history, we have met the ultimate enemy, over and over again, and he is the rabid carnivore in us. Working together — and only together — we can lure that dark beast out into the open and, not destroy it, but harness its incredible power, gentle it, and civilize it, once and for all.
Enter the Dragon
Here’s the rub: We’re not just taming lions anymore. After five thousand years of conquest, genocide, and slavery, the predatory side of the human psyche has become a force of mythic proportions, a fire-breathing, landscape-destroying, coldhearted, flying reptile that lives for the hunt, goes for the jugular — and gets high from it.
To make matters worse, this dangerous, mutant species can talk. It uses intelligence as a weapon. And it appears to have magical powers, a kind of verbal bait-and-switch tactic that’s little more than a perceptual parlor trick. Postindustrial dragons weave complex webs of pseudologic to mesmerize human prey, baiting them with promises of easy wealth, pretending to hold some innovative new secret to success that mere mortals can’t possibly understand, deftly hiding the fact that these get-rich-quick schemes are filled with nothing more than hot air.
A particularly articulate and seductive beast named Enron offers the ultimate case study. Remnants of this modern dinosaur should be collected and displayed for posterity, perhaps in the Smithsonian museum as a cautionary tale for high school and college students to study, except that his bones are scattered throughout Texas, California, and India, among other unfortunate places, making the cost of such a massive reconstruction project prohibitory, especially in the currently depressed economy that Enron’s demise foreshadowed.
The height of the company’s rise in the 1990s, the speed of its fall in 2001, and the limitless depths of its deception are already legendary. In fact, the sheer audacity of the illusions Enron’s top executives fed to investors, employees, and the public suggests that advanced intelligence and unchecked predatory behavior are a toxic combination, spawning a particularly delusional form of hubris that backfires, ironically, in a most disturbing mutation: a devastating, highly contagious strain of widespread human stupidity. If we want to know what sets us apart from all the “other beasts,” Enron makes a strong case for the idea that our big crafty brains are not necessarily an evolutionary advantage, that when intelligence dissociates from empathy in particular, our very survival becomes questionable.
Up until the moment it declared bankruptcy, the Houston-based energy giant represented the sovereignty of unbridled capitalism. Appearing to increase profits year after year, Enron thrived on competition and deregulation, promoting its aggressive, “survival of the fittest” culture as evolution in action while simultaneously positioning its mutual-exploitation philosophy as a new economic religion.
Behind the scenes, however, the company was losing money at an alarming rate. Through the magic of an accounting system known as “mark to market,” Enron would claim potential future profits on the very day a contract was signed, no matter how little cash came in the door. To make matters worse, deal makers would receive bonuses on speculative profits regardless of how accurate those initial projections turned out to be. For instance, the corporation spent a billion dollars building a power plant in India, realizing much later that the country couldn’t pay for the power Enron’s recently completed plant produced. Executives had already received several million dollars in bonuses based on imaginary profits that never arrived. In another, highly publicized deal, which Enron made with Blockbuster, the companies announced video-on-demand technology when developers were still struggling with the details. The plan collapsed when engineers failed to work out the kinks. Yet through mark-to-market accounting, Enron used future video-on-demand projections to book over $50 million in earnings — on a scheme that never made a cent!
Over time, it became clear that even mark-to-market tricks would be incapable of obscuring a fast-growing behemoth of debt. As a rising number of employees were encouraged to invest their retirement funds in Enron stock, outright fraud became the last resort of executives addicted to the company’s “total domination” of trading in power, communications, and weather securities. CFO Andy Fastow came up with the ultimately fatal idea of creating special companies to hide increasing losses. With names like Raptors and Jedi, these deceptive financial entities symbolized Enron’s adolescent fantasies of supercarnivores and space-age battles in which a supernatural “Force” was “with” executives, allowing them to defy the laws of financial gravity.
Soon enough, these wily wizards would be accused of black magic: At the end of 2001, tens of thousands of ordinary citizens and trusting employees lost everything. Several key players subsequently went to prison; one committed suicide. And the corporation’s founder, a Baptist minister’s son who mistook Enron’s rapid rise as a sign that God was on the company’s side, died from a heart attack weeks after receiving a guilty verdict that could have sent him to jail for forty-five years.
It’s tempting to blame Enron’s demise on avarice, pride, and deception, reading the entire fiasco as a moralistic passion play. We could just as easily present it as a case study of capitalism’s failure. Or we could take a psychological approach and characterize company executives as sociopathic. Hell, we could even say the devil made them do it. But we’d be missing the point. Enron imploded because of a glass ceiling on predatory behavior that (as mentioned in the previous section and bolstered by research presented at the end of this chapter) seems to be a long-ignored principle of nature itself. This dangerous failure to recognize the profound limitations of predatory power was reinforced in the twentieth century by a gross misreading of Darwin’s sorely incomplete “survival of the fittest” concept and a long-standing, culturewide inability to notice that the founders of three of the world’s major religions, including Christianity, actively promoted nonpredatory wisdom. Until we as a species expand our perceptions, modify our beliefs, and alter our behavior in response to these factors, we will keep breeding dinosaurs like Enron, suffering the dire consequences of our own inability to evolve, despite constant warnings and helpful hints from God and nature.
The Smartest Guys in the Room?
A number of fascinating books on the Enron scandal have been written since the company declared bankruptcy in late 2001, including The Smartest Guys in the Room by Fortune senior writers Bethany McLean and Peter Elkind. Power Failure, by Texas Monthly editor Mimi Swartz, is a collaboration with Sherron Watkins, the Enron global finance executive who was named one of Time magazine’s People of the Year for blowing the whistle on her company’s illegal bookkeeping schemes. But the printed word alone doesn’t do justice to the gestures, attitudes, and interpersonal dramas involved. For a taste of that “other 90 percent,” I highly recommend the DVD documentary version of The Smartest Guys in the Room.
Among numerous standout moments, taped phone conversations documented callous Enron traders cheerfully encouraging California power plant managers to find “creative” excuses for interrupting electrical service. With Fastow’s raptor tricks capable of hiding loss, not making money, Enron eventually felt the need to pirate its own hard-won deregulation of energy at the retail level, secretly causing rolling blackouts, manufacturing a phony California energy crisis to drive up the price of electricity.
As author Bethany McLean observes in an on-camera interview: “The Enron traders never seemed to step back and say, wait a minute, is what we’re doing ethical? Is it in our best long-term interests? Does it help us if we totally rape California? Does that advance our goals of nationwide deregulation? Instead, they sought out every loophole they could to profit from California’s misery,” an incredibly shortsighted move that threatened to bankrupt the entire state, adding further momentum to Enron’s cataclysmic downfall. A particularly pathological desire to manipulate the system for personal gain was at work, echoing Goldsmith’s recognition that “even when the issue is clearly to our disadvantage, we want to win.”
The corporate culture wholeheartedly supporting
