I read Pierre-Guy’s Mises Daily article, “The Curse of Being Rich“, and would like to point out some of my own thoughts on the matter.
If one looks at the list of top ten earning Canadian CEOs, which is provided as an appendix to the CCPA report Pierre-Guy mentions, one will see that two work for Canadian chartered banks, one for the Canadian National Railway Corp. (CN), and that at least four for resources/mining/energy companies.
Interestingly, included in the CCPA report is compensation paid out to the 5 CEOs of Canada’s chartered banks in the form of stock options. The CCPA report claims that as of November 2010 these options had a value of roughly $34,000,000. While this might be viewed by some as an indication that the Canadian chartered banks are efficient and productive institutions that provide a necessary services at a low price, I find no way of defending these CEO’s high compensation. In the present economy banking is a fraudulent and criminal industry entirely dependent on the state. There are severe limits to entry and the government sustains and encourages the banks’ policy of credit expansion – that is, wealth redistribution from the poor to the rich. To add to this, the industry has also recently been bailed out by the Harper government.
The CEO of Canadian National Railway is second from the top of the list. CN is a creation of the Canadian government and has been under its ownership most of its existence. I am not sure whether it is true to claim that the profits of this company are entirely, or even mostly, due to servicing customers in a cheap efficient manner. It is very likely they at least partially originate from past state privileges and benefits CN may have enjoyed.
There are four resource and drilling companies in the top 10. I suspect these companies also benefit heavily from political support from the Canadian government, monopoly drilling rights, land grants, and third world dictatorships eager to benefit from the resources they rule over while pillaging wealth from their own populations. Number 32 on the list is TransCanada Corp. which is clearly using anti-market means to raise its profits. I would not be surprised if the same same could be said for other large companies in the industry. I have written about TransCanada in a previous article.
Yes, in a free market profits and wealth will indicate that a necessary service or product is being provided in an efficient and productive manner, but no such market presently exists. What we have presently is state corporatism with barriers to entry, subsidies, monopolies, political aid and unending government intervention in markets. While honest productive entrepreneurs may acquire large profits I don’t think that high profits alone are an indication that a desirable outcome, as deemed by the market and voluntary social interaction, is being pursued.