Speaking at the Catholic University of America this week, Sen. J.D. Vance reportedly said, “There is no meaningful distinction between the public and the private sector in the United States of America.” His remark drew outraged responses. “This is how the right lays the predicate for even more comprehensive state control of the private sector, including plowing through constitutional limitations on state authority,” wrote David French, the New York Times columnist.

Some seemed to miss the fact that Vance’s statement was descriptive, not prescriptive, that it stated a fact, not a wish. Further, Vance’s critics simply ignored the fact that while Vance may not be a libertarian, he has repeatedly spoken of the proper limits on state power and the need for subsidiarity.

“Such an order is neither liberal nor socialist, but corporatist.”

So what stands behind the controversy? Most fundamentally, the outcry showed how reluctant many remain to acknowledge the reality of our politics. Ideological combatants on both sides speak as if we face a great choice between socialism on the one hand and classical liberalism on the other. The reality is less dramatic. Whether a Republican or Democrat wins in 2024, the candidate will preside over a state that in important ways melds public and private power. Such an order is neither liberal nor socialist, but corporatist.

Corporatism is most often associated with the discredited regimes that arose in Europe in the middle of the 20th century. But as Howard Wiarda, the political scientist, argued in Corporatism and Comparative Politics (1997), the term has broader application. It exists wherever

  1. politics is organized not in terms of individuals but in terms of “corporate” units such as family, racial group, sexual identity, business lobby, or interest group;
  2. the state seeks to organize, coordinate, or control these groups; and
  3. the groups seek benefits from the state while the state seeks to incorporate them into its structure, turning them into “private-sector governments.”

Americans are particularly reluctant to acknowledge the corporatist elements of their regime, because they see their country as deeply individualist. Despite this self-image, America has long undergone what Wiarda describes as a form of “creeping corporatism”—the unacknowledged growth of a nonliberal mode of governance.

One early instance of American corporatism came during World War I, when Woodrow Wilson established the War Industries Board in order to ensure adequate production and guard against strikes. The government board brought together the labor leader Samuel Gompers with businessmen like Bernard Baruch in the classically corporatist “tripartite” model of coordinating business, labor, and state.

Yet the real beginnings of American corporatism came with World War II and the New Deal. As Wiarda observes, American corporatism was “gradual, incremental, societal corporatism”—not abrupt and authoritarian. For this reason, some prefer to describe it as “pluralism” or “interest-group liberalism.” Under whatever name, corporatism has become a familiar feature of American life. Government agencies turn to outside groups for help in setting policies. And it is not just business and labor that are consulted and coordinated by the state, but groups defined by shared ideological concerns (such as environmentalists) or common identities (such as racial and sexual groups).

Conservative intellectuals have denounced this post-New Deal order, but Republican presidents have accommodated it. Dwight Eisenhower expressed distaste for what he called “regimented statism,” but he nonetheless believed that enlightened managers had a role to play in creating concord between labor and business. Richard Nixon, too, carried on the tradition. Even Reagan, who spoke against the industrial-era corporatism that sought to regulate the relations between business and labor, did little to slow the rise of a post-industrial form of corporatism characterized by the management of identity groups.

When Wiarda wrote his study in the 1990s, he argued that American corporatism was still “limited and partial.” Since then, it has steadily grown. We have seen the rise of “private-sector governments,” not only in the form of social media companies coordinating with intelligence agencies, but also in the spread of diversity requirements and h.r. mandates, which have given private corporations an important role in enforcing current understandings of civil-rights law. In countless domains, we have undergone what Wiarda describes as “the merging of the public and private sectors, the delegation of public power to private-interest associations, and the increased central government consolidation of economic and political power.” Whether you celebrate or lament these developments, there is no use denying their reality.

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