph Schumpeter presented an address during which he openly declared that corporat­ism was the economic theory of the future (translated from the French and published in Prime and Henderson 1975; also Cramer and Leathers 1981; Solterer 2005). In the mean­time, in France and England, and even in the United States (see the group of Jesuits who were followers of Father Dempsey at St Louis University), ideas on corporatism were well received and this gave rise to many publications (Noto 2008).

From an analytical point of view, it was probably a group of Italian economists in the 1930s, who achieved the most significant results in the development of the theoretical corporatist system. One in particular was Luigi Amoroso (1886-1965) who was a math­ematician and a follower of Pantaleoni and Pareto. He was an economist of international stature, and together with Schumpeter and Spiethoff, many issues concerning interna­tional economics in the 1930s were discussed. He aimed to prove that corporatism could potentially represent a challenge to economics and be accepted by the community of economists as a legitimate contribution to macroeconomics. Amoroso moved on from the notion of stable Paretian distributions and suggested that there are two different levels: an analytical level where economic processes are dynamic, and an economic policy level according to which the economy is totally subservient to political objectives. From an analytical point of view, the most original aspects of his theory are concerned with methodology, the business cycle and the dynamics of money.

We take a quick look at some of the issues discussed by Amoroso, since he was probably the person who made the most significant effort in terms of grounding cor­poratism on analytical economics, namely, on a “corporatist” business cycle theory. Methodologically, Amoroso is worth noting for his attempt to include non-economic factors in his analyses, for example, psychological, political and social factors. He thus enriched (but also complicated) the hypothesis relating to stable distributions. However, he was not confident that economic analyses alone could produce scien­tifically valid results and so he used mathematics as a more suitable means to express economic phenomena in exact terms. Consider also that Amoroso used the descriptive (not deductive) function of mathematics, following a long-standing Italian tradition that had started with Angelo Messedaglia and continued up to Corrado Gini (Pomini and Tusset 2009).

Amoroso divides the economic system into three sectors: industrial, commercial and banking, their respective aims being production, exchange and currency (Amoroso and De’ Stefani 1933). The business cycle is the result of two basic parts, cyclic and evolution­ary. Their interaction determines the structural characteristic of economics, conceived as a dynamic, not static, system. The time frame in which the cycle manifests itself gives rise to simultaneous actions, albeit distributed in successive moments (leads and lags). Amoroso’s cycle theory does not envisage a clear separation between the various phases, nor does it envisage separation between different monetary, productive or commercial factors. Consequently, money cannot be separated from production; money is not neutral except when there are some particularly unstable conditions. Price fluctuations are determined both by monetary actions and by productive actions and exchange, which affect relative prices. Inflation is determined by the expansion of monetary circulation, while deflation is not due to monetary causes and does cause monetary effects because it is determined by excessive capital assets. Therefore, it is up to politics to conciliate the needs deriving from contrasting interests. Inflation benefits the producers, whereas deflation tends to safeguard private savings. Corporatism, with its focus on balancing contrasting interests, appears to be a necessary solution to internal economic problems.

Fascist corporatism was analysed by Amoroso in his scientific work but there have also been many other scholars working on various different, alternative trends. It is well worth remembering Ugo Spirito’s work on corporatism, which was both philo­sophically and epistemologically oriented. He claimed that there was a correspondence between the state’s general interest and the individual’s interest. He eventually came to several conclusions that many economists found interesting, particularly regarding the limitations he introduced to the law of individual material property rights. These rights were only to be considered legitimate where they were included in a legal and economic corporatist system. Also worth noting was a more radical branch of Italian corporatism, which suggested a social and economic revolution and was promoted by Luigi Razza, among others. Edmondo Rossoni’s (1884-1965) corporatism, on the other hand, had no strong theoretical basis, but it is a remarkable variety of fascist corporatism that went against the mainstream in its effort to bring the unions to the foreground in the corpo- ratist process. Finally, we should also remember Gino Arias, the main representative of a political trend promoting a predominantly juridical type of corporatism, which, through an articulated system of laws, aimed to regulate the market and production (Rasi 2009: 26-9).