Corporatism and the Ghost of the Third Way

61 Pages Posted: 30 Jan 2013

See all articles by Randall Morck

Randall Morck

University of Alberta - Department of Finance and Statistical Analysis; National Bureau of Economic Research (NBER); European Corporate Governence Institute; Asian Bureau of Finance and Economic Research

Bernard Yin Yeung

National University of Singapore - Business School

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Abstract

An economic system called corporatism arose in the late 19th century, promoted by Anti-Cartesian French intellectuals dismayed with the "disenchantment of the world" Weber attributed to capitalism, and by a Roman Catholic church equally dismayed with both liberalism and socialism. Corporatism recognizes the innate inequality of human beings and their need for secure places in a legitimate hierarchy and thus puts the police power of the state behind officially sanctioned Corporations, elite-controlled industrial group cartels empowered to set wages, prices, employment, and quotas, to regulate entry, and to limit imports. Corporatism was to end the class struggle by guaranteeing workers their accustomed jobs and incomes and by delegating traditional authority through a principle of subsidiarity. We argue that countries that adopted corporatism most fully - those with Roman Catholic majorities or French-educated elites - experienced substantial financial development reversals and retain legacy Corporatist institutions that continue to retard financial development and growth.

Comments on this paper can be found at: http://ssrn.com/abstract=2209138

Keywords: legal origin, financial development, fascism, corporatism, syndicates, Catholic social teachings, ethics

Suggested Citation

Morck, Randall K. and Yeung, Bernard Yin, Corporatism and the Ghost of the Third Way. Capitalism and Society, Vol. 5, Issue 3, Article 2, 2010. Available at SSRN: https://ssrn.com/abstract=2209136

Randall K. Morck (Contact Author)

University of Alberta - Department of Finance and Statistical Analysis ( email )

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National Bureau of Economic Research (NBER)

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Asian Bureau of Finance and Economic Research ( email )

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Bernard Yin Yeung

National University of Singapore - Business School ( email )

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65 6779 1365 (Fax)

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