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

Vectors of Corporate Power

Another way in which capitalist globalization might reshape Canadian corporate power is through transnatiofialization of interlocking, as distinct from transnationalization of corporate investment. How is the elite embedded within the global network? It is useful to break this question into two parts: the specific Canada-U.S. relation, and the interlocks between Canadian business and the rest of the world. Consider first the north-south vector of corporate power. Here the issue is whether creation of a North American economic space has expanded "continental connections" across elites. Mapping the Canada-U.S. network of 500 corporations (the top 250 from each country), I found only scant interlocking across the border, which decreased over time. By 1996, continental ties occurred at a rate of only two per 1,000 pairs of companies--less than 1/10 the density of domestic interlocking in either country. (3)

Table I shows not only that no continental financial-industrial axis existed in the mid-1970s, but that free trade and the decline of the U.S. branch plant sector has brought a sparser continental network. By 1996, only a dozen interlocks linked Canadian subsidiaries to their American-based transnational parents. Again, however, we should be cautious in drawing interpretations. Recalling that corporate power is multiform, the decline of continental directorship ties may actually reflect a shift from strategic power (exercised board-to-board) to operational power (exercised within a more unified continental enterprise). As the Canadian subsidiary becomes simply one among various sub-units within a single economic zone, the need for cross-border directorate interlocks fades. Other mechanisms of capital integration, facilitated by the trade agreements, also favour a continentalization of corporate power--for instance, cross-border mergers such as Molson-Coors (2005) and the movement of operational offices of Canadian firms to American cities (e.g., Nova Corp. to Pittsburgh, The Thomson Corporation to Stamford). Even so, at the level of corporate boards and their interlocks, the Canadian corporate elite remains strikingly detached from its American counterpart, suggesting that the "unequal alliance" of dominant national capitalist fractions, mooted by Wallace Clement (1977) in his thesis of continental connections, has still not materialized.

When we look beyond this continent to the global corporate network, for the most part we again find only sparse and weak ties connecting Canada's corporate elite to the rest of the world (Carroll, 2004: 136). The one exception is the Desmarais-Frere group, which gives the Montreal-based Desmarais a controlling share in some of Europe's largest firms. Overall, the sparse ties linking Canada's corporate elite to the global network support Dicken's (1998: 193) claim that most transnational corporations remain nationally embedded. Canadian corporate capital has retained a predominantly "national" base even as finance capital has become increasingly transnational in scope. This resilience of the national factor in elite organization urges us not to overestimate the disorganizing impact of recent globalization.