For most Americans, Enron was the poster child of unfettered capitalism. After its fraudulent activities led to the company’s collapse, business ethicist Marjorie Kelly proclaimed, “The ideal of the unregulated market is flawed and it’s time we said goodbye to the invisible hand.” But as Rob Bradley argues in a provocative new essay (pdf), Enron was the epitome not of capitalism, but rather of the environmental Left and the corporate social responsibility (CSR) movement.
Bradley should know. He spent sixteen years at Enron, ultimately serving as a corporate director in public policy analysis, and even wrote speeches for none other than Enron chairman Ken Lay. (Bradley is also the founder of the Institute for Energy Research, a free market think tank with which I am affiliated.) Yet as a believer in capitalism—true capitalism, where consumers determine winners and losers, not the politicians—Bradley didn’t fit in so well with his peers. It seems the “smartest guys in the room” running the company decided that the best way to ensure profits was to put in the fix, courtesy of the government, and all sold to the public under the guise of CSR and “green” energy.
Enron’s key to (politically assisted) success was to lobby for “farsighted” government policies that just so happened to give the company an advantage over its competitors. For example, because it was heavily invested in natural gas production, transmission, and electricity generation, Enron would benefit from regulations on carbon dioxide emissions. (Natural gas is less carbon intensive than oil and especially coal.) Enron also was far ahead of the curve in investing in alternative energy sources such as wind and solar power.
Given its business position, it’s not so surprising that Enron supported the Clinton administration’s 1993 proposal for a Btu tax, spearheaded the nation’s strictest renewable energy mandate in Texas in 1999, and lobbied the Bush administration to regulate carbon dioxide emissions. Its actions on these fronts were as self-serving as those of domestic manufacturers who petition Congress with their concerns over “unsafe” Chinese imports.
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