Risk and Ruin: Enron and the Culture of American Capitalism

Risk and Ruin: Enron and the Culture of American Capitalism

Risk and Ruin: Enron and the Culture of American Capitalism

Risk and Ruin: Enron and the Culture of American Capitalism


At the time of its collapse in 2001, Enron was one of the largest companies in the world, boasting revenue of over $100 billion. During the 1990s economic boom, the Houston, Texas-based energy company had diversified into commodities and derivatives trading and many other ventures--some more legal than others. In the lead-up to Enron's demise, it was revealed that the company's financial success was sustained by a creatively planned and well-orchestrated accounting fraud. The story of Enron and its disastrous aftermath has since become a symbol of corporate excess and negligence, framed as an exceptional event in the annals of American business.

With Risk and Ruin, Gavin Benke places Enron's fall within the larger history and culture of late twentieth-century American capitalism. In many ways, Benke argues, Enron was emblematic of the transitions that characterized the era. Like Enron, the American economy had shifted from old industry to the so-called knowledge economy, from goods to finance, and from national to global modes of production.

Benke dives deep into the Enron archives, analyzing company newsletters, board meeting minutes, and courtroom transcriptions to chart several interconnected themes across Enron's history: the changing fortunes of Houston; the shifting attitudes toward business strategy, deregulation, and the function of the market among policy makers and business leaders; and the cultural context that accompanied and encouraged these broader political and economic changes. Considered against this backdrop, Enron takes on new significance as a potent reminder of the unaddressed issues still facing national and global economies.

Published in cooperation with the William P. Clements Center for Southwest Studies at Southern Methodist University.


The men did not stand a chance in Houston. Kenneth Lay’s company, Enron, had become a potential embarrassment for the Texas city after the corporation collapsed in 2001 amid a shockingly elaborate and expansive accounting fraud. Blame for this fiasco largely fell on Lay and Jeffrey Skilling, who had transformed the company over the course of the previous decade. Now, at the start of 2006, the two men were facing criminal charges. Some former Enron executives had already agreed to jail time, but the trial of these two men was especially symbolic—and the mood was ugly. “They don’t even deserve a trial,” one potential juror put it. “Let all the people they ruined have at them.”

The anger and outrage in the jury pool should not have surprised Lay. The word “Enron” was already a pithy reference for corporate wrongdoing. The company’s story had been told and retold by journalists, filmmakers, exemployees, and others, powerfully shaping public opinion. Many of those in the jury pool had even read a book or seen a movie about Enron. Lay’s attorneys argued it was absurd that he should stand trial in Houston, but their effort to get their client away from that Texas court house was unsuccessful. In February, the soft-spoken Lay appeared alongside Skilling as a prosecutor told the jury that Enron’s collapse was “about lies and choices.”

The trial went on for months, and as a hot Texas summer loomed in late May, both men were found guilty. The verdicts read like veritable laundry lists of white-collar crime, including wire fraud, securities fraud, conspiracy, insider trading, and making false statements to banks and auditors. After the convictions, though, their fates parted. Lay died of a heart attack less than two months later, launching conspiracy theories variously involving suicide, foul play, or a faked death. Skilling, for his part, began a lengthy prison sentence and equally long legal battle to get out of jail early. Rich and powerful men had been held to account. However, the trial of Ken Lay and Jeff Skilling did not deliver high courtroom drama. It was mere epilogue.

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