Full-fledged corporatism, as a system for organizing the formulation and implementation of economic policies, requires the replacement of political representation according to area of residence by political representation according to position in the socioeconomic division of labor. The citizen of a corporate state has a political identity not as a resident of a particular geographical district but as a member of a certain occupation, profession, or other economic community. He will probably be distinguished according to whether he is an employer, an employee, or self-employed.
One who looks for information about corporatism is frequently referred to fascism. (In the International Encyclopedia of the Social Sciences, for example, the entry for corporatism reads simply, "See Fascism.") Indeed, the corporatist ideal achieved its fullest historical expression in Italy under Mussolini's regime. There, workers and employers were organized into syndicates based on local trades and occupations. Local syndicates joined in national federations, which were grouped into worker and employer confederations for broad economic sectors, such as industry, agriculture, commerce, banking, and insurance. In 1934 the government made peak associations part of the apparatus of state, with one corporation for each of 22 economic sectors. The corporations received authority to regulate economic activities, to fix the prices of goods and services, and to mediate labor disputes.
In practice the Italian corporate state operated not as a grand compromise among economic interest groups but as a collection of sectoral economic authorities organized and dominated by the government in the service of the dictatorship's aims. Neither capitalists nor laborers enjoyed autonomy or private rights defensible against the fascist regime. (See Mario Einaudi, "Fascism," International Encyclopedia of the Social Sciences [New York: Macmillan and The Free Press, 1968], pp. 334-41.) Other fascist regimes in Europe and Latin America operated similarly. In light of this experience, one might judge fascist corporatism to have been something of a fraud. The appearance of rationalized popular participation in government failed to mask the dictatorial character of the system.
Not surprisingly, after World War II, fascism became a dirty word and full-fledged corporatism a discredited program. Nevertheless, arrangements bearing some similarity to fascism's corporate state developed in the democratic countries of western Europe, most notably in Scandinavia, Austria, and the Netherlands, but also to some extent in other countries. No one describes these arrangements as fascist; most commonly they are called neocorporatist.
Neocorporatism (also known as liberal, social, or societal corporatism, sometimes as tripartism) shares with fascist corporatism the preference for representation according to membership in functional economic groups rather than according to location. It disavows, at least rhetorically, fascism's totalitarian aspects and its suppression of individual civil and political rights. Neocorporatists support the organization of economic interest groups and their participation as prime movers in the formulation, negotiation, adoption, and administration of economic policies backed by the full power of the government.
Political scientists have concluded correctly that the United States is not a corporate state-certainly not a corporate state comparable to modern Sweden or Austria. American interest groups have been too partial in their membership. Normally the government power they hope to seize has itself been fragmented, divided at each level among executive, legislative, and judicial branches and dispersed among the national, state, and local levels in a federal constitutional system. Residual allegiance to liberal ideology and its political norms and practices, including limited government and territorial representation in the legislature, has also impeded the development of corporatism. …