Social corporatism (also called Social democratic corporatism) is a form of economic tripartite corporatism based upon a social partnership between the interests of capital and labour, involving collective bargaining between representatives of employers and of labour mediated by the government at the national level. Social corporatism is a major component of the Nordic model of capitalism, and to a lesser degree, the West European social market economies.
Corporatism is considered a compromise to regulate the conflict between capital and labour by mandating them to engage in mutual consultations that are mediated by the government, and is generally supported by nationalist and social democratic political parties.
Social corporatism developed in the post-World War II period, influenced by social democrats and Christian democrats in European countries such as Austria, Norway, the Netherlands, Germany and Sweden.
Social corporatism has been adopted in different configurations and to varying degrees in various European countries. The Nordic countries have the most comprehensive form of collective bargaining, where trade unions are represented at the national level by official organizations alongside employers unions. Together with the welfare state policies of these countries, this forms what is termed the "Nordic model". Less extensive models exist in Germany and Austria, which are components of Rhine capitalism.
Some controversy has existed in the political left over social corporatism, where it has been criticized for abandoning the concept of class struggle, legitimizing privately owned enterprise, and for lending credence to a form of regulated capitalism.
Others on the left counter these criticisms by claiming that social corporatism has been progressive in providing institutional legitimacy to the labour movement that recognizes the existence of ongoing class conflict between the bourgeoisie and the proletariat but seeks to provide peaceful resolutions to disputes arising from the conflict based on moderation rather than revolution. Thus proponents of social corporatism consider it a class compromise within the context of existing class conflict.
In the 1930s, social democracy was labeled social fascism by the Third International, which maintained that social democracy was a variant of fascism because, in addition to their shared corporatist economic model, they stood in the way of transitioning to socialism and communism.
The development of social corporatism began in Norway and Sweden in the 1930s and was consolidated in the 1960s and 1970s. The system was based upon the dual compromise of capital and the labour as one component and the market and the state as the other component. Social corporatism developed in Austria under the post-World War II coalition government of the Social Democratic Party of Austria and the Austrian People's Party. Social corporatism in Austria protects private property in exchange for allowing the labour movement to have political recognition and influence in the economy, in order to avoid the harsh class conflict that plagued Austria in the 1930s.