Madeline Bunting
Common Dreams
It’s hard to overstate the enormity of the impact of Enron’s implosion. The biggest corporate collapse in US history is now dragging politicians, banks, accounting firms, other corporations, pension funds, investment analysts, the reputations of so-called business experts and millions of investors into an astonishing vortex where they risk losing billions of dollars and some of the most trusted reputations in corporate America. …
With at least 10 investigations beginning work on Enron, we have glimpsed only a fraction of what will be the repercussions of this corporate disaster. The main focus of interest so far has been the stench of political corruption: can anything be pinned on the Republican administration? For the first time in history, Congress is suing the White House to find out the exact details of the cozy relationship between “Kenny boy” (Kenneth Lay, CEO of Enron) and Vice-President Dick Cheney, which had been bankrolled by $326m to the Republican party over three years.
Enron provides a textbook case of how corporate power subverts the political process in whatever country it operates (the US, the UK or India) through donations to political parties combined with intensive lobbying. It’s mucky stuff, and heads will roll, but it’s also a very familiar theme. What makes Enron such an extraordinary story is that it spells the end not just to some nasty pork-barrel politics but to an ideologically driven, vicious corporate model which was rippling from its Houston base across the globe.
This vision of a Darwinian dog-eat-dog market, which could be applied to everything from gas supplies and fiber-optic capacity to hedging against the weather, drove Enron’s political campaign for privatization and deregulation. Its pitch rested on a near-fundamentalist faith in the self-regulating efficiency of the market; true believers claimed there were simply no limits to its application. To Enron’s legion of admirers on Wall Street, in Harvard Business School and elsewhere, it epitomized the free-market philosophy which emerged in the US and shaped the Thatcher-Reagan era before being exported to the developing world under the aegis of World Bank and IMF’s deregulation and privatization programs ever since.
The anti-corporate movement’s struggle to assert that the world is not for sale – and certainly not to the casino gambler types of Enron – has had a massive shot in the arm from Enron’s demise. Plenty will drive that point home at the World Economic Forum in New York this week and at its alternative counterpart in Porto Alegre, Brazil. Just how much of that free-market fundamentalism, if any, will survive Enron will be a key theme. The tide began to turn against deregulated free markets after the Californian black-outs, in which Enron played a notorious role. Now it’s in full flood. Re-regulation is back on the agenda and in the US its remit will run from accounting procedures, power supplies and all other public utilities to pension provision.