 In
the last year, Canada's largest brewery, largest retailer, three of its
largest mining companies, one of its largest steel companies and two of
its largest forestry companies have been sold to foreigners. Now, the
largest media and telecom conglomerate is about to be sold. The natural
resource companies were sold at big premiums compared to prevailing
stock price. The other companies, long-struggling, were sold for a song.
Despite
the fact that the acquiring companies were generally from jurisdictions
that would not have tolerated a comparable takeover by a Canadian
company, the Canadian government, the corporate establishment, and the
public have hardly raised a peep about this massive sell-off.
Until
Tuesday, that is, when Thomas Caldwell, the combative head of a large
Canadian securities firm, took out full-page 'open letter' ads in the
business section of Canada's three largest newspapers headed "The
Sellout of Corporate Canada".
His outrage was directed at the
executives and 'managers' who pocketed millions of dollars in
'compensation' for these sell-offs, generous even compared to the high
salaries they were earning.
The motivation of the buyers was
simple: They wanted the land and natural resources, finite,
non-renewable resources poised to soar in price as they become scarce.
They wanted the other companies for brand, market, and the elimination
of competition in their respective oligopolies.
The victims
are the Canadian environment and the (non-executive) Canadian workers.
Both are expendable externalities that are not factored into the
purchase equation. To the corporatists, they have no value. The
payments to the Canadian executives, people paid to steward their
corporations, in Caldwell's opinion, bordered on legal bribes. He
claims it is wrong for executives to benefit from the sell-off of
organizations they are supposed to be managing.
The problem with
this logic is that, if Canada made it illegal for Canadian executives
and managers to be compensated for the sale of their companies, the
buyers would simply repackage the deals as 'long-term management
agreements' under which the executives would stay on at their hefty
salaries but essentially do nothing to 'earn' them. There is a long
tradition of doing this in takeovers, a kind of extended early
retirement that makes the deal look somehow more ethical.
Anti-combines
law has essentially not been enforced in Canada for over thirty years,
because it became too political to try to decide how many companies
might be needed in an industry (in Canada? Globally?) to ensure
competition. It was easier to say "the world is going global and size
and consolidation is needed for any company to compete in a global
marketplace". This is nonsense, but it has been said often and long
enough that most people now accept it. It is also true that there are
basically no Canadian-owned or Canadian-controlled companies in any of
the global oligopolies.
The real obscenity, I think, is the
sale of our land and scarce resources to indifferent rapacious
foreigners, and the utter lack of effective anti-pollution and
anti-waste regulations to prevent foreign and
Canadian companies from fouling our land, air, soil, water, and
ultimately our food with toxins and garbage. And our willingness, once
hoodwinked by NAFTA and the WTO, to allow junky foreign goods (often
made from Canadian materials sold raw and cheap) to be dumped in our
country without recognition of their damage to Canadian enterprises who
cannot compete because we require them
to pay decent wages and to maintain a modest level of social and
environmental responsibility. And the salaries and benefits some
executives receive that are out of proportion to the value they provide
(since, as James Surowiecki has explained, the distorted 'market' is
the sole determinant of this remuneration).
So the answer, in my
opinion, is not to demand ethical stewardship behaviour of Canadian
managers, or to resurrect politically paralyzed anti-competition review
boards.
A better answer is to require owners of land and natural
resources to live in the community where that land and those resources
are located. And to tax 'bads' (pollution, waste, use of non-renewable
resources, to discourage their use, and imports, to level the playing
field for domestic producers) and excessive wealth (to redistribute it,
to eliminate poverty and the inequity that underlies a host of social
problems, and stop rewarding greed) -- and cancel grievous 'free' trade
agreements and taxes on employment and clean, responsible business. And
to teach and encourage entrepreneurship, so we have better choices than
the crap produced by most multinational oligopolies.
These
answers would be simple to enact and straightforward to administer. No
subjective debate over the morality of particular transactions
required. Rather than just trying to prevent corporatist oligopolies
from doing their worst, we should make it easy for people who care to
do better.
|
MADE IN CANADA
trust your
instincts 
