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Abstract

Jones (1999) attempts to explain the course of UK company law in the Victorian era by referring to Dicey's schema, according to which a period of laissez-faire legislation was succeeded in the 1870s by an era of collectivism. Jones asserts that the removal of an accounting disclosure requirement reflected laissez-faire principles, which he takes to mean a Victorian belief that business should be free of all regulation. I question this approach. The Victorians invoked laissez-faire, but their interpretation of its policy implications varied widely. There was no consensus as to whether limited liability companies created a free market or distorted one by removing the natural sanction of business failure. Similarly, some commentators stressed that accounting publicity helped to protect small investors, others that it was an intrusion into the private affairs of large investors. Non-disclosure was not, as Jones asserts, a concomitant of laissez-faire; it was a policy choice that promoted the interests of large “insider” investors and disadvantaged outsiders.

Keywords

Companies Acts limited liability laissez-faire accounting disclosure

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Accounting does not "evolve": a reply to Jones

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