From Canadian corporate elite to transnational capitalist class: transitions in the organization of corporate power

Canadian Review of Sociology and Anthropology, The, August, 2007 by William K. Carroll

Each form of economic power has its characteristic agents and sites. Managers wield operational power within internal hierarchies. Strategic power can involve complex alignments of major shareholders, whether individual or institutional. It is centred in the board of directors, where major strategic decisions are made, but often cuts across individual companies through interlocking directorates and intercorporate ownership (Berkowitz and Fitzgerald, 1995). Allocative power, centred in the control of money-capital, creates complex relations between creditors and debtors, often evident in interlocking directorates between financial institutions and corporations.

The board of directors brings together all three kinds of power, and although operational power remains bound within each enterprise, directorate interlocks often trace relations of strategic and allocative power across firms. Considered in their entirety, these relations constitute a structure of finance capital: a coalescence of the forms of capital, under conditions of monopolization and internationalization (Thompson, 1977; Overbeek, 1980; Richardson, 1982). Thus defined, finance capital has been an integral feature of advanced capitalism, what Hilferding called "organized capitalism," (2) yet the specific institutional ordering of finance capital has varied with national differences in business systems.

The Continental European and Japanese systems have been the most "organized," with deeply structured capital relations integrating the largest corporations and banks. At the other end of the continuum, the Anglo-American system of capital mobilization and elite formation has limited the concentration of shareholdings and positioned banks at the centre of a system of "polyarchic financial hegemony," inducing a relatively thin corporate network (Scott, 1997). Canada's regime has been somewhat of a hybrid. Although financial-industrial relations have been built more around credit than ownership, Porter (1965) and others (e.g., Niosi, 1978) were able to identify controlling interests (whether persons, investment companies or other corporations) for most large corporations, and diversified investment companies have integrated strategic control over numerous firms within complex pyramids of intercorporate ownership (Carroll and Lewis, 1991).

Corporate power is not simply a matter of commanding the heights of industry and finance. The consent of subordinates cannot be taken for granted. Much of the work of manufacturing that consent can be delegated to various intellectuals--in media, public relations, academe, etc.--but the corporate elite must exercise active leadership. The ruling class may not rule, but business leadership does reach into civil society and the state, recruiting support for a worldview within which the interest of capital in profitable accumulation is universalized. To reach effectively, to be a leading cultural and political force, the corporate elite must achieve cohesiveness as a business community, with a shared perspective on what is to be done. A second component of my research program has focussed on how corporate-elite organization enables the exercise of hegemony as a form of class power distinct from accumulation. Here again, the empirical mapping of corporate-elite networks gives us one window on the relations and practices of corporate power.