Historically, corporatism did not refer to an economy or political economy in which corporations (in the modern sense) are powerful, nor one in which government favors corporations' economic interests over the rights or well-being of citizens. It did not, in fact, refer to corporations in the modern sense at all. Rather, it referred to a form of statist trade unionism which was modeled after medieval guilds, and was attempted on a major scale in pre-WWII Fascist Italy.

Under corporatism, unlike under socialism, the state did not seek to confiscate industrial capital from employers and turn it over to workers. Rather, it sought to organize employers and workers into syndicates, one for each major field of endeavor. These syndicates were known as corporations; they were supposed to provide a peaceful means for labor and employer interests to be worked out, as well as to represent the field's interests in government. At the same time, industry, like all other aspects of society under Fascism, was to be subservient to the government, or rather to il Duce.

If this sounds like a mishmash of capitalism and communism ... well, it is. Italian Fascism was not merely right-wing or nationalist extremism. Though it violently attacked leftist (i.e. revolutionary socialist) groups, Fascism still drew upon trade-unionism and even syndicalism for economic ideas. The existence of corporatism in the Fascist state should tell us something about the inaccuracy of a one-dimensional "political spectrum".

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