Capitalism at Work: Business, Government and Energy (Political Capitalism) (Hardcover)

~ Robert L. Bradley Jr (Author)
Key Phrases: political capitalism, resource optimism, political capitalists, Adam Smith, United States, Ken Lay (more...)

Editorial Reviews

Review

Businesses succeed by creating real, long-term value for their owners, customers, and society. On the other hand, as Capitalism at Work shows, companies that resort to political profiteering and public grandstanding can fail spectacularly. Bradley's defense of economic freedom provides new insight for business ethics, business best practices, and public policy. --Charles Koch, Chairman of Koch Industries<br /><br />Fascinating, comprehensive ... far surpassing my own history of political capitalism done in the 1960s. --Gabriel Kolko, historian and author<br /><br />Fascinating, comprehensive ... far surpassing my own history of political capitalism done in the 1960s. --Gabriel Kolko, historian and author

Fascinating, comprehensive ... far surpassing my own history of political capitalism done in the 1960s. --Gabriel Kolko, historian and author

Product Description

Capitalism took the blame for Enron. Yet Enron was anything but a free-market enterprise, and company-architect Ken Lay was hardly a principled capitalist. On the contrary, Enron was a politically dependent company and, in the end, a grotesque outcome of America s modern mixed economy.
That is the central finding of Robert L. Bradley s Capitalism at Work: The blame for Enron rests squarely with political capitalism - a system in which business interests routinely obtain, and employ government intervention for their own interests at the expense of consumers, taxpayers, and competitors. Although Ken Lay professed allegiance to free markets, he was in fact a consummate politician. Only by manipulating the levers of government was Enron transformed from a $3 billion natural gas company to a $100 billion chimera, one that went from seventh place on the Fortune 500 list to bankruptcy.
But Capitalism at Work goes beyond unmasking Enron s sophisticated foray into political capitalism. Employing the timeless insights of Adam Smith, Samuel Smiles, and Ayn Rand, among others, Bradley shows how fashionable anti-capitalist doctrines set the stage for the ultimate business debacle. Those errant theories, like Enron itself, elevated form over substance, ignored legitimate criticism, and bypassed midcourse correction. Political capitalism was thus more than the handiwork of profit-hungry businessmen and power-hungry politicians. It was a legacy of failed scholarship.
Capitalism at Work s penetrating, multidisciplinary explanation of the demise of Enron breaks new ground regarding business history, business ethics, business best practices, and public policies toward business.
As Bradley concludes: The fundamental lesson from Enron is this: Capitalism did not fail. The mixed economy failed. The capitalist worldview is stronger, not weaker, post-Enron. But there is another, deeper lesson that explains Enron and the mistakes of the intellectual mainstream before, during, and after Enron s active life. It is that arrogant behavior, or what in the Enron vernacular is called the smartest-guys-in-the-room problem, can strike anytime and anywhere. Whether in business or academia or a profession or association conceit, deceit, and dogmatism are the bane of personal, intellectual, and organizational success .

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Product Details

• Hardcover: 500 pages
• Publisher: M & M Scrivener Press; 1st edition (October 30, 2008)
• Language: English
• ISBN-10: 0976404176
• ISBN-13: 978-0976404170
• Product Dimensions: 9.3 x 6.4 x 1.5 inches
• Shipping Weight: 2.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars  See all reviews (6 customer reviews)
• Amazon.com Sales Rank: #817,969 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

3 of 3 people found the following review helpful:

5.0 out of 5 stars Case Studies in the Dynamics of Intervention, December 10, 2008

By	Gregory F. Rehmke (Seattle, WA USA) - See all my reviews

Rob Bradley Jr.'s Capitalism at Work offers a fascinating combination of business history, economic theory, business ethics, and moral philosophy. Maybe those topics don't sound fascinating, but by weaving his analysis in with American business history, past and present, readers gain insight into how the US economy really works.

Bradley argues that major corporate flameouts, from Samuel Insull at Chicago Edison to Ken Lay at Enron, involved more than just character flaws, incompetence, malfeasance, and arrogance. Each involved a corrupting network to government favors, subsidies, and protective regulations.

Especially today when another cohort of corrupted businesses, from Fannie Mae and Freddie Mac, to the Wall Street firms and big three automakers that have either been taken over, bailed out, or bankrupted, Bradley's episodes from business history help us put today's crises in historical perspective.

Bradley is an expert on the history of regulation in the energy industry, the author of Oil, Gas and Government: The U.S. Experience, and has lectured and written widely on energy economics and politics. He argues that much of the U.S. economic system is better understood as "political capitalism" rather than market capitalism. Government spending and regulation, at both the state and federal level, are such a key part of many industries, that any entrepreneur or firm thriving in these industries gains success as much by political capital and leverage as by physical capital or financial leverage.

Bradley observes that "the scope and scale of Enron's politically dependent profit centers was unprecedented." He further claims: "The story of Enron is one of the most important benchmarks in the history of mixed-economy capitalism." But most books, articles and movies about Enron have so far "only superficially probed into fundamental incentives and motivations..."

To explain and contrast market capitalism with political capitalism, Bradley draws upon the writings of Adam Smith, Samuel Smiles, and Ayn Rand. Few of us are familiar with Samuel Smiles, but his work on personal improvement is fascinating: "In the mid-1840s, Smiles saw a higher calling in empowering each person to improve his or her character. Government policy was important, but the individual was the mainspring of social progress and good government... Smiles's writings inspired thousands to take charge of their own lives, revisit their attitudes, refine their best efforts, and improve in the workplace."

After reviewing these three writers on what he calls "Heroic Capitalism" Bradley explores its shadow "Political Capitalism" in Part II "Business Opportunity, Political Opportunism." I remember meeting in Seattle a businessman who strongly advocated recycling. He spoke with passion and enthusiasm, but I noticed also that his firm had the contract to supply all the plastic recycling bins that would be mandated for city and county residents. It would be hard not to be excited about recycling when holding such a business opportunity. Bradley's overview of the views and theories of industrial organization show the shift from early personal improvement and entrepreneurship to later theories that offered a diminished role for laissez-faire.

Part III of Capitalism at Work drills into debates over Energy and Sustainability, and again, the historical perspective is fascinating. We find that recent debates over "Peak Oil" are similar to debates over a century earlier over "peak coal"--that is, fears that coal reserves would rapidly run out, throwing industrial economies into chaos. Perhaps because the energy industry has for so long been regulated, and because energy is so central to a modern economy, academics have written many books on energy issues--most calling for governments to strengthen regulations and empower academics to shape energy production and policy.

The energy and environmental regulation industry has evolved over the decades, from early Earth Day activities for school children, to today's demands for banishing coal plants and limiting or sequestering carbon dioxide. Readers of Capitalism at Work are given a walk town memory lane with sections on early players like Resources for the Future, E. F. Schumacher, Paul Ehrlich, ZPG, and events like Earth Day, and the publication of The Limits to Growth by the Club of Rome.

Next up is a chapter titled "The Dark Decade" on the disaster of US energy policies from Richard Nixon to Jimmy Carter. We read the views and fears of scholars, writers, and interest groups who shaped US energy policy over these years, and further distorted both the energy industry and the US economy.

It is hard to think of a better way to prepare ourselves for the coming years of political capitalism and further government intervention in energy and environmental policy, than by reading Bradley's "Capitalism at Work: Business, Government and Energy." Highly recommended.

5 of 6 people found the following review helpful:

5.0 out of 5 stars Business In Bed With Government, December 25, 2008

By	Michael A. Beitler (Greensboro, NC United States) - See all my reviews (REAL NAME)

Dr. Bradley does a great job explaining that it is not capitalism that is failing, but political capitalism that is destroying American prosperity.

Bradley's first three chapters (Part 1), under the banner of "heroic capitalism," summarize the work of Adam Smith, Samuel Smiles, and Ayn Rand. If you want to understand the historical roots and philosophical foundations for capitalism, these chapters are excellent.

The second part of the book describes how free-market capitalism and entrepreneurial start-ups are being destroyed by business cartels supported by government intervention. Political capitalism is not capitalism at all; political capitalism is simply corrupt business leaders in bed with corrupt government bureaucarts and politicians.

Part three of the book was surprisingly interesting and educational. My background is in banking and CPA/management consulting. I have had little exposure to the energy industry, so I didn't expect these chapters to be interesting. I was wrong. The business-government corruption found in the energy industry (seen through the stories of Samuel Insull and Kenneth Lay) can be found growing in every industry.

Michael A. Beitler, Ph.D.
Host of "Free Markets With Dr. Mike Beitler"
Author of "Rational Individualism" Rational Individualism: A Moral Argument for Limited Government & Capitalism

4 of 5 people found the following review helpful:

5.0 out of 5 stars Political Dependency Threatens Capitalism, December 11, 2008

By	Kenneth W. Chilton - See all my reviews (REAL NAME)

Capitalism at Work: Business, Government and Energy by Robert L. Bradley Jr, is a timely read for those wishing to gain a better perspective of the type of business/government "cooperation" America is experiencing at the close of 2008. The book's Epilogue with its focus on Enron is most instructive.

As is the case for today's financial market turmoil and the auto industry struggles, the collapse of once-mighty Enron was blamed on unregulated markets and free-market capitalism. But Bradley, an Enron insider -- and Enron critic as an insider -- explains how the company was the antithesis of the type company that leading capitalist philosophers such as Adam Smith espoused. Enron was a "politically dependent" firm, not a truly "free-market" company.

The list of Enron political initiatives to promote a marketing strategy of "sustainable development" includes: 1) support for the Clinton/Gore 1993 proposal for a Btu tax; 2) aggressive investment in solar power in 1994; 3) the purchase of Zond Corporation in 1996 to start the U.S. wind industry; 4) spearheading of the nation's most strict renewable energy mandate in Texas in 1999 and 5) unsuccessful lobbying of the Bush administration to regulate carbon dioxide emissions.

Capitalism at Work also offers a warning to those who anticipate millions of green jobs resulting from the activities of a new energy/environment Czar or reduction of greenhouse gas emissions from a cap and trade system. Enron Energy Services (EES) ostensibly offered energy outsourcing for large commercial and industrial customers through long-term contracts. Bradley says, "EES, in fact, was one of Enron's fraud-rife divisions, with the estimated savings in energy and customer costs consisting mainly of speculation and accounting tricks. EES's contracts were liabilities parading as assets."

The epilogue's informed and lively account of the rise and fall of Enron offers a vivid case study of the perils of both government intervention and corporate social responsibility theory. Bradley concludes, "Enron lived, thrived, and perished in and through the mixed economy. Enron's artificial boom and decisive bust had more to do with government regulation than free markets."

Kenneth W. Chilton, Ph.D. is Director Emeritus of the Institute for Study of Economics and the Environment at Lindenwood University in St. Charles, Missouri.