In explaining his shift away from Maoist economics, Deng Xiao Ping, chairman of the Chinese Communist Party, described his market-oriented changes as “socialism with Chinese characteristics.” Today, American businesses, as well as the media and academic establishments that serve them, increasingly embrace what can best be described as “Chinese capitalism with American characteristics.”
A convergence between the world’s two superpowers is taking place. In the United States, as property and power further consolidate, the “diffusion of power,” so critical to democracy, erodes and autocracy develops naturally. Only players at the highest level possess the heft and the motivation to influence policy. This powerful front consists of a new alliance between large corporate powers, Wall Street, and the progressive clerisy in government and media.
Its agenda consists of several goals. On the corporate front we have the emergence of “stakeholder” capitalism, which embraces the state’s priorities implicitly and those of the progressives generally, as a way to please regulators, the woke among their employers, and, to some extent, their own consciences. In this they resemble companies in authoritarian states—like Mussolini’s Italy, Hitler’s Germany, and today’s China—where private capital accumulation is permitted but dissent from the agreed norms of the media-government-academy, once the privilege of individuals and corporations, is now largely verboten.
Yet complicity in the West differs from fascist or corporate socialist standards in one important way. In wealthy societies, a large part of the corporate elite does not see widespread economic growth or rising living standards as a goal but as an impediment to meeting the demands of the “stakeholders,” who are largely defined by the clerisy, their orbit of nonprofits, cowed media, and their academic mentors. Profits are fine in this arrangement but only if they do not increase the material consumption of the populace while allowing new advantages to select racial or lifestyle minorities. The new corporatism is not bad for established capitalists but offers little to the middle or working classes, or, for that matter, to smaller independent businesses.
The New Convergence
The concentration of power in few hands, whether in the Chinese or American variant, has its true antecedents not in Marxism, as is often claimed, but in European fascism. Benito Mussolini, who viewed himself as a “revolutionary” transforming society, not a traditionalist, wanted the state to become “the moving center of economic life.” He successfully co-opted Italian industrialists to build new infrastructure and the military, and he used them to fight off Italy’s historically militant and socialist-oriented unions. Corporate power was essential to the ideology of fascism; it was critical to achieving its revolutionary goals. Not only did Mussolini rely heavily on large landowners and companies for his seizure of power in the run-up to the March on Rome. Once the fascists were in power, Confindustria, the leading organization of Italian industrialists, was glad to see the end of class-based chaos and welcomed the state’s infrastructure surge. This may have not made all capitalists fascists at heart but it preserved what Mussolini called “formal adherence to the regime.”
Most importantly, fascist corporatism, by rejecting the autonomy of private interests, parallels today’s fashionable theories like “stakeholder capitalism” and the environmental “Great Reset.” As in the fascist state, corporations now take it on themselves to be conscious change agents for particular political and moral agendas. Two doctrines guide these actions. First, “stakeholder capitalism,” which holds that corporations must push onto society doctrines concerning gender, “systemic racism,” and other elements of the woke agenda. Second, the “Great Reset,” which seeks to have companies essentially “save” the planet by slowing material growth for the working and middle classes while maintaining rich profit opportunities through “disruption” of energy and other industries. Both doctrines currently guide the majority of America’s major corporations.
China has already followed this model, and America’s corporations are on the cusp of doing so. In China, as one scholar observes, corporatism is “a socio-political process” where monopolies flourish with the assistance and connivance of state agencies. They follow state strictures by embracing the official ideology, celebrating the Communist Party’s vision, and enforcing ideological conformity among employees and even foreign business partners.
Chinese authorities see that “a conflictual-competitive system,” like that usually dominant in America, “will hold back national economic priorities and damage the social fabric.” Under the rubric of “Corporate Social Responsibility,” the state still holds the command keys, and, although entrepreneurs are allowed to get rich, they cannot deviate much from the state orthodoxy.
Rather than allowing independent corporations to adopt their own agenda, as was traditionally the case in the West, Chinese corporate power kowtows to the mandarins of the Communist Party. Since 2000, a hundred billionaires—the number of Chinese billionaires in 2017 was just behind the number of billionaires in the United States and growing much more quickly—from tech and other sectors sit in the country’s Communist legislation, a development that Mao Tse-Tung would never have countenanced.
The Emerging American Corporate State
In China, these policies are focused around a single figure—Xi Jinping—who combines the boldness of Mussolini with the backing of the world’s ascendant economic and technological power. The Democratic Party may seek to play this role, usually in the guise of Franklin Roosevelt’s New Deal but with very different ends in mind. FDR’s New Deal was about expanding ownership and productivity while the current version is more about constricting the population and depressing their standard of living.
Indeed, the United States has been on the path toward corporate-government autocracy for some time. A recent study in the Review of Finance notes that three-quarters of American industry have become more concentrated, with both fewer and more dominant players, since the late 1990s. This has been most notable not in the manufacturing sector but in nontangible fields of finance, technology, and media; all have seen growing barriers to the entry of possible competitors. A tenth of the US economy is made up of industries where four firms dominate more than two-thirds of the market, with finance and information technology now among the most concentrated.
Read the rest of this piece at Claremont Institute.
Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.