Capitalism is like that

Enron doc lets capitalism off the hook

by Junius

There is nothing in the Enron documentary that you didn’t know already. You get to see several rich men lying very well and the chief liar hobnobbing with the Bush family. But you knew that already. You get to see the rather sympathetic governor of California, Gary Davis, clawed down for supposed incompetence in an electric grid crisis engineered by Enron for massive profits, in possible collusion with the high decision-makers of the Republican Party. But you guessed that already.

None of the talking heads in the film say anything about wider implications beyond “It could happen again.” Of course it could happen again. It is happening all the time. Corporations are led by liars, cut corners in unimaginative ways (Enron was at least imaginative), and go into bankruptcy after being gutted by insiders. Why? Because there are some unethical people around? That’s what the powers-that-be would like us to think—and this Enron documentary doesn’t get much beyond the “bad apple” theory and therefore plays into their hands. While proposing to be sort of radical, the film could actually have been made by apologists for this system.

Our local effort, The Corporation, was much more alert and on the mark, but even so, it suggested that there are corporations trying to be good. The hero of the film was a rather noble CEO of a carpet manufacturing firm who said he had a conversion and would now make less harmful carpets, though his firm’s competitiveness might suffer. He was obviously, at the moment of filming, very sincere about implementing the less-poison plan, within the next four years! He didn’t mention the problem of whether or not the shareholders would let him.

No, there will be, and are, other Enrons, big and small, because it is the essential nature of corporations to be like that. That’s why there was little thrill in the film in seeing those white collar culprits in handcuffs. One knows that it’s really not the individual’s fault to do what a joint stock company in its essential functioning proposes. As soon as enterprising capitalists at a certain moment in history thought up the joint stock company, ie, a corporation where shares could be bought by just anybody seeking a profit, that was the end of morality in the production of wealth.

In a family business or partnership, the proprietors are left with the consequences of their actions. I shall never forget the scene in Women in Love where the founding mine owner (who went to work like everyone else) inches his Rolls Royce out of the same gate the miners took to walk home. It was a great symbolic cinematic moment, and to say that this kind of capitalism is the beginning of Enron is a great mistake. It is not a question of degree. An essential difference occurred with absentee ownership, and company laws that enabled owners to escape responsibilities.

If we need “to anticipate the foundation of a new, post-oil global economy, and begin construction of it now” (as I have read in a recent Republic), then I do not see any alternative: the central factor in getting things down to size and sanity must be the repeal of the laws allowing for joint stock companies. Those gambling dens we call stock exchanges will disappear, and the genuine marketplace will remain. Family firm partnerships and cooperatives are quite good at creating wealth in the marketplace. Don’t worry, people can still get rich. But it will be within bounds of appropriate size, which boundaries corporations as we know them broke out of when man-made law jiggled the natural goalposts and the rules of the game. You don’t have to see this Enron film to know that the world will be better off when all corporations are declared illegal, and we can get on with family businesses, partnerships, and cooperatives.

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