The mandarins of corporate capital continued to preach the gospel of free markets and economic globalization at the World Economic Forum in New York, but a more traditional preacher reminded them that the burgeoning Enron scandal ought to give the shapers of the new world economic order pause. “There’s a big question mark over capitalism today,” the Rev. George Carey, Archbishop of Canterbury, informed the assembled CEOs and political hangers-on. “It’s one word and it’s ‘Enron.’ And what is that challenge? Capitalism has to act within boundaries.”
Much of the US media and all but a few members of Congress continue to fixate on the domestic debacles–from lost pensions to lax regulations–that the collapse of Enron has exposed. But the Archbishop’s invocation served as a reminder that the Enron scandal is not merely an American affair. The rise and fall of Enron is very much the story of a model global corporation gone awry. It is also an apt illustration of the consequences of the rush to embrace a corporate-sponsored template for economic liberalization: from multilateral free-trade pacts that supersede domestic regulations to privatization, deregulation, International Monetary Fund-ordered “structural adjustments” of national economies and the corrupting interplay of corporate campaign contributions and policy-making that is no longer just a US phenomenon.
Enron’s business model, which until recently was taught in business schools around the world, did not respect boundaries. Its global reach, powered by as much as $2.4 billion in loans backed by US taxpayers and aided by barrier-breaking “reforms” pushed by the World Trade Organization, made the Houston-based corporation not merely the seventh-largest in the United States but the sixteenth-largest in the world. Before its empire began to unravel last fall, Enron was regularly featured on Global Finance magazine’s annual list of the “world’s best global companies.” Enron was a globalizer on a grand scale, its grubby big hands stretching from Houston to London to Bombay to Maputo to La Paz. Forget about trying to chart the maze of Enron’s 874 “offshore partnerships”; the corporation bragged quite openly about “business units” (Enron Americas, Enron Europe, Enron Australia, Enron South America, Enron Japan, to name but a few) that traded in the world’s natural gas, crude oil, metals, plastics, fertilizers, forest products, lumber, steel and, ominously, the weather. The shorthand description of Enron in most US media reports continues to refer to the corporation as a “Texas energy giant.” But that does not begin to describe the conglomerate that, in addition to being the planet’s largest energy trader, had a hand in virtually every economic sector–in every country–that a corporate jet could reach. If, as Global Reach authors Richard Barnet and Ronald Muller predicted a quarter-century ago, “the men who run the global corporations are the first in history with the organization, technology, money and ideology to make a credible try at managing the world as an integrated unit,” then Enron throughout the 1990s tried harder. However, the company was not always credible–let alone credit-worthy.