The Coming Corporate State
Updated: Jul 12
THE Corporate State is based upon industrial or occupational organization rather than the regional or geographical method of government used today. This feature runs through the whole system, both of Government and representation, and must be grasped as a fundamental before the real nature of the Corporate State can be appreciated. The regional administration of Democracy is largely replaced by functional industrial organization on a vocational basis.
British Union seeks a more effective means of self-government. Turning from the local administration of the urban borough and the rural district, the Corporate State endows industries and occupations with new powers of self-government. These powers are exercised in the same manner as those of local authorities today. In the position of the borough council we have the industrial corporation, which possesses the right to pass by-laws binding upon the industry as a whole, just as the council can pass by-laws for the borough.
Hitherto all attempts at industrial planning have broken down because of the difficulty of compelling an industry to fulfil agreements. In the Corporate system decisions arrived at by the corporation will be legally binding, and any breach will be punishable at law.
Within the Corporate State every great industry, and groups of smaller industries and professions, will be controlled by such a Corporation giving the industry powers of economic self-government.
These Corporations would, in their turn, be split up into smaller groups functioning in single industries within the main category, but would represent the whole industrial section in relation to the central government.
We now turn to the typical Corporation, and see in what manner it is organized and how it will function. There will be represented on the Corporation employers, workers and consumers. Each group will be given equal representation and equal power, and may not be outvoted by the other two.
Sane functioning of the nation as a whole can only be attained by collaboration between the various industrial factors, not by their mutual hostility, as supposed by the Manchester school of economists.
The employers' representatives will be elected by the owners, partners and directors in the business enterprises of the industry, and by those engaged in a managerial capacity or in executive office. They will represent the organizing side and will form an employers' federation. Association to this employers' federation will be compulsory upon every business enterprise, which will contribute a yearly subscription proportional to the number of its employees, and submit itself to the disciplined control of the federation.
The workers' representatives will be elected by all employees, whatever their function, including clerical staff (excepting only those engaged in a managerial capacity mentioned above). They will form a trade union embracing every worker, but confined entirely to these. The principle of Trade Unionism is entirely retained, and advanced to 100 per cent. Stripped of their obnoxious and irrelevant political activities the Unions will play an essential part in the organization of the Corporate State.
The consumers' representatives cannot be elected like the others, as consumers may very well be scattered broadcast. Actually the nation itself is the ultimate consumer in the case of most products and, therefore, the Government, as representative of the nation, is best fitted to nominate the consumers' representatives. Reputable persons will be chosen to represent the interests of the ultimate consumer, and these will hear the grievances and suggestions of anyone who is affected by the working of the industry in question. In many cases other industries are big consumers, when the Government will appoint representatives to be nominated by the Corporations controlling these industries to watch over their interests.
It is through these corporate institutions that a rationalized expression of opinion will be realized in keeping with the modern age. For the first time all members of every industry will have their share in the control of the great economic factors of their daily life. By electing trustworthy representatives they will choose not some vague general Party policy - to be conveniently forgotten by politicians in office - but will determine, in common with the other factors of production, the conditions of their daily work, the remuneration for their service and the planning and regulation of their own trade or profession.
ECONOMISTS and sociologists will recognize that, in effect, the system of the Corporate State closely resembles Syndicalism as advanced by revolutionary thinkers during the nineteenth century. True, the new syndicalism is divested of its original class-conscious outlook, and incorporates employers with workers in its system, but the basis remains syndicalist and in Italy both employers' and workers' organizations are termed "syndicates."
The argument which defeated the original Syndicalists was that they made insufficient allowance for central government. They wished to invest each syndicate with self-governing powers, and assumed that they would arrange for a mutual distribution of their products by negotiation. Obviously tendencies would then arise for each industry to attempt to exploit the community, possibly by means of restricted output, which would mean merely replacing the class war by an internecine industrial conflict.
British Union will take strong measures to prevent this danger arising, and the Corporate State may be defined as a syndicalist system upon which has been superimposed a powerful central government. The consumers' representatives described in the last article are an indication of the check and control which Fascism exerts over any tendencies to exploit the nation.
The consumers' representatives are in a certain sense the delegates of central authority, to give warning of any unjustifiable raising of prices or restricting of output. They are, however, backed up by a central economic council, which crowns the industrial structure of the Corporate State. This general economic council is the National Corporation, which comprises representatives from every Corporation, and centralizes the administration of the whole system. The Corporations themselves are not only diversified by their different industrial functions, but they will certainly in many cases have their administrative centres in the provinces.
It will be the duty of the National Corporation to co-ordinate activities in the interests of the national welfare. The National Corporation will be elected upon the same principle as are the Corporations. Each will nominate equal numbers of employers and workers. The number of members from each Corporation will not be equal, but will be weighted in accordance with the importance of the industry to the national welfare. The total of members will, however, be kept as low as possible.
Its function will be executive and administrative, as distinct from the occupationally elected House of Commons, which will be legislative. All controversies within the individual Corporations, which cannot be settled by compromise, will be referred to the National Corporation for settlement according' to the public interest. Disputes between individual Corporations will also come before the National Corporation, which will exercise a judicial capacity. The task of industrial planning on a national scale will be vested in the National Corporation, which will adjust consumption to production by its control over wage rates throughout the industrial field. Similarly, the control over the Investment Board, the Foreign Trade Board, and other important corporate institutions, will be exercised by this national economic council. All broad economic issues will come before this body, which will include the best executive brains of industrial and professional life of the country, sitting as an advisory council to the Minister of Corporations, who will act as speaker and control the deliberations of the assembly.
The first task of the National Corporation must be to solve the economic quandary of so-called "overproduction," which is bound up with that of unemployment. The problem is essentially one of organization, and refutes the suggestion made by modern defeatists that unemployment is the inevitable result of rationalization, Socialists actually suggest that machines should be put on the dole; a return to the policy of the machine wreckers of over a hundred years ago. Surely man can establish his mastery over modern technique?
To take a simple analogy, we will suppose there are twenty families on an island in the Pacific, who by the use of primitive methods of agriculture can feed themselves by eight hours' work a day. Were a passing philanthropist to supply them with a plough, he would be introducing rationalization. The islanders would find that fifteen families could now supply the needs of the community. If they were foolish enough to follow the methods of Western Civilization, they would condemn five of their families to unemployment, and supply them with just sufficient food to keep them alive, according to the calculations of the medicine-man of the island. The most primitive savages would scarcely be as foolish as this. They would quickly learn that by a readjustment of the hours of work to six a day instead of eight, all would have employment and would enjoy more leisure.
It will be seen from this simple analogy that the problem of rationalization is a problem of organization. The advance of modern science can bring either greater wealth or greater leisure, or a sane combination of both. The planned state is required to meet the problem of rationalization by organized methods. We do not necessarily propose a wholesale shortening of hours of work, but rather an increase in the standard of life. The means used will be largely financial, through higher wages and salaries and putting a larger volume of currency and credit into free circulation. We shall have to break with the gold standard and set up a managed currency, but this involves no real danger of inflation in a planned and disciplined State.
The issue is a simple one. Modern science enables us to produce enormous quantities of goods, and it is purely muddle and inefficiency in our economic system if these goods are denied to those who need them. The success of a planned State is in the degree in which it can distribute the products of industry to the people; the need is evidenced by the fact that the Liberal-Capitalist system is incapable of solving that problem. The Corporate State will not be set up in order to stabilize the present status quo, but to release the full powers of modern production for the benefit of all sections. Within such a State we can give an absolute guarantee that the problem of unemployment will be finally and permanently.
THE Corporations have important duties within the structure of the State. These may be divided into three general categories. Regulative, Planning and Social. Each Corporation must regulate the relations between the various factors of production in the industry it controls; it must also plan the development of the industry or the closing down of redundant plant; finally, it must take heed of the social amenities of those engaged in the industry, their industrial insurance, superannuation, etc.
To begin with the regulative function, we have the relation between the three main groups of employers, workers and consumers. At present employers and workers are opposing armies threatening one another with the destructive, anti-social weapons of the strike and lock-out. In the planned State neither can be tolerated, and all questions of wages, hours and conditions of work will be settled .between employers' and workers' representatives on the Corporation.
Early in the formation of the Corporate State, the National Corporation will call upon every industrial Corporation to prepare their codes of wages, hours and conditions of work, which shall be legally binding upon every member of the industry, master or man. In the preparation of these codes, the consumers' representatives will act as intermediaries between the two parties, and make every endeavor to bring about an amicable agreement. If they fail, the National Corporation will intervene with suggestions, and in the last resort the matters in dispute will go before a Labour Court for compulsory arbitration.
Similarly as between employers and consumers, questions of prices, terms of competition, output, etc., will be settled by mutual agreement. Any attempt of employers and workers to combine to restrict production and extort unreasonable profits and wages will be combated by the consumers' representatives, who can appeal to the National Corporation to intervene in the public interest.
The return upon invested capital in the form of dividends and other payments will also be the subject of regulation, as workers and consumers will resist too great a share going to capital. Here the National Investment Board will prove useful, as it will publish from time to time a guiding figure of the requisite return upon secure investment to maintain a steady economic flow of national saving. Investors will have a right to claim a higher return in respect of previous losses and insecurity in the case of speculative ventures, which will all be taken into consideration. In the event of failure to reach an agreement the investors will have a right of appeal to the Investment Board.
In regard to the planning of industry on a large scale, the Corporation will consider the advisability of the expansion or contraction of the industry it controls. Where the industry has been successful and the demand for its products increasing, expansion in the public interest is necessary. The Corporation will apply to the Investment Board for capital, and the Board will encourage and authorize the flotation of new concerns. The workers' representatives will make arrangements for the necessary new trained workers, while the consumers' representatives will advise on the marketing.
For the first time representatives of workers and consumers will enter into partnership with employers in the planning of the industry in which they are so intimately concerned. In those unfortunate cases of industries which owing to the advance of science are superseded by new inventions, the inevitable contraction can be carried out with the minimum of hardship in a planned system. By mutual agreement redundant plant will be closed down, the employers compensated and the displaced workers transferred by means of Government training centres to other expanding industries in need of men.
The tremendous scope for useful action is not completed with the above, as the social development of the Corporate State is perhaps its most important feature. In Italy, the Dopolavoro, or "After-Work" recreation, is one of the most startling innovations to foreign eyes, and the German Labour front is developing apace the amazing "Strength through Joy" organization. In this country the same methods will undoubtedly be carried even further with the greater resources at our disposal. Already many progressive firms have their own recreation facilities for their employees. These desirable enterprises will be coordinated into a general system of recreation in which all members may take part. The Corporations will maintain their own industrial insurance and superannuation schemes, which will produce pensions for all employees commensurate with the service they have rendered the industry during their working lifetime. This will be more, satisfactory than the pensions offered by many private concerns today, which are lost if the employee leaves to join another firm.
The field for industrial self-government and regulation for mutual benefit is only too evident. The Corporate State is the only means of realizing the advantages of such a system, without the destructive, anti-social features of the Class War, which are so repugnant to all fair-minded Englishmen.
DESPITE our immense advantage in some respects over other-countries, we do not feel entirely satisfied with our legal system. However incorruptible our judges may be, they can only administer the Law as it exists, and the Law is biased in favour of the owner of property. Indeed, the Law is mainly concerned in defining-the rights of property and protecting the property owner. Our system of Law is the bulwark erected by bourgeois society to protect the interests of those who have. Behind this barrier financiers and capitalists exert their full money power, secure in the knowledge that bourgeois Law maintains their right to the ownership and use of their wealth, even when it is used against the public interest.
What we require today is economic justice; justice as between the various factors of industry. Employers, workers, consumers are at present occupied in a bitter conflict each for their own interests. It will be the duty of Corporate justice to bring economic life within the bounds of law and order. Under financial democracy morality has sunk to a low ebb. It is a case of "eat, or be eaten" in the fierce struggle of modern commercial competition.
Justice will go beyond the bourgeois conception of protection of property, indeed it will lay down the conditions under which property may be owned. A man may by no means do what he likes with his own. If he possesses great wealth, he bears a grave responsibility that that wealth is used to the public benefit.
Private ownership and initiative is encouraged, but the individual is required to consider public welfare as well as private interest. Liberal atavism, which held that in serving his own interests the individual automatically advanced the interests of the community, has been discredited, and we now turn from the laws of the jungle to the laws of man.
Economic justice will be the first object of the Corporate State. The Corporations have been devised for the express purpose of regulating all the factors in industry in accordance with justice. The British Union sets its face sternly against class war and cut-throat competition. Strikes and lockouts will be prohibited as crude resorts to force where justice should hold sway in a dispute over ownership of property we do not permit force, why then in a dispute over wage rates and conditions of labour?
The workers will no longer need to resort to direct action to enforce respect for agreements, but will be enabled to bring suit against the offending employer before the Courts by ordinary legal means.
Similarly, agreements as to prices and terms of competition will be negotiated between representatives of employers and consumers. No industry will be permitted to force up prices (by restricting production) beyond what is a fair return for labour and investment, commensurate with that in other industries. Once prices and terms of competition have been negotiated and approved by the Minister of Corporations, they will be given legal standing, and anyone undercutting or indulging in any other form of unfair competition will be guilty of an offence for which he can be arraigned before an Industrial Court.
The above outlines the first beginnings of ordered economic justice. The very first crudities of present economic relationships will be regulated; but the code of economic justice will be extended to social insurance, child welfare, superannuation and other means of safeguarding the individual against economic mishap.
No longer will it be possible for an honest workman, dismissed through no fault of his own, to sink lower and lower in the social scale of despair and misery. No longer will a black-coated worker, faithful servant for twenty years or more, be dismissed with a week's or month's wages. No longer will a small tradesman face the cut-throat competition of a multiple store suddenly planted down beside his shop. All these will turn confidently to Corporate economic justice, which will safeguard them against unfair treatment and unfair competition at the hands of even the wealthiest and most powerful interests.