Hostname: page-component-cd9895bd7-gxg78 Total loading time: 0 Render date: 2024-12-26T20:35:09.708Z Has data issue: false hasContentIssue false
  • English
  • Français

Concentration of Economic Power and the Economic Elite in Canada

Published online by Cambridge University Press:  07 November 2014

John Porter
John Porter*
Affiliation:
Carleton College
Get access

Extract

Membership in an élite group implies a role by virtue of which the individual has the power to make effective decisions and to co-ordinate activity in a particular sector of the social structure. In simpler types of social structure, or the “folk” society, decision-making roles tend to be fused with other roles such as headship of kinship units or magical and religious functions. In industrial types of social structure with a great differentiation of social life, decision-making and co-ordinating roles are assigned to members of élite groups. The élite groups which can be distinguished are the economic, political, bureaucratic, military, and, where the ideology has a strong religious component, church hierarchies. Where the ideology tends to be secular, the position held by church hierarchies is taken over by an intellectual élite. The spheres of influence of the several élite groups are not always clearly defined, but in general they correspond to essential social functions.

Such a scheme of élite groups has been suggested by Professor Aron as a more useful analytical device in the study of power than the classes of Marxian theory. It might be added that a scheme of élite groups is also more useful than the “Warner” system of classification which is more relevant to prestige than to power. Hollywood film stars might be considered both “capitalists” and “lower-uppers” but they do not exercise power, although the élite groups who do exercise power might use them for purposes of prestige in the way that advertising and political campaigns suggest.

Type
Research Article
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 22 , Issue 2 , May 1956 , pp. 199 - 220
Copyright
Copyright © Canadian Political Science Association 1956

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Aron, R., “Social Structure and the Ruling Class,” British Journal of Sociology, March and 06, 1950.Google Scholar Cf. Pareto, V., The Mind and Society, ed. Livingston, (New York, 1935), III, 1423 ff.Google Scholar See also John Porter, “Elite Groups: A Scheme for the Study of Power in Canada,” this Journal, XXI, no. 4, Nov., 1955, 498–512, for a theoretical model of élite groups.

2 For an interesting discussion of the Warner system see Kornhauser, Ruth R., “The Warner Approach to Social Stratification” in Bendix, R. and Lipset, S. M., eds., Class, Status and Power (Glencoe, Ill., 1953).Google Scholar

3 Mills, C. W., The New Men of Power (New York, 1948).Google Scholar

4 See, e.g., Temporary National Economic Committee, Monograph no. 11, Bureaucracy and Trusteeship in Large Corporations (Washington, 1940), chapter III.Google Scholar This to some extent would seem to be the view of Burnham, J. in The Managerial Revolution (New York, 1941).Google Scholar

5 Berle, A. A. Jr., and Means, G. C., The Modern Corporation and Private Property (New York, 1932).Google Scholar

6 E.g., National Resources Committee, The Structure of the American Economy (Washington, 1939), Part I, 158.Google Scholar

7 Dominion Bureau of Statistics, The Manufacturing Industries of Canada, 1948 (Ottawa, 1951).Google Scholar

8 E.g., G. Rosenbluth, “Industrial Concentration in Canada and the United States,” this Journal, XX, no. 3, Aug., 1954, 332–46. See also the discussion in Nutter, W. G., The Extent of Enterprise Monopoly in The United States, 1899–1939 (Chicago, 1951)Google Scholar on the difficulties of using industrial classification systems in the study of concentration.

9 The industrial distribution of the national income and the net value of production by industry are different ways of viewing the whole economy. The methods of computing both aggregates, and the differences in them, are explained in D.B.S., National Accounts, Income and Expenditure, 1926–1950 (1952), Part II, “Concepts, Sources and Methods.” See also D.B.S., Survey of Production, 1938–1951 (1953).

10 The Manufacturing Industries of Canada, 1948, 75, gives 347 establishments with more than 500 hands, but D.B.S. Reference Papers 1950, no. 7, List of Manufacturing Establishments Employing 500 Hands and Over, based on 1948 returns, actually contains 338. The aggregate gross value of production of the 338 establishments in 1948 was supplied by D.B.S.

11 The establishments with more than 500 hands employed about 35 per cent of the labour force in manufacturing in 1948. The Manufacturing Industries of Canada, 1948, 75.

12 It could be argued that “net value of production” would be a more appropriate aggregate than “gross value of production” which is the selling value of the output rather than the “net value added.” Gross values are used here because those aggregates are available by establishments and by industry, but at the same time gross value would seem better for the purpose in hand. Gross value of a firm's output reflects that firm as a buyer of materials, a hirer of labour, and a consumer of electricity. Net value does not give a better picture of a firm's position as a user of economic resources than gross value. Furthermore, net value may be nil or very low in a particular year, but this does not mean that a firm has no control over resources. Subsidiaries may be kept operating at a loss, or they may sell to a parent organization, at cost. Net values may not properly reflect that subsidiary's true economic power. It is interesting that in the United States it was found that 100 corporations contributed 24.7 per cent of all the net value added in manufacturing and 32.4 per cent of the value of products, presumably gross. (Bureaucracy and Trusteeships in Large Corporations, 5.) Although there is some difference in the percentages it is still debatable which gives a truer picture of concentration.

13 Report of the Royal Commission on Prices (Ottawa: Queen's Printer, 1949), III, 225 ff., 203 ff.Google Scholar

14 Ibid., 144 ff.

15 This remark would not apply, however, to printing and publishing firms in the United States, considering their position in the pulp and paper industry in Canada.

16 The Standard Industrial Classification has been used to eliminate the less important industries because it is by this classification that gross values of production can also be eliminated.

17 Aggregate supplied by D.B.S.

18 A rough estimate computed from such items as “net sales” and “operating profit” in their accounts as they appear in Financial Post Survey of Industrials, 1951. The D.B.S. aggregates refer to the various industrial classifications. If individual firms are removed or added, the firms' published accounts must be used, but the estimate becomes less precise.

19 Also a rough estimate.

20 The Miner Rubber Co. Ltd., Kaufman Rubber Co. Ltd., Gutta Percha and Rubber Ltd., the relative positions of which can be determined from Rubber Products (Dept. of Justice: Ottawa, 1952), Table V, p. 20.Google Scholar The tobacco company is W. C. MacDonald Inc., the relative size of which can be inferred from Report of the Royal Commission on Price Spreads (Ottawa: Queen's Printer, 1937), 52.Google Scholar The meat-packing company is J. M. Schneider Ltd. See Report of The Royal Commission on Prices, III, for a study of the livestock and meat industry.

21 E.g., the position of Canada Packers Ltd. in the butter industry in Report of the Royal Commission on Prices, III, 66 ff.

22 Marshall, H., Southard, F. A., and Taylor, K. W., Canadian–American Industry (New Haven, Conn., 1936).Google Scholar

23 See below for a discussion of “residence” and “citizenship” of directors.

24 It is interesting that, considered in terms of investment and stock ownership, American control amounted to 24 per cent of all industry and merchandising in Canada in 1951. The total foreign ownership was 32 per cent. Industry here includes manufacturing, mining, steam railways, and other utilities. See D.B.S., The Canadian Balance of International Payments, 1953 and the International Investment Position (1954), 26.Google Scholar

25 See Appendix, “A Note on Sources and Methods,” for an account of the sources on the mineral industry.

26 The statistics on transportation in this paragraph were obtained from the following publications of D.B.S.: Steam Railways, 1948 (1950); Express Statistics, 1948 (1949); Telegraph and Cable Statistics, 1948 (1949); Civil Aviation, 1951 (1952); Motor Carriers Freight–Passenger, 1948 (1949).

27 D.B.S., Telephone Statistics, 1948 (1949).

28 D.B.S., Canada Year Book, 1952.

29 These percentages were arrived at by taking the kilowatt hours sold by the ten companies as reported in Financial Post Corporation Service. The total of kilowatt hours produced was taken from Canada Year Book, 1952. In two cases the total of kilowatt hours sold was not reported, but a rough estimate was made by comparing the installed horse-power capacity with that of the other firms.

30 D.B.S., Electric Railways, 1948 (1950).Google Scholar

31 Report of the Royal Commission on Price Spreads, 204–6.

32 Ibid., 207.

33 Iron Ore Co. of Canada, a joint undertaking of Hollinger Consolidated Gold Mines and a group of American steel companies.

34 More thorough studies of concentration, in which the total activity of firms can be identified and American and Canadian influence more clearly established, must wait until more comprehensive data are available to the non-governmental investigator.

35 Quoted in Bureaucracy and Trusteeship in Large Corporations, 6.

36 It has been pointed out above that a further 119 directorships of American subsidiaries and 11 of United Kingdom subsidiaries could be considered as representing influence outside Canada. However, these Canadian residents are here included in the economic élite in Canada.

37 Brebner, J. B., North Atlantic Triangle (New Haven, Conn., 1945), 227.Google Scholar

38 This distinction is Mr. E. P. Taylor's.

39 The Bank of Canada has not been included. The directors of several Crown corporations and other publicly owned economic organizations have been omitted from the economic élite, but are to be included in the bureaucratic élite on the grounds that they work more as officials than entrepreneurs.

40 Berle, and Means, , The Modern Corporation and Private Property, 231.Google Scholar

41 Financial Post, April 7, 1951.