Enron and the Fall of Communism

I was reading through David Brock's "Blinded By the Right" this morning and was reminded of the political debates that surrounded the collapse of the Soviet Union. That's when Conservatives really turned to a "family values" platform and started sending Dan Quayle to attack Murphy Brown for having a fictional child out of wedlock. See, the cons had decided that the collapse of the Soviet Union meant that any sort of debate about communism and its virtues was over. They had won.

Not so fast, said some liberals. The Soviet Union wasn't really communist, it was a dictatorship. This argument was met with much harrumphing from the other side and, to be honest, it did and does sound like a lame "But, but, but" argument. Which is not to say it wasn't a meaningful argument, it's just one that sounds bad and unconvincing. The form of argument has an image problem.

In 2004, with former Enron CEO Kenneth Lay under indictment and the revelation that Enron energy traders purposefully drove up the price of California's electricity and joked about "robbing grandmothers," the cons are making the same "But but but" argument about California's and much of the nation's deregulated electricity markets.

Jerry Taylor of the Cato Institute wrote in the 12/9/04 Wall Street Journal writes: "California's restructured energy market was, in fact, the furthest thing from a capitalist jungle imaginable."

Maybe he has a point. Maybe the best system for buying and selling electricity has not been found and perhaps Jerry Taylor has never seen his free-market dream at work. But if that's so, I guess we'll have to open up the Communism debate again, becauyse we've never seen that dream at work either.