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Kerry–Lieberman: A “Simple” 987-page Bill? (Enron postmodernism in a Senator’s voice)

“We’re trying to minimize the package,” [Sen. John] Kerry said yesterday of the 987-page bill. “We’re trying to keep it simple. We’re trying to keep it transparent and open and understandable for why something took place.”

- Darren Samuelsohn, “Kerry-Lieberman Bill Uses ‘Fewer Buckets’ in Giving Out Highly Prized Allowances,” E&E News, May 14, 2010.

“One often speaks without seeing, without knowing, without meaning what one says.”

- Jacques Derrida, quoted in Mitchell Stephens, “Deconstructing Jacques Derrida; The Most Reviled Professor in the World Defends His Diabolically Difficult Theory,” Los Angeles Times Magazine, July 21, 1991.

The late postmodern philosopher,  Jacques Derrida (1930–2004) would find intellectual kinship in the political debates about climate and energy coming from the party in power. If alive today, Derrida would nod approvingly at Senator John Kerry’s above I-say-it, it-is-true inversion of reality. It ranks right up there with Ken Lay and Jeff Skilling telling the world after the Enron collapse that Enron was a great company.

Donway Unmasks Enron’s Inner Philosophy

Roger Donway was the first person to identify Enron as a postmodern company. In “The Collapse of a Postmodern Corporation,” he wrote:

But if Enron’s executives were neither incompetent nor crooked, what brought Enron down? I believe it was a culture of corporate values rooted in postmodernism. These were not your grandfather’s businessmen.

He explained:

The philosophical essence of the postmodern, or anti-Enlightenment, outlook is that there exists no external reality to which our beliefs should conform. On the contrary, say postmodernists, the nature of reality simply is what people believe and say it is. Of course, people cannot believe and say anything they like. Their beliefs and speech must be coherent and consistent. And if they want to work with others, they must ensure that the group is in agreement about what to believe and say. But that is the goal: constructing a shared narrative that supports the group’s desires and activities. So long as that is achieved, no “external reality” is going to come along to correct or punish them.

And Enron exhibited just this philosophy with this anecdote with involving CFO Andy Fastow:

In February 2001, Fastow went to New York to offer representatives of the bond-rating agencies some arguments that would lead them to raise their evaluation of Enron’s bonds. There is nothing unusual in that. The evaluation given to a company’s bonds determines the interest rate the company must pay when it borrows money. That, in turn, determines how much a company can borrow.

On this particular occasion, however, the agencies’ representatives said that the facts Fastow presented did not justify a change. Fastow’s response? If the agencies changed Enron’s ratings, Enron would be able to strengthen its finances, which would justify the higher rating. In short: if everyone would agree on a narrative that was supportive of Enron, reality would snap into line. The agency representatives laughed.

They laughed, but Fastow, Ken Lay, and Jeff Skilling were not smiling. This became a way of life, particularly as problems mounted and more desperate measures–but not midcourse corrections–were resorted to.

Donway concluded:

Getting everyone to agree on a supportive narrative seems to have been the principal goal of Enron’s postmodern accounting. The rating agencies would not sign on to the narrative until Enron was able to say certain things. Therefore, Enron must be able to say those certain things.

Enron’s postmodernism applied to its money-losing investments in solar power, wind power, and energy efficiency services. Gaming the regulations and fleecing the taxpayer was justified in the name of being “progressive” and “green” and practicing social corporate responsibility.

BP Postmodernism?

“Beyond Petroleum” BP, philosophically a sister company to Enron when it came to global warming and renewable energy, engaged in so-called greenwashing to sell the world on the belief that it was an environmental steward. But behind closed doors, it appears that the company’s mantra was to cut-cut-cut costs to achieve the profitability that better companies in its industry were achieving.

The environmental record of BP versus its peers speaks for itself. But BP has ended up not putting profits before people and the environment; it has put losses ahead of people and the environment.

The lessons of Waxman–Markey, Kerry–Lieberman, Enron, and BP point toward the badness of postmodernism–and the need to return to reason and reality going forward.

[Also see: "On the Fall of Enron and Ken Lay: Philosophical Fraud at an Errant Energy Company"]

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Appendix: Subjectivism Defined and Applied to Enron

This excerpt is from Capitalism at Work: Business, Government, and Energy (Scrivener: 2009, pp. 64–65):

The philosophical morass that Objectivism sought to escape was Subjectivism, defined by one philosopher as

the belief that reality is not a firm absolute but a fluid, plastic, indeterminate realm which can be altered, in whole or in part, by the consciousness of the perceiver—i.e., by his feelings, wishes or whims. It is the doctrine which holds that man—an entity of a specific nature, dealing with a universe of a specific nature—can, somehow, live, act, and achieve his goals apart from and/or in contradiction to the facts of reality, i.e., apart from and/or in contradiction to his own nature and the nature of the universe.

The escape from reality sanctified by Subjectivism—a philosophy whose modern incarnation can be traced back to Immanuel Kant (1724–1804) and whose contemporary manifestation is broadly known as postmodernism—can be played out on a grand scale by government tyrants, on a large scale by business tycoons, or in the microcosm of personal relationships. Postmodernism is a multi-disciplinary movement whose “primary goal has been to challenge convictions about the objectivity of knowledge and the stability of language.” Facts, truth, reality, communication, and open inquiry are more than questioned, as they are in the time-honored practice of “prove it”; they are trivialized as subjective and unknowable.

Postmodernism is a reaction to the outlook of modernism, “the notion of the freely acting, freely knowing individual whose experiments can penetrate the secrets of nature and whose work with other individuals can make a new and better world.” To modernists, reality and truth are knowable and discoverable, language is understandable, and improvement is achievable by comprehending, communicating, and implementing the wisdom of social and natural science. Human progress is the goal and vindication of modernism.

What is the argument of postmodernism, variously described as complete skepticism, contemporary relativism, cynicism, deconstructionism, nihilism, obscurantism, perspectivism, romanticism, and mysticism?

Postmodernists maintain that the biases of society, and particularly the predilections of those who wield power, make the disinterested search for truth a charade. “Objectivity,” it is held, is “a disguise for power or authority in the academy.” Perception is reality since reality is nothing more than “suspect dichotomies on the flux of events.” Reality is dismissed as a fleeting, impermanent subjective state. Natural science is viewed with suspicion; social science wholly rejected. Predictably, postmodernists are especially opposed to “the modern, industrial, and urban way of life,” because they sense what underlies it—reason, science, and freedom. Capitalism is despised as an arbitrary political economy with a class-based politics of truth.

Tensions and contradictions abound within postmodernism. It is a profoundly anti-intellectual intellectual movement. Postmodernists discredit themselves as seekers, communicators, and knowers of truth by questioning reality, language, and veracity. Somehow, they know that knowledge is unknowable. Postmodernists are “deeply disillusioned intellectuals” who want to change the world but cannot accept any end-states from capitalism to communism to anarchy. What began in literature and the arts as “a playful acceptance of surfaces and superficial style, self-conscious quotation and parody … and a celebration of the ironic, the transient, and the glitzy” turned into a nonsensical creed against human thought and progress.

Postmodernism creates a large void in place of what might otherwise be described as workable reality—a realm that is generally, albeit imperfectly, recognizable by seekers of truth. Not surprisingly, postmodernism is irrelevant outside of the ivory tower. There are no postmodern how-to business books, for example, because any such effort would comically demonstrate the difference between consumer-grounded realism and whim. Any “postmodern” business would crash and burn.

Postmodernism, denying “the individual as knower and doer,” becomes an ethos of “anything goes” and “never having to say you’re sorry.” Postmodernism allows Enron apologists to say that the company was “in great shape,” and outsiders “killed a great company.” Far from being a hypothetical possibility, such statements were made by disgraced former Enron CEO Jeff Skilling during a nationally televised congressional hearing in February 2002. Enron founder and chairman Ken Lay, on the eve of his trial, called on his former employees to step forward to “prove that Enron was a great company,” presumably by joining Skilling and himself in declaring it to be a fact. For both Enron leaders, these declarations were not—at least, not only—an attempt to “tell the same story” and protect each other at trial; they reflected a postmodern belief that a thoroughly shared narrative is reality. Enron was—and should always be remembered as—a postmodern company.

Postmodernists meet themselves coming and going in the Enron debacle. Enron created, in postmodern jargon, its own “language” and “truth” under the “hubris of power.” Postmodernists must shine a critical light on themselves to ask, is the reality of Enron unreal? And was the Enron debacle—marked by executives fighting reality with perception— postmodernism in action?


Epistemological subjectivism is different from economic subjectivism, or subjective value theory applied to human action in the marketplace. See Internet appendix 3.2, at http://www.PoliticalCapitalism.org/BookI/Chapter3/Appendix2.html.

Also see Internet appendix 3.3, “The Roots of Philosophical Subjectivism,” at http://www.PoliticalCapitalism.org/BookI/Chapter3/Appendix3.html

6 comments

1 Jon Boone { 05.19.10 at 10:08 am }

Terrific post. Anyone who has seen the influence of literature faculty on university senate behavior will understand the postmodern mentality at work. Aside from the epistemological vacuities described above, there is a whining soporific quality to any discussion that makes reasonable people, those with better things to do, want to leave the room. The postmoderns take over by default, since no one takes them seriously. Soon enough, they take over the university and, well, the law schools. Then the courts. And the entertainment media.

They respond best to flattery and insist upon rewards based upon their good intentions, if not on their actual achievements.

2 David Schnare { 05.19.10 at 10:14 am }

The problem with the term “post-modernism” is that it gives credence to what is, in fact, self-delusion leading to delusion leading to fraud. We see it throughout the climate change agenda.

The proper response to this is what is at issue. Certainly transparency and reanalysis of assumptions will be necessary, but not sufficient. It will probably take the great weight of the ground truth, actuated through the political process, to provide the immovable force against which the inertia of post-modern climate science collides and shatters. If there is a name for this weighty ground truth, I suspect it might be “tea partyism”, not to coin a phrase.

3 Jon Boone { 05.19.10 at 10:43 am }

Agreed, David. Our larger societal problem is what to do expensive policies that are born in flights of fancy and degrade quality of life. Hucksters have long known how to manipulate, for their own advantage, the stuff dreams are made of, believing that when renitent reality eventually emerges, they’ll have long before taken the last train to the coast.

The weighty ground truth is floored over by tiles of fraud. Hastening the day of reckoning is our task. The tea partism you reference provides the heart and the courage. Now it needs to be given a proper head.

4 Andrew { 05.19.10 at 11:05 am }

Reading the description of “subjectivism”, I was struck by where I’ve seen ideas like “the belief that reality is not a firm absolute but a fluid, plastic, indeterminate realm which can be altered, in whole or in part, by the consciousness of the perceiver—i.e., by his feelings, wishes or whims. It is the doctrine which holds that man—an entity of a specific nature, dealing with a universe of a specific nature—can, somehow, live, act, and achieve his goals apart from and/or in contradiction to the facts of reality, i.e., apart from and/or in contradiction to his own nature and the nature of the universe.” Before-Richard Lindzen, in his talks about AGW often mentions a book by Mike Hulme, who often writes things that Roger Pielke Junior posts on his blog. Tell me if you don’t see the paralells:

“The idea of climate change should be seen as an intellectual resource around which our collective and personal identities and projects can form and take shape. We need to ask not what we can do for climate change, but to ask what climate change can do for us…Because the idea of climate change is so plastic, it can be deployed across many of our human projects and can serve many of our psychological, ethical, and spiritual needs…We will continue to create and tell new stories about climate change and mobilize them in support of our projects…These myths transcend the scientific categories of ‘true’ and ‘false’” .”

I am beginning to get the feeling that the attitude underlying much of left wing politics is fundamentally that reality doesn’t matter-only what you think is real matters. Any rational person must surely begin to realize how insane that is.

5 Noblesse Oblige { 05.19.10 at 6:40 pm }

Indeed, post modernism is leading us to ruin. But it has the reins and is winning hands down. What is to stop it?

6 Bruce { 05.21.10 at 4:21 pm }

Terrific post. Anyone who has seen the influence of literature faculty on university senate behavior will understand the postmodern mentality at work. Aside from the epistemological vacuities described above, there is a whining soporific quality to any discussion that makes reasonable people, those with better things to do, want to leave the room. The postmoderns take over by default, since no one takes them seriously. Soon enough, they take over the university and, well, the law schools. Then the courts. And the entertainment media.

They respond best to flattery and insist upon rewards based upon their good intentions, if not on their actual achievements.

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