Writing the History of the Enron Collapse

Writing the History of the Enron Collapse
A Justice Site

The Enron Collapse
Mirror Sites:
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California State University, Dominguez Hills
University of Wisconsin, Parkside
Soka University Japan - Transcend Art and Peace
Created: February 27, 2002
Latest Update: February 27, 2002
jeannecurran@habermas.org
takata@uwp.edu

Writing the History of the Enron Collapse
Copyright: Jeanne Curran and Susan R. Takata and Individaul Authors, February 2002.
"Fair use" encouraged.

This essay is based on a post to PSN by Petros Haritatos of Athens. He summarizes a story on BBC that gives the conservative position on what happened to Enron: a run on the bank. He links us to the story on Jeffrey Skilling, apparently a Harvard M.B.A.
In the BBC story:
"But Mr Skilling insisted that the company was brought down by the fears about the firm's credit and accounting methods, not by the controversial off-balance sheet partnerships themselves.
"Claiming an accounting fraud in the business world is tantamount to walking into a crowded theatre and screaming 'fire' - everybody runs for the exits," he explained.
"I think if the company had some time, and had access to some liquidity... (it) would have been fine."

On Wednesday, February 27, 2002, Petros Haritatos posted to PSN:

Subject: Enron's Skilling as business philosopher
The BBC carries a fascinating story on http://news.bbc.co.uk/low/english/business/newsid_1841000/1841824.stm in which Enron's former chief executive Jeffrey Skilling insists that he had not done nothing wrong and that Enron's collapse was caused by a "classic run on the bank".
According to this Harvard MBA, two parties are to blame:

those who lost their belief in Enron's integrity (i.e. investors), because of
those who spoke of "accounting fraud" (i.e. critics of Enron's practices).

This is a "self-evident truth" for a lot of people. In the way that flags are tokens of national sentiment, stocks are tokens of monetary value. Such tokens are held up by shared belief. Levitation of stock prices is also an act of belief, cultivated by a priesthood, Skilling's peers and mentors. Those who doubt it, are the new Enlightenment challengers of the new Western absolutism.
A key process is at work here, of need and want, demand and supply. For good reasons, people need to believe in natural orders. Articulate minorities have always catered to this need. They succeed for a period, and achieve a close "fit" between what they offer and what most of society wants. For example, the widespread devotion to Christianity among ordinary people in the West, the gigantic expectations from Socialism, the optimistic hopes of equal opportunity in market capitalism. But at some point the fit starts to loosen and society (or segments of it) seeks another fit, e.g. from Catholicism to Protestantism and to secularism. Thus, to talk about "decline of religion" is to adopt the viewpoint of a waning priesthood, when what we are really seeing is the displacement of belief from one belief system to another.
So what can one expect regarding the currently dominant belief system which Skilling expresses so clearly? Are the investors who lost faith in Enron stock apostates, or do they simply move to another shrine of the same religion? Are we seeing any differenciations within the priesthood, any stirrings of a new Reformation?
Petros Haritatos, Athens