Rodney Atkinson runs Freenations, a website dedicated to analysing the European Union, geopolitics, macro-economics and mass immigration.
Corporatism is an economic and political system characterised by the close collaboration between the state and large corporations. In a corporatist system, the government plays a significant role in regulating and coordinating economic activities, often through extensive state intervention and control over key sectors of the economy.
The key distinction between corporatism and capitalism lies in the role of the state and the degree of intervention in the economy. While capitalism is based on the principles of free markets, private ownership of resources, and limited government interference, corporatism emphasises the partnership between the state and corporations (and sometimes labour unions).
Corporatism stifles competition and innovation.
By granting special privileges and protections to corporations via the state, corporatism reduces the incentives for businesses to improve efficiency, develop new products, or respond to changing market demands. As a result, lack of competition leads to stagnant industries, limited consumer choices, and reduced overall economic growth.
The collaboration between the government and corporations (or powerful interest groups) often results in policies that favour specific corporations or industries at the expense of others and the general public, leading to market distortions, cronyism, and a concentration of wealth and power in the hands of a few influential entities.
Moreover, the state’s involvement in economic decision-making almost always leads to inefficiencies, corruption, and the misallocation of resources.
Corporatism can be summarised as:
- stifling competition and innovation,
- concentrating wealth and power,
- leading to market distortions and inefficiencies,
- perpetuating income inequality, and
- relying on state favouritism and cronyism.