Back to Index

The Andersen collapse and its side effects



This is where I came in. Like people all around the world, we were intrigued by the American system. During the boom of the 20s, we wondered what was the secret of the American success. The British government sent a mission to discover the secret. Then, during the Depression, there were theories as to what was wrong in the American system. John Heelan shows that these questions still bother the UK today: He writes:

"My understanding (perhaps mistaken or out of date) is that the Andersen Consulting corporation is structured as a series of territorial, quasi-independent partnerships, each fiercely independent in its own patch and each acknowledging a loose chain of central control. (Rather similar to the US State/Federal relationship). Perhaps somebody would confirm or correct my understanding.

If my understanding is correct, it seems to me to be an eminently sensible structure that can withstand the interruptions and vagaries of central "palace revolutions", while generating confidence by keeping its professionals and business managers geographically close to its clients.

If that structure has been unable to withstand a calamity like ENRON, despite having some of the best professionals in the various fields, as partners, managers and employees, does that imply the structure is not as sound as I considered? If so, does that means that US governance, based on a similar structure, is equally suspect if it were to be hit a cataclysmic event, (such as a successful surprise attack that eliminated both Washington DC and New York)?"

My comment: John is one of several who have brought up the question of trust as the basis of the American system. When I was a child, trust and honor were sacred concepts, and a handshake was sufficient to seal major deals. Now everything is spelled out in detail to avoid fraud. We all receive each day a pile of letters treating us as old friends, and offering us something free. The expression "con man" used to indicate an unusual type. Should these letters be viewed as "Ěcon letters"?

Ronald Hilton - 3/29/02


Webmaster