> However, his comments on Enron betray so fundamental a misunderstanding > of the situation that I had to respond. > > On Tuesday, June 18, 2002, at 04:53 PM, Lee Actor wrote: > > > You can unfairly castigate the free market if you > > wish (the failure of Enron is a textbook demonstration of the > > corruption of > > government/business partnerships, and it was the natural operation of > > market > > processes that revealed the corruption) > > In fact, it was not the "natural operation of market processes" that > revealed the corruption, it was the investigation of government > regulators -- the SEC. And it was the *deregulation* of the California > energy market which allowed Enron to operate the way it did. And while > it is indeed the "natural operation of market processes" that allowed > the top brass at Enron and Global Crossing to split with a multi-million > dollar windfall while thousands of their employees get shafted, I'm not > so sure that's a desirable outcome. > > - Darcy
It is obvious that neither of us can convince the other of his horrible wrongness and our perfect rightness. Of course, I maintain that it is you who learned the wrong lessons from the Enron debacle. Your analysis of government regulation is superficial. As public choice economists have shown, government bureaucrats have incentives to act in their own self-interest just as people do in their private lives. The notion that people in government only have pure motives to work in the public interest is laughably naive. It is in the nature of government regulation that powerful private and public interests benefit at the expense of the less powerful and unconnected. This was certainly the case with Enron, which had insider relationships with regulators in highly regulated energy markets, including California (it is much more accurate to describe what happened in California the past 2 years as partial re-regulation, than deregulation; how else to describe a system in which mostly publicly-owned utilities paid market prices for their supplies, but were not allowed to charge market prices to their customers?). The free market, a complex set of processes in which all activity is voluntary, does not include fraud or force. It is a legitimate function of government to enact and enforce clear, unambiguous laws against fraud, force, theft, etc. Vague and confusing securities laws and regulations provide the illusion of safety, while often preventing shareholders and employees from being able to recognize the true nature of the risks they assume. This is a failure of government. I don't advocate trusting corporations; I advocate being skeptical of government, especially when it's trying to help you. -Lee _______________________________________________ Finale mailing list [EMAIL PROTECTED] http://mail.shsu.edu/mailman/listinfo/finale
