What Plato Knew About Enron

This paper applies Plato’s cave allegory to Enron’s success and downfall. Plato’s famous tale of cave dwellers illustrates the different levels of truth and understanding. These levels include images, the sources of images, and the ultimate reality behind both. The paper first describes these levels of perception as they apply to Plato’s cave dwellers and then provides a brief history of the rise of Enron. Then we apply Plato’s levels of understanding to Enron, showing how the company created its image and presented information to support that image, and how the public eventually emerged from the cave to realize the truth about Enron’s actual accounting practices and financial state, which led to the corporation’s downfall. We find Plato’s allegory both useful in analyzing the relationship between Enron and the public and instructive about the power and moral responsibility of Enron’s executives.     

Accounting colonization: Three case studies in further education

The colonizing power of accounting in the public domain was linked to coercive institutional processes [Broadbent J, Laughlin R. Developing empirical research: an example informed by a Habermasian approach. Accounting, Auditing and Accountability Journal 1997;10(5):622–48]. To further explore processes of accounting change in the public domain, three linked case studies were undertaken, from a Habermasian standpoint, at a local Learning and Skills Council and two Further Education Colleges in England. Adopting a critical constructionist methodology, three interpretations of the data were developed suggesting that aspects of accounting were colonizing, implicated in legitimation and rationality crises and implicated in ambivalent managerial roles. A double hermeneutic, based in phenomenology, was then undertaken to critique the theory which underpinned these interpretations, leading to the development of an extended theory of colonization to include coercive (mock obedience; real obedience), instrumental (devious compliance; dialogic compliance) and discursive processes (discursively pathological; discursively benign). The way accounting colonization is theorised has implications for the critical theme of how desired accounting changes might be identified and initiated.     

Rent-seeking and the tragedy of the commons: two approaches to problems of collective action in biology and economics

I am interested in how models, practices, and concepts travel across specialties and thereby change and are changed in turn. In the present essay I discuss Gordon Tullock’s ideas about the relationship between biology and economics in the light of his correspondence with the biologist Garrett Hardin. Tullock contributed to one of Hardin’s edited projects, but they took different approaches to related problems, which I characterize as problems of coordinated action. Tullock saw that he and Hardin were up to a similar line of inquiry, and Hardin engaged with him up to a point, but ultimately the biologist differed with the economist regarding the potential for the reliability of a regulating power such as the state.     

The Navajo documents: a study of the economic representation and construction of the Navajo

In the mid 1930s, surveyors and other agents from the Bureau of Agricultural Economics and the Soil Conservation Service descended on the Navajo Reservation in the southwest USA. During their short stay, the surveyors produced detailed reports on the extent of overgrazing and soil erosion on the reservation. The reports, which contained maps, tables of numbers, accounts, and photographs claimed to depict and represent the real. As part of social survey research, popular in the UK and US from the turn of the century until World War II, the Navajo documents, as we refer to them, used a form of family budget or income and expenditure report to construct the Navajo economically. Indeed, Navajo families were referred to as consumption units or groups. The economic construction of the Navajo permitted the construction of an economic solution to the Navajo problem. In effect it was demonstrated economically, that the impact of stock reductions, thought necessary to prevent further soil erosion, could be offset by increased agriculture. In contrast to the economic claims, the stock reductions were an economic and social disaster for the Navajo. We approach the economic construction of the Navajo in and through the notion of representation. We draw upon the heightened discussion of this term in art theory in the 1970s and 1980s. We frame our analysis in terms of three relationships — namely, the relationship between representation and depiction, the relationship between representation and the copy and the relationship between representation and the real.     

Reconciling conflict: The role of accounting in the American Indian Trust Fund debacle

In 1887, the United States Congress broke American Indian Tribal lands into allotments which it held and controlled “on behalf” of individual American Indians in trust funds. The following century has been marked by allegations of fraud, mismanagement and accounting failures prompting repeated calls for reform, none very successful. As a result, neither the federal government nor trust holders themselves are sure whether the account balances are $7 or $100 billion currently.In 1994, Congress passed yet another attempt to reconcile the American Indian Trusts. This time, legislation spelled out the responsibility of the Secretary of the Interior (the department in charge of the trust accounts) to provide a complete “historical” accounting including accurate reports of balances, and to ensure that future payments of principal and interest were accurate and timely. More than 10 years later, the Interior reported its progress in a 24-page brochure that defended the Interior's narrowed definition of “historical” and its decision to limit its reconciliation to accounts that were open on 1994 or later. In the brochure, the Interior argued that its limited definition of historical and any other shortcoming in the Interior's efforts were acceptable given the cost of a more complete accounting. Finally, the brochure argued that the Interior Department had fulfilled its role as trustee and, as such, is the good guy in the conflict over these accounts. It is the Interior's American Indian Trust holders who are unreasonable troublemakers.In this paper, we examine the Interior's brochure and locate it within the larger conflicted relations between American Indians and the federal government. We are interested in the Interior's narrow vision of historical accounting, and the role this narrowness might play in deepening or resolving centuries long conflicts. We argue that the brochure provides an example of how parties in dispute over economic resources may attempt to frame or control the accounting process itself as a way to control those conflicts and limit the possible meanings that could be accorded to accountability within a particular set of relations. This episode illustrates how the ability to frame accounting definitions, formulations, and boundaries becomes a powerful means of controlling the final allocation of both dollars and political privilege. We conclude by accentuating the limitations of accounting in restoring a sense of justice and “balance” to relationships that embody uneven access to power and long-standing conflicts over economic claims.     

The sales process and the paradoxes of trust

This essay explores a major ethical variable in personal sales: trust. By analyzing data drawn from life insurance sales, the essay supports the thesis that the role of the agent and the exigencies of personal sales create certain antinomies of trust that compromise the sales process. As a result, trust occupies a problematic and apparently paradoxical position in the sales process. On the one hand, success in personal sales is held to depend upon trust. On the other hand, because the techniques required to form trust in personal sales nullify the conditions under which trust is possible, these instruments of trust formation are self-defeating. Guy Oakes is Kvernland Professor in the School of Business, Monmouth College (NJ). He has written on classical social theory, the sociology of culture, and, most recently, the sociology of ethics. His most recent books are Weber and Rickert: Concept Formation in the Cultural Sciences (1988), Die Grenzen kulturwissenschaftlicher Bergriffsbildung: Heidelberger Max Weber Vorlesungen (1990), and The Soul of the Salesman: the moral ethos of personal sales (1990).     

Efficiency of independence working analysis of correlated survival data with general cluster size

We consider estimation of the regression coefficients in the multivariate positive stable frailty model with Weibull marginals introduced by Hougaard (1986) . For general cluster sizes and various covariate patterns, we study the efficiency, relative to full maximum likelihood, of estimation from the independence working model and from the fixed effects model.     

Reflections on the practice of research

In this essay, we consider the relevance of research. To support our argument of its relevance, we offer three cases – Hull House, the Indian Trust Fund, and accounting standard-setting – that examine the taken-for-grantedness of accountability and the ways in which the term is frequently used.     

Louis D. Brandeis and standard cost accounting: A study of the construction of historical agency

During a 1910 Interstate Commerce Commission hearing Louis D. Brandeis argued that U.S. railroads could save a million dollars a day if they introduced scientific management (in particular, standard costing) into their operations. Brandeis' claim received widespread press attention and helped set into motion four years of public preoccupation with the ideas of efficiency. In this paper we examine the construction of Brandeis' agency and note that Brandeis' extensive publicity campaign on behalf of scientific management provided significant impetus to the spread of standard costing.