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Anarchy as an Organizing Principle 2023

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Anarchy as an Organizing Principle 2023



The series of accounting fraud scandals that have recently occurred mark the conclusion of a period. There is a growing disappointment and dissatisfaction with American capitalism, which could lead to a significant shift in ideology towards greater government intervention and regulation, rather than relying on laissez faire and self-regulation.


Anarchy as an Organizing Principle 2023
Anarchy as an Organizing Principle 2023


This would go against the trend established by Thatcher in Britain and Reagan in the USA, and could cause some basic principles of free-market economy to be questioned.

The concept of markets is that they are independent systems that come together to trade information, products, and services. The "invisible hand" theory by Adam Smith refers to all the processes that work together to achieve the most efficient distribution of resources in an economy. What makes markets superior to central planning is their spontaneity and absence of self-consciousness.


Individuals in the market focus on their own interests and strive to optimize their benefits, paying little attention to anyone except those they directly interact with. Despite the disorder and noise, a system of organization and effectiveness eventually arises. Humans are unable to deliberately create superior results, and therefore, any attempts to intervene in the economy are believed to harm its proper operation.


This utopian perspective is closely related to the beliefs of the Physiocrats, who came before Adam Smith and promoted the ideology of "laissez faire, laissez passer" - the idea of non-interference. They viewed the market as a natural phenomenon and argued that it had the same rights and liberties as individual people. John Stuart Mill opposed government intervention in the economy in his seminal work "Principles of Political Economy", which was published in 1848 and widely influential.

Despite the increasingly apparent proof of market inadequacies, such as the incapability of offering affordable and abundant public goods, this erroneous belief made a strong comeback in the final two decades of the preceding century. The trendy catchphrases of privatization, deregulation, and self-regulation were and still are promoted as part of a worldwide agreement by commercial banks and multilateral lenders.


Concerning professions including accountants, lawyers, insurers, bankers, stock brokers, and others, self-regulation was founded on the notion that the best way to ensure long-term survival is to prioritize oneself. This means adhering to the rules and standards of a fair and equal environment in order to improve one's economic standing and uphold their ethical responsibilities.


Unfortunately, this admirable quality appears to have been influenced by greed and vanity, as well as the inability to delay immediate satisfaction. The inability to control oneself led to drastic measures being taken by the government to regulate various financial sectors.

In the United Kingdom and the United States of America, the government now has a more significant and expansive role in overseeing accounting, stock trading, and banking, a stark contrast to just two years ago.


The idea of creating order from chaos was not just limited to the arts, but also had advocates in the scientific field.


This philosophy had a profound effect on the culture of business, which underwent a significant transformation as a result. It is no coincidence that the Internet - a disordered network with a free-wheeling operating system - thrived during this period.

The dotcom revolution focused more on innovative business strategies than technology. It involved combining many conflicting elements, mixing them thoroughly, and hoping for success. Nobody had a clear plan for how to generate revenue from website visitors, also known as "eyeballs." The belief was that website traffic, even if unordered, would somehow lead to profit without the same amount of hard work traditionally required.


Anarchy as an Organizing Principle 2023
Anarchy as an Organizing Principle 2023


The act of privatization was a huge risk.


Various assets, such as utilities and providers of public goods like healthcare and education, that were previously owned by the state were handed over to individuals seeking profit. There was an underlying assumption that the cost would regulate and organize these services adequately. Essentially, this meant that higher prices would guarantee that services would always be available. However, as anticipated, this approach proved unsuccessful, resulting in failures such as energy providers in California and railway operators in Britain.

The collapse of these myths about urban life happening at the same time, including the idea that the internet would free people, markets would regulate themselves, and privatization was always beneficial, resulted in an opposing reaction.



Since World War II, the government has become extremely large.


It's going to get even bigger and take control of sectors that haven't been regulated yet. This isn't good news. However, those of us who believe in individual freedom and responsibility, known as libertarians, are to blame. We stopped the market, which is the unseen controller, from doing its job.


Summary:


The recent series of fraudulent activities within the accounting field implies that a significant period of time has come to an end. With Americans becoming dissatisfied and disillusioned with their capitalist system, there may be a substantial change from a laissez faire approach to state intervention and regulation. This would be a reversal of the trend that began with Margaret Thatcher in Britain and Ronald Reagan in the United States, and it would question some of the most fundamental concepts of free-market practices, which are much older.



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