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

This framework can be applied both at the national and transnational levels. Indeed, my own research has gradually moved from the former to the latter, considering Canada as a critical case--a middle power whose national economy has been for many decades relatively internationalized via high levels of foreign investment and trade, within the logic of a "permeable Fordism" (Jensen, 1989) linking "Canadian" capital circuits to those of global capitalism's dominant state. Let us begin with Canada.

With co-authors that include my doctoral supervisors, John Fox and Michael Ornstein, international collaborators like Malcolm Alexander and Meindert Fennema, and several of my graduate students, I have mapped corporate networks with an eye to transitions in the organization of corporate power. The timeframe has spanned the second half of the 20th century, taking in the "golden era" of Fordism, the Keynesian welfare state, the economic downturn of the 1970s and subsequent development of transnational neo-liberalism. What animated my research initially was the debate--in full flower by the late 1970s--over the character of Canadian capitalism and the capitalist class, summarized well by Brym (1989). For the corporate elite, the question could be posed in terms of two scenarios. Has corporate power been organized around an alliance of Canadian banker/merchants and foreign-based industry, presiding over a cumulative process of silent surrender and underdevelopment? Or has Canada's corporate elite been organized much as in other advanced capitalist societies--its dominant fraction controlling finance capital and showing the capacity to accumulate globally (Carroll, 1986: xiv-xv)? Along with important work by Ornstein (1976) and Richardson (1982), my research on the "golden era" (Carroll, 1986) established the validity of the second scenario:

1. Leading industrial corporations and financial institutions controlled by Canadian capitalists have tended to interlock most profusely. These comprise the network's core--a dominant fraction of indigenous finance capital, centred in Toronto and Montreal.

2. Foreign-controlled companies have not participated extensively in the corporate network: earlier notions of a compradorization process based in an alliance of Canada's commercial bourgeoisie and U.S. TNCs (as in Clement, 1975; 1977) were overstated.

3. Although American direct investment poured into Canada after World War II, it began to drop in the 1970s as American global hegemony weakened and as Canadian-based capitalists expanded their control of the home market while quickening investment abroad. The "silent surrender" that Kari Levitt (1970) projected as a cumulative process turned out to be specific to an era, during which Canada's capitalists did not "surrender" but pursued opportunities within a U.S.-centred regime that applied as much to Europe and Japan as to Canada.

In short, we find the classic scenario of "organized capitalism" in its Anglo-American variant--with some elements of European-style organization-as in the investment companies that have enabled finance capitalists like Paul Desmarais to build corporate empires of remarkable scope. This basic interpretation--that Canada's capitalist class is not an historical aberration (as in Naylor's [1972] notion of "merchants against industrialists" [MacDonald, 1975])--but is socially and economically organized similarly to capitalist classes in other countries of the centre, has been strongly validated in recent empirical work (Burgess, 2006; Kellogg, 2005).