The organising principle of anarchy

The recent wave of incidents involving accounting fraud marks the end of an era. A tectonic ideological shift from laissez-faire and self-regulation to state involvement and regulation could result from disillusionment and disgust with American capitalism. This would be the reversal of a trend that can be traced to Reagan in the United States and Thatcher in Britain. Additionally, it would seriously question some fundamental—and far older—tenets of free-market ideology. Markets are thought to be self-assembling, self-organizing exchanges of products, information, and services. The totality of the systems that interact to produce the best possible allocation of economic resources makes up Adam Smith's "invisible hand." The randomness and lack of self-awareness of the market are precisely its greatest advantages versus central planning.

Market members conduct their egocentric business while attempting to maximize their utility, blind to the interests and actions of everyone but those with whom they directly deal. Out of the commotion and confusion, a system of unsurpassed order and efficiency appears. Man is unable to purposefully produce superior results. Therefore, any interference or involvement is seen to be harmful to the economy's ability to function properly. The Physiocrats, who came before Adam Smith and advocated the ideology of "laissez-faire, laissez passer," the hands-off battle cry, are only a small step removed from this idealized worldview. Their religion was one of nature. They bellowed that the market, as a collection of people, was unquestionably entitled to the same rights and liberties as each and every individual.

In his influential and well-timed maximize "Principles of Political Economy," written in 1848, John Stuart Mill argued against the role of the state in the economy. This faulty hypothesis came back with a vengeance in the final two decades of the previous century, unfazed by accumulating evidence of market failures, such as the inability to supply affordable and plentiful public goods. Privatization, deregulation, and self-regulation developed into trendy terms that were spread by both commercial banks and multilateral lenders as parts of a worldwide consensus. Self-regulation was based on the idea of long-term self-preservation when it came to the professions, such as accountants, stock brokers, lawyers, bankers, insurers, and so on. By abiding by the norms and regulations of a level playing field, rational economic participants and moral actors are meant to their utility over the long term.

. Sadly, it appeared that avarice, vanity, and an immature inability to delay satisfaction had interfered with this noble tendency. Self-remarkable regulation's failure to overcome human nature gave rise to the most intrusive stealth tactics yet created. Government involvement in the details of accounting, stock trading, and banking has increased significantly over the past two years in both the UK and the USA. However, there was more to the ethos and myth of "order out of chaos"—which had proponents in the exact sciences as well—than that. The whole culture of the trade itself underwent a profound transformation. It is hardly shocking that the Internet, a disorderly network with an anarchic operating system, thrived in these circumstances.

   The dot-com revolution was less about technology than it was about innovative business practices that involved combining a large number of incompatible ingredients, swirling thoroughly, and hoping for the best. No one, for example, provided a linear revenue model for how to convert "eyeballs," or the number of website visitors, to money (also known as "monetizing"). It was dogmatically believed to be true that traffic, a chaotic occurrence, will somehow magically transfer to profit, which was previously the result of arduous labor. Privatization was a huge leap of faith in and of itself. Profit-seekers received wholesale transfers of state-owned assets, including utilities and providers of public goods like health and education. The implicit assumption was that the absence of planning and regulation would be filled by the price system.

In other words, greater charges were meant to ensure a constant level of service. Failure followed, as was to be expected, from British railroad operators to Californian power utilities. Unavoidably, a backlash resulted from the simultaneous demise of several urban tales, including the freeing power of the Internet, self-regulating markets, and the unrestrained benefits of privatization. In the decades following the Second World War, the state has grown to monster dimensions. It is about to expand and eat up the few areas that have so far remained unaffected. These are bad news, to put it mildly. But by obstructing the function of that intangible regulator, the market, we libertarians—supporters of both human freedom and individual responsibility—have brought it upon ourselves.