1. The collapse of Enron has cast revealing light not just on the corruption of business
leaders, auditors and politicians but on the appearance of deregulated capitalism as it has
emerged from the stock-market bubble. It has highlighted, too, the vulnerability of the
broad layers whose pensions are tied up in the savings routine so ingrained in the
economy. This failure has affected not only Enrons employees but tens of millions of
holders of 401(k) and defined-benefit retirement schemes.
Enrons demise was significant not just because of its size (other concerns failing at the
same time, such as K-Mart or LTV Steel, had more employees and pensioners) but because
it had represented the cutting-edge of corporate strategy, living proof that financialization
and deregulation were the wave of the future. Enron was far more interested in maximizing
trading opportunities than producing electricity. Its momentum came not from productive
investment or innovation but from financial engineering.
Following the companys collapse, Enron has become a by-word for corporate
irresponsibility. The financial misrepresentation that covered-up the giant black hole at the
heart of the companys finances have fuelled interest in how such corporations can be
identified and held to account.
The firm projected itself as a highly profitable, growing company – an image that quickly
turned out to be an elaborate mistruth. Enrons statements about profits were shown to be
untrue, with massive debts concealed so that they didnt show up in thecompanys accounts.
Not only that, but the company was seen to have been extraordinarily active in political
lobbying – with large numbers of legislators close to the company in one way or another.
