Enron: The Smartest Guys in the Room

A good overview of the Enron story, its main players and their basic dramas.

Only in passing does it place the Enron phenomenon in its historical context, but there’s only so much time. For an overview of why Enron happened in the first place, I recommend The Corporation.

The key to a thing like Enron is the Milgrim experiment, which the film discusses at length. For those unfamiliar, Milgrim had one guy pose as a scientist and another guy pose as a test subject, and then asked normal people to come in and participate in some “scientific research.” He said that he wanted to learn if electrical shocks would help improve memory.

This was all a Mametesque put-on. There was no experiment, at least not involving electrical shocks.

The “scientist” was in the room with the normal person, and the “test subject” was in another room, unseen. The “scientist” would tell the normal person to increase the power of the electric shocks, the normal person would push a button and the “test subject” would scream in agony as the “shocks” got progressively worse and worse. The “experiment” would continue until the “test subject” was either dead or the normal person said that he wouldn’t push the button any more.

What Milgrim found was that over half of the normal people would gladly, even enthusiastically, kill the “test subject” just as long as the order to do so came from a legitimate enough authority figure.

A simple form of this can be found in, say, a restaurant, where you get bad service from a surly waiter. Why is the waiter angry? Probably because he’s treated badly by the manager, who is being squeezed by the owner to cut corners and maximize profits.

So the Enron story is about a handful of deeply unethical, conscience-free, amoral monsters who set the agenda for one of the largest corporations in history. They told their employees, by example and by direct order, that anything they did to make money for the corporation was not only good, but would be rewarded. And so the employees, and everyone working with the corporation, including banks and contractors and lawyers and accountants, enthusiastically participated.

Eventually, “anything” came to include a rainbow of fraud, theft, destruction and death.

Nazi Germany, same thing.

And the current administration.

And Hollywood.