TAIL (Trade and Investment Liberalization) Wags Investment Dog?

A Shrinking Universe by Jordan Brennan on the Canadian Centre for Policy Alternatives website argues that trade and investment liberalization measures such as the 1988 Canada - US Free Trade Agreement and the NAFTA extension in 1994 have warped economic power such that the 60 biggest corporations have grabbed an ever-increasing share of the wealth and income pie. Here is one of the study's charts.

Apart from the huge downward dagger around 2001 - due to the tech bubble and Nortel bust? - there certainly looks to have been an upward trend in earnings share and market cap share. If Brennan is right as to the cause - the TAIL wagging the investment dog - then maybe investors in TSX 60 companies e.g. by holding iShares S&P/TSX 60 Index Fund (XIU), just need to sit back and enjoy their profitable future so long as trade liberalization doesn't end.

Would that life were so simple. I just wonder why the lower end of the TSX Composite stocks, held for example in the iShares S&P/TSX Completion Index Fund (XMD) seems to have performed just as well as XIU over the past ten years, in fact, a little better - XMD's total annual compound return (net of costs including a higher MER) was 9.58% while XIU's was 9.09%.

Perhaps there are other explanations than TAIL, like the amazing rise to dominance of financial services over the last 25 years?

Brennan's study is interesting as well for a few other bits of data: in 1965 there were 153,000 private and public corporations in Canada and by 2009 there were over 1.3 million. A sizeable proportion, more than executives, of the people in the top 1% of earners are health professionals.