CAPITALISM VS CORPORATISM, STATISM, AND CRONYISM
By: SzyszkePaleo
In the 21st century, we have many misunderstandings about capitalism. Especially among the left, which equates everything that is not socialism with capitalism. So, too, it is necessary to say what capitalism is and what differences it shares with popular systems in our and slightly earlier times.
Capitalism, in a nutshell, is a system of free, voluntary exchange in a free market. The free market is an economic system that is part of the capitalist organization, which is based on the phenomenon of exchange, demand, and supply, that's it. Capitalism emerged as a comprehensive system at the beginning of the 19th century, but behavior that can be described as capitalist relations existed much earlier, you can go back to the 15th century, when free exchange flourished in the principalities within Italy and Germany, with technological development, capitalism and the society based on it developed until capitalism became a common system in the West. However, from the beginning of the 20th century, a trend can be seen in the new political thought - socialism. Socialism demanded one thing - the abolition of capitalist relations in favor of an imaginary utopia in which: everyone produces what the state orders him, even if he can't; the abolition of private property, or in short, the prohibition of ownership and enslavement, and the nationalization(beautifully called socialization) of everything that belonged to private entrepreneurs. In other words, theft.
Socialist thought evolved into newer forms and manifested in the emergence of social democratic thought and "in-between capitalism and socialism" regimes. It was from these crazy ideas that two of the title systems - corporatism and statism - evolved. What are these systems and why should they be distinguished from capitalism?
Corporatism is a system that evolved from syndicalism, another socialist theory that advocated the creation of unions by the state that would control factories. These unions would consist of workers, production managers, and party-state representatives. The evolution of this thought came in the formations in Italy and France of circles that combined the idea of the extreme nationalism of Charles Mauras, the French leader of French Action, with socialism and syndicalism. This is how the system rejected some of the ideas of socialism such as the abolition of private property in favor of widespread state intervention combined with the creation of professional-state corporations, which were supposed to, in theory, abolish the supposed class struggle whose existence was promoted by socialists of all kinds. At that time, the first movement promoting corporatism was already forming in Italy; we are of course referring to the Fasci di combattimento, an organization formed by Benito Mussolini and other Quadrumvirate leaders. It was this group that led the march on Rome and formed Fascist Italy, controlled by the National Fascist Party. The former socialists, who became staunch nationalists, did not completely abandon their ideas. In 1926, they brought about corporate reform, having just created corporatism. Corporatism was created and became an instrument of extensive state intervention. Mussolini spoke positively about relations with Soviet Russia and conveyed that the Army of Italy had extensive ties with the Red Army and that Italy was second only to the USSR in terms of nationalization of industry and agriculture.
Subsequently, already after the Allied destruction of Italy and the resignation of Mussolini, and the subsequent establishment by him and the Nazis of a puppet state called the Italian Social Republic, Mussolini repeatedly said that his views were not fully realized and only under the conditions of the Social Republic does fascism have the possibility of full existence. Mussolini deeply expressed indignation at the fact that he had previously allowed any private property to exist and ordered the nationalization of such property with more than 100 employees. In his last testament, he said that only fascism as the ultimate form of socialism has a chance of any realization. Earlier in the 1920s, the main ideologue of fascism and its philosophy, Giovani Gentile, reiterated that fascism and corporatism were the only forms of realization of socialism and that the other forms of socialism were meaningless.
Turning to another example - National Socialism. National Socialism, as an ideology that was inspired by fascism, also adopted a corporatist form, liquidating those businesses that openly opposed the government. Hitler repeatedly spoke negatively about capitalism and considered it a "Jewish conspiracy." German socialism also consisted of extensive state intervention in the economy and the economic system itself was similar, although not identical, to that introduced in the USSR.
Thus, corporatism can easily be counted as a statist system, but our next system to analyze, namely, interventionism otherwise known as statism, does not.
Statism was widely promoted by John Maynard Keynes, who in his books promoted state intervention in the economy so that it could "patch up the problems created by the market" Statism was seen as a third way between socialism and laissez-faire capitalism. Interventionism in the 20th century boiled down to, among other things, three mechanisms: price regulation, forced elimination of unemployment through state-created jobs, and socialism. With the first aspect alone, one can see the absurdity of statism and the departure from the capitalist balance of power. While prices under capitalism are dictated entirely by supply and demand, which sooner or later equalize and stability is achieved, under a system of price controls, the supply of products falls, and so the state must conduct further intervention to prevent this. More and more intervention leads to a collapse in supply and an increase in demand beyond scale. So we see the result - a shortage of products and queues in front of stores. Statism is also a product of socialism, as capitalism, adjusts to people's needs and demands, leading to a situation where shortages do not exist.
Widespread statism can be seen in the fascist states, where, as I mentioned above, corporatism - a statist system derived from syndicalism, or socialist theory - prevailed. Mussolini was also an admirer of Keynesianism, which he confirmed in his own words: "Fascism completely agrees with Mr. Maynard Keynes, despite the latter as a liberal. Mr. Keynes' excellent booklet The End of Laissez-Faire (1926) can, as far as possible, serve as a useful introduction to Fascist economics. There is almost nothing in it to object to, and there is much to praise." Non-fascist statism can be seen at ease in the reign of Franklin Delano Roosevelt and the New Deal, where extensive intervention led to recessions and the beginnings of the popularity of state interventionism, which, as we know, leads to economic crises, deficits, and a whole lot of people who live off the state's support, with the state raising the money to support them through taxation, i.e. stealing money from citizens.
The last system to be addressed is cronyism or crony capitalism. This is a system that is the result of extensive state intervention and the existence of corruption in the state machine. In short, there is an elimination of competition and monopolization of the economy by state-backed corporate enterprises. These enterprises, in return for the elimination of market competitiveness and monopolization by the state, must pay certain "handouts", so the state makes money, and the enterprises for these handouts have the market to themselves. State-enterprise relations in which the state earns benefits are the results of widespread corruption in power and often the elimination of free exchange.
As in previous descriptions of the systems, one can also give some examples where cronyism occurs - including Russia, Ukraine, Belarus, and some of the former Eastern Bloc countries. The formation of a similar system can be seen slowly in Western countries including Great Britain, Germany, and especially the United States.
Moving on to the conclusion - one cannot confuse overtly socialist systems, i.e. systems that eliminate, limit, or hinder basic aspects of capitalism, such as demand, supply, free market, free trade, competition, and lack of state intervention with capitalism in general. Socialism comes in various forms and manifests itself. The systems of corporatism, statism, or cronyism directly or indirectly derive from it, and in no way are they just another form of "capitalism" that is in total contradiction to capitalism, liberalism, or libertarianism. One should be able to distinguish this and explain to those who brazenly instill in people that everything that is not socialism is capitalism.
