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There are plenty of people in the world who’d say that history is boring. There are probably even more people who’d say that accounting is worse. So a book about the history of accounting, as an actual CPA said to me, is never going to be a best seller. And while that may be true, this history of accounting was mostly informative, sometimes exciting, and at the end, downright inspiring. That’s because the author frames it as a tool of transparency with the power to topple corruption in governmen
Double-entry accounting was invented by a Florentine monk in the Renaissance era. He was the first Westerner to adopt Arabic numerals instead of the Roman, so it was really the beginning of mathematics as we know it, at least in the Western world. But revolutionary as it was, I couldn’t help but wonder about other cultures through these for these early chapters. What about the Arabs who invented the numerals? What about the Chinese, whose language, according to Malcolm Gladwell, is embedded with mathematical concepts? And of course, what about the Jews? From the collections for the Bais Ha Mikdash (Holy Temple) to our early days as merchants, surely we had some way of accounting for who paid for what.
The chapters progressed through history from the medieval era to the present day, sometimes showing how societies that embraced accounting flourished, and sometimes showing how far kings and nobles would go to cover up their overspending. The most exciting chapter was about the French Revolution and an accountant and reformer named Jacques Necker. I’d never even heard of him, but not only was his work responsible for revealing the excesses of the king and queen to the public, if they had continued to listen to him, the ending might not have been so bloody. He was more reformer than revolutionary.
The book goes on to the industrial revolution and then to our present day. And herein lies our current conflict: as the economy became more complex, so did accounting, which allowed it to become as much of a tool for fraud as it can be a tool for transparency. With the Enron scandal and the 2008 financial crisis fresh in our memories, the author ends with a call to stop thinking of accounting as boring but as necessary to democracy and prosperity. Just as the first accountants were priests who did their financial reckoning alongside their spiritual one, he wants the study of accounting and economics to be enmeshed with our humanity, not just the realm of profit-hungry businessmen and cold, calculating machines. With this history book, he’s taken one big step forward. He appealed to a liberal arts major like me.
Adding this to my list because of an op-ed, No Accounting Skills? No Moral Reckoning. I found it both fascinating:
In Renaissance Italy, merchants and property owners used accounting not only for their businesses but to make a moral reckoning with God, their cities, their countries and their families. The famous Italian merchant Francesco Datini wrote “In the Name of God and Profit” in his ledger books. Merchants like Datini (and later Benjamin Franklin) kept moral account books, too, tallying th
there was potential for an interesting book here. accounting is indeed a powerful set of ideas, little known by the wider population, and i don’t doubt that as the book’s blurb says different understandings of it have shaped how empires, nations, ethnic groups have fared. an accountancy professor at a good US university, well-connected (long list of thanks in the acknowledgements) should be an ideal guide. and soll has done some research. the best of the book are the many great historical anecdo