dinsdag 7 december 2010

The California Energy Crisis (2)

After Enron’s bankruptcy, a confidential memo surfaced in which Enron’s own lawyers admit that the company abused the rules, by manipulating the energy market. Also, the memo reveals the names of the strategies Enron used to exploit the California electricity market: ‘Wheel Out’, ‘Get Shorty’, ‘Fat Boy’, ‘Death Star’...

The ‘Death Star’ memo for instance literally states that “Enron gets paid for moving energy to relieve congestion without actually moving energy or relieving congestion". During his appeal, Skilling’s answer to all the questions concerning these memos would be: “The rules weren’t quite clear...”

Still, the question remains: Why did the traders act so unethical? The documentary draws a parallel with the well-known Milgram experiment. As Milgram found out, people lost their sense of morality when a supervisor says that behaving inhumanly -in this case giving higher electric shocks- is permitted.

It’s obvious that Skilling could be seen as the man who’s telling people below him that it’s okay to put up the power. Consequently, the traders kept manipulating the electricity market without asking ‘why?’ enough. Or, as a former Enron trader said in the documentary: “I just didn’t want confirmed what I suspected might be true, that what I was doing was in fact unethical, if not worse.”

Based on
and the documentary 'Enron: The Smartest Guys In The Room'

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