Risk and Ruin: Enron and the Culture of American Capitalism

Abstract

The stunning collapse of Houston-based Enron ranked as the second biggest story of 2002, behind the attacks of September 11, 2001. Enron garnered coverage that ranged from the Wall Street Journal to Playboy—and a 2006 musical. But these narratives, Gavin Benke explains, failed to capture the mythology that fueled the company's rise and demise, treating Enron as an “aberration” rather than a symbol for the new era of capitalism (p. 189). Enron is significant to economic historians because it “typified the nature of American capitalism” following the disruptions of the 1970s (p. 2). The story of Enron is usually told as a morality tale focusing on Kenneth Lay and Jeffrey Skilling, the architects of Enron's financial schemes. But Benke refashions Enron into a lens that helps reveal the new economy that defied established corporate logic and assumptions. Enron embodied the “new attitudes toward regulation” among business and political leaders and their confidence in market mechanisms to promote business prosperity and social good. The old postwar economy gave way to new technology and an “interconnected world”—and to the financialization of the American economy through new instruments and an emphasis on “flexibility” in capital arrangements (pp. 6, 7, 126).