How does the movie The Smartest Guys in the Room reflect The Iron Law of Oligarchy?

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Ashley Kannan | Middle School Teacher | (Level 3) Distinguished Educator

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I suppose that a case can be made that the leadership at Enron represents the "Iron Law of Oligarchy" in a couple of ways.  The first is the idea that oligarchic rule is inevitable given public passivity.  In this way, the situation at Enron could be seen as compatible because people failed to question accounting practices at the company so long as the profits on the balance sheet remained so high.  Skilling's embrace of mark- to- market accounting practices allowed the profits at Enron to be perceived as so high, enabling the public and those who might clamor for change to become silent in the face of amazing wealth amassed.  At the same time, the atmosphere that Skilling and his advisers installed, such as rating employees and firing the bottom 15 percent, prevented any power sharing structure to emerge.  In its place was a system where competition and intense jockeying for position enabled the oligarchic rule to maintain, as few, if anyone, questioned the structure that implemented such bizarre elements.  Consider Leach's interpretation of the "Iron Law:"

Bureaucracy happens. If bureaucracy happens, power rises. Power corrupts.

This could be a reason why Enron fits this pattern, as depicted in the film.

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