Anarchy as an Organizing Principle
225
Business > Ethics
Mar 1, 2007
Sam Vaknin
Anarchy as an Organizing Principle
The recent spate of accounting fraud scandals signals the end of an era. Disillusionment and disenchantment with American capitalism may yet lead to a tectonic ideological shift from laissez faire and self regulation to state intervention and regulation. This would be the reversal of a trend dating back to Thatcher in Britain and Reagan in the USA. It would also cast some fundamental - and way more ancient - tenets of free-marketry in grave doubt.
Markets are perceived as self-organizing, self-assembling, exchanges of information, goods, and services. Adam Smith's "invisible hand" is the sum of all the mechanisms whose interaction gives rise to the optimal allocation of economic resources. The market's great advantages over central planning are precisely its randomness and its lack of self-awareness.
Market participants go about their egoistic business, trying to maximize their utility, oblivious of the interests and action of all, bar those they interact with directly. Somehow, out of the chaos and clamor, a structure emerges of order and efficiency unmatched. Man is incapable of intentionally producing better outcomes. Thus, any intervention and interference are deemed to be detrimental to the proper functioning of the economy.
It is a minor step from this idealized worldview back to the Physiocrats, who preceded Adam Smith, and who propounded the doctrine of "laissez faire, laissez passer" - the hands-off battle cry. Theirs was a natural religion. The market, as an agglomeration of individuals, they thundered, was surely entitled to enjoy the rights and freedoms accorded to each and every person. John Stuart Mill weighed against the state's involvement in the economy in his influential and exquisitely-timed "Principles of Political Economy", published in 1848.
Undaunted by mounting evidence of market failures - for instance to provide affordable and plentiful public goods - this flawed theory returned with a vengeance in the last two decades of the past century. Privatization, deregulation, and self-regulation became faddish buzzwords and part of a global consensus propagated by both commercial banks and multilateral lenders.
As applied to the professions - to accountants, stock brokers, lawyers, bankers, insurers, and so on - self-regulation was premised on the belief in long-term self-preservation. Rational economic players and moral agents are supposed to maximize their utility in the long-run by observing the rules and regulations of a level playing field.
This noble propensity seemed, alas, to have been tampered by avarice and narcissism and by the immature inability to postpone gratification. Self-regulation failed so spectacularly to conquer human nature that its demise gave rise to the most intrusive statal stratagems ever devised. In both the UK and the USA, the government is much more heavily and pervasively involved in the minutia of accountancy, stock dealing, and banking than it was only two years ago.
But the ethos and myth of "order out of chaos" - with its proponents in the exact sciences as well - ran deeper than that. The very culture of commerce was thoroughly permeated and transformed. It is not surprising that the Internet - a chaotic network with an anarchic modus operandi - flourished at these times.
The dotcom revolution was less about technology than about new ways of doing business - mixing umpteen irreconcilable ingredients, stirring well, and hoping for the best. No one, for instance, offered a linear revenue model of how to translate "eyeballs" - i.e., the number of visitors to a Web site - to money ("monetizing"). It was dogmatically held to be true that, miraculously, traffic - a chaotic phenomenon - will translate to profit - hitherto the outcome of painstaking labour.
Privatization itself was such a leap of faith. State owned assets - including utilities and suppliers of public goods such as health and education - were transferred wholesale to the hands of profit maximizers. The implicit belief was that the price mechanism will provide the missing planning and regulation. In other words, higher prices were supposed to guarantee an uninterrupted service. Predictably, failure ensued - from electricity utilities in California to railway operators in Britain.
The simultaneous crumbling of these urban legends - the liberating power of the Net, the self-regulating markets, the unbridled merits of privatization - inevitably gave rise to a backlash.
The state has acquired monstrous proportions in the decades since the Second world War. It is about to grow further and to digest the few sectors hitherto left untouched. To say the least, these are not good news. But we libertarians - proponents of both individual freedom and individual responsibility - have brought it on ourselves by thwarting the work of that invisible regulator - the market. Sam Vaknin ( samvak.tripod.com ) is the author of Malignant Self Love - Narcissism Revisited and After the Rain - How the West Lost the East. He served as a columnist for Global Politician, Central Europe Review, PopMatters, Bellaonline, and eBookWeb, a United Press International (UPI) Senior Business Correspondent, and the editor of mental health and Central East Europe categories in The Open Directory and Suite101. Until recently, he served as the Economic Advisor to the Government of Macedonia. Visit Sam's Web site at samvak.tripod.com
Markets are perceived as self-organizing, self-assembling, exchanges of information, goods, and services. Adam Smith's "invisible hand" is the sum of all the mechanisms whose interaction gives rise to the optimal allocation of economic resources. The market's great advantages over central planning are precisely its randomness and its lack of self-awareness.
Market participants go about their egoistic business, trying to maximize their utility, oblivious of the interests and action of all, bar those they interact with directly. Somehow, out of the chaos and clamor, a structure emerges of order and efficiency unmatched. Man is incapable of intentionally producing better outcomes. Thus, any intervention and interference are deemed to be detrimental to the proper functioning of the economy.
It is a minor step from this idealized worldview back to the Physiocrats, who preceded Adam Smith, and who propounded the doctrine of "laissez faire, laissez passer" - the hands-off battle cry. Theirs was a natural religion. The market, as an agglomeration of individuals, they thundered, was surely entitled to enjoy the rights and freedoms accorded to each and every person. John Stuart Mill weighed against the state's involvement in the economy in his influential and exquisitely-timed "Principles of Political Economy", published in 1848.
Undaunted by mounting evidence of market failures - for instance to provide affordable and plentiful public goods - this flawed theory returned with a vengeance in the last two decades of the past century. Privatization, deregulation, and self-regulation became faddish buzzwords and part of a global consensus propagated by both commercial banks and multilateral lenders.
As applied to the professions - to accountants, stock brokers, lawyers, bankers, insurers, and so on - self-regulation was premised on the belief in long-term self-preservation. Rational economic players and moral agents are supposed to maximize their utility in the long-run by observing the rules and regulations of a level playing field.
This noble propensity seemed, alas, to have been tampered by avarice and narcissism and by the immature inability to postpone gratification. Self-regulation failed so spectacularly to conquer human nature that its demise gave rise to the most intrusive statal stratagems ever devised. In both the UK and the USA, the government is much more heavily and pervasively involved in the minutia of accountancy, stock dealing, and banking than it was only two years ago.
But the ethos and myth of "order out of chaos" - with its proponents in the exact sciences as well - ran deeper than that. The very culture of commerce was thoroughly permeated and transformed. It is not surprising that the Internet - a chaotic network with an anarchic modus operandi - flourished at these times.
The dotcom revolution was less about technology than about new ways of doing business - mixing umpteen irreconcilable ingredients, stirring well, and hoping for the best. No one, for instance, offered a linear revenue model of how to translate "eyeballs" - i.e., the number of visitors to a Web site - to money ("monetizing"). It was dogmatically held to be true that, miraculously, traffic - a chaotic phenomenon - will translate to profit - hitherto the outcome of painstaking labour.
Privatization itself was such a leap of faith. State owned assets - including utilities and suppliers of public goods such as health and education - were transferred wholesale to the hands of profit maximizers. The implicit belief was that the price mechanism will provide the missing planning and regulation. In other words, higher prices were supposed to guarantee an uninterrupted service. Predictably, failure ensued - from electricity utilities in California to railway operators in Britain.
The simultaneous crumbling of these urban legends - the liberating power of the Net, the self-regulating markets, the unbridled merits of privatization - inevitably gave rise to a backlash.
The state has acquired monstrous proportions in the decades since the Second world War. It is about to grow further and to digest the few sectors hitherto left untouched. To say the least, these are not good news. But we libertarians - proponents of both individual freedom and individual responsibility - have brought it on ourselves by thwarting the work of that invisible regulator - the market. Sam Vaknin ( samvak.tripod.com ) is the author of Malignant Self Love - Narcissism Revisited and After the Rain - How the West Lost the East. He served as a columnist for Global Politician, Central Europe Review, PopMatters, Bellaonline, and eBookWeb, a United Press International (UPI) Senior Business Correspondent, and the editor of mental health and Central East Europe categories in The Open Directory and Suite101. Until recently, he served as the Economic Advisor to the Government of Macedonia. Visit Sam's Web site at samvak.tripod.com
Write a Review
Add to My Favorite
Refer it to Friend
Report Article
Other links owned by this user
Personality traits enduring, usually rigid patterns of behavior, thinking (cognition), and emoting expressed in a variety of circumstances and situations and throughout one's life (typically from early adolescence onward). Some personality traits
Category:
(The author was among the first contributors to Nupedia, the Wikipedia's peer-reviewed predecessor, and spent six years, on and off, studying the Wikipedia) It is a question of time before the Wikipedia self-destructs and
Category:
Politics, in all its forms, is bankrupt. The notion that we can safely and successfully hand over the management of our daily lives and the setting of priorities to a political class or elite is thoroughly discredited. Politicians cannot be trusted,
Category:
I use words as others use algebraic signs: with meticulousness, with caution, with the precision of the artis. I sculpt in words. I stop. I tilt my head. I listen to the echoes. The tables of emotional resonce. The fine tuned reverberations of pain
Category:
5. Slush Funds
According to David McClintick ("Swordfish: A True Story of Ambition, Savagery, and Betrayal"), in the late 1980's, the FBI and DEA set up dummy corporations to deal in drugs. They funneled into these corporate fronts money from drug-related asset
Category:
Are all personality disorders the outcomes of frustrated narcissism? During our formative years (6 months to 6 years old), we are all "narcissists". Primary Narcissism is a useful and critically important defense mechanism. As the infant
Category:
There is an often missed distinction between Being the First, Being Original, and Being Innovative. To determine that someone (or something) has been the first, we need to apply a temporal test. It should answer at least three questions:
Category:
Their arrival portends rising local prices and a culture shock. Many of them live in plush apartments, or five star hotels, drive SUV's, sport $3000 laptops and PDA's. They earn a two figure multiple of the local average wage. They are busybodies,
Category:
With the exception of Nietzsche, no other madman has contributed so much to human sanity as has Louis Althusser. He is mentioned twice in the Encyclopaedia Britannica as someone's teacher. There could be no greater lapse: for two important decades (the
Category:
Personality disorders are dysfunctions of our whole identity, tears in the fabric of who we are. They are all-pervasive because our personality is ubiquitous and permeates each and every one of our mental cells. I just published the first article in this
Category:
11. The Roman Family
The father in the Roman family (paterfamilias) exercised absolute and lifelong power over all other family members (patria potestas): his wife, children, and slaves. If the father's father was alive - then he was the supreme authority in the household.
Category:
Psychology is more an art form than a science. There is no "Theory of Everything" from which one can derive all mental health phenomena and make falsifiable predictions. Still, as far as personality disorders are concerned, it is easy to discern common
Category:
The history of the Cathoic Church reads ike the annas of a goba crime concern. It gave the word the inquisition, incestuous and murderous popes, reigious warfare, pedophiiac sex scandas, idoatry, and the gnawing guit that comes from embracing
Category:
Personality disorders are like tips of icebergs. They rest on a foundation of causes and effects, interactions and events, emotions and cognitions, functions and dysfunctions that together form the patient and make him or her what s/he is. The DSM
Category:
Most politicians bend the laws of the land and steal money or solicit bribes because they need the funds to support networks of patronage. Others do it in order to reward their nearest and dearest or to maintain a lavish lifestyle when their political
Category:
The DSM-IV-TR (2000) defines a personality disorder as: "An enduring pattern of inner experience and behavior that deviates markedly from the expectations the individuals culture (and is manifested in two or more of his or her areas of mental
Category:
Both now-discarded Lamarckism (the supposed inheritance o acquired characteristics) and Evolution Theory postulate that unction determines orm. Natural selection rewards those orms best suited to carry out the unction o survival ("survival o the
Category:
The most beautiful experience we can have is the mysterious. It is the fundamental emotion that stands at the cradle of true art and true science." Albert Einstein, The World as I See It, 1931 The debate between realism and
Category:
The Diagnostic and Statistical Manual, fourth edition, text revision [American Psychiatric Association. DSM-IV-TR, Washington, 2000] - or the DSM-IV-TR for short - describes Axis II personality disorders as "deeply ingrained, maladaptive, lifelong
Category:
The preservation of human life is the ultimate vue, a pillar of ethics and the foundation of l mority. This held true in most cultures and societies throughout history. On first impression, the last sentence sounds patently wrong. We
Category:
Other links at Business > Ethics
A few weeks back, Business Week did an article that caught my eye. Where MBAs Learn The Art Of Blue-Skying. For the longest time, High Tech has produced entrepreneurs and CEOs who are, for the most part, nerds. Fairly unidimensional, Silicon Valley is
Category:
Nobody benefits when profit is eliminated from the economic equation. With the economy on the mend, a lot of people in the material handling industry are expecting good times without having to make any changes in the way they do business.
Category:
On of th mor significant pics of California lgislation that wnt into ffct on January 1, 2005, was AB 1825. This law rquirs mployrs with 50 or mor mploys to provid two hours of sxual harassmnt training and ducation to all suprvisory
Category:
Save lots of time, money and enthusiasm by learning these screening steps before spending your resources on internet money making opportunities
Category:
The United States is the home -country for the largest amounts of foreign licensing and direct investment. Therefore, its policies understandably arouse some of the major trade unions of such outward moments.
Category:
Site Sponsor
Directory Statistics
Articles: 68234
Categories: 501
Yahoo Entertainment
