Fifth amendment capitalism, or the fallacy of the free lunch

In my youth I knew a fellow who was a notorious drunk — the word "alcoholic" not as yet having found a home in the Ozark dialect — who had an interesting take on his situation.

"The weekend's coming," he was once heard to remark. "Sure do dread it. Gonna have to get drunk again." He said this with touching sincerity, and a hint of a victim's genuine indignation. As my dear old Dad used to say, "That really takes the rag off the bush." I was reminded of this fellow when I read the remarks offered by the former chairman of Enron in explanation of his self-sacrificial refusal to answer questions which members of a congressional investigating committee might want to put to him. He wanted to answer those questions, he really did. God knows, he had nothing to hide, and how fervently he longed to set the record straight! But they just wouldn't let him. He sure did dread it, but that mean old lawyer of his was just going to make him invoke his constitutional protections against possible self-incrimination. In the bad old days of Senator McCarthy such folks were known in the private lingo of the House UnAmerican Activities Committee as "Fifth Amendment Communists." It is an index of the general increase in human felicity that today the Fifth Amendment Communist is a rara avis indeed while Fifth Amendment Capitalists are as common as house sparrows.

Not that there isn't something mildly theatrical about the newly discovered just wrath of our elected representatives, whose eagerness for the handout coexists so commodiously with their ferocity, in this rare circumstance, of biting the hand proffering it. It now appears to offer some slight electoral advantage to a candidate if he can claim to have received 10 percent less Enron money than an opponent. But the absolutely top award for pre-emptive self-exculpation, if I am to credit reports in the Daily Princetonian, must go to my academic colleague and fellow columnist at a rival East-coast daily, Professor Krugman.

Like so many others, I read and approved his scathing op-ed essay in the 'Times' in which he laid bare the incompetence of the Enron executive and board whose myopia, to say nothing harsher, had enabled the debacle; but this essay did not mention the fact that its author himself had received an honorarium of fifty thousand dollars to advise the Enron Corporation. That I learned only later from the 'Prince.' Please do not misunderstand me. It should be obvious that I believe that in this great country the rights of college professors to strut and posture should be no less plenary than those granted to career politicians. What I found truly interesting, however, was Krugman's explanation. It really takes the rag off the bush. When a 'Prince' reporter apparently raised the question whether such behavior, if unchecked over a long period of time, might not come at length to give hypocrisy a bad name, the professor was ready. There was really no issue here, for although there might appear to have been a certain amount of quid, there was practically no quo at all: he had done nothing, or at least so very little as to be first cousin to nothing, to advise, guide or direct the Enron Corporation.

My view of such matters is undoubtedly clouded by my lack of Real World experience. Hick that I am, $50,000 seems like a considerable piece of change as a retainer for doing nothing; but I actually think that my view might be shared by some other professors who do not happen to be housed in quarters quite so lavish as those provided by the Department of Economics or the Woodrow Wilson School. That sum is, in fact, about the amount of money we offer to new assistant professor for a year of teaching between four and six semester-long courses, supervising the independent work of ten or twelve undergraduates, and serving on lots of committees, among many other things.

Ordinarily an expert on medieval poetry would be cautious about expressing his opinion on matters relating to the Dismal Science, but since the collapse of Enron has dumbfounded American business leaders, confounded one of the world's great accounting firms, and nonplussed the two energy barons who are President and Vice President of the United States, what do I have to lose? The answer, which is quite simple and has little to do with arcane accounting or Byzantine limited partnerships beneath the swaying palms, is implicit in the impatient remarks of one senator when asked by a reporter what Enron thought it might get from the beneficiaries of its lavish political donations. "They get the same thing everybody else gets," he snapped: "good government." Enron's fatal error was the lavish nature of their disinterested largesse. They simply gave away too much money for no economic return. They fell afoul of Adam Smith's iron law of the Free Lunch. John V. Fleming is the Louis W. Fairchild '24 professor of English. He can be reached at jfleming@princeton.edu.