Enron’s revolution-always approach to energy in its latter years was Schumpeter on steroids. Adding to the company tumult was another complicating factor: Enron’s business model was dependent on political, not free-market, capitalism.

In early 2001, Enron founder and chairman Ken Lay proclaimed a new corporate vision: to become the world’s leading company. But this goal was not about beating oil majors like ExxonMobil or Chevron at their game. It was about mandatory open-access with gas and electricity transmission to trade the commodities; reducing tax bills with solar and wind investments (what GE does today with what was once Enron Wind); developing infrastructure in risky countries with government-guaranteed financing; and more.

Enron’s Business Guru

Lay’s super-Schumpeterian view of business strategy drew upon Peter Drucker’s The Age of Discontinuity, which Professor Lay taught to his graduate economics students at George Washington University in the early 1970s.…

[Editor’s note: This is Part II (Part I here) of a two-part analysis examining projections of increasing human mortality to accompany projections of increases in temperature resulting from greenhouse gas emissions produced from burning fossil fuels to produce energy. Such studies typically give short shrift to the effectiveness of rather simple adaptations and the power of cheap, and reliable electricity.]

In my post yesterday, I discussed the seemingly incongruent fact: the more frequent heat waves, the fewer the number of people who die from them. This results from adaptive measures that the people who live in hot places incorporate into their lifestyles. These adaptations include access to air-conditioning which is facilitated by the availability of cheap, reliable, and abundant electricity.

Today, I’ll look more in detail at a new paper which projects a rapid rise in human mortality across Europe to accompany projections of rising temperatures there—contrary to observations.…

[Editor’s Note: This is Part I of a two-part analysis examining projections of increasing human mortality to accompany projections of increases in temperature resulting from greenhouse gas emissions produced from burning fossil fuels to produce energy. Such studies typically give short shrift to the effectiveness of rather simple adaptations and the power of cheap, and reliable electricity.]

Increased use of air-conditioning, made possible by access to affordable, reliable electricity, goes a long way towards counteracting the acute effects of excessive heat events, a.k.a. heat waves, on human mortality and morbidity. Projections of rapidly rising human heat-related mortality under a warming climate, such as those made in a recent paper published by Joan Ballester and colleagues, fail to acknowledge the power and reality that this and other (even simpler) adaptations can have at protecting human life.…

“The two greatest enemies of free enterprise in the United States … have been, on the one hand, my fellow intellectuals and, on the other hand, the business corporations of this country.”

– Milton Friedman. “Which Way for Capitalism?” Reason, May 1977, p. 21.

Special government favor. A little something for nothing at the other’s expense…. Sure, a particular business or industry can gain in the short run. But when everyone is getting the booty, almost all lose.

Just look where government is today. The chronic, gargantuan federal budget deficit is testament to the Enrons then, GEs now  receiving government subsidies from either the U.S. Treasury or the tax code. The rest of us pay (or will pay) what the rent-seekers are getting and not paying for (outside of their lobbying costs).…