This year marked a watershed of sorts. Unable to find enough accounting dodges to hide their bulging books, two of the banks simply shrugged and exceeded their media-prescribed limit. Altogether, the Big Six reported a collective profit of $5.2-billion for the year ended Oct. 31, "a profit that in all modesty," as a New Yorker cartoonist once had a CEO report to his shareholders, "could only be described as obscene." The media response to this bit of defiance was predictable.

Why the fascination with bank profits? There are larger corporations in this country with bigger profits, at least in dollar terms - and remember, it is crude dollar figures, not such arcane yardsticks as return on equity that matter in medialand. As a bank spokesperson complained, General Motors regularly takes in more from just its Canadian operations than the biggest Canadian bank does worldwide, yet to nothing like the same public opprobrium.

One reason for this apparent anomaly may be that most workers at the auto makers are union members, while the banks are almost completely union-free. When the head of the Canadian Auto Workers rises to denounce corporate profits, he is hardly likely to include his own industry in the index of the damned. Far from the countervailing force of Galbraithian nostalgists, business and labour are to be found on the same side of most of the issues that matter, almost always to the cost of consumers and taxpayers.

When, for example, the government proposes to lower the tariff on imported cars and parts, you may be sure to find the chief executives of the major auto companies in agreement with the CAW chief, even if this is reported as a "rare" event. Lower tariffs on imports means more competition from abroad and more competition means lower prices and, well, you know what that means. Profit is a dirty word, all right, unless the unions get a piece of the action.

Actually, profit can be a dirty word. It depends. It isn't the size of the profit that counts but how it's made. One reason the banks have collectively been making so much money of late, as the federal Competition Bureau was so rude as to point out, was the stranglehold they collectively held over the network of automated teller machines - and hence over more and more of the payments system - through the Interac organization.

It is one thing to earn a profit in the face of vigorous competition. Where consumers have choices, profits in a given industry are driven down to the minimum level that might still attract capital from alternative investments of comparable riskiness. In such conditions, profit is not only defensible, it is a social obligation: It is the difference between the value society derives from the product - measured by the price consumers are prepared to pay for it at the margin - and what it costs to society to produce, measured by the price of the labour, capital and other inputs that went into producing it.

I stress society. The means of production may be privately owned in a capitalist economy but they are still, in a sense, social: They are scarce resources to be allocated among competing users in a way that best serves society. It happens that competition and prices are better instruments to this purpose than central planning, but it is no less social a process for being conducted through private markets. Profit, likewise, may be privately earned, but it is a calculator of a social return. Those that do not produce for the collective good in this way are dispatched with a ruthlessness that would do any Maoist proud: They are driven out of business.

But profit in the absence of competition is a different matter. There can be no confidence that the price charged to consumers, or the returns to labour and capital, bear any relation to the relative scarcity of the resources used. Yet far from promoting competition, the instinctive reaction of most of our leaders is to prop up cartels like the auto industry with protective barriers and to bash the banks in ways calculated to derive maximum media exposure to minimal practical effect. If bank profits are such a concern, after all, why was it left to the lowly gumshoes at the Competition Bureau to finally crack open the Interac monopoly?