For more information, contact: [email protected]<?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” />


August Junto Meeting, <?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />New York City


Competitive Enterprise Institute's President Fred Smith to speak on the topic of

Corporate Aftershock: Economic Liberty Before and After Enron.


The disasters at Enron and then Worldcom have proved exhilarating to those favoring greater political control over the economy.  In the aftermath of these disasters, interventionists found it easy to argue that America had once again allowed “cowboy capitalists” to wreak havoc on consumers and investors.  More regulations were clearly needed and Congress and the Administration rushed through the Sarbanes-Oxley Corporate Responsibility Act to do exactly that. 


Smith argues that this whole experience illustrates the confusion over the inevitability of risk in any real “trial and error” world.   Moving out into the economic frontier entails adapting old arrangements to novel risks and (sometimes) evolving new institutions to address risks not encountered elsewhere.  Smith argues the goal is to ensure that much is learned from errors, that the risks taken are prudent, and that individuals and firms in these novel economic areas are more effectively disciplined by competitive rather than political institutions.  Using this framework, Smith tells the Enron story anew, focusing on the political as well as market causes of the disaster.  He concludes by arguing that future Enrons would best be avoided by strengthening the competitive pressures that make the market functional.  This is best done by eliminating the rigidities that inhibit competitive disciplines on errant market actors.


Although the Enron experience motivates this talk (derived from his chapter in the recently published Cato book “Corporate Aftershock”); the presentation will range further afield, arguing that civilization can be viewed as the gradual evolution of risk management strategies.  From the family to derivatives, society has developed increasingly sophisticated ways of taking on a wider and deeper range of risks ever more prudently.  Like brakes on cars, these risk management arrangements allow us to speed more quickly into the future.  Our goal is not to avoid risk but to ensure that we develop ever more effective “brakes” to allow us to take more risks more prudently.  



August Meeting


The August meeting will be at 7:00pm

on Thursday, August 7th

at the Soldiers', Sailors', Marines' and Airmen's Club

at 283 Lexington Avenue, 2nd floor

between 36th and 37th Street,

five blocks south of Grand Central.

Reservations are not required.


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