Capitalism at Work: Business, Government and Energy (Political Capitalism)

499 Pages·2008·5.33 MB·English

by  Robert L. Bradley Jr

Capitalism at Work
To Charles G. Koch,
free-market capitalist
Capitalism at Work
Business, Government,
and Energy
Robert L. Bradley Jr.
Published by M & M Scrivener Press
3 Winter Street, Salem, MA 01970
www.mmscrivenerpress.com
Copyright © 2009 M & M Scrivener Press
Confl icts and Trends® in Business Ethics
Series Editor: Nicholas Capaldi
Cover design by Hannus Design
Library of Congress Cataloging-in-Publication Data
Bradley, Robert L., 1955–
Capitalism at work: business, government, and energy /
Robert L. Bradley Jr.
p. cm.—(Political capitalism; 1)
Includes bibliographical references and index.
ISBN 978-0-9764041-7-0 (hbk.: alk. paper)
1. Corporations—Moral and ethical aspects.
2. Corporations—Political aspects. 3. Capitalism.
I. Title.
HF5387.B687 2008
330.12'2—dc22 2008024425
All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted in any form or by any
means electronic, mechanical, photocopying, recording, or other-
wise, without the prior permission of the publisher, except by a
reviewer who wishes to quote short passages for use in a review for
inclusion in a magazine, newspaper, broadcast or website.
Printed in Canada on acid-free paper.
Contents
Preface ix
Introduction 1
Part I Heroic Capitalism 15
Chapter 1 The Soul of Commerce: Adam Smith 19
Chapter 2 Character and Success: Samuel Smiles 37
Chapter 3 Supply-Side Ethics: Ayn Rand 58
Part II Business Opportunity, Political Opportunism 91
Chapter 4 Business Opportunity 96
Chapter 5 The Business of Politics 119
Chapter 6 U.S. Political Capitalism 142
Part III Energy and Sustainability 183
Chapter 7 Malthusianism 189
Chapter 8 A Joined Debate 208
Chapter 9 Neo-Malthusianism 224
Chapter 10 The Dark Decade 241
Chapter 11 New Light 271
Epilogue Surreal Enron, Real Capitalism 292
Appendixes
Appendix A The Ayn Rand Problem 320
Appendix B A Taxonomy of Political Capitalism 332
v
vi Contents
Appendix C Gabriel Kolko’s Revisionism Reconsidered 336
Appendix D Resources for the Future: Away from Optimism 343
Source Notes 351
Bibliography 417
Illustration Credits 451
Name Index 453
Subject Index 459
We may well turn to the “wisdom of the ages” in our
human quest to understand reality,
for that wisdom contains a truly inexhaustible contemporaneity.
—Josef Pieper, The Four Cardinal Virtues (1954)

Preface
DURING MY LAST TWO YEARS at Enron (2000–2001), I was asked to
gather information for a history of the company—with particular
emphasis on its chairman, Ken Lay. In this period, Enron declared vic-
tory on its mission to become the world’s leading energy company and embarked
on a new one: to become the world’s leading company. Expectations were high
for an eventual book with a title such as The Making of the World’s Leading Com-
pany. Joining me as codirector of the Enron Oral History Project was a leading
business historian and energy specialist, Joseph Pratt, Cullen Professor of His-
tory and Business at the University of Houston.
In the course of the project, we gathered the recollections of key employees
and members of the board of directors, past and present. Reminiscences from
Ken Lay’s old economics professors and former bosses were recorded. One
interview was with Lay protégé Jeff Skilling, who gave nary a hint of Enron’s
brewing troubles. His impressions were akin to a hall-of-fame acceptance
speech—how the company came together, endured tough industry conditions,
and fi nally triumphed—as if it were game, set, and match Enron. This mentality
never wavered, at least in Skilling and Lay, despite Enron’s bankruptcy and
despite subsequent revelations of blatant wrongdoing. Enron was a great com-
pany, Skilling maintained. Enron had an unassailable competitive advantage, Lay
insisted.
In retrospect, Skilling and Lay suffered from extreme overconfi dence, hubris,
even delusion. So long as everyone believed, and got others to believe, a healthy
ENE stock price would make everyone a winner, they thought. Doubters were
dumb and, within the walls of Enron, not considered good team players.
But Enron could not invent its own reality forever. Real value was not being
created. Cash fl ow was inadequate. Enron’s problems came from a combination
of many bad bets and the poor execution of some good bets—and were magni-
fi ed by a paucity of midcourse corrections. What is remarkable, in retrospect, is
that the company did not implode sooner.
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