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Corporatism vs. Conservatism in Tennessee

David Callahan

Here's a radical idea: Capitalism needn't feature nonstop conflict between workers and owners, and can actually work better if these two sides cooperate. Things can work better still if government and nonprofits are partners, too. That's the basic idea behind corporatism, and decades ago, it had pretty wide traction among America CEOs and elites generally. Once business leaders realized they had to deal with strong labor unions in the mid-20th century, many came to see the benefits of actively partnering with workers to improve human capital, solve problems, and boost productivity. That's not surprising, since the people manning the front lines of any enterprise -- from a sandwich shop up to an auto plant -- probably have an idea or two about how to improve operations. 

Corporatism isn't entirely dead in the United States, and you can find lots of examples of owners and workers collaborating with each other, and with nonprofits and government -- especially when it comes to educating and training workers. 
And it sure isn't dead in Europe. Take a company like Volkswagen, which relies on works councils -- as many Germany companies do -- to run its factories. These councils bring together workers and management to address problems, set policies, and improve operations. “Our works councils are key to our success and productivity,” a top company executive said recently. “It is a business model that helped to make Volkswagen the second-largest car company in the world."
That executive, Frank Fischer, is the CEO of Volkswagen's operations in Chattanooga, Tennessee, and he was talking up works councils to explain why the company was not opposing a UAW unionization drive at its auto plant in that city. Having a union is typically a prerequisite to having a works council, and Volkswagen's plants in Germany are unionized, so the company is fine with its American workers joining a union, too. Fischer explained: "Our plant in Chattanooga has the opportunity to create a uniquely American works council, in which the company would be able to work cooperatively with our employees and ultimately their union representatives, if the employees decide they wish to be represented by a union.”
And herein the story should end. Workers may want a union and the execs are down with the idea. 
But the story doesn't end there, because the Volkswagen plant is in an anti-union state, with conservative leaders who don't want any unions anywhere. So those leaders are threatening to withhold future tax incentives to VW if it doesn't get with the program and push back harder against the UAW. Conservative national groups have joined the push, according to the New York Times, putting up billboards with warnings about the "United Obama Workers."
Crazy stuff. 
But back to the big picture: You'd think that American politicians interested in boosting the economy might pay attention to how Germany does things. After all, Germany is an economic powerhouse that, in 2012, had the highest trade surplus in the world and has an unemployment rate of 5.1 percent. And Volkswagen, as Fischer noted, is the second-largest car company in the world. If Germans tell us that something is likely to increase efficiency and productivity, we should probably listen. More broadly, we should pay attention to how their economic system is organized -- so key groups find it easier to work with each other, not against other. 
Corporatism isn't what it once was in Europe. But it still exists in many places and it's still working. The same can be true in Tennessee.