Rules are rules only “post factum”?

Concerning our entry as of 11 May – “When is a rule a rule?” –  we received two comments from Wittgenstein experts (one from Munich and one from Slovenia). The commentators marked the following:

1. Mutual control is not the general scheme of Wittgenstein. According to him, it is only possible post factum to determine, which rules were followed. Following rules is done blindly. Wittgenstein would have said that the described mirroring is a proof that rules can only be described as rules post factum.

2. It would be possible to follow a rule alone (for instance, we play patience alone). It makes no sense to wait ad infinitum that the others confirm our rules. We do not follow rules in order to control each other, but as a constitutional part of society.

Concerning these comments, I would like to summarize the last blog entry: I am curious, why economic subjects ask me to control their accounts. My key problem is to decide whether a rule is a rule (i.e. what I should control). The observed phenomenon is that the controller becomes the controlled. I identified economic interest as a limiting condition for possible endless mirroring. The promise of growth seems to be the motivation why subjects start to create rules and ask for confirmation that they really followed a rule. This original motivation makes this way of rule handling dependent on growth.

I am not so good in discussions of what Wittgestein said or did not say (I took a chapter from Habermas´ Communication Theory, Vol. II – and I learned now that his interpretation of W. was probably simplified). I learned from the comments: Yes, we can only say post factum that a rule is a rule. And once again this is exactly what happens in practice! It seems as if the client accounts “blindly”, but the client is accounting somehow – only, post factum auditors determine: “Ah, obviously you are accounting in this way; this seems to be your rule; let´s fix this rule and then we can say that you followed the rule!” This is exactly what happens in our transnational audits. Did you know that this phenomenon is so far poorly addressed by the International Standards on Auditing?

Of course I cannot exactly say whether my clumsy ideas are “Wittgenstein”-derived, but I feel that your comments encourage me to go further on this path. The surprise is that we need philosophy to understand what is going on in contemporary business.

Yes, also true: You can play patience alone. Thank you for this remark. In this case an auditor is not needed. This is not our case.

2 Responses to “Rules are rules only “post factum”?”

  1. When they are announced in the Federal Register, a public-comment period of uncertain duration will begin, during which the public will be encouraged to comment on the effects of the rules on the stakeholders involved; those comments may affect the final wording of the rules. In a follow-up article, we will let you know when the proposed rules are posted and the public-comment period is to begin; this is expected to be later this summer.

    • admin says:

      This is ofcourse true. And it works pretty good in the national surrounding. Legitimacy through processing, as Luhmann said. There is a due process, and this makes the rule valid, before it is applied. I suppose it works in the national surrounding, because there is a common cultural background. This background allows to stop the possibly endless loop of legitimacy through processing with a cultural intervention. At some point, we do no longer ask, how to justify the process that justifies the process that justifies the process. This goes rather unnoticed and/or it is accepted. Things are different in a transnational surrounding. I fear we cannot rely on a common cultural background, and thus we are caught in either endless processing or unjustified intervention. I hope, I could explain my problem? Frank Fabel, CPA. P.S. I must beg your pardon, for not answering immediatedly. As you see, I write infrequently. The blog should move to Empacta – this would be the better forum.

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