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Preventing the Next Enron Will Require
More than Nader’s Proposed Reforms
by Pete Dolack, Brooklyn Greens
The Enron scandal must be seen in its full context. It can’t be looked upon as an isolated incident, as an isolated act of one bad apple—what business leaders and their hired guns in the corporate media have been furiously arguing in an attempt to minimize the damage. The behavior of Enron executives differs from other corporate oligarchs more in that they were caught than in their behavior.
Calls for reform are welcome, but we shouldn’t get caught up in illusions that reforms will solve the very real structural issues exposed by the Enron ponzi scheme. And, yes, this includes the somewhat illusory reforms put forth by Ralph Nader, the Green Party’s past (and future?) presidential candidate.
In the March 2002 issue of The Progressive, Mr. Nader presented a damning indictment of Enron while making the case that there are many Enrons in Corporate America. Indeed there are. But while Mr. Nader’s proposed reforms are certainly far more thorough-going than the meek bleatings of Democrats—and his critique is far stronger than anything put forth by the “Left” wing of the two-party corporate duopoly—it still falls well short of the analysis that Greens should be making.
Mr. Nader…sees us only as consumers, not as the producers we are.
The problem here is the problem that has always been Mr. Nader’s—he sees us only as consumers, not as the producers we are. Mr. Nader wishes to “empower” consumers and it is undeniable that we do have some power as consumers, if we unite in a boycott or other organized fashion. But this power is ultimately limited and, in the end, potentially counterproductive.
Let’s look at specifics. Mr. Nader, to his credit, indicts corporate crime. “Crime in the suites damages more people’s health, safety and economic resources by far than crime in the streets,” writes Mr. Nader. “But crime in the suites is not on the top of the agenda of the Democratic and Republican parties.” This is certainly true. But this should be a starting point, not the culmination, of an argument. At this point, it could, and should, be argued that the Democratic and Republican parties merely represent different sectors of the corporate class that completely dominates the United States. What does Mr. Nader call for? Certainly not for American workers to demand the fruits of their labor, which are stolen every day by corporate executives and by Wall Street, nor for the empowerment of American workers. Instead, he calls for appealing to Congress.
Mr. Nader calls for “the American people to organize as investors and pension holders, and along with distinct professional groups—upstanding economists, accountants, lawyers and others—to make representations before their members of Congress and before [Congress’] key investigation committees.”
Oh, yes, a firm letter to our senators, and all should be well. Let’s take apart this pathetic argument. Congress is full of Republicans and Democrats whom even Mr. Nader concedes are uninterested in corporate crime. In fact, Republicans and Democrats are facilitators of corporate crime, and differ only in that the two parties represent different sectors of the ruling class. The Republicans represent industrialists (owners and top executives of companies producing tangible products) and those at the top who believe in an eternal hard line, while Democrats represent the financial industry (Wall Street), the lawyers who represent Wall Street interests and those at the top who realize concessions have to be made once in a while. These interests overlap, and members of both parties are the direct representatives of the Enrons and Arthur Andersens of Corporate America. Hundreds of congressional members, from both parties, eagerly took Enron’s money. Suddenly, all these people are going to slap themselves in the forehead and say, “Gee whiz, we never knew?”
What does Mr. Nader call for? Certainly not for American workers to demand the fruits of their labor…
All Congress is interested in—all Congress can be interested in—is grandstanding in hearings because this one is too hot to ignore. Already, the Department of Justice has attempted to cut a deal with Arthur Andersen, Enron’s accountant, whereby Andersen will be placed on some form of “probation,” and we can safely wash our hands of the whole thing with no individual facing jail. If the individuals who profited from the schemes go unpunished, other than absorbing a flurry of publicity that will end when the next scandal erupts, then what will stop the next Enron?
Mr. Nader, in his Progressive essay, writes that “flashy televised hearings are not enough. We need the federal cop on the corporate beat as both an apprehender and deterrer of corporate crime.” Sounds good. But when it is the corporations that install the federal cop, then use their overwhelming economic power to hold their own cop in check or convert the cop into their protector, how realistic is it to believe that there will be a “federal cop” to reign in corporate criminals?
What we have to face up to is that the capitalist system can’t be “reformed” nor can it be made to “behave nicely.” If Mr. Nader’s reforms were to be enacted, that would be a large improvement over the current situation. But reforms can be taken away, and often are. And even if these reforms could be made permanent, we’d still be applying a band-aid over a gaping wound. The corporate criminals of the United States aren’t acting out of “evilness,” although many are undoubtedly awful human beings. The Capitalist system drives companies to become bigger—if Company X doesn’t take full advantage of the loopholes to maximize its profits at all costs, Company Y will and will swallow or crush Company X in the process. Expand or die is the inexorable “logic” of capitalism. The ultracompetitiveness of the system, whipped on by Wall Street, forces corporations to act in predatory fashion. Even in the unlikely event the head of a major corporation wanted to be “nice,” the executive couldn’t—the market would swiftly force a change in behavior.
The ultracompetitiveness of the system, whipped on by Wall Street, forces corporations to act in predatory fashion.
The US government is wholly subordinate to the holders of enormous wealth, which directly translates into power, and can only rule on behalf of this power. No reform can alter this basic premise; reform can only ameliorate this corrosive power until the reform is taken away or a new loophole is found.
Wall Street is not going to listen to, much less act on, the concerns of individual workers acting as a group of “investors.” Brokerage houses and giant institutional investors call the tune on Wall Street, and you, as an individual “investor,” are in the way. But why should we “organize” as “investors?” Why should our retirements be dependent on the ups and downs of the stock market and the hope that the company pension-fund manager is honest? We, as the workers, created the wealth to begin with. We should have safe retirements as an indisputable right. We, who create the wealth taken by CEOs and Wall Street, should be entitled to that wealth. The top executives and financiers earn their piles of money by confiscating profits. What is profit other than the difference between the value of what is produced and what you are paid for producing?
This is the reality of American society that is rarely discussed. Although there has been a great deal of hand-wringing over the billions of ill-gotten dollars hauled in by Enron executives, the concept of restitution to the swindled Enron employees is absent from the corporate media. Creating oversight over company pension plans would be welcome, but doesn’t solve the basic problems and will not get Enron employees’ retirement money back. This is the trap that is laid for us when it is argued that we are should organize as “investors” rather than as employees or workers. If many have become “investors” it is a status forced on us because traditional pension plans are ceasing to exist. Employees’ “investment” is a sham obscuring the fact that most of us will never see a pension ever after decades of working. It also artificially ties us to Wall Street and gives us the illusion that we have a stake in it, obscuring the fact that Wall Street plays a parasitical role, skimming money from us and from corporations that have stock or debt that is traded. Wall Street also serves as the “whip” that ensures the maximum profit is extracted from corporate workforces. As an individual “investor,” you are given tiny crumbs from this massive extraction of profit, patted on the head and told that getting back a minuscule portion of what was taken from you is a “reward” for owning shares of stock or a mutual fund (minus handling fees, of course).
If many have become “investors” it is a status forced on us because traditional pension plans are ceasing to exist.
All the ill-gotten money made by Enron executives should be seized, including all assets bought with that money, the company should be fined, the executives behind the ponzi schemes should be jailed and fined, the Arthur Andersen auditors should be fined and possibly jailed and Andersen should be fined and made to turn over all profits from its Enron work. All the money collected from these actions should be turned over to the Enron employees’ pension plan, so that their retirement funds are replenished. That would be justice. Think you’ll see these ideas in the corporate media?
Since we live in the present day, not the future, we need to extract any and all reforms we can out of the system. We should try for Mr. Nader’s reforms. But we should have our eyes open, understand that these sorts of reforms should be merely “transitional,” and that we should be asking for far more while working toward the end of the entire system that subjugates the large majority of the population for the benefit of a relative handful at the top. We need a candidate who understands the difference between illusory reform and real structural change, and who can articulate this effectively.