Re: ghosts of Enron Past

[Chris Burford <cburford@xxxxxxxxxx>]

At 25/01/02 20:27 -0800, Michael Perelman wrote:
> Keats, Charles. 1982. Magnificent Masquerade: The Strange Case of
> Dr. Coster and Mr. Musica (NY and London: Garland).
> Philip Musica, a NY swindler, who created the false identity
>         of Dr. Coster, took over McKesson Robbins.  He weathered the
>         Depression by creating fictitious profits from a Canadian
>         firm. false invoices were forged to obtain very positive
>         financial reports for auditors.  His machinations went
>         unnoticed until 1940, when internal political difficulties
>         rather than a failure to pay dividends led to the discovery.
>
>
> I believe that he was seriously considered as a person with presidential
> potential.


Yes why not? He clearly had some qualities generalisable to being a
president. And don't politicians fall usually because of internal political
difficulties rather than strict logical application of standards.

I would  like to take the wider economic point further. During recessions
we always hear of financial scandals. That of course does not mean that
they do not occur at other phases of the economic cycle: they just do not
become manifest as scandals.

We need to draw a wider conclusion: absolutely all economic activity occurs
within a penumbra of understandings, webs, and alliances around the strict
exchange of commodities and their mathematical accounting. The signals of
mutual sympathy, alliance and understanding are also use values of great
psychological and material importance, although they are not traded as
commodities and do not have a declared price.

The bourgeois legal model in which atomised bourgeois right, and atomised
bourgeois legal obligations, are applied impartially in a way that reflects
the ideal conventions of the exchange of commodities, exists nowhere in
pure concrete form.

There is always a contradiction between this ideal of a fragmented
bourgeois right and the reality of human social and economic intercourse.
It becomes overtly antagonistic when other contradictions have precipitated
a crisis of the system.

Western accounting systems are to a large extent fuzzy fiction. They get
exposed at times of crisis, but unfortunately people think that the
particular case is the exception, rather than the norm.

Chris Burford

London