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To cite this article: Galit Ailon (2011) Mapping the cultural grammar of reflexivity:
the case of the Enron scandal, Economy and Society, 40:1, 141-166, DOI:
10.1080/03085147.2011.529331
To link to this article: http://dx.doi.org/10.1080/03085147.2011.529331
forbidden. Terms & Conditions of access and use can be found at http://
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Abstract
Theorists of political economy, institutional sociology and late modernity have
recently embraced reflexivity as a pivotal concept in their accounts of change in
capitalist society and institutions. Despite significant differences between them,
these theorists jointly promote an image of reflexivity as a culturally unstructured or
disembedded reflection upon problematized conventions and beliefs. The paper
turns this joint theoretical image into an empirical question. Focusing on the
reflexive discourse sparked by the Enron scandal, it offers a grounded analysis
of Enron-related articles published in the popular American BusinessWeek in
19972007. The analysis examines the rise and fall of the Enron icon and the
sense-making process that followed its bankruptcy which, at that time, was the
biggest in history. It shows that reflexivity had an underlying cultural grammar that
paralleled that pertaining to the management of money. Its four primary principles
were: minimizing costs entailing loss of discursive status or persuasive effect;
maximizing the use-value of a core truism; quantitatively cueing morality; and
conducting discursive competitions. Capitalist reflexivity, the case study proposes, is
based on an underlying grammar cast in the shape of its own beliefs.
Keywords: reflexivity; Enron; capitalist culture; financial scandals.
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Stark, 1996) and late-modernity (e.g. Beck, 1992; Giddens, 1994; Lash, 1994a)
have identified reflexivity as pivotal in this regard, referring to it as a process
involving self-reflection upon problematized beliefs or knowledge limitations
and attempts to revise them. Despite significant differences between the
streams, they promote a joint theoretical image of reflexivity as a discourse1
that is culturally and institutionally unstructured, representing a look from an
abstract or disembedded outside upon conventional ways of conceiving the
provisions and practices of the capitalist world.
The paper turns this joint theoretical image into an empirical question.
Using an interpretative approach, it offers a longitudinal analysis of a decadelong reflexive sense-making process that unfolded in a popular American
business media outlet. Its findings indicate the existence of an underlying
cultural grammar of reflexivity: a group of principles structuring its unfolding
dynamics and standing at the basis of its logic. The case study thus suggests
that reflexivity does not represent a look from a disembedded cultural
outside. Rather, it is premised upon a structured movement that is capitalist
in the deepest cultural sense of the word, managing beliefs with the same
underlying grammar pertaining to the management of money.
The reflexive discourse under analysis unfolded in the widely-read
American BusinessWeek magazine in relation to the Enron scandal. Once a
prime icon of New Economy rigour and an exemplary prototype of postderegulation entrepreneurship, Enron was a fast-growing energy trading firm
that thrived alongside the American public faith in the free market. It collapsed
in 2001 after some of its accounting manoeuvres were revealed as questionable.
Its bankruptcy, then the largest in history, and first in a series of corporate
financial scandals, constituted a capitalist failing at a time of seeming triumph,
a failing in its own terms and by its own momentum. It gave rise to a long
discursive shock which drew attention to financial and business knowledge
limitations and contradictions. The Enron discourse thus offers an opportunity to explore some of capitalisms modes of self-reflecting upon truth failures
and problematized beliefs and of coping with and revising them.
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market grew increasingly optimistic and engulfed American culture writ large.
In the 1990s writers and reporters announced a new economy and claimed
that advanced communication technologies were revolutionizing production
and democratizing the market, overcoming entrenched elite privileges and
promising creative new opportunities for making money (Frank, 2000;
Henwood, 2005; Thrift, 2001).
Enron was a celebrated emblem of this triumphant free-market faith.
Founded in 1985 as a natural-gas pipeline company, it evolved into an energy
trading firm that bought and sold not only gas but also electricity, that
ventured abroad to build power plants and utilities and that eventually became
a dot-com, trading commodities online. In 2000 its revenues reached $101
billion, making it the seventh-largest company in the US and an exemplary
specimen of New Economy thinking throughout the world. Like McDonaldization and Disneyfication, Enronization [was] at the center of the new
global economy (Boje, Rosile, Durant & Luhman, 2004, p. 766). During its
years of growth, the company spent millions on lobbying in order to receive
assistance for advancing projects abroad and furthering energy deregulation,
and its chairman, Kenneth Lay, was called upon to take part in policy task
forces (Fox, 2003; Stiglitz, 2003).
To help sustain its growth and prop up stock prices, the company hid losses
and shuffled debts through complex accounting procedures. Many of these
procedures, it should be noted, were within the wide, deregulated American
legal bounds, and actually quite standard in the 1990s (Stiglitz, 2003).
Additionally, the company was among the suppliers and traders involved in
Californias electricity crisis in 20001. The crisis, precipitated by the
deregulation of the states electricity market, involved overpriced power and
blackouts (see Fox, 2003; Stiglitz, 2003).
In the end of 2001, at the height of the Californian crisis, Enrons stock price
tumbled and its financial manoeuvres were exposed. As the Securities and
Exchange Commission (SEC) began investigating the companys records,
employees of Arthur Andersen, Enrons auditor, shredded relevant documents.
The accounting firm was consequently indicted by the Justice Department and
collapsed. Enron went bankrupt in December 2001 and its bankruptcy was, then,
the largest in history. The years since the bankruptcy have involved a series of
trials and legal hearings, including those which eventually led to the criminal
conviction in 2006 of Enrons former CEOs Kenneth Lay and Jeffrey Skilling
on counts of fraud, conspiracy and related charges.
The revelations and legal dramas unfolded gradually, over the course of
years. It was a megaspectacle (Boje et al., 2004); a long-lasting media
sensation that rocked America (Stiglitz, 2003, p. xlii). So much of the last
twenty years come together in the Enron story, writes Henwood, deregulation, financialization, post materiality fantasies, the links between capital and
the state, the increased role of the stock market in the running of big
corporations, and professional corruption . . . Enron would be read as the
demise not just of one firm, but of an entire economic model (2005, p. 33).
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As the details of Enron story were revealed there was some space there is
always some space for determining what they mean, how they impinge upon
existing convictions, what lessons should be drawn from them. Since this was
not a one-shot event but an ongoing spectacle, the reflexive sense-making
process was a gradual project, constantly checked against itself by the sequence
of discoveries and the stream of corporate scandals that followed Enron. What
were the elements of this process? What type of sense-making, criticisms and
reflections did they incite? What were the dynamics of reflexivity that the
Enron scandal set in motion?
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Findings
This section consists of two parts. The first traces the history of the Enron
icon: its initial fame and the events leading to its re-iconization as a symbol of
corruption and evil. This part is designed to contextualize the reflexive debate
that ensued from the bankruptcy onwards. Focusing on this debate, the second
part discusses the grammatical principles expressed through its evolution.
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The deals were first revealed in a 1999 proxy, raising concerns from investors
and analysts. By this summer, when Enrons stock was falling and its bets in
broadband were souring, complaints about LJM grew louder. So in June, Fastow
pulled out of the partnerships. When the write-offs came, Enron enraged
analysts and investors further by failing to disclose the hit to equity in its thirdquarter earnings press release. Instead, Lay mentioned it in a conference call
with analysts. (12 November 2001)
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Minimizing the blame of the market The BusinessWeek articles were primarily
preoccupied with the task of assigning blame for the Enron debacle to various
actors and institutions executives, accountants, analysts, banks and others.
Indeed, blame attributions constituted one of their central thematic underpinnings (see Boje & Rosile, 2002).8 Nevertheless, underlying the stream of
blame attributions was a market-blame minimizing impulse: if the declaration of
an Enron debacle directed anger away from deregulation and the free market
towards a single, supposedly deviant market actor, then reports of the
bankruptcy basically exonerated the market from any fault, blocking the neoliberal core from the reflexive process. The post-bankruptcy portrayal posed
Enrons managers as deviants who committed serious offenses against todays
Information Economy (26 August 2002a). Thus, the economy was posed not as
a cause but as a casualty, a prime victim of Enron. The alleged lack of innocence
of the deviants (Enrons managers and their professional accomplices) was used
to assert the innocence of the capitalist market. For example:
Capitalism works only when it is played on a level field. The essence of efficient
markets . . . is transparency . . . Enron management and its auditor, Arthur
Andersen, didnt play by the rules that define a market economy. And they were
allowed to get away with it for years. The great tragedy is that if the system had
worked as it should have, Enron would still be in business . . . No one would
ever have noticed if the auditors, outside directors, and regulators had done the
right thing. It all would just have worked the way it was supposed to and that
would have been the real tribute to capitalism.
(28 January 2002b)9
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financing and accounting techniques . . . may not rise to the level needed to
put the executives in jail (26 August 2002a).
The sense of criminality nevertheless withstood this lack of clear legal
culpability. It was sustained by two interrelated elements. One was the
tendency to pose the market not only as Enrons ultimate victim, but also as
Enrons ultimate judge, and to construe bankruptcy as its judgement. The
basic rationale was that Enron was hyped (10 December 2001b) to appear
innocent and successful but the market was able to see and reveal its true
nature through the lost faith (10 December 2001a) of investors and
customers. Since the outcome bankruptcy was seen to expose the truth
about Enron, all that made the company seem innocent and successful before,
including the apparent legality of its actions, was, according to this logic,
scandalously designed to hide the truth. Enrons managers committed the sin
of shamelessly promoting [Enrons] image (18 March 2002). They hid the
companys true nature with sophisticated accounting mirages (25 February
2002e). In effect, there has to be an implicit moral contract to make the New
Economy work, one article construed the meaning of the market-sentencing,
and Enron violated that contract (20 May 2002). In other words, what
Enrons managers did was perhaps technically legal but immoral, violating
some higher, retroactively defined law. They had the most obsessive and
careful concern for the letter of the law, but they sacrificed the spirit (12
June 2006b). Backed by a notion of a clear market judgement, the sense of
criminality was sustained alongside the acknowledged legal ambiguities.
Additionally, the sense of criminality was sustained narratively. Several
textual elements gave rise to a sense of criminal plot. Most evident was the
characterization of Enrons managers: for example, describing CFO Fastow, an
article claimed that insiders saw him as sometimes volatile and vindictive, that
he had a screaming, table-pounding style, that he could also turn on the
charm and that Fastows spokesman denies that he ever threatened bankers to
get them into Enrons deals (4 February 2002c). Similarly, Kenneth Lay was
first compared to Mr Ponzi the infamous financial schemer (e.g. 11 February
2002b), and later recast as a weak, even spineless manager . . . [who] made no
real effort to control Skilling and his kamikaze minions as they gamed energy
markets and US accounting laws (6 February 2006). Such characterizations
were complemented with cynical public-shaming displays, such as a proposed
annual Enron Award . . . nicknamed the Kenny Boy (after Ken Lay) that
will go to the company whose actions did the most to undermine capitalism
and free markets in the preceding year (20 May 2002). And to complement
this sense of a criminal plot filled with crooks and a sense of justice-revealedafter-all, there was also a helpless whistleblower who had seen it all in the
making, was powerless to make the bad guys stop, but would nevertheless be
called upon to make them pay:
One of the few heroes to emerge from this sordid case is Sherron Watkins, an
Enron finance executive who wrote a letter in August to Chairman and CEO
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Kenneth L. Lay that laid out in amazing detail the companys accounting tricks.
Her letter, since made public, shows that Lay knew far more about misdeeds at
the company than he has admitted.
(28 January 2002a)
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Once under way, this just right reform of stiffer SEC disclosure rules
neither too light nor too tough was described as creating dramatic
changes, as constituting a high enough price. The ground is shifting beneath
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the foundation of Corporate America, it was thus declared two months later.
Fueled by investor resentment and driven by renewed activism by regulators,
a new age of reform is radically changing the rules of business in America
(29 April 2002b).
Yet, as the stock market continued falling and more scandals erupted, the
reform price rose along the scale. Articles next embraced the proposal noted
tougher before. Thus, an editorial titled Accounting: stronger reform,
please, stated: we think the best bet for strong accounting and financial
reform is the legislation proposed by Senator Paul S. Sarbanes (D-Md.)
(3 June 2002). Once this legislated reform was passed, BusinessWeek writers
announced that a believable bottom line is back: Credibility in financial
numbers is quickly being restored. Investor confidence and the willingness to
risk buying stocks should soon follow (17 March 2003).
But once the stock market stabilized and the Enron trials were over there
was a backward motion on the three-point scale. As far as accounting was
concerned, the Sarbanes-Oxley Act supported earlier was claimed to entail too
high a price:
The intentions were good. But in the two years since its passing, the SarbanesOxley Act has collapsed into a glob of regulatory confusion costing U.S.
businesses billions of dollars a year in compliance costs. Now comes the mad
dash to fix the statute . . . On Nov. 30 a long-awaited report from a committee of
Wall Street VIPs gave its best idea: Lets tinker. Rather than repealing SarbOx,
the committee recommended minor changes to the law, such as relief for small
companies and better guidance from regulators on how to apply the rule. The
act never got the vetting it deserved because of the race to approve it after the
Enron and WorldCom meltdowns, but the SEC . . . is hoping to make
improvements by spring.
(18 December 2006)
Thus the legislative reform was cast as too costly a pricey concession to be
legitimately reduced through the tinkering of market actors and the
modifications of regulators. The same occurred with regard to other major
reform-issues which were priced up until the sense of investors trust was
regained. Consider corporate governance:
Actually, too many [boards] are running scared. And while that may give some
governance groups a self-satisfied twinge of victory, a board in defensive mode is
bad for employees, companies, and the economy . . . hunkering down over
numbers and downside scenarios is just not what boards should be doing with all
their time.
(25 December 2006)
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we have laws galore, and people still drive above the speed limit, rob
convenience stores, and, of course, do far worse . . . we cant let a small group
of companies rewrite reality and make businesspeople cower in shame and lose
their courage.
(12 June 2006a)
Thus, through most of the period calls for reform gave an impression of a
discourse transcending its bounds by embracing proposals of change deemed
too tough before. However, the goal of reform was defined in terms of fixing
trust in the market, not the market itself. Moreover, the discursive movement
was structured as a form of exchange with articles setting a changeable reform
price for investors trust. This price was raised when trust seemed short in
supply and minimized when it seemed more abundant, marking a measured
movement never more expensive than deemed necessary by the constructed
price-scale.
Maximizing the use-value of a core market truism
The articles maximized the use-value of the market ideologys core truism
about human nature by applying it as a sole, fit-for-all explanation. The core
truism was that people are driven by self-interests, that this insatiable egoism
is the predominant inner force that directs them not only in the realm of
market exchange (where it is traditionally expected and supposedly
monitored by an invisible hand), but in other contexts as well. Thus, in all
the professional contexts reflected upon, problems were attributed to
unmonitored self-interests, constructing them as a force so preponderant as
not to yield to and conflict with role interests that should transcend them (i.e.
conflicts of interest). And solutions were defined in terms of monitored selfinterests, engineered through incentive or oversight programmes to be
checked and balanced against the professional interests. Applying selfinterest to basically every problem in need of explaining, the articles turned the
failures of the professional foundations of the market economy into proof of the
correctness of this foundational truism of the market ideology.
For example, in Enron [s]elf-interested executives gorged with stock-option
wealth and [m]any of the corporations outside professionals fell prey to greed
and self-interest as well (6 May 2002). Fastow had a clear conflict of interest,
as did other executives and Andersens accountants (17 December 2001).
Lawyers had conflicts of interest (4 March 2002). Bankers had conflicts
of interest (12 August 2002). Conflicts of interest stopped Wall Street
analysts from pulling the plug on Enron (17 December 2001). Financial
conglomerates have egregious conflicts of interests (9 September 2002).
The New York Stock Exchange is another bundle of conflicts of interest
(13 October 2003).
To solve these conflicts of interest, articles claimed, incentives and oversight
must be engineered to monitor self-interests. Corporate America has . . . to
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restore the checks and balances that would allow capitalism to work as
effectively as it could (1 July 2002). Checks and balances must be restored to
corporate governance (29 July 2002). Or: Its time to reinstitute checks and
balances inside the US financial system (9 September 2002).
Self-interest was thus presented as the single, fundamental source of
practically all choice and behaviour, its predominance and consequent conflict
with other interests as the source of all problems and its checking and
balancing as the key to solutions. It was the origin and the horizon, the
question and the answer. The all-encompassing self-interest was nonetheless
haunted by its opposite: the possibility of altruism and selflessness. Was
Sherron Watkins really so selfless? (16 December 2002) asked an article
reporting revisionist criticism about the whistleblower who was declared a
hero a year earlier. Discussing philanthropy, an article assured readers that
companies argue their funding causes are completely within their self-interest
(1 December 2003). And, referring to Bushs State of the Union address, a
writer expressed disappointment that even President Bush apparently
subscribes to the romantic notion that volunteering is somehow better for
society than working at a market wage, and, citing Adam Smith, declared: as
a general tendency, it is better if people operate from self-interest than from a
desire to serve the public good (25 February 2002d).
Thus, both the bad and the good were made up of self-interests. Problems
and solutions, too: self-interests. The point here is not ontological but economical: the discourse bolstered the use-value of its core truism by selling it in every
heuristic corner. Every reported failure and success, every misdeed and deed
were used to further annihilate human motivations, perceptions and ambitions
by this single, unified abstraction standing at the core of the market ideology.
More-lizing
The third principle concerns the juxtapositioning of more and morality,
quantity and ethics. The underlying premise, repetitively constituted, was that
the two always come together or go together. Thus, as shown, market justice
was seen to work by raising or hammering stocks.
This should not be taken to imply that more and morality were
constituted as identical. The two were distinguished. In accordance with the
self-interest truism, the underlying premise was that morality is too romantic a
notion to direct behaviour or bring about actual good. Impractical on its own,
it needs more as its horizon and motivation. Accordingly, calls for good
behaviour were couched in growth-evoking rationalizations, never completely
justifiable as ends in themselves. For example: companies . . . with the most
transparency will be rewarded with higher stocks. And theyll deserve it
(4 February 2002a).
The juxtapositioning of more and morality further expressed itself in the
structuring of the discourse in terms of both the timing of the morally-charged
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dramatic turns and the dynamics of size. Regarding the former, articles took
their moral cues from quantitative shifts: they idealized Enron when it was
growing, renounced it as its stock was falling, reproached it as it went
bankrupt, criminalized it as the bankruptcy turned out to be the biggest in
history. Major turns in the moral narrative thus explicitly correlated with
quantitative signals. In other words, the moral plot was structured along the
contours of a stock-price graph or an income diagram.
Regarding the dynamics of size, the declared moral shocks were accompanied by rises in the volume of rhetoric. If two articles referring to Enron
were published in October 2001, the month before a debacle was announced,
then thirteen were published in November and forty-three in the bankruptcy
month of December. The number further rose as more scandals erupted,
giving the impression of a rhetorical swell sustained by the flow of moral
shocks: the number peaked at eighty-one in February and averaged forty-seven
in the five months that followed. Then it gradually dropped and from April
2003 onward the average number of articles per month was seven. Thus, the
intertwining of more and morality expressed itself in both narrative
structure and shifts in volume.
Competing
The final structuring principle was expressed in the tendency of articles to
conjure up and sustain a sense of competitive rivalries and to secure a sense of
advantage within them. A major discursive competition of this sort concerned
the global status of American capitalism. Basically, articles sought to persuade
readers that despite Enron and other scandals American capitalism was still
number one. Thus, while compliments were granted to specific foreign
CEOs or companies (e.g. the European BusinessWeek 50 list, 28 July 2003),
writers repeatedly reasserted the inferior status and achievements of foreign
markets. The strategies of persuasion diverged, and I will illustrate three. The
first was to cast Enrons fall as a tribute to American capitalism. Consider the
following excerpt from a commentary titled Why a few Enrons would do
Europe good:
. . . Enrons fall is a reminder of just why the American economy has been
performing so much better than its European rivals over the past two decades
and why it will probably continue to do so despite the pain of the current
recession. The speed at which Enron crashed is almost a textbook example of
Austrian-born economist Joseph A. Schumpeters celebrated description of
creative destruction at the heart of vibrant capitalism . . . Compare and contrast
that idea with the state of Europes industrial undead. (31 December 2001)
A second strategy was to acknowledge that Enron was causing trouble for
American capitalism, but nonetheless argue that foreign markets are facing
related or similar competitive setbacks. Discussing Europe, one article for
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example stated, Make no mistake, though: Enronitis is having its effect there,
too (25 February 2002b). Another stated that the Continent . . . is grappling
with severe economic shocks, that it might have Enron-scale time bombs and
that European equities have imploded far more severely than stocks in the
US (31 March 2003).
A third strategy was to ascertain that American capitalism had proved its
superiority by the quality of its recuperation from the scandals. Consider the
following citation:
When it comes to US corporate scandals, the bad news never stops . . . Yet despite
their magnitude, these sins are of the venial rather than the mortal variety . . . The
fact is, CEOs in the US lack the power to drag down entire industries or the
economy as a whole . . . The imperial CEO . . . is much less pernicious than an
entrenched government bureaucracy, an economy dominated by a few large
families, or a single-party political system. Such roadblocks to growth are far more
common in Europe and Japan than they are in America . . . The ability to fix
problems when things go wrong is one of the great virtues of the US economic
system . . . Thats tough for other countries to match . . .
(4 April 2005)
Conclusions
The analysis of Enron-related articles published during a decade in a central
business magazine was designed to explore some of the cultural attributes of
capitalist reflexivity. The analysis tracked the rise and fall of the Enron icon: its
enactment as an enchanting emblem of the new economy and its transformation
into a symbol of corruption and evil. This transformation, I showed, occurred
in the context of the California deregulation crisis, but was primarily narrated in
terms of accounting irregularities. It caught momentum alongside the
companys plunging stock. By the time of bankruptcy, Enron was already cast
as the New Economys number-one criminal, a single scandalous offender, albeit
with plenty of professional accomplices from all corners of the financial scene.
The sense-making that followed the bankruptcy tackled the contradictions
and failures made evident by Enron. The tackling of these failures, however,
always seemed on guard to protect the neo-liberal ethos, exonerating the market
by compressing blame into the realm of a supposedly deviant market actor and
diffusing it outside the market, to the professions charged with ensuring the
integrity of numbers. Minimizing the markets blame was thus revealed as a
prominent structuring principle in a grammatical code of reflexivity which
included other principles as well: minimizing reform concessions, maximizing
the use-value of the core self-interest truism, quantitatively cueing moral
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outrage and competing. To a great extent, then, the capitalist discourse under
analysis managed its beliefs like a capitalist manages money: it responsively
paid in discursive concessions making knowledge revisions as it reappraised
superstar managers or acknowledged problems with the financial professions
but its underlying commitment was to cutting costs and capitalizing on the
core discursive asset; it traded convictions but the exchange was conducted
with an eye open to supply and demand; it sanctified more as morality; and it
craved competition and mobilized all the forces of construction to winning.
This, it should be stressed, is not a mere analogy. The reality statements
produced this way never saw themselves as a metaphor but as a truth; indeed, a
winning truth.
This paper is based on a single case study. Theorists that I reviewed in the
opening section have noted the importance of media discourse for understanding the workings of contemporary capitalism and capitalist institutions.
This study encompassed an influential, popular and mainstream media outlet,
but, since it is a single case study, it does not easily lend itself to generalization.
The core value of this studys contributions lies in the sort of rethinking
and research that its empirically-grounded findings can incite. Its conclusions
should be read along these lines as propositions for future theoretical
development.
A first conclusion concerns the pervasiveness of the capitalist mindset. If
capitalism produces beliefs in the same way it produces money, if it approaches
both with the same impulses, than its materialism should be seen as pertaining
not only to what people think or value but also to how people think. With a
grammatical code that pertains not only to economic but also to ideational
production, capitalism appears to be programmed to efficiency in the crafting
of discursive products, in the crafting of truths.
This grammatical code may explain the simultaneity of capitalisms
transformation and resilience. Capitalist discourse, the analysis indicates,
does responsively surrender truths in the reflexive process, but the price paid
in terms of surrendered content is reclaimed by the structure of the surrender:
by its cost-efficiency; by the value of the truism it objectifies in exchange; by
the way it recasts its loss as a competitive advantage. Even as reflexivity aims to
resolve contradictions by examining capitalisms axioms, its impulses are
annihilated by these axioms, performing them through the process of critique.
Capitalist reflexivity thus seems to be a sense-making mechanism cast in the
shape of its own beliefs.
As such, reflexivity is neither above nor beyond capitalist culture.
Reflexivity, this case study indicates, is not conducted from some disembedded
outside: a critical edge (Thrift, 2005), a space between institutions (Berk &
Scheiberg, 2005), a liberated high ground of expertise (Giddens, 1994), a
groundless ground (Lash, 1994a) and so on. Rather, it appears as a structured
praxis that is deeply shaped by capitalist impulses, turning critical selfreflection into a symbol of the potency and validity of the culture that is
reflected upon.
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What are the implications of these findings for theories of the new politicaleconomic virtualism, institutional change and late modernity? Regarding the
first, the findings indicate that as the virtual realm turns contradictions and
truth failures into objects of abstract reflection it transforms them from
structural threats to raw materials of a discursive production system set, like
any production system, on minimizing costs and securing profit. Thus, the
claim that reflexivity enables capitalism to surf along the edge of its own
contradictions (Thrift, 2005, p. 6) tells only half the story: reflexivity also
turns the surfing into an economical endeavour. As such, it re-embeds critical
reflection into the same culture it appears to distance itself from. The story
here is thus not merely one of the virtualization of the economy (e.g. Carrier &
Miller, 1998), but also one of the economization of the virtual realm. Far more
than being constitutive of economic practice (e.g. Carrier, 1998; Miller, 1998),
or even of staying close to economic practice (Thrift, 2005), reflexive thinking
is an economic practice. In order to understand what virtualism holds in store
for contemporary capitalism, there is a need to study it as such.
Regarding institutional change theory, the findings of this research indicate
that the process of deliberating alternatives or choosing paths may not only be
the mark of agents wits and pragmatic sensibilities (e.g. Berk & Schneiberg,
2005), but also of a culturally structured reflexivity that they conform to and
enact. It is thus problematic to take agents sense of reflective ingenuity at face
value. Though deliberation can and does evolve in new directions, the study
indicates that it is also conditioned by a grammatical system that patterns it
along particular, taken-for-granted routes, that filters deliberation and
mediates change. Reflexivity thus seems to be an institution-modifying
institution of sorts. Change, it seems plausible to propose, is determined
through the interplay between this institution of reflection and the institutions
that are reflected upon, an interplay whereby discourse does not merely impact
on the structures that are reflected upon (Schmidt, 2008), but is also
structured by them itself, grammatically embodying the same rules and
conventions it observes. This finding indicates a much more intricate
institutional change dynamics than is currently acknowledged and points to
the need for further methodical research into the unfolding logic of reflection
and deliberation.
Regarding late modernity theorists, the findings of this study fit uncomfortably with their various accounts. The reflexivity studied here did not appear
to be an unaware reflex gradually becoming cognizant, as Beck (1992)
maintains, or the mark of a liberated cognition, as Giddens (1990, 1994)
does. Even as existing beliefs were examined, the underlying structure of
reflexivity became neither cognizant nor liberated: reflexivity was thoroughly
captivated by the same capitalist beliefs it reflected upon, performing them (for
example, by structurally binding morality and growth, cutting costs or
maximizing value). The examined reflexive process also did not appear to be
born of the fashionable mimesis Lash (1994a) refers to by the term aesthetic
reflexivity or of the self-mobilized, groundless hermeneutics he refers to by
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Acknowledgements
I thank Economy and Societys anonymous reviewers for their comments. I also
thank Michael Shalev, Gideon Kunda and Daniella Arieli for their suggestions.
This research was supported by the Israel Science Foundation (grant no.
568/08).
Notes
1 By discourse I refer to a particular way of defining, describing and narrating both
events and knowledge about events. The concept of culture is related to that of
discourse, although as they are used here the latter is more directly concerned with the
content of meaning, the former with its underlying patterning and organization.
2 This analysis includes content selected by an academic computerized search engine.
Note that until 2005 BusinessWeek customized its domestic edition for Europe and Asia.
Articles referenced by the search engine as belonging to these customized Englishlanguage editions are included in the analysis (less than 10 per cent of the total amount
of articles, some of which were also published, often with slight changes, in the
domestic edition). The analysis does not cover BusinessWeek Online and the local
language editions that were published with regional partners since 2005.
3 http://finance.google.com/finance?qbusinessweek&hlen (22 June 2009).
4 http://onlinepresrom.net/businessweek/ (25 June 2009).
163
5 This study does not examine BusinessWeek itself, the way it functions or the way its
audience receives it. Nor does it examine actual Enron events as existing outside their
media representation.
6 Different search engines select slightly different numbers of articles in this
date range. I began the analysis with one search engine and then updated the
dataset according to the larger citations list (consisting of 1118 items) of LexisNexis.
The difference was approximately eighty items. Note, that data did not include readers
reports. The databases used for referencing are Gale Academic Onefile and LexisNexis.
7 The Californian crisis regained attention months later, when evidence was found
indicating that Enron (and other traders) manipulated its deregulated market. Thus the
crisis returned to centre stage as a means for augmenting the sense of Enrons deviancy,
after it was possible to use it as such.
8 This discussion does not concern actual blame but blame discourse. For example,
when claiming that the articles repeatedly directed blame discussions away from the
market, I am not debating whether or not market blame existed, but pointing out that
the discourse always tended to evolve this way.
9 It is interesting to note that a rare pro-regulation article sustained this basic blame
construct, sanctifying market ideals by posing Enron as an assault on the very heart of
capitalism (4 February 2002b).
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165
12 November 2001. The Enron debacle. S. Anderson Forest & W. Zellner with
H. Timmons, 3757, 106.
26 November 2001. End the numbers game. Editorials. 3759, 130.
10 December 2001a. Enron: Running on empty. P. Coy, E. Thornton, S. A. Forest with
C. Palmeri and bureau reports, 3761, 80.
10 December 2001b. Skilling: The man who knew . . . how much? W. Zellner, 3761, 82.
17 December 2001. Enron: Let us count the culprits. Editorials. 3762, 154.
31 December 2001. Why a few Enrons would do Europe good. J. Rossant, 3763, 22.
28 January 2002a. How to prevent future Enrons. Editorials. 3767, 124.
28 January 2002b. Theres no positive spin on this one, Mr. Lindsey. H. Gleckman, 3767,
41.
4 February 2002a. Brutal honesty could force a market correction. M. der Hovanesian,
3768, 44.
4 February 2002b. Enron: A powerful blow to market fundamentalists. R. Kuttner, 3768,
20.
4 February 2002c. The man behind the deal machine. W. Zellner with M. France &
J. Weber, 3768, 40.
11 February 2002a. Paying for the sins of Enron. N. Byrnes, 3769, 35.
11 February 2002b. The good, the bad, and the worse. R. Barker, 3769, 90.
25 February 2002a. Congress will huff and puff and . . . do little. G. Weiss, 3771, 116.
25 February 2002b. In Europe, the search is on for other Enrons. S. Reed with K. Capell,
A. Reinhardt, C. Matlack and bureau reports, 3771, 58.
25 February 2002c. The betrayed investor. M. Vickers & M. McNamee with P. Coy,
D. Henry, E. Thornton, M. Der Hovanesian and bureau reports, 3771, 104.
25 February 2002d. The state of the union: Bush mostly got it right. R.J. Barro, 3771, 30.
25 February 2002e. The wrath of the investor class. Editorials. 3771, 150.
4 March 2002. Et tu, Enron lawyers? G. Weiss, 3772, 80.
18 March 2002. Enron was mostly right about one thing: Deregulation. G.S. Becker, 3774,
26.
8 April 2002. Auditing here, consulting over there. N. Byrnes with M. McNamee,
R. Grover, J. Muller & A. Park, 3777, 34.
29 April 2002. A ripe time for reform: Editorials. 3780, 130.
6 May 2002. How to fix corporate governance. J. A. Byrne with L. Lavelle, N. Byrnes,
M. Vickers & A. Borrus, 3781, 68.
20 May 2002. And the Enron award goes to . . . Enron. M. J. Mandel with W. Zellner,
3783, 46.
3 June 2002. Accounting: Stronger reform please. Editorials. 3785, 102.
10 June 2002. Time for CEOs to speak up. Editorials. 3786, 160.
1 July 2002. Investor power has its downside, too. J. A. Byrne, 3789, 48.
8 July 2002. Can trust be rebuilt? B. Nussbaum. 3790, 32.
29 July 2002. Getting the message, finally. Editorials. 3793, 116.
12 August 2002. Merrill has to face the music. Editorials. 3795, 116.
26 August 2002a. 3: Crimes against the information age. M. J. Mandel, 3796, 80.
26 August 2002b. 8: Firepower for financial cops. J. Weber, 3796, 98.
9 September 2002. Flawed financial giants. Editorials. 3798, 156.
16 December 2002. Was Sherron Watkins really so selfless? W. Zellner, 3812, 110.
13 January 2003. The best (& worst) managers of the year. 3815, 58.
17 March 2003. A believable bottom line is back. Editorials. 3824, 118.
31 March 2003. Europe cant afford to stay mad for long. J. Rossant, 3826, 42.
28 July 2003. The best European performers. D. Fairlamb with J. Ewing, G. Edmondson,
K. Capell, S. Reed, A. Reinhardt & F. F. Jespersen (international eds), 3843, 50.
13 October 2003. The big board: Crying out for regulation. R. Kuttner, 3853, 26.
166
1 December 2003. The corporate donors. M. Conlin & J. Hempel with J. Tanzer &
D. Polek, 3860, 92.
4 April 2005. A few bad apples spoil . . . not much. M. J. Mandel, 3927, 38.
6 February 2006. Ken Lays audacious ignorance. A. Bianco, 3970, 58.
12 June 2006a. The real verdict on business. J. Welch & S. Welch, 3988, 100.
12 June 2006b. The Skilling trap. M. Gimein, 3988, 31.
18 December 2006. The jury is out. 4014, 106.