Forget Canada: The Thomson and Irving names show up also on a list of the 10 greatest concentrations of private wealth on the planet. Indeed, in the days when the Reichmanns, who topped the list the last time, could still get their cheques cashed, Canada counted three billionaires among the world's top 10, as many as the United States. Beloved as our self- image as pseudo-Scandinavian social democrats may be, the secret history of Canada has been as a place where filthy fortunes could be made, and kept - not merely with the tolerance of the authorities, but often with their enthusiastic participation. The U.S. had its trust- busters; we had the Pacific Scandal. The U.S. has an inheritance tax; Canada, almost alone among the developed nations, has none.

Probe the veneer of G7 respectability, and you find something more closely resembling a Third World, commodity-producing colony, where government works hand in pocket with the business elite. In the early days before Confederation, meetings of the provincial cabinet and the board of directors of the local railway might have been held concurrently, and perhaps were. To this day, the province of New Brunswick remains a wholly owned subsidiary of the Irving clan; the office of the Prime Minister seems to be on a semi-permanent lease from Paul Desmarais (the last prime minister was a former employee; the present one is an in-law; the next - Paul Martin? - will probably take the job on secondment).

Alas, those heady days are coming to an end. Union leaders might get excited about "record" profits, but these are measured only in inflated dollars, and without reference to any yardstick, save the unprecedented depths to which they sank in the last recession. In fact, by any of the usual measures, whether as a percentage of revenues, equity or total economic output, corporate profits remain near their historic lows. The real glory days of profitability in Canada were in the years just after the Second World War, when profits averaged nearly 15 per cent of GDP. By the 1960s that had fallen to less than 12 per cent; by the 1980s, to 10 per cent. In the 1990s, corporations are raking in just six cents of every dollar. And most of that gets reinvested.

The interesting question is why this 50-year decline in profits has been going on - interesting, because no one seems to know. Nonetheless, a couple of factors stand out.

One is competition. Canada has historically endured relatively high degrees of corporate concentration, not merely across industries but within each. Not coincidentally, for most of the postwar period our companies have also enjoyed higher rates of profitability than their American cousins. This is in part a function of the size of our markets, but it's at least as much the result of foreign- investment controls; without those vulgar foreigners bidding up the price, domestic agglomerators could pick up a nice portfolio of assets on the cheap. Small wonder that one of the earliest and most ardent supporters of the Committee for an Independent Canada was the chairman of Brascan.

That's changing. Deregulation, tougher competition laws and declining concentration of ownership have combined to make Canadian industry much more competitive than in the cozier past. But the biggest influx of competition has come from outside, as our markets have gradually opened to the world under bilateral and multilateral free-trade agreements. More than one-third of Canada's economy is traded now, twice the ratio of 30 years ago.

A second big reason for the fall of profits, at least in recent years, is the conquest of inflation. As a general rule, inflation tends to exaggerate a corporation's profitability, understating depreciation (given the use of historic cost accounting) and overstating income from interest and capital gains. More particularly, inflation fed spectacular increases in the prices of commodities such as gold or oil - or real estate: file under "Reichmanns" - over the past three decades, generating equally spectacular profits in Canada's resource-heavy economy. That's over, too. If you don't like corporate profits, you should love John Crow.

In the long run, then, the decline of profitability is mostly good news - as long as you don't own stocks. For those who do, it's bad news, and I don't just mean Ken Thomson. The biggest owners of capital today, by far, are not top-hatted captains of industry, but the pension funds of their employees. Workers of the world unite! You have nothing to lose but your dividends!