The Rise of Corporatist Regulation in the English and Canadian Dairy Industries

This article answers Larry Gerber’s (1995) challenge for a renewed appreciation of the social science literature on corporatism and state theory by explaining variations in corporatist institutions through the concept of policy legacies. To understand the variation in corporatist forms of governance, three policy areas are key: the long-standing trade policies of the England and Canada, the forms of government intervention during World War I, and prior political battles within the dairy industries. In their own unique way, these policies shaped the character of the market failure, the political capacities of farm organizations, and the institutional response that incorporated private interest groups within the formulation and implementation of public policy. By viewing the emergence of corporatist institutions in England and Canada as examples of governmental responses to economic crisis, this research on corporatism contributes to the larger theory of the determinants, as well as the effects, of the state in capitalist democracies.

Although the literature on corporatism is both expansive and diverse,¹ corporatism essentially describes the institutionalization of interest groups in the formation and implementation of public policy. Whether corporatism is due to market and state failure (Brenner 1969), the need to establish social order (Streeck and Schmitter 1985), or the recognition of mutual dependence (Cawson 1986), it is important not to overextend the concept of corporatism and to preserve its use for “the three-cornered configuration of conflicting social interests and state intermediation” (von Beyme 1983: 187). In a more elaborate statement on the structure and function of corporatist institutions, Lehmbruch 1984 distinguishes sectoral corporatism from corporatist concertation. Only in corporatist concertation do conflicting interests negotiate with the government to find a policy that offers benefits beyond the narrowly defined goals of the sector. Accordingly, the organization of interests found in sectoral corporatism is a necessary, but not a sufficient condition, for the emergence of corporatist concertation. Corporatist concertation therefore, in sharp contrast to sectoral corporatism, represents the transcendence of the concerns of a particular set of “private” interests in favor of the larger “public” interests that traditionally have been the domain of the liberal state. This distinction is significant and represents the pivotal difference between the corporatist institutions in England’s and Canada’s dairy industries during the 1930s.

By the mid-1930s, both England and Canada had constructed corporatist institutions to stabilize the producer and retail price of milk. On both sides of the Atlantic Ocean, newly enacted legislation had organized and integrated three principal interest groups within their dairy industries—producers, wholesalers, and distributors. However, despite the fact that both governments confronted similar problems of market and state failure in their dairy industries during the 1930s depression, England established an encompassing form of corporatism (corporatist concertation) while Canada established a limited set of institutional arrangements (sectoral corporatism). How can we explain these historical differences? While the literature on corporatism both distinguishes the difference between the cases and suggests the general conditions under which corporatism emerges, the literature is less helpful in providing an explanation for why we observe this important difference. Case studies and comparative research have described contemporary institutions (Grant 1985a, 1985b, 1989, 1991; Farago 1985; van Waarden 1985; Traxler 1985; Coleman and Grant 1984, 1985; Coleman 1987); unfortunately, they do not include rich historical explanations of how these corporatist institutions came into being. Conversely, historical works on the emergence of corporatism in England operate on the basis of a single case and therefore cannot explain the variable origins of corporatist governance (Cox et al. 1990a, 1990b). To provide an adequate explanation, comparative research must consider the historical antecedents to the market and state failures of these two cases and how they affected the ability of farm groups to formulate and participate in economic governance. More specifically, by utilizing the concept of policy legacies, comparative and historical analyses are able to capture the character of the cases’ market instability...