Russ Roberts at Cafe Hayek gives us an excellent summary of the downside of universal standards. To which I will add that if you have universal standards, you can much more easily have a winner take all, which means greater inequalities in wealth and income. (Equality of standards yields great inequalities of wealth.) If you have universal standards, then it is easier for the biggest, baddest (i.e. most efficient) institution to gobble up the others and become too big to fail, which then means huge bailouts and/or other corruption.
…Rather than have a set of experts come up with the best standard, I would prefer competition among standards. Let investor dollars determine which are the best standards. Maybe tehre would be convergence, maybe not. And when there are lots of standards, you can get improvement as people learn over time. But those universal standards struggle to improve. The people who design them have a tendency to defend them even when they’re flawed.
At the end of the discussion, a committee was mentioned, I think it was part of the UN, that was looking at some accounting issue. It was mentioned that the committee represented the different regions of the world. There was a representative from Africa, South America, Asia, North America, and Latin America. Because every part of the world had a representative, it was assumed in the conversation that everyone’s interests would be heard.
The word “representative” is usually used that way, but it really has no meaning. …