What about Enron?

As we have been stating the Bible teaches the principles of capitalism as a godly economic system but includes the many safeguards we have been teaching here to govern it and keep it from spiraling out of control. The Moravians were able to keep these safeguards in place but this is not always the case as is evidenced by the Enron Scandal.

Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. It was founded in 1985 as the result a merger. Before its bankruptcy on December 2, 2001, Enron employed approximately 20,000 staff and was one of the world’s major electricity, natural gas, communications and pulp and paper companies, with claimed revenues of nearly $101 billion during 2000. Fortune actually named Enron “America’s Most Innovative Company” for six consecutive years.

At the end of 2001, it was revealed that its reported financial condition was sustained by systematic, and creatively planned accounting fraud, known since as the Enron scandal. Enron has since become a well-known example of willful corporate fraud and corruption.

The scandal also affected the greater business world by causing the dissolution of the Arthur Andersen accounting firm, which was one of the top five accounting firms in the USA at the time. In effect Arthur Anderson was complicate in the cover up of all the accounting fraud. As an outside auditor they helped to cover up the fraud and went out of business because of it…because no one could trust them to do an honest audit. Honesty is very important in the auditing world and the business world for that matter.

Chairman Ken Lay was indicted by a grand jury and was found guilty of 10 counts of securities fraud. Lay died while vacationing, three months before his October 23 sentencing. A preliminary autopsy reported Lay had died of a heart attack caused by coronary artery disease. Lay left behind “a legacy of shame” characterized by “mismanagement and dishonesty. Other top Enron executives were prosecuted as well.

Lay’s company, Enron, went bankrupt in 2001. It was the biggest bankruptcy in U.S. history. In total 20,000 employees lost their jobs and in many cases their life savings. Investors also lost billions of dollars. Enron employees and shareholders received limited returns in lawsuits, despite losing billions in pensions and stock prices. Sad. 

So critics of capitalism would like to site Enron as an example of why capitalism is a failed economic system. However we find the Biblical safeguards meant to govern capitalism were not followed. Just a few follow and speak for themselves:

Exodus 20:16 You shall not bear false witness (lie) against your neighbor.

Mark 8:36 – For what does it profit a man to gain the whole world, and forfeit his soul?

Proverbs 13:11 – Wealth obtained by fraud dwindles, but the one who gathers by labor increases it.

Proverbs 22:16 – He who oppresses the poor to make more for himself or who gives to the rich, will only come to poverty.

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One Response to What about Enron?

  1. Chase Cheshire says:

    Great. I enjoyed it.

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