Wednesday, May 23, 2007

Enron and the End of Post Modernism

The notion that reality is socially constructed; that ethics are local or conventional; that power rather than truth has authenticity; and that the will to power is the ultimate arbiter of factuality has never been a very convincing point of view. Indeed, that this perspective has gained legitimacy in academia suggests a decline of standards and of competence. Happily, the notion that reality is socially constructed was debunked once and for all in 2001, in the form of Enron's bankruptcy.

The management of Enron attempted to socially construct the firm's legitimacy. It ignored the social context of ethics, pretending that its own, localized definition of ethics was enough and that the public image rather than the substance was sufficient to achieve ethical virtue.

Enron did not really earn money and was not a profit-maximizing firm. It pretended to earn money. Its profits were socially constructed, and Wall Street concurred with this social construction of profit maximization. Enron's approach to rejecting reality in favor of social construction is consistent with English departments' arguments for conventionalism and the will to power. It worked well with business school academics, who touted Enron's creativity, and it also worked well with stock analysts, in part becuse they were graduates of the same business schools and in part because they were told that if they didn't play along they'd be removed. Much as the post-modern left is suppressive and totalitarian, so the employees of Enron were subjected to tight, authoritarian social control that ensured that "politically incorrect" views were inhibited.

Enron had all of the pathologies of the post-modern left. It was narcissistic. It was paranoid. And it was sociopathic. It claimed to be ethical but it was manipulative. It claimed to democratically care about its employees, but its goal was to harm and steal from them. Indeed, Enron claimed to create a revolutionary form of organization based on "asking why?", an assent to the post-modern left's claim to egalitarianism and skepticism. But of course, like the post-modern left, Enron was a fraud.

The post-modern left claims that power is more important than reason, and alas, Enron was a power company. Its chairman, Ken Lay, sought political power in Washington rather than focusing on management of his firm. Post modernism claims that social construction defines our perception, and indeed, social perception defined Enron's success which was not real for at least several years before its public demise. Enron rejected reason, much as post-modernism rejects reason, and its managers believed that they could construct a perpetual pyramid scheme based on social belief rather than truth. They were wrong. Enron failed, just as any social scheme that the post-modern left advocates will fail.

Like the New Left, Enron fell because it had no empirical support. The belief in power is not the same as empirically-derived rules of law. Substantive truth will win out over popular delusion, and if popular delusion, the ideas of the left, prevail, then our society will die. Liberalism and the new left avoid rather than address reality.

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