Thursday, May 25, 2006

Enron and the law...

Back in 1970, Yale law professor Charles A. Reich published a best-selling and very controversial book, The Greening of America. While some of his work rightfully deserved criticism, perhaps even ridicule, his analysis of the anatomy of the corporate state in America was particularly insightful.

Law, he pointed out, began as "a codification of those lasting human values which a people agree upon." With the rise of corporations in the early twentieth century, however, and particularly during the 1930s, "the law was gradually changed from a medium which carried traditional values of its own to a value-free medium that could be adapted to serve 'public policy,' which became the 'public interest' of the Corporate State." Law supported the needs of administration rather than protecting the individual, and it proliferated thereafter. In the end, Reich concluded: "If 'law' means a general rule to govern a community of people, then in the most literal and precise sense we have no law; we are a lawless society."

Almost two decades later, the Enron case illuminates Reich's view. Here was a case in which almost everyone agreed that Skilling and Lay probably were not "ethical" in their behavior and actions, but they had not actually "broken the law." Why? Because the law served their needs; it was administrative in nature. The law had trumped ethics, or if you will, the "general rule" by which people live, the "codification of those lasting human values."

The law, I fear, is too administrative in its nature, a plethora of infinitesimal rules riddled (by design, too often) with loopholes that are aimed at serving the friends and allies of those who write them. But today, in Houston, the people rejected a defense that was built on that law and reached back, I think, to the law as a general rule of human behavior. It is something we all should applaud.


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