ENRON: ABERATION OR SYMPTOM OF
The media appropriately chastises Enron executives
for immoral behavior. On Feb. 3rd the New York Times noted "At the
bottom of the Enron debacle there now appears to have been a simple
proposition: for years Enron reported profits that it should not
have reported, while Enron insiders reaped huge profits to which
they had no right."
What I find surprising in both congressional
investigations and in media treatment of the Enron scandal is not
the moral outrage but the lack of sustained reflection on how the
Enron situation reveals the fragility and weaknesses of our corporate
system. The first thing to note is that publicly traded companies
are rewarded for maximizing short-term profitability. The higher
the short term profitability, the better the stock price, the higher
the salaries and stock options offered to key executive of the corporation
by their board.
Everyone is out for their short-term gains:
investors, boards of corporations who have a legal obligation to
maximize share holder values and benefit when they do so, as well
as key executives of corporations who are handsomely rewarded for
delivering the goods. Everyone is locked in to a financially self-interested
mechanism given our present forms of public corporate ownership
and the functioning of the stock market.
The temptation on the part of key executives
to provide false information, of accountants who are also consultants,
to participate in deception and of brokerage houses to give misleading
forecasts are great. The fall of Enron is not surprising. What is
surprising is how few corporations actually participate in such
deception given the pressures they are exposed to.
Rudolf Steiner repeatedly noted the danger
of the speculative financial system controlling the production of
goods and services, the economic system. Enron points to the need
for looking more deeply at the ownership forms of companies, at
mechanisms for raising capital and at criteria for the pay of employees.
Laws alone would protect us from immoral behavior in a system based
on self-interest. Both the limitations of our present system and
helpful alternatives are explored in David Korten's new book, The
Post Corporate World, Life after Capitalism (Kumerian). Balancing
the rights of capital with the right of people is the subject of
the compelling historical analysis of Bowles and Guitis, Democracy
and Capitalism, Harper Collins.
Also, for a different model of relating economic,
political and cultural life which supports and provides a context
for the other two studies see Rudolf Steiner, Toward Social Renewal,
If we want to overcome the dangers of elite
globalization, of environmental degradation and of a growing gap
between rich and poor we will have to explore alternatives to both
capitalism and socialism. Steiner's insights into what he called
the 'Threefold Social Order' can provide a start.
Christopher Schaefer, Ph.D.
1. NY Times, Feb. 3rd, page. 1
All logos and trademarks in this
site are property of their respective owner.
The comments are property of their posters, all the rest © 2000-1
by the Anthroposophical Society in America