Revolutionary and Oppressive Pedagogies of Leadership: The Enron Spectacles

David M. Boje, Ph.d.

New Mexico State University

March 3 2002

 

 

I intend to develop a theory of cultural action that will transform the Society of the Spectacle (Debord, 1967). The spectacles of oppression at Enron Corporation constitute an example of the praxis of dominant elites in the Society of the Spectacle, which were not sufficiently dialectically opposed by an antithesis of critical thinking by employees, investors, monitors, and regulators. Spectacle is the dialectic thesis to which the carnival is the antithesis contradiction. Revolution is a carnival of resistance (such as the street theatre in the 1999 Seattle protests against the WTO) that is antithetical to the spectacle of oppression (See Figure 1 and Boje, 2001c). Out of this dialectic, once in a great while comes a liberatory dialog I shall call Festivalism (Boje, 2001b). Festivalism is short-term, and is quickly reappropriated by either spectacle or carnival, becoming one more thesis.

Part I – Dialectic Models of Leadership

 

 

There are leaders, such as those at Enron, who oppress by producing and distributing spectacles for wider consumption by employees and investors.  And there are leaders who engage in resistance to spectacle, such as Sherron Watkins, who attempted to blow the whistle. Revolutionary leaders, either transform in ways that are more festive and liberatory, or in ways that duplicate the pedagogy of the oppressor. Freire (1970: 119), for example, argues that people’s acts and reflections, combined as praxis can change the world. The activism and reflection about Enron is recently redirected in ways that transform its oppressive structures. Freire’s theory of leadership is dialogic, that leaders should not assume the exclusive role of thinkers while the oppressed take the role of doers.

The leaders do bear the responsibility for co-ordination – and, at times, direction – but leaders who deny praxis to the oppressed thereby invalidate their own praxis (Freire, 1970: 120).

 

 

Figure 2: X, Y Z Model of Leadership In the Box (Boje, 2000a).

 

In the X, Y, Z (in the box) model of leadership (Figure 2) we have been developing at NMSU, the leaders performs transactional responsibilities (X-dimension) such as direction and coordination. Yet, for the revolutionary leader, the Y and Z dimensions are critical. Revolutionary leaders who do not teach followers to empower their situation become one more oppressor (Y-dimension). Leaders, who do not engage in communal dialog with followers nor do joint reflection and joint action, reproduce the situation of oppression (monolog on Z-dimension). These are leaderly acts of revolution without the people, done for the people, but not with the people.  By imposing a monophonic voice on the revolution, such leaders invalidate dialogic praxis.  “Revolutionary leaders cannot think without the people, nor for the people only with the people” (Freire, 1970: 126). By contrast, bureaucrats and charismatic heroes do think without the people in order to dominate them more efficiently and effectively.

In Figure 2, my ideal revolutionary is polyphonic, high on X, Y, and Z dimensions. The ideal revolutionary leader is dialogic with the people, and has a will for power that is jointly exercised with the people; they are also transformational, as opposed to strictly transactional. There are many other forms of leadership that do not accomplish this. Freire (1970) distinguishes between two types of revolutionary leaders: those that are monophonic (in our Z terms) and those that are dialogically polyphonic and therefore dialogic with the people. The danger of the charismatic leader for the revolution is that the leader can become monophonic and try to serve the people, but not form a dialogic and polyphonic relationship. It is for this reason that Freire’s (1970) Pedagogy of the Oppressed stands opposed to both the praxis of the dominant elites of the spectacle and to revolutionary leaders who do not work with the people in join-praxis.

The elite leaders of the spectacle create cultural heroes who engage in sloganizing (“Just Do It”) and in bureaucratic regimentation (McDonaldization and Disneyfication), but this only further distributes the praxis of domination. “In order to dominate” says Freire (1970: 121), “the dominator has no choice but to deny true praxis to the people, deny them the right to say their own word and think their own thoughts.” Spectacle leaders do not act dialogically and do not relinquish power. Employees and investors are not people who have the right to weak their word in the Enron spectacles.

Enron spectacles are what Deleuze and Guattari (Thousand Plateaus) would term “schizophrenic.” The spectacle is an instrument for paternalistic domination, a way of naming the world, domination implicit in top-down monolog pretending to be dialogue, in a world constructed by the few executives who act as dialoguers for the majority of spectators.  Freire (1970: 78) might call Enron spectacles a dialog of schizophrenia  “pathology of love: sadism in the dominator and masochism in the dominated.”  Enron spectacles cultivate naïve thinking by employees and investors, and is therefore anti-dialogic. The spectacles of Enron are constructed to enroll spectators (investors and employees) as actors who will overlook the concrete, existential, present situation of risk in Enron work and investment. Executives design and script Enron spectacles according to their own personal views of reality.

 

Part II – Situation of Oppression

I am interested in a critical postmodern analysis of situations of oppression in Enron spectacles. The situation of oppression can be either a will to power or a naïve will to serve; in either situation, it is a regime of exploitation that is antidialogical. The situation of oppression is such that dialogical action is a threat to the managerial control of the Spectacle of Oppression. The dominant elites of Enron encourage passivity in the oppressed, so that people are “submerged” in states of minimal consciousness (Freire, 1970: 84). Executives create spectacles that fill passive consciousness with slogans, like “loose-tight.”  Jeffrey Skilling, for example, was recruited from McKinsey consulting, and named the world of Enron in the “loose-tight” managerial language expounded by other McKinsey alums, such as Tom Peters and Bob Waterman (London & McNulty, 2001). Enron employees filled their consciousness with slogans, that substituted for more critical awareness of situations of oppression. Doubts, hopes, and fears were mollified by slogans in ways that oppressed consciousness of concrete situations of risk.

Spectacles are composed of “limit-situations” which can be defined as “impassable boundaries” where possibilities that separate “being from being more” are not explored” (Freire, 1970: cf 89, citing Pinto, 1960: 284). People that enroll into Spectacle dramatics may be unable to separate themselves from “limit-situations” and note their submergence in emergent generative themes of Spectacles. Or, participants may be aware of their submergence in Spectacle realities, but be fatalist about it (Freire, 1970: 105).  

For example, as the Enron spectacles unwound and were taken out of the directing hands of executives, a climate of hopelessness emerged on the part of employees and investors.  The question for our investigations is how is that more critical perceptions, such as those of Sherron Watkins and her memo to Kenneth Lay, did not surface earlier to question the limit-situations before the Enron spectacle became catastrophic.

Antidialogue at Enron is one means of oppression.  For Freire (1970: 133-167) antidialogic oppression is accomplished by (1) conquest; (2) divide and rule; (3) manipulation, and; (4) cultural invasion.  As a will to power, the process of oppression allows elite executives to subsist on the “living death” of the oppressed, by stealing their words, and forbidding the oppressed to have a voice (Freire, 1970: 127, 129). Antidialogue and Spectacle is how oppression sustains its exploitative power grip. Liberating actions attempt to make oppressed and oppressor conscious of the hegemony of the antidialogic situation. To sustain the oppression of the antidialogic situation, various myths or ideological frames are enacted through the theatrics of Spectacle (cathartic control). Revolution is more about events of transformation as opposed to transaction, and voices that are silenced (not yet dialogic) versus those that are bureaucratically or even heroically monophonic. There are at least five situations of oppression where spectators experience complicity with false illusions and antidialogic abyss of Spectacle (Boje, 2002b).

1. Oppressive interpersonal relations
2. Oppressive acts of discrimination
3. Oppressive thought control
4. Oppressive employment relations
5. Oppressive corporate moral decay

 

Installing transactional bureaucratic or governmental leaders further installs bureaucracies that undermine the revolution. The danger to the revolution is that transformational, opinion, and superleaders will imitate and reenact the procedures of the oppressors. Such leaders may use revolutionary slogans and processes as a means of domination, not liberation.

To change a situation of oppression involves dialogue with the people. “Dialogue with the people is radically necessary for every authentic revolution” (Freire, 1970: 122).  I agree with Freire, that a duality between a prior stage of reflection and a subsequent stage of action is not ideal revolutionary praxis. Rather “action and reflection occur simultaneously” (Freire, 1970: 123).

 

Part IV – Dramaturgy of Spectacle Situation of Oppression

I want to extend a project that Burke and Boal began. Burke (1945: 231) aligns Aristotle’s (350BCE) six Poetics elements with the five dramatistic terms of the Pentad. Burke’s “plot would correspond to act,” “character would correspond to agent,” theme to purpose, dialog and rhythm combine in agency, and spectacle is classed under scene. Boal (1979) also bends Aristotle's Poetics, but takes it along a much more critical postmodern turn, while integrating Freire's Pedagogy of the Oppressed with Poetics into a Poetics of the Oppressed.

We can read Freire (1970: 123) as dramaturgical theory, “in this theory of action one cannot speak of an actor, nor simply of actors, but rather of actors in intercommunication.” Pedagogy of the Oppressed can be read using Burke’s (1945) Pentad (act, scene, agents, agency, & purpose). Leaders and followers are characters (actors) in situations (scenes) of oppression. The actors (agents) revolutionary behaviors (acts) seek to change the situation (scene), transforming it by their acts of reflection and dialog (agency) into a liberatory pedagogy (purpose). Dialog is the medium and the agency for transforming situations of oppression into liberation. 

We can also read Pedagogy of the Oppressed with Aristotle’s (350 BCE) Poetic six-element terminology (plot, characters, theme, dialog, rhythm, & spectacle). The plot of the Pedagogy of the Oppressed is to conduct a revolution against forms of oppression. The characters in the revolution are the leaders, followers, and elite oppressors. The theme is oppression and liberation.  The dialog is the rhetorical acts of leaders and followers that involve characters in intercommunication rather than a dichotomy where leaders have voice and people (followers) have ears listen, obey, and then act.  Rhythm for Aristotle was too obvious too explain. Yet, rhythm in contemporary times is all about self-organizing, patterns of complexity, emergence, and chaos. Rhythm springs from intercommunication and from the acts grasped together into plot.  This leaves spectacle. For Aristotle (350 BCE), spectacle is the least important of the six elements of drama. I contend spectacle is now the most important, and agree with Debord (1967) that we live in the Society of the Spectacle.

There are important differences between the dramatics of Aristotle and Burke. Burke preferred to keep acts separate from plots; characters were essentially agents. Agency for Burke was how the act was accomplished (Burke, 1945: 231). Burke notes that Aristotle said dialog and rhythm were the means.  Spectacle and scene were analogous for Burke, but I shall argue that Spectacle has evolved into something altogether different than scene. Burke and Aristotle do not do much at all with rhythm, which for me, is of more critical importance.

Burke (1972: 23) says that "many times on later occasions: he "regretted" not adding a sixth element (Frame) to his Pentad (act, scene, agent, agency, & purpose), and turning it into a Hexad. Aristotle (350 BCE: 1356a: 2) in Rhetoric also addresses the concept of Frame. For Aristotle it is “putting the audience into a certain frame of mind” (Rhetoric, 1356a: 2).  Burke (1937 Attitudes Toward History), on the other hand, views frame as dialectic between "Frames of Acceptance" and "Frames of Rejection." For Burke, Frames are grander, more about the paradigm or grand narrative in which something happens. Frames of acceptance include tragedy and comedy. We accept the Situation as tragic and temper our acts accordingly or we accept the situation as comedic and act accordingly.  Or, we can be more Marxian, says Burke and focus on Frames of Rejection have all to do with the Grotesque and the Burlesque. The Grotesque is "something like humor-with-the-laughter-omitted" (Burke, 1937: cf p. 76).  Marx and critical theorists set about debunking and de-veiling the Frame to expose the Grotesque and Burlesque.

If we tally up the unique elements of dramaturgy we have unearthed thus far in Aristotle and Burke, they lead to the contrasts in Table 1. I propose a combination of Burke and Aristotle, what I derive as a Septenary.  This all adds up to seven elements of the Theatrics of Leadership, or the Septet. 

Table 1: Poetic, Pentad, and Septet Grammars

Poetic (Aristotle)	Pentad (Burke)	Septet
1. Plot	1. Act	1. Plots
2. Character	2. Agent	2. Characterizations
3. Theme	3. Purpose	3. Themes
4. Dialog	4. Agency	4. Metascripts
5. Rhythm	4. Agency	5. Rhythms
6. Spectacle	5. Scene	6. Spectacles
* Frame of Mind of spectator	* Frames	7. Frames

Key: * = Discussed, but not one of their main dramaturgical elements (Source of Table, Boje, 2020c).

The Septet terms of dramaturgy form, I hope, a grammar of leadership as well as a grammar that can be applied to situations of oppression.

Table 2: The Septet Grammar of the Leadership Situation

SEPTET

1. Plot – (or Fable) - to “act” says Aristotle is “dran” (1448b: 35).[i][i] Plot is “the incidents of the story” (1450a: 15) and the “construction of a story” (1450a: 36); the “combination of the incidents, or things done in the story” (1450a: 4-4).  Plot is the way stories are framed (1449b: 5). In tragedy, included incidents arouse pity and fear in the spectators (1453b: 1), who then purge themselves of tragic flaws viewed in the play (e.g. seeing the suffering by some deed of horror or error of judgment). In comedy, the bitterest enemies walk off good friends at the end of their conflict. Episodic plots are not as tightly wound.

2. Character – (or Agent) - “agents” says Aristotle, are “either good men or bad – the diversities of human character being nearly always derivative from this primary distinction, since the line between virtue and vice is one dividing the whole of mankind” (1448a: 1). Agents are the “personages” [that] act the story” (1448b: 30). Agents are the actors who “act the stories” (1449b: 31). “Character is what makes us ascribe certain moral qualities to the agents” (1450a: 5). “Character in a play is that which reveals the moral purpose of the agents, i.e. the sort of thing they seek or avoid…” (1450b: 8; also 1454a: 18).

3. Theme – (or Thought) – Like purpose for Burke, “Thought is shown in all they [agents] say when proving a particular point” (1450a: 6, bracketed additions mine). “Thought, i.e. the power of saying whatever can be said, or what is appropriate to the occasion” (1450b: 5). A tragic theme is a catharsis of the emotions of pity and fear in the spectators (1449b: 25). Thought (theme) says Aristotle is already developed elsewhere in “Art of Rhetoric” (1456a: 35).

4.  Dialog – (or Diction) – Dialog is the “means of their [i.e. stories’] imitation” (1449b: 31, bracketed addition mine). Dialog (and Rhythm) for Burke are agency. Dialog means “merely this, the composition of the verses” (1449b: 34), the “expression of their [agent’s] thoughts in words” (1450b: 14, bracketed additions, mine). Dialog for Aristotle is the Rhetoric of persuasion.

5.  Rhythm – (or Melody) is “what is too completely understood to require explanation: (1449b: 35). Rhythm is the “means of their [i.e. stories’] imitation” (1449b: 31, bracketed addition mine); i.e. it is agency. It is the “greatest of pleasurable accessories of Tragedy” (1450b: 15). We know it now as self-organizing, as chaotic perturbations, or repetitive cycles.

6.  Spectacle – “stage appearance of the actors” (1449b: 31). It is “an attraction, is the least artistic of all the parts, and has least to do with the art of poetry… the getting-up of the Spectacle is more a matter for the costumier than the poet” (1450b: 16-20). “The tragic fear and pity may be aroused by Spectacle…” (1453b: 1) but producing the effect by Spectacle rather than choice of acts in a plot, “is less artistic, and requires extraneous aid” (1453b: 6). Once the least important, it is now the most important.

7. Frame - For Aristotle, the spectators have "frames of mind" that characters and plots seek to persuade through dialog and rhythm. For Burke (1937) Frame is a worldview, what we now call grand narratives. For burke the Frames of Acceptance and Frames of Rejection are in dialectic interaction.

 

-Source, Boje, 2002d for derivation of the Septet.

Aristotle, Burke, and Freire (and Boal) have different theories of dialectic. For Aristotle, the dialectic worked toward progress. For Burke, the dialectic is Frames of Acceptance opposed by Frames of Rejection. And for Freire and Boal, the dialectic is that thesis of oppression and the antithesis of resistance to oppression. 

In dialog, people can   improve their consciousness of material conditions of situations of oppression. The bureaucratic leader seeks to change the situation of oppression mechanistically by coming up with rules and procedures.  The bureaucrat does not seek to raise questions about false consciousness of reality, or the necessity of transformational revolutionary action.

I am working with Augusto Boal’s (1979) Theatre of the Oppressed in my leadership classes to create a better appreciation of situations of oppression. Boal builds upon Aristotle’s poetics to craft a Poetics of the Oppressed:

In order to understand this poetics of the oppressed one must keep in mind its main objective: to change the people – “spectators,” passive being in the theatrical phenomenon – into subjects, into actors, transformers of the dramatic action (Boal, 1979: 122).

The Postmodern Turn away from Aristotle - Boal revision to Aristotle is that the spectators no longer delegates power to the dramatic character on the spectacular stage in some sort of catharsis. The spectator becomes the actor, able to act and think for himself or herself as spectator reflecting consciously on situations of oppression and as actor changing that situation. In short, spectator and actor or “spect-actor.” Boal also breaks with Brecht who “proposes a poetics in which the spectator delegates power to the character who thus acts in his place” and instead the spectator acts for him or herself (Boal, 1979: 122). Boal (1979: 122), like Freire (1970: 124-5) wants to awaken the “critical consciousness of the spect-actor. The spectator takes the live action character role of the protagonist, out to change the dramatic action, trying out solutions, engaging in dialogs of liberation and transformation. Boal’s (1979, 1992, 1995) theatrical exercises are rehearsals for the revolution. The spectator liberates himself or herself from the spectacle of oppression.  Both Boal and Freire affirm dialog, rehearsing encounters that transform the world.  Freire (1970: cf 124) notes, “… dialogical encounter cannot take place between antagonists.” 

Consequently, any apparent dialogue or communication between the elites and the masses is really the depositing of “communiqués,” whose contents are intended to exercise a domesticating influence (Freire, 1970: 126).

The third element of Septet, “theme” is also a concept developed by Freire (1970: 86-118). Freire proposes a thematic methodology that I intend to adapt to the investigation of Enron spectacles.  Each spectacle is a “thematic universe” what Freire (1970: 86) defines as a complex of “generative themes.” Spectacles are an antenarrative plurality, where themes are generated, transformed, and dissolved (Boje, 2001a). People live submerged in ‘thematic universes’ that are spectacular and limiting. From a critical postmodern view, ‘Reality’ and ‘Spectacle’ co-evolve in dialectic interaction and co-emergence, but they can get out of step.  The antenarrative quality of themes is that they are not isolated, but are intertextually connected, dynamic, interpenetrating and rich in dialectic contradiction. Spectacles have a tendency to mythologize reality into a universe of themes that can create what Freire (1970: 92) calls a “climate of irrationality.” As such Spectacles become limit-situations of uncritical thinking and untested feasibility. The antithesis to such a complex of spectacle theme of untested feasibility is the liberating actions of the carnivalesque.

Intertextuality – The horizontal dimension of intertextuality is the tri-dimensional past, present, and future textual production, distribution, and consumption (Boje, 2001a: 74-92).  The vertical dimension of intertextuality is what Freire (1970: 93) calls “concentric circles moving from the general to the particular.” Generative themes are intertextual across concentric circles, such as local, regional, national, continental, and global. Some circles pose limit-situations of domination over other circles. The horizontal and vertical intertextuality is traversed by thematic diversifications. 

The fact that individuals in a certain area do not perceive a generative theme, or perceive it in a distorted way, may only reveal a limit-situation of oppression in which men are still submerged” (Freire, 1970: 94).

Thematic investigation, the tracing of thematic intertextuality, allows one to explore the dominated consciousness that is one of the constitutive elements of Spectacle. Spectacle is apprehended in its fragments, so people (even executives) lack a total vision of the context. A thematic investigation is a critical attitude toward the limit-situations of Spectacle. It is a study of how critical forms of thinking about the thematic universe of Enron became subverted.  It is a study of how people participate in Enron’s spectacle, but do not investigate its generative themes and fashion more critical forms of thinking.  To the participants in Enron Spectacles, the thematic universe is “dense, impenetrable, and enveloping” (Freire, 1970: 94-95).

Limit-Situation of Participative Theory - The implication for participative leadership theory is that much of it is not liberatory. Rather, the monophonic bureaucrats and heroes think for or about the people rather than with the people. Much of so-called “participative management” perpetuates the non-thinking of the people.  “If the elites were to think with the people, the contradiction would be superseded and they could no longer dominate” (Freire, 1970: 126).  Participation becomes a way of co-opting followers into not resisting changes directed by an oppressor who does not want people to think and act for themselves. Revolutionary leaders can also engage in practices that do not allow people to think and act for themselves; in which case they are a contradiction to revolutionary liberation, and only an imitation of the situation of oppression.

Both Boal and Freire want to transform false consciousness of the reality of limit-situations of oppression, to see causes of the situation limits. Out of each situation of oppression and its antithetical contradiction, there emerges a leadership of the carnival of resistance. Each limit-situation of spectacle is a socially constructed reality where people fragment into different areas (and sub-areas), and can engage quite opposite themes and tasks without awareness of the contradictions and situation limits of oppression.

The methodology of Spectacle analysis begins by reintroducing critical thinking. For me, this is the Septet, to apply the six other elements of dramatism to the Spectacle one (Table 2).  The following methodology of Spectacle investigation I have derived and extended from Freire (1970):

1. Critical Thinking - Reintroduce critical thinking about the dramatism of Spectacle within participants’ situationality so participants learn to investigate spectacle thinking. And see themselves acting in their Spectacle situations.
2. Action Research - Create an action research group of participants (and interdisciplinary researchers) to co-investigate generative thematics and contradictions of the situated Spectacles. Freire’s term was “thematic investigation circles” that were interdisciplinary co-investigative circles with participants to situations, not “action research team.” Thematics is how participants think about their Spectacle-mediated reality and their action upon that reality in their praxis without awareness of the system of contradictions. The task of the co-investigative circle is to collect data about life in the area in order to unveil Spectacles and their systems of contradiction. Observations and vocabularies (grammar and syntax) are registered into field notebooks to trace how themes (thoughts) are constructed in situ. Some contradictions are selected for scene analysis and critical codification analysis.
3. Coding - Analyze how participants ‘code’ their existential situation-limits in their situated historical cultural context. Codes live in the dialog, themes, and characters that participate in Spectacle of cathartic force. Living codes accomplish participants’ state of submersion into Spectacle. Living codes are to be deciphered in order to penetrate Spectacle domination. Freire recommended classifying themes along various social science disciplines (sort of a grounded theory).
4. Decoding – In decoding action researcher teams (that include participants) externalize Spectacle thematics in order to stimulate the appearance of new perception and new knowledge. To take a step back in order to ‘decode’ the living code of Spectacle re-presentations, noting the dialectic of Spectacle with material conditions of their world. This can be facilitated with essay writing by the action research team that dialogically decodes the living code of Spectacles.  Decoders reflect upon the codification processes of Spectacle, and their “thematic fan:” how themes open up intertextually into other themes and to “auxiliary” coding. Thematic fans extend intertextually to auxiliary codifications. The intertextual analysis explores the dialectic relations between themes and their opposites. There are also “hinged themes” that connect between two themes.  This can be aided by listening to tapes recorded ruing decoding sessions and studying field notes.
5. Conscintizacao – A deepening of the attitude of awareness characteristic of all participant-emergences from submersion in Spectacle. The inhabitants’ awareness of contradictions and dialectics, and the living code that constitutes the limit-situations of oppression of the Spectacle is the immediate task. Critical consciousness supersedes Spectacle consciousness to reveal untested feasibility lying beyond limit-situations of oppression.
6. Pedagogy of Diffusion – Out of the Spectacle investigation comes a pedagogical program that is dialogical. Channels of communication of the coding process of Spectacle and how to decode them are selected. The dialectic codification and decodification processes re-totalize the disjoined themes of Spectacle to re-present the existential situations of oppression. Freire anticipates Boal, in suggesting that some themes are best presented by means of brief theatrical demonstrations, other are presented as photos or cartoons, or entire texts.

Participants in Spectacle have evolved a coded existential situation that at some point is no longer critically decoded. “Codifications are not slogans; they are cognizable objects, challenges towards which the critical reflection [methodology] of the decoders should be directed” (Freire, 1970: 107, addition mine). The purpose of Spectacle methodology is to analyze the dramatism of the spectacles in which participants have enrolled as characters.  The method as applied by Freire and Boal is definitely action research that does include decoding the Spectacle drama and even brief dramatization of themes of oppression (Freire, 1970: 116; Boal, 1979: 159-190).  Both have a dialogical pedagogy that is rooted in critical theory.

Festivalism - My reading of Freire and Boal is that the leadership group that emerges to oppose Spectacle is a Carnival of Resistance. Out of this dialectic, can be reborn a more festive opposition to the spectacle of oppression.  It is not a final synthesis, since Festivalism is temporary, and easily reappropriated by either Spectacle or Carnival. In Festivalism, the barrier to dialog between protagonist and antagonist is (momentarily) bridged. It is in the festive situation that the process of continuing liberation through dialogic praxis becomes stable (for a time). Freire (1970: 133) adopts a similar idea to Burke (1937, 1945) in that people in dialogue “name” their world. In festivalism there is greater individual freedom than in either the Spectacle of Oppression or the Carnival of Resistance. Spectacle of Oppression is fundamentally antidialogical; leaders engage in monologue not dialog. Carnival is a monolog of satire, parody, and irony. Out of this dialectic comes the potentiation of Festivalism, where the dialog of liberation can happen.

Frames and Myths - The idea of Frame in Aristotle and in Burke is treated differently in Freire. Freire uses the term “myth” in ways that are like Aristotle’s frame of mind of the spectator, and somewhat like Burke’s Frames of Acceptance (people buying into the tragic or comedic frame). Oppressors enact through Spectacle theatrics myths that are indispensable to the preservation of status quo.  Freire (1970: 129-130, 135-137) lists several myths that keep people unconscious:

1. Absolutizing Myth of Ignorance – This myth implies the existence of someone who decrees the ignorance of someone else.  The oppressed are defined as a class, and their words are stolen from them; they are forbidden to speak, while another class emerges to guide, order, direct, and command the oppressed – making dialog impossible. It is in this situation of oppression that revolutionary leaders are tempted to imitate oppressor elites.
2. Myth of Free Society – the myth that the oppressive order is a free society
3. Myth of Free Work – the myth that all men are free to work where they wish, that if they don’t like their boss they can leave him and look for another job
4. Myth of Oppressors Respect for Human Rights – myth that the oppressive order respects human rights and is therefore worthy of esteem
5. Myth of the Industrious Entrepreneur – the myth that anyone who is industrious can become an entrepreneur. This is complimentary to the myth that the oppressed are lazy.
6. Myth of the Street Vendor  - myth that the street vendor is as much an entrepreneur as the owner of a large factory
7. Myth of Universal Right to Education  - myth of universal right of education, when out of the children who begin school only a tiny fraction every reach university
8. Myth of Equality  - myth of the equality of all people
9. Myth of Heroism of the Oppressor – that defenders of western capitalism are heroes.
10. Myth of Generous Deeds of Elites – myth of the charity and generosity of the elites, when what they really do as a class is to foster selective “good deeds”” so that the people accept their situation and do not rebel.

Themes  - The Septet element, Themes is developed by Freire (1970: 96-99). I want to develop the Septet methodology to explore the dramatics of spectacle praxis.

 

Part V – The Rise, Fall, and Autopsy of Enron Spectacles

 

This is a critical postmodern analysis of a series of Enron spectacles which I read as limit-situations of oppression. The limit-situation is a Spectacle in which Enron investors, executives, employees, regulators, auditors, and monitors lacked a critical understanding of the Enron reality. I think this is because the stakeholders apprehended Enron reality in a series of fragments, until the whole house of cards collapsed.  Here, we explore the theatrical dimensions of Enron’s Spectacles in dialectic relations to Enron’s contextual reality. We can begin our Septet dramatist investigation of Enron spectacles by exploring the generative themes. To investigate the generative themes of each Enron spectacle is to investigate the stakeholders’ (characters) thinking (themes and frames) about Enron reality and their actions (plots and dialog), which along with rhythm is their dramatic and poetic praxis (Freire, 1970: 97). Each Enron Spectacle codes situations of oppression so the existential reality is quite veiled.  The fact that Enron investors and employees (and sometimes executives) do not perceive the degenerative theme of collapse or perceive it in some distorted way, as Freire (1970: 94) points out, reveals a “limit situation of oppression.”

 

I propose to analyze Enron spectacles, the way Aristotle critiqued tragedy, and also apply Burke’s (1945) and Boal’s (1979) extensions to Aristotle’s dramatism (e.g. Table 2).

 

The next section aanalyzes a series of Enron spectacles. Each one is theatrical. Each Spectacle is a double. Once facet of spectacle is what Aristotle (350 BCE) calls catharsis, a means by which actors on the stage, and directors of plays control and educate spectators. The other side of spectacle, its double is the carnival of resistance to spectacles of oppression. After the collapse, carnival is everywhere, but during its rise, and when the house of cards begins to shake, there was precious little carnival.

The Rise of Enron Spectacle  - The Rise of Enron is a myth-creating adventure. Enron set out to transform the world of energy, to mediate that world in acts of investment, and to rename that world in such vocabulary as ‘deregulation’ and ‘energy futures.’ The Rise of Enron to the seventh largest American corporation is also a spectacle with an accompanying generative “theme of silence” since the face of Enron is veiled and spectators and actors are unconscious of the limit-situations of oppression in the chaotic-frenzy of the New Economy. As some point the Rise of the Enron spectacle made a turn from heroic and creative entrepreneurship to become an instrument for the domination of investors, employees, and regulators. At some point creative energies of collective dialogue became a monologue where collective silence and denial were substituted for crucial thinking.  The Rise of Enron at some point became a dehumanizing oppression of aggression. “The domination implicit in [Enron] dialogue is that of the world by the dialoguers; it is conquest of the world for the liberation of men” (Freire, 1970: 77).  Enron was revolutionary, a transformer of industries (electricity, gas, water, and then other industries). Enron saw industry regulation and corporate taxation as situations of oppression. The Rise of Enron is a renaming of the world around them, to displace old industry with new ones. Enron executives were in a struggle to liberate industry and overcome a politics they saw as paternalistic manipulation. Enron executives were critical thinkers, but at some point their thinking became naïve; perhaps they could no longer see the risks in the situations their renaming had created.  The emergence of critical awareness, and revolutionary leadership, ceased at Enron, and the dialog became monolog, secretive, where slogans and passivity replaced critical analysis.

The rise of Enron, not its collapse is the main political scandal. During the first Bush administration Enron received waivers from regulations by the Federal Energy Regulatory Commission headed by Wendy Gramm who was later appointed to Enron’s Board of Directors. The Clinton administration made the waivers part of federal law. Enron was a major contributor to both the Bush and Gore parties. Academia is equally complicit. Business school professors eagerly made Enron the shining example of success through hyper-competitiveness, reengineering, deregulation, outsourcing, and strategic business partnerships and alliances in the New Economy.

The generative theme of the Rise of Enron, the hyper-aggressive competitive tactics of executives, did not become decoded until Enron was near to collapse. Slogans like "new economy" have a snake-oil ring to them, and they legitimate aggressive and predatory corporate praxis.  For example, outsourcing and reengineering began at Enron in 1993 when non-essential functions were turned over to outside contractors that paid former Enron employees less.

Enron Corp. systematically reviewed all of its functions and weeded out those that didn't have anything to do with the gas business - the mailroom, fitness center, cafeteria, photocopy center and others… Enron employees were given time to transition into the contractors' businesses or to quit (Woodyard, 1996).

For over a decade Enron is the star of the knowledge and service-sector New Economy. For example, President Bill Clinton, in 1997 described CEO Kenneth Lay of Enron as have the strength and diversity necessary on to keep the New Economy on track in the 21^st century (Clinton, 1997). Enron’s executives were seen as “financial whiz kids” who exploited “arbitrage opportunities in energy markets” and successfully managed the “financial risks associated with buying and selling various forms of energy” (Hamel, 1997). This continued right up to the collapse.  For example, in June 2000, then CEO Jeffrey Skilling was quoted as saying there were significant rewards to e-commoercen and industry restructuring "If you can take that platform, and you use the capabilities the bricks bring to the table, e-commerce the industry and change the structure, you're selling for more than a 50 multiple” (Durgin, 2000).

Spectators to spectacles code along managerial lines and learn to describe, for example, the Rise of Enron, as the triumph of the New Economy. For example, in 1997 and 1998 Enron executives were seen as the heroic reengineers of business processes, strategists that could toss out the old business model, and reinvent entire industries in the new reinvent-or-die requirements of the New Economy (Hamel, 1998; Heying, 1997; Prahalad, 1998). The advice to executives was to form temporary alliances and partnerships, so mergers and acquisitions are endemic in the 1980s and 1990s as these heroic executives transferred risks and skills across networks of firms while protecting critical intellectual property rights. In 1996, energy deregulation was eagerly anticipated and no one was critical about Enron strategies.

Enron is working skillfully to win favor in Washington, D.C., where it has contributed more than $1.9 billion to political campaigns over the past decade, and in Portland, where it has promised a $20 million contribution to the PGE Foundation to help fund civic projects (Francis, 1996, as cited in Heying, 1997).

Spectators and actors are persuaded and distracted, to not decode the Enron Rise and see its grotesque concrete situations of oppression. The emplotment of acts is done through Spectacle, so the generative theme is veiled and not decoded. As Flanigan (1999) summarizes the spectacle dialog, “The new economy at its best means power to the people.” Were investors and employees to step back from the Rise of Enron in the New Economy Spectacle, they would behave differently and think more critically about their investments. The veil would no longer hide the concrete reality, and the theme of silence would be decode in critical analysis of the Spectacle codes to reveal situations of oppression (Freire, 1970: 96).

 

The Rise of Enron Spectacle is a theatrical performance that is dense, impenetrable, and enveloping until its near collapse.  Freire (1970: 95) recommends that in such veiled events, we investigate elements that here we call Spectacular, so that the abstract no longer masks the concrete materiality. Rather in acts of reflection we investigate the dialectic of the abstract spectacle theme and the concrete materiality it masks.

 

In retrospective sensemaking, the collapse of the energy trader Enron on December 2—the largest bankruptcy in US corporate history—has resulted in a series of increasingly critical comments both in the American and international press. Analysts, for example, point out that Enron’s collapse is rooted in recent changes in US legal, financial and accounting professions (Washington Post commentator George Will, in an article published in the January 22 edition of the Australian Financial Review).  Will points out that the Rise of Enron happened in an “epidemic of aggressiveness in the 1980s, when all three professions [legal, finance & accounting] began to think of themselves as ‘can do’ people—‘problem solvers’ who ‘think outside the box.’”

 

Characterizations of Enron executives point out their extreme arrogance, unable to see the extreme risks of their wheel of fortune. But, is the Enron story much larger than one corporation and its hyper-aggressive executives?  Perhaps the macro story is the entire economic system of western capitalism failed.

January 15, New York Times columnist Paul Krugman dubbed the Enron affair “crony capitalism, US style” and pointed out that the “real story is much bigger” than one company. Three days later, in a comment titled “A System Corrupted”, he further elaborated. “The Enron debacle,” he wrote, “is not just the story of a company that failed; it is the story of a system that failed. And the system didn’t fail through carelessness or laziness; it was corrupted.”

If the Spectacle veil of the Rise of Enron were penetrated before its collapse, then we might see that the capitalist economy, including its accounting rules, independence of auditors, financial market regulation, and controls against insider trading have been corrupted (Krugman, 2002). 

 

How is it that stakeholders during the spectacular rise of Enron could not decode the whole picture?  I think it is because the dramatism of the Rise of Enron is a Spectacle that thwarted critical perception of the concrete situation of oppression. It was dense, impenetrable, and enveloping for actors and spectators. The generative theme was silence of critical thinking in the face of the limit-situation of oppression.

 

Whistle Blowing Spectacle  - As managers such as Sherron Watkins began to blow the whistle, Enron executives denied that there were any problems with Enron’s off-the-balance-sheet partnerships. They reacted by erecting defense mechanisms and creating spectacles of rationalization. For example, Watkins met with Lay on August 21 2001.  That is when the seven-page Watkins memo was discussed (cover page plus six page supplemental letter). By all accounts the meeting was cordial, and the matter was turned over to the law frim of Vinson & Elkins:

The [Aug 21] session was businesslike, and Lay seemed genuinely concerned.  Watkins brought along a six-page letter detailing her worries, and Lay promised to have a team of lawyers review the controversial deals. But he decided to use Enron's law firm, Vinson & Elkins, despite Watkins' unease about a conflict of interest. Vinson & Elkins had been paid for work on Condor and Raptor transactions. But Lay went ahead with the review--whose scope he kept strictly limited (Duffy, 2002).

The subsequent rereadings and recitations of Watkins’ texts include Max Hendrick III, of Vinson & Elkins, letter to James V. Derrick Jr., Executive Vice President and General Counsel of Enron Corp which is dated October 15, 2001 title “Preliminary Investigation of Allegations of an Anonymous Employee,” and subsequent Congressional testimony about Watkins’ texts. The Vinson & Elkins’ analysis of the Watkins letter and supplemental material (7-page Watkins text) yielded a nine-page text by the law firm that is more intertextual in its dialoguing with Watkins text, but also quoting other prior texts (e.g. Board of Directors approval of the transactions), anticipating being reread, and in its relations to yet unwritten texts. Vinson & Elkins’ text is a permutation of texts, citing and referencing utterances from other texts that serve to neutralize the Watkins text, just in time. The day after the Vinson & Elkins letter, i.e. October 16 2001, Enron rewrote its equity downward by $1.2 billion and declared losses of $544 million. The collapse proceeded rapidly.

The Vinson & Elkins letter erects a defense mechanism and rationalization that Watkins’ text does not merit further investigation; the validity of the concrete reality is deniable. To legitimate Watkins’ would lead to uncomfortable perceptions of the limit-situation of oppression. By resisting any attempt to dialog further about the oppression, the heart of the question about the pending collapse of Enron into scandal is avoided. There is no further dialog to explore a critical understanding of the Enron reality. The force of Spectacle remains antidialogic.

After she blew the whistle, Watkins obtained partial immunity from prosecution.

A law enforcement source said Watkins asked for and received a "non-target letter" from prosecutors. In testimony, she has acknowledged selling Enron stock after she became aware of the company's accounting irregularities, which could be viewed as insider trading by the Securities and Exchange Commission (Schmidt, 2002).

The spectacle plot gets stickier. For example, “while Watkins came forward to Enron chairman Kenneth Lay and to the Andersen LLP accounting firm, her professional code of ethics required her to consider going to a regulatory agency such as the SEC as well” (Curtin, 2002).

Carnival of Resistance  - With each spectacle there emerges a carnival of resistance. There was precious little carnival before the collapse.  However, in India, in January 2001 Enron was being criticized as the new East India Company of the 21^st century. The East India Company was a notorious British trader that colonized India’s economy in the 19^th century (Merchant, 2000). Enron was viewed as a profiteering multinational corporation because its 2.2 billion dollar electricity generating plant at Dabhol is India's biggest single foreign investment has doubled its tariffs since 1993, and is three times greater than that charged by other independent power producers (IPPs). Enron ran a series of "myth and reality" ads in local newspapers following the west Indian state of Maharashtra's decision to review the tariff it pays Enron (Merchant, 2000).

The competition for the award ‘The World's Worst Corporation' is stiff, but Corporate Watch, Human Rights Watch, and Amnesty International recommended Enron for the top award in 2000.

The angriest Seattle protester could not have invented a firm that better connected the greed of the first world to the exploitation of the third; the groovy PR of the 'new economy' to lamentable service in the real one. The energy conglomerate Enron has the distinction of being the subject of Amnesty International's sole condemnatory report on a corporation as opposed to a government.  California is staring at the hitherto unthinkable prospect of electricity blackouts because of a deregulation of its utilities that brought lavish profits to Enron and its competitors. Enron has been cursed in Bombay, San Diego, Shepton Mallet and many points in between. But the criticisms are rarely echoed in ruling circles. Governments adore Enron, and the affection is reciprocated. Enron is the global leader in the political 'influence' market… Enron was denounced by Amnesty and Human Rights Watch after it built a power station at Dabhol near Bombay. I should mention, in passing, that the World Bank has said that the plant charges three times as much for electricity as suppliers in other Indian states. But it is not the prices that have provoked outrage. Villagers complained that their fisheries were being wrecked by Enron's discharges. Ataman More described what happened when they took their grievances to Dabhol. 'We told the police that we were peaceful demonstrators and would go to hold our rally. The police fired tear gas and lathi-charged us.' Women in their eighties were beaten and dozens were taken prisoner and held in the Enron site, which at this, and 30 other demonstrations in 1997, doubled as a private prison. Indian law allows companies to hire police officers. Enron bought them at $2.50 per cop per day. They raided villages while the men were at sea and terrified women and children. When Professor Sadanand Pawar criticised the corporation, a police inspector threw him in a stinking jail and told him: 'If you want to agitate, you must face these things' (Cohen, 2001).

Kenneth Lay, Enron's chief executive, gave $100,000 towards the cost of the Bush inauguration celebration; Lay and Skilling contributed another $330,000 to the Republican party (Enron added $620,000 from company funds and Enron gave $520,000 to the Gore campaign).  Jeff Skilling, the company president, once told delegates to a management conference to: 'Cut costs ruthlessly by 50 or 60 per cent. Get rid of people. They gum up the works.'

The Collapse Spectacle  - The rise of Enron as the star of the New Economy companies in the 1990s happened during the longest period of growth in the history of American capitalism. Enron’s collapse wiped out $70 billion in market value, 5,500 jobs and $850 million in employee retirement benefits (Bloomberg News, 2002). On October 16, Enron announced $618 million loss for the three months to June 30. On December 2, 2001, Enron filed for bankruptcy. The SEC, Justice Department and various congressional hearings in limited-liability partnerships and other issues of possible fraud followed.  The seeds of the Collapse Spectacle, however, were planted in a more longer term historical context.

The significance and implications of the Enron collapse can only be grasped by examining it within the context of the historical development of the capitalist economy, in particular the post-World War II period (Beams, 2002).

Enron was operating in a epoch when the growth rate, as Beams (2002) points out, had been declining since the 1950s and 1960s, from 4 percent to 3.1 percent. This means that new tactics and strategies get implemented to keep profit rates from dropping. As Marx pointed out,

If the rate of profit falls,” Marx wrote, “there follows, on the one hand, an exertion of capital in order that the individual capitalists, through improved methods, etc., may depress the value of their individual commodity below the social average value and thereby realize an extra profit at the prevailing market-price. On the other hand, there appears swindling and a general promotion of swindling by recourse to frenzied ventures with new methods of production, new investments of capital, new adventures, all for the sake of securing a shred of extra profit which is independent of the general average and rises above it [Capital, Volume III, Marx, pp. 253-254].

Enron is not the first company to enrich its executives while impoverishing its workers and investors. Enron is not the first to revaluate its debt and earnings. Nor, is Enron the first corporation to protect and deregulate markets by purchasing influence from the White house. According to TheStreet.com, 464 companies restated earnings in 1998 to 2000, more than did so in the previous 10 years. What is unique is that during this context of historical development of the capitalist system, competent accounting firms such as Arthur Andersen certified Enron financial statements, regulators at the SEC and experts on Wall Street did not decipher Enron’s financial problems, the tax system of the IRS did not question Enron’s shell companies for hiding income and debt, nor did Enron’s Board of Directors question the risky adventures of Enron executives. Only after the collapse, did people ask critical questions about how the Collapse Spectacle, including the largest U.S. bankruptcy in history could have come about.

Then everyone recognized Enron as a tragedy waiting to happen.  The tragedy extended to employees’ loss of job and retirement savings, investors loss of stock value, while Enron’s top executives made millions of dollars selling their Enron shares purchases with cheap stock options. The Enron executives sold their stocks at the right time, leaving unknowledgeable investors to absorb the loss.

The story is similar to something out of Euripides or Sophocles: protagonist engages in hubris (here, putting all retirement money in company stock); angers the gods by doing so (here, the gods are the gods of the market); and pays the price (here, losing job and losing retirement funds). In a Greek tragedy, however, the tragic protagonists would be Kenneth Lay and his peers (Francis-Wright, 2002).

It is not just that Enron collapsed; it is that the whole economic and political system to protect investors against fraud and abuse fell apart. Accounting firms such as Arthur Anderson and regulators such as the Securities and Exchange Commission are supposed to certify financial statements.

Enron managed to move billions of dollars of debt off of its balance sheets even though it lacked the authority to do so, and Andersen certified that Enron's treatment was substantially correct. The footnotes to Enron's 2000 annual report take up 16 pages of agate type. Deep within the footnotes are hints of the transactions that proved to be Enron's downfall. A truly independent auditing firm would have refused to make such transactions as opaque as they were to investors and analysts (Francis-Wright, 2002).

But then Enron would lose the account and give up its $50 million in annual billings. Anderson gambled that no one would ask critical questions about its financial statements. The SEC was not given enough funds to hire the staff it needed to analyze the complexity of Enron’s agate type. The IRS was not able to police Enron’s tax dodges in hundreds of countries and territories that had little or not corporate income tax, such as the Cayman Islands, where Enron did little or no business. In 2000 the Enron Board of Directors was rated among the top five boards by Chief Executive magazine; the Enron Board appeared to be independent of corporate executive influence, a model of corporate governance. The Enron Board of Directors, however, did not protect investors or employees from the hyper-aggressive (greedy) tactics of its executives. The White house, Congress and Senate did not control Enron’s appetite. They were too connected in campaign contributions. For example, Texas senator Phil Gramm’s wife was on the Enron Board of Directors and Texas separator Kay Bailey Hutchinson’s husband was a partner in Enron’s law firm.

One director, John Urquhart, earned more than $ 490,000 in consulting fees from Enron. Another netted $ 72,000 for advice on its European business. Two others worked for non-profits on the receiving end of Enron generosity. Then there were the obscenely large salaries that board members earned -- $ 300,000-plus in cash and stocks, nearly three times the average for big firms (USA Today, 2002).

Vice President Dick Cheney relied upon Enron executives to craft the administration’s energy policy. The Enron Board (as the Enron law firm response to the Watkins memo reveals) approved the Raptor and Condor partnerships that led to Enron’s collapse. Bush and Gore campaigns depended upon Enron financing. Political influence peddling and a lack of campaign finance reform legislation is part of the story of Enron’s collapse.

Enron Spectacle of Executive Greed  - Gordon Gecko's "greed is good" speech in the film Wall Street (based upon the Ivan Boesky character) seems to fit this spectacle.

For Aristotle (Nicomachean Ethics, Book 5) profiting from wrongful acts motivated by greed is not just a vice (as Plato argued):

When one acts from greed, in many cases his action expresses none of [the] vices -- certainly not all of them; yet what actuates him is certainly some kind of wickedness, since we blame him, and in particular it expresses injustice. If the offender has profited from his offence, it is attributed to injustice and to no other wickedness.

Executive greed includes such areas as insider trading (dumping stock before the bankruptcy), manipulations that inflate stock prices (to attract investors), and hiding debt and profitability (to keep credit ratings). Dramatic insider trading by executives is usually a big warning sign to investors. And this is not a new phenomenon. “In the roaring 1920s, Wall Street traders blatantly manipulated stock prices. In the 1980s, a bull market spawned insider-trading scandals; In the 1990s, aggressive accounting practices misled investors about the true value of many companies” (Moritsugu, 2002). The spectacle risk is that investors loose faith in the system.  Major shareholder losses at Enron and the loss of employees' retirement savings have sparked calls for prosecution. Insider trading carries a sentence of up to 10 years and a fine of $ 1 million. However, the charge is very hard to prove.

The Enron spectacle includes characterizations that Lay, Skilling and other executives engaged in greed. Kenneth Lay, for example, made 20 insider trade transactions from Feb. 1 through Oct. 26 of 2001 (Mulligan, 2002). But is this fraud or just greed?

 At Enron, executives raked in tens of millions of dollars from stock-option gains and other forms of compensation as rewards for  the company's soaring stock price and spectacular earnings growth. That growth, though, turned out to be a sham. Enron acknowledged last fall that it had overstated its earnings by $ 586 million over the previous four years. Some executives continued to cash in on their options even as the company headed for bankruptcy, while lower-level employees were prevented from doing the same (Spinner, 2002).

It wasn't until mid-February that Lay was required to fill in a key piece of the puzzle: The revelation that he sold $70.1 million worth of stock back to the company last year, including $26.1 million worth after Vice President Sherron S. Watkins sent him her now-famous Aug. 15 memo warning that Enron could "implode in a wave of accounting scandals." …

Lay's was a spectacular exception because his $70.1 million in sales back to Enron in 2001 dwarfed the $15.9 million in net public market sales that he had previously reported in monthly SEC filings. Moreover, Lay's public market sales, which had been occurring like clockwork at the rate of 3,000 to 4,000 shares a day virtually every trading day, halted abruptly July 31…

So the investing public had no way of knowing until mid-February that Lay kept right on selling--but to the company, not in the market--through August, September and October as damaging revelations about Enron's finances were pounding its stock lower. A big difference between Lay's dispositions and others that are done on a regular basis to cover taxable stock-vesting events is that Lay controlled the timing of his sell-backs, so they appear much more like voluntary investment decisions, Dye said.

Lay's fellow Enron officers, including former Chief Executive Jeffrey K. Skilling and former Chief Financial Officer Andrew S. Fastow, also have been accused of profiting at other investors' expense, but all of their 2001 stock transactions apparently were reported in regular monthly filings.

Skilling sold 240,000 shares for $15.5 million last year, with none of the sales coming later than June 13, according to SEC filings. Fastow did not sell any company stock in 2001, the filings show. Lay's $26.1 million in sales after his Aug. 15 warning from Watkins also came while he was reassuring employees in teleconferences and e-mail messages that Enron was solid and the stock was a good buy (Mulligan, 2002).

Related to insider trading are performance and bonus schemes at Enron that can motivate employees and executives to manipulate stock prices. Once again, it may be quite difficult to prove fraud.

The New York Times reported Friday. The stock targets, ending in 2000, were reached at the same time investigators say Enron officials were improperly inflating company profits by hundreds of millions of dollars, thereby buoying the stock price.  Details of the bonuses - as well as other payments totaling more than $ 432 million made to almost 2,000 corporate executives during the two years before Enron's collapse - are described in spreadsheets and data maintained on the corporate computers, information that has been obtained by federal prosecutors. Copies of the spreadsheets were also obtained by the Times. An Enron spokesman said that bonus payments at the company were linked to a variety of factors, and did not differ significantly from similar programs offered by other companies. "They were all performance-based programs, which is pretty standard for most corporations," the spokesman, Eric Thode, said (Houston Chronicle, 2002).

Enron’s auditor for ten years, Arthur Anderson is also skirting criminal and civil prosecution. On February 26, 2002 Arthur Andersen lawyers met with lawyers for two shareholder groups in New York and Washington, D.C., to explain how much it can pay to settle the Enron matter and remain viable (Bloomberg News, 2002). On November 29, the SEC expanded its investigation to include Andersen.  The shareholder groups are accusing Andersen of enabling Enron to conceal billions in debt and showing inflated profits of  $586 million. Anderson offered $600 to $800 million to settle the claims of the class-action lawsuit and creditors (Hirsch, 2002). In November, the University of California Board of Regents, who lost $145 million, became lead plaintiff in a lawsuit seeking repayment of retirement plans by 29 senior executives of Enron and Andersen (Fogarty, O'Donnell & Kasindorf, 2002).

Finally, to keep stock process buoyant, the off-the-balance-sheet partnership schemes by Andrew S. Fastow, Enron’s CFO are being investigated by the Justice Department, SEC, and Congressional hearings. Several of Fastow’s former subordinates have been trying to cut a deal with the Justice Department in return for immunity from persecution. “Among those who offered information to the government is former Enron treasurer Ben F. Glisan, who could provide important evidence” (Schmidt, 2002). 

Executive greed spectacles contribute to the spectator ideological frame (Table 2) of crony capitalism. For example, “Enron scandal could cause a whole generation of investors to lose faith in their retirement portfolios” (Curtin, 2002). Spectators may conclude that free market capitalism does not work anymore. Employee loyalty is also an issue: About 20,000 Enron workers were blocked from collecting promised employee benefits by Enron's bankruptcy-court filing (Fogarty, O'Donnell & Kasindorf, 2002).

The Autopsy Spectacle of Enron – The latest spectacle is the autopsy of Enron. Once the paragon of entrepreneurial culture and hyper-competitive business strategy in the New Economy of the Knowledge Corporation, Enron is now the cautionary tale of every Business College classroom. Enron used New Economy “magic” to transform a stodgy old economy gas company into soaring New Economy hero. Cases are now being written to explain the rise and fall of Enron using organization theory. The case will open in 1986, with Kenneth Lay laying out his vision to liberalize and deregulate the world’s energy markets. The analysis will use the latest in corporate culture theory. It will point out how Enron’s corporate culture grew too strong. The case will include quotes, like:

Spend long enough around top Enron people and you feel you are in the midst of some sort of evangelical cult. In a sense, you are. Mr Lay, with his "passion for markets", is the cult's guru. His disciples are Enron's managers, an intelligent, aggressive group of youngish professionals, all of whom "get it". The "it" is the rise of market forces in the long-staid energy business (Economist, European Intelligence Wire service, June 3, 2000, no author). 

Then the case will explore what Aristotle (350 BCE) would call certain tragic flaws in the character of Enron executives. Kenneth Lay will be berated for his arrogance. The case will explain how in 1990 Enron, hired from McKinsey management consulting firm, took the company into chaotic waters. McKinsey hawked the “loose-tight” managerial model expounded by its alums Tom Peters and Bob Waterman (London & McNulty, 2001). One of Skilling’s first recruits was Mr. Fastow, an expert in securitisation, the repackaging of financial assets so they can be traded in financial markets.  Merchant energy business employees were loosely supervised and tightly evaluated on innovate ways to break the rules in existing markets. Loose-tight became a strategy of decentralized control of risk, loose legal commitments, lack of transparency about investor risk, and tightly controlled performance evaluations. As chief operating officer, Skilling focused on a strategy of agility, moving quickly and keeping options open; the options that do not pan out are shut down. Planting lots of seeds, is how Skilling made Enron a wheeler-dealer in gas, electricity, water, and bandwidth trading. ''It's like planting seeds,'' says Skilling. '' There are a lot of seeds you know are not going to grow up into anything. Our objective is to have a lot of seeds planted'' (Coy, 1999).  Skilling, became CEO in February of 2000, and once described the loose-tight approach in this way: "As long as you clear your deals or business ideas through those screens, you can do whatever you want around here" (London & McNulty, 2001). Skilling resigned from Enron in August, prompting Watkins to blow one whistle.

Congressional Hearings Spectacle – The Congress is no strange to spectacle. The Enron hearings have been compared to McCarthyism, Watergate, Whitewater, Oliver North Contra-gate, and the Michael Milken junk bond scandal.  Congressional hearings call executives to testify in a spectacle that can quickly turn into carnivalesque showboating.

“The recent testimony of Jeffrey Skilling, the former chief executive of the Enron Corporation, brought howls of disbelief from members of Congress. Repeatedly, Mr. Skilling denied any knowledge of the financial rot in the hull of his corporate ship, which, collapsed into bankruptcy just months after he resigned” (Eichenwald, 2002).

"I am not an accountant," he replied under hostile questioning from Sen. Barbara Boxer (D-Calif.), unwittingly echoing one of Richard Nixon's more infamous denials (Washington Post, 2002).

It may be that “shifting of debt off its balance sheet into related partnerships was perfectly legal” but if it can be shown that this practice inflated earnings, and then it could qualify as fraud, not just bad judgment.  Document shredding by Enron and Andersen employees can lead to obstruction of justice cases. In addition there is the issue of insider trading that allowed executives to profit at employee and pensioner expense (Eichenwald, 2002).

Corporate executive criminal prosecution cases revolve around the concept of “professional reliance” which means, “everything the executives did was first approved by accountants and lawyers, so there could not be the intent to commit a crime” (Eichenwald, 2002).  Enron executive, Kenneth Lay, for example, immediately turned over Sherron Watkins’ accusatory memo to Enron’s law firm, who produced a document listing the approvals each executive had obtained from Anderson and the Enron Board of Directors.  With Enron’s bankruptcy, there are even fewer chances to prosecute executives for fraud.

Despite the precariousness of proving executive fraud, the Congressional hearings occur in a media circus, where fleeced investors and employees demand punishment. And Congresspersons are arguing that some level of punishment had been meted out.

Cultural Spectacle of Enron  - Enron has become an icon of popular culture. The Smithsonian Institute has opened an Enron collection and is seeking memorabilia of the cultural spectacle. The collection will include the Enron stock certificates, coffee mug, and Enron ethics manual, dated July 2000, is emblazoned with the company's tilted E logo that went for $ 96 on Ebay. Page 9 of the ethics manual reads, "If a director, officer or any employee of the Company (as defined herein) has material nonpublic information relating to Enron Corp. . . . it is the Company's policy that neither that person nor any related person may buy or sell securities of Enron Corp. … “ (Zeller, 2002).  The Smithsonian is collecting memorabilia that will tell the story.

Enron memorabilia has earned a spot alongside Old Glory and Dorothy's ruby red slippers in the museum that chronicles the nation's story…  "The Enron story is about accounting, pensions, stock, workers and management. It is resonating in front of Congress and has implications all the way to the White House."… The  Smithsonian purchased a company coffee mug and an ethics manual, complete with a letter from former Chairman Ken Lay, from an online auction site… Enron collectibles have already spurred great interest on Internet auction sites. On eBay.com, trinkets run the gamut from a $4 Enron light bulb stress ball, which comes in red blue and green, to a sterling silver Tiffany key chain, which featured a dangling Enron E and sold for $ 102 (Khanna, 2002).

Conclusions

Boal bends Aristotle in a most critical postmodern turn. The spect-actor in Theatre of the Oppressed is trained to reflect upon situations of oppression and then rewrite the script with more liberatory plot, characters, dialog, and rhythm.   The spect-actor in the case of Enron did not take control over the dramatic situation of oppression, until the tragedy was quite widespread.  There was little or no dialogue between Enron and its employees and investors; there was a good deal of monolog. Enron produced its Rise of Enron spectacle to be consumed by uncritical employees and investors. Competent auditors, regulators and financial experts did not decode the Enron spectacles before the collapse. The concreteness of Enron’s existential reality was veiled by slogans and managerialist codes.  The situation of oppression in Enron investments, risky investments and employment was diffusely apprehended until after the Watkins memo was deflected by Kenneth Lay and the Enron law firm. Watkins was the only manager (middle level) to take a step back form the situation and challenge the executive appreciation of the situation. Using Freire’s (1970: 97) terms, the “theme of silence” was an “overwhelming force of the limit-situations” of Enron. As co-investigators, Arthur Andersen was not able to be critical about the thematics of the Enron spectacle; they sacrificed their objectivity in their audits. Until the Watkins memo there was no transformation in how Andersen perceived the reality of the Enron transactions with off-the-balance-sheet partner arrangements and tax dodges in the Cayman Islands and elsewhere. Andersen could not liberate itself from the Enron spectacle themes until it was too late.

The pedagogy of leadership in Andersen and Enron produces spectacles of oppression that materially damage employees and investors.

 

References

 

Aristotle (written 350BCE). Citing in the (1954) translation Aristotle: Rhetoric and poetics. Introduction by F. Solmsen, Rhetoric. (W. Rhys Roberts, Translation); Poetics (I. Bywater, Translation.).  New York, NY: The Modern Library (Random House).  Poetics was written 350 BCE. Custom is to cite part and verse (i.e. Aristotle, 1450: 5, p. 23) refers to part 1450, verse 5, on p. 23 of the Solmsen (1954) book.  There is also an on line version translated by S. H. Butcher http://classics.mit.edu/Aristotle/poetics.html or http://eserver.org/philosophy/aristotle/poetics.txt

Aristotle - Nicomachean Ethics. Translators: TI- Terence Irwin, Hackett Publishing Co. 1985; DR - David Ross, Oxford University Press 1980; JT - J.A.K. Thomson, Penguin Books 1955 http://www.interlog.com/~girbe/ethics5.html

Beams, Nick (2002). The Enron collapse and the crisis of the profit system
29 January. World Socialist web site http://www.wsws.org/articles/2002/jan2002/enro-j29.shtml

Bloomberg News (2002, no author). SEC begins settlement talks with lawyers suing Andersen. Bloomberg News, CanWest Global Communications Corp. Ottawa Citizen, February 28, Business; Pg. F4.

Boal, Augusto (1979). Theatre of the Oppressed. Translation by Charles A. & Maria-Odillia Leal McBride. Originally published in Spanish as Teatro de Oprimido in 1974. NY: Theatre Communications Group.

Boal, Augusto (1992). Games for Actors and Non-actors. Translated by Adrian Jackson. A conflation of two books, Stop C’est Magique (Paris: Hachette, 1980) and  Jeuz pour acteurs et non-acteurs (Paris: La Découverte, 1989) with additions by Boal. London/NY: Routledge.

Boal, Augusto (1995). Rainbow of Desire, The Boal Method of Theatre and Therapy. NY: Routledge.

Boje, David M. (2001a). Narrative Methods for Organizational & Communication Research. London: Sage Publications.

Boje, David M. (2001b). Festivalism. May 28. Accessed March 3, 2002 http://www.zianet.com/boje/1/

Boje, D. M. (2001c). Carnivalesque resistance to global spectacle: A critical postmodern theory of public administration. Administrative Theory and Praxis, 23 (3), 431-458. http://business.nmsu.edu/~dboje/papers/carnivalesque_resistance_to_glob.htm

Boje, David M. (2002b). Exercises in Games of Power and Leadership. February 26, 2002. http://business.nmsu.edu/~dboje/388/games_of_power.htm

Boje, David M. (2002c). The Rise, Collapse, and Rebirth of Enron Spectacles: An Antenarrative Tamara Analysis of Corporate Theatre. Dated February 21, 2002.

Boje, David M. (2002d). What is situation? What is Situation? Feb 19, 2002 – What is situation is located on line at http://business.nmsu.edu/~dboje/388/what_is_situation.htm This is a Study Guide to accompany Situation Leadership http://business.nmsu.edu/~dboje/teaching/338/situation_and_contingency.htm and Games of Power, Games of Power http://business.nmsu.edu/~dboje/388/games_of_power.htm

Burke, Kennethh (1937). Attitudes Toward History. Las Altos, CA: Hermes Publications. 

Burke, Keneth (1945). A Grammar of Motives. Berkeley and LA, CA: university of California Press. 

Burke, Kenneth (1972). Dramatism and Development. Barre, MASS: Clark University Press with Barre Publishers. 

Clinton, William J. (1997). Remarks at San Jacinto Community College in Houston, Texas. Weekly Compilation of Presidential Documents; Washington; Oct 6, Vol. 33 (4): 1431-1437.

Cohen, Nick, (2001). Guess who's going to Dubbya's party. New Statesman. January 22,  no page number given.

Coy, Peter (1999). Exploiting uncertainty. Business Week. June 7, Number 3632; Pg. 118.

Curtin, Dave (2002). CU inject ethics into business lessons Enron, Decade of Greed inspire social responsibility. The Denver Post, February 24, Pg. A-25.

Debord Guy (1967). Society of the Spectacle. La Société du Spectacle was first published in 1967 by Editions, Buchet-Chastel (Paris); it was reprinted in 1971 by Champ Libre (Paris). The full text is available in English at http://www.nothingness.org/SI/debord/index.html It is customary to refer to paragraph numbers in citing this work. 

Durgin, Hillary (2000) Enron sees bricks and bytes mix reshaping energy market. Financial Times (London). Companies and Finance Section, June 16, London Edition, pg. 32.

Eichenwald, Kurt (2002). Another Quality of the Corporate Titan: Ignorance at the Top. The New York Times. March 3, Sunday,  Section 4; Page 3; Column 1; Week in Review Desk.

Firat, F. A. & Dholakia, N. (1998). Consuming people: From political economy to theaters of consumption. London, UK: Routledge.

Flanigan, James (1999). Energy deregulation helps power U.S. productivity gains. Los Angeles Times. March 14, Sunday, Home Edition, Business Section; Part C; Page 1; Financial Desk.

Fogarty, Thomas A., Jayne O'Donnell & Martin Kasindor (2002).  Enron work now begins. USA Today. February 20, Pg. 3B.

Freire, Paulo (1970). Pedagogy of the Oppressed. Translated by Myra Bergman Ramos. NY: The Seabury Press (A Continuum Book).

Francis, M. (1996). Dual citizenship. The Oregonian, July 25, pp. Bi, B2.

Francis-Wright, Tim (2002). The Deeper Lessons of Enron. Bear Left web site http://www.bear-left.com/original/2002/0120lessons.html
 

Goffman, Erving. (1959). The presentation of self in everyday life. Harmondsworth, England: Penguin Books.

Goffman, Erving. (1961). Encounters. Indianapolis, IN: Bobbs-Merrill.

Goffman, Erving. (1963). Stigma: Notes on the management of spoiled identity. Englewood Cliffs, NJ: Prentice-Hall.

Goffman, Erving. (1967). Interaction ritual: Essays on face-to-face behavior. New York: Anchor Books.

Hamel, Gary (1997). Killer strategies that make shareholders rich. Fortune. Jun 23, Vol. 135 (12): 70-84.

Hamel, Gary (1998). Strategy innovation. Executive Excellence. August, Vol. 15 (8): 7-8.

Heying, Charles H. (1997). Civic elites and corporate delocalization: An alternative explanation for declining civic engagement. The American Behavioral Scientist. Mar/Apr, Vol. 40 (5): 657-668.

Hirsch, Jerry (2002). Andersen Broaches a Settlement Plan. Los Angeles Times. February 22, Business; Part 3; Page 1.

Houston Chronicle (2002, no author). The fall of Enron. The Houston Chronicle. March 02, 2002, Saturday, Pg. 19.

Khanna, Roma (2002). Smithsonian exhibit to tell Enron story. The Houston Chronicle. February 28, Pg. 6

London, Simon & Sheila McNulty (2001).  Enron flickers: Once a paragon of the new economy. Financial Times (London). October 29, London Edition, pg. 22.

Merchant, Khozem (2000). Energy group launches image offensive. Financial Times (London). Jan. 3, London Edition, pg. 12.          

Moritsugu, Ken (2002). Finance scandals usually are born during major stock market booms The San Diego Union-Tribune. February 24, Pg. H-4 (Knight Ridder News Service).

Mulligan, Thomas S. (2002). Calls for Faster, Fuller Disclosure by Insiders. Los Angeles Times. March 3, Sunday Home Edition , Part 3; Page 1; Business Desk.

Pinto, Alvaro Vieira (1960). Consciencia e Relidade nacional vol. II. Rio de Janeiro. Reference from Freire (1970: 89).

Prahalad, C. K. (1998). Managing discontinuities: The Emerging Challenges  Research Technology Management. May/Jun, Vol. 41 (3): 14-22.

Schmidt, Susan (2002). U.S. Weighs Immunity for Enron Officials' Testimony. The Washington Post. February 27, Pg. A06.

Spinner, Jackie (2002). SEC Targets Bonuses in Audit Probe. The Washington Post. February 23, Pg. E01.

USA Today (2002, no author). 'Yes men' make up boards that miss Enron-type failings. USA Today. February 21, Pg. 16A

Washington Post (2002, no author). Revisionist History at the Enron Hearings. The Washington Post. March 03, Sunday, Final Edition, Pg. H02

Woodyard, Chris (1996). U.S. industries making comeback with self-help. The Houston Chronicle. February 4, 2 STAR Edition Section A, Pg. 1.

Zeller, Tom (2002).  The Tao of Enron: Well, It Sounded Good.  The New York Times. February 24, Section 4; Page 5; Column 4.

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