In Defense of 'Corporatism'

Ron Paul probably thought he was clarifying things when he told an interviewer that President Obama was not a socialist, but a 'corporatist.' But as Jonathan Chait writes in the current issue of The New Republic, 'corporatism' is a slippery concept that means different things when used by the left and the right. Chait thinks the President is getting a bum rap from both sides over his dealings with big business. He first answers the critique from the left:

One mistaken premise is the belief that there is a zero-sum relationship between good public policy and the interests of corporate America. Take, for instance, longstanding left-wing hostility toward cap-and-trade as a mechanism to control pollution. Corporations prefer cap-and-trade -- where the government sets an overall level of emissions and allows high-emanating businesses to pay low-emitting businesses -- over blunt regulation that forces all businesses to meet a fixed target. That's because cap-and-trade allows the same emissions reductions as regulation, but at a much lower cost. To assume that corporations' preference for cap-and-trade damns the policy is to assume that imposing costs upon corporations is an end in itself.

Whatever the actual effect of cap-and-trade, I'd guess that leftist objections to it aren't based on a desire to "impose costs" as much as on a belief, perhaps simplistic, that everyone ought to reduce emissions. Critics of cap-and-trade most likely believe in shared responsibility while disliking the notion that anyone's share of the responsibility should be turned, in typical capitalist fashion, into a commodity. It's kind of like a rich man paying for a substitute to fight in his place during the Civil War. The government still got the manpower it needed, but many people perceived something dishonorable in the process, the sacrifice of money and of life not being equal in their eyes. In any event, that's a particular case of a general leftist complaint about Obama's course.

"The left critique maintains that progress comes only when the president wages a climactic, Manichean struggle against the business lobby," Chait writes. He argues that progress throughout American history has come "almost exclusively through compromise," with every important measure from the emancipation of slaves through the Clean Air Act looking like a half-measure to some dissatisfied absolutist. I don't think that Obama's critics on the left necessarily look at matters in "Manichean" terms. They don't necessarily view big business as evil, but they do most likely question the extent to which and the basis upon which the business lobby insists on compromise from the elected representatives of the people.

Chait now turns to the confused conservative response to Obama's alleged corporatism:

It is worth noting that conservatism is starkly divided between those terrified of Obama's coziness with big business and those terrified of his hostility to big business....[To the former] American business is Volkswagen, a grubby handmaiden to power. [To the latter] it is the Jews, being demonized and stripped of their rights while a nation cheers....Of course, most right-wingers stop well short of the Third Reich metaphor. Yet the striking thing is that few leading conservatives can be found who consider Obama's relationship to business neither frighteningly close nor frighteningly hostile.(emphasis in original)

Chait's own view is that "corporatism" -- which might be best defined in the current context as the politics of corporate welfare -- is a fallacy we oughtn't worry about.

The central fallacy of all the critiques of Obama's 'corporatism,' both right and left, is that they mistake negotiation for collaboration. There is a difference between businesses jostling to minimize the damage of a reform they can't stop and businesses crafting legislation they desperately want to enact.

The latter, Chait implies, simply isn't happening under Obama. But there seems to be room, despite Chait's chiding, for both left and right to question the extent and propriety of the "negotiation" Chait describes so benignly. Whether you think that government should keep hands off business or that business should defer to elected representatives, you have every right in our era of post-Bailout populism to question the business lobby's influence on legislation and regulation.

Chait also seems to believe that 'corporatism' is a false charge simply because some business groups publicly oppose the Obama administration. It should occur to him that those hostile noises are simply part of the "negotiation" process, if not an eminently successful negotiation technique for dealing with the likes of Democrats. Against all critics, Chait appears to recommend complaisance. To the right, he insists that things aren't as bad as they say; to the left, he insists that this is the best they're going to get. Writing like a stalwart Democrat, he exhorts disappointed liberals, progressives, leftists, etc., to settle for all a Democratic administration says it can afford to do, while pretty much dismissing conservative and populist objections out of hand. Chait's attempted refutation of the "corporatism" charge ends up being a vindication of "business as usual" in Washington.