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.…

Ed. Note: Occasional posts at MasterResource include big-picture entries on key social science thinkers that are relevant to understand dynamic market capitalism versus its opposite, political capitalism. This entry examines a leading twentieth-century thinker whose work continues to frame many debates in applied economics and political economy.

Brilliant, blithe, eclectic, and obsessive, the immaculately attired, aristocratic scholar [Joseph Schumpeter] captured the essence of entrepreneurial capitalism and introduced the terms “creative destruction” and “business strategy.”

– Robert Bradley, Capitalism at Work: Business, Government, and Energy, p. 100.

“I set out to become the greatest lover in Vienna, the greatest horseman in Austria, and the greatest economist in the world. Alas, for the illusions of youth: as a horseman, I was never really first-rate.”

– Joseph Schumpeter, as recalled by student M.

“Business that is everything to everyone is not anything at all in itself.”

 – Elaine Sternberg,  Just Business: Business Ethics in Action. Oxford University Press, 2000, p. 33.

No doubt his handlers have given Al Gore the word: go easy on climate warming (aka climate change). The issue has little traction. You are the wrong voice for the cause. Solyndra. Climategate 2.0. Winter snows…. Not now, Al.

Take it up a notch! they must be telling him. Think bigger. Subsume the issue…. And so Gore’s new piece in the Wall Street Journal barely mentions his pet issue of (man-made) climate change but something much larger and amorphous.

“A Manifesto for Sustainable Capitalism,” coauthored with David Blood, calls for “abandoning short-term economic thinking for ‘sustainable capitalism’.” Such is code for that subjective, holistic, anything goes doctrine of corporate social responsibility, which I elsewhere questioned as follows:

The discipline of business ethics should be reoriented around a more sophisticated understanding of capitalism proper.

It is a common refrain in headlines at Joe Romm’s Climate Progress:

• “Koch-Fueled Americans for Prosperity Takes Credit for Bullying GOP Lawmakers Into Climate Denial” (Emilee Piece: December 8, 2011);
• “Koch-Fueled Denial Backfires: Independents, Other Republicans Split With Tea-Party Extremists on Global Warming” (Romm: December 2, 2012); and
• “Koch-Fueled Americans for Prosperity Spends $2.4 Million on Solyndra Attack Ad (VIDEO)” (Stephen Lacey: November 28, 2011).

Smearing and innuendo is hardly fair play. But in this case, Joe Romm has something embarrassing to hide. Just as Koch Industries might be his least favorite company, Enron was his darling company.

Specifically, Romm was not only a cheerleader of Enron (Enron is “a company I greatly respect,” Romm would say). He was also an unpaid consultant and collaborator with the infamously fraudulent division, Enron Energy Services (EES), purveyor of energy efficiency service in (gamed) long-term contracts.…