Social corporatism (also called social democratic corporatism) is a form of economic tripartite corporatism based upon a social partnership between the interests of capital and labour, involving collective bargaining between representatives of employers and of labour mediated by the government at the national level. Social corporatism is a major component of the Nordic model of capitalism and to a lesser degree the West European social market economies. It is considered a compromise to regulate the conflict between capital and labour by mandating them to engage in mutual consultations that are mediated by the government.
Generally supported by nationalist and/or social-democratic political parties, social corporatism developed in the post-World War II period, influenced by social democrats and Christian democrats in European countries such as Austria, Norway, the Netherlands, Germany and Sweden. Social corporatism has also been adopted in different configurations and to varying degrees in various European countries.
The Nordic countries have the most comprehensive form of collective bargaining, where trade unions are represented at the national level by official organizations alongside employers unions. Together with the welfare state policies of these countries, this forms what is termed the Nordic model. Less extensive models exist in Germany and Austria, which are components of Rhine capitalism.
Position on class conflict: class compromise
Some controversy has existed in the political left over social corporatism, where it has been criticized for abandoning the concept of class struggle, legitimizing privately owned enterprise and for lending credence to a form of regulated capitalism.
Others on the left counter these criticisms by claiming that social corporatism has been progressive in providing institutional legitimacy to the labour movement that recognizes the existence of ongoing class conflict between the bourgeoisie and the proletariat, but seeks to provide peaceful resolutions to disputes arising from the conflict based on moderation rather than revolution. Thus, proponents of social corporatism consider it a class compromise within the context of existing class conflict.
In the 1930s, social democracy was labeled social fascism by the Third International, which maintained that social democracy was a variant of fascism because in addition to their shared corporatist economic model they stood in the way of transitioning to socialism and communism.
1930s–1970s: Norway, Sweden and Austria
The development of social corporatism began in Norway and Sweden in the 1930s and was consolidated in the 1960s and 1970s. The system was based upon the dual compromise of capital and the labour as one component and the market and the state as the other component. Social corporatism developed in Austria under the post-World War II coalition government of the Social Democratic Party of Austria and the Austrian People's Party. Social corporatism in Austria protects private property in exchange for allowing the labour movement to have political recognition and influence in the economy—to avoid the sharp class conflict that plagued Austria in the 1930s.
- Hicks 1988.
- Rosser & Rosser 2003, p. 226: "Liberal corporatism is largely self-organized between labor and management, with only a supporting role for government. Leading examples of such systems are found in small, ethnically homogeneous countries with strong traditions of social democratic or labor party rule, such as Sweden’s Nordic neighbors. Using a scale of 0.0 to 2.0 and subjectively assigning values based on six previous studies, Frederic Pryor in 1988 found Norway and Sweden the most corporatist at 2.0 each, followed by Austria at 1.8, the Netherlands at 1.5, Finland, Denmark, and Belgium at 1.3 each, and Switzerland and West Germany at 1.0 each".
- Peter J. Katzenstein. Corporatism and change: Austria, Switzerland, and the politics of industry. Ithaca, United States. Cornell University Press. 1984 (first publication). 1987 (first printing). pp. 74–75.
- Moschonas 2002, pp. 63–69.
- R.J. Overy. 2004. p. 614.
- Moschonas 2002, p. 64.
- Moschonas 2002, pp. 65–69.
- Moschonas 2002, p. 69.
- Moschonas 2002, p. 70.
- Moschonas 2002, p. 65.
- Katzenstein. 1984 (first publication), 1987 (first printing). p. 73.
- Katzenstein. 1984 (first publication). 1987 (first printing). p. 75.
- Hicks, Alexander (1988). "Social Democratic Corporatism and Economic Growth". The Journal of Politics. University of Chicago Press. 50 (3): 677–704. ISSN 0022-3816. JSTOR 2131463.
- Moschonas, Gerassimos (2002). In the Name of Social Democracy: The Great Transformation, 1945 to the Present. Translated by Elliott, Gregory. London: Verso Books. ISBN 978-1-85984-639-1.
- Rosser, J. Barkley; Rosser, Marina V. (2003). Comparative Economics in a Transforming World Economy (2nd ed.). Cambridge, Massachusetts: MIT Press. ISBN 978-0-262-18234-8.