ACCOUNTING HISTORY AND ACCOUNTING PROGRESS
Christopher J. Napier
University of Southampton
Correspondence Address: School of Management University of Southampton Highfield
Southampton SO17 1BJ
United Kingdom
Telephone: +44(0) 23 8059 5318
Fax: +44(0) 23 8059 3844
E-mail: cjn@socsci.soton.ac.uk
Paper presented at the Second Accounting History International Conference,
ACCOUNTING HISTORY AND ACCOUNTING PROGRESS
ABSTRACT
A. C. Littleton famously described accounting as “relative and progressive”. However, in recent historical accounting research, there has been increasing hesitation in describing accounting as “progressing”. This is largely because “progress” implies a degree not only of change but also of improvement, and historical accounting researchers, influenced by social science conventions, often regard describing accounting changes in terms of progress as involving improper value judgements. As accounting becomes an object of study less as a technical and more as a social phenomenon, consensus as to what constitutes an improvement becomes harder to secure.
Within so-called “traditional” historical accounting research, use of a progressive narrative framework is not uncommon, although writers often describe accounting change as “evolution”. This term has multiple meanings and connotations, ranging from a simple view of slow and gradual change to a teleological view of history tending towards some ultimate end or goal. In some interpretations, evolution is seen as inherently progressive, while in others no claim to progress is made. In assessing the work of historical accounting researchers, care is necessary to ensure that their use of models of evolution or progress is accurately understood.
ACCOUNTING HISTORY AND ACCOUNTING PROGRESS
INTRODUCTION
In his pioneering history Accounting Evolution to 1900, A. C.
Littleton describes accounting in the following terms:
Accounting is relative and progressive. The phenomena which form its subject matter are constantly changing. Older methods become less effective under altered conditions; earlier ideas become irrelevant in the face of new problems. Thus surrounding conditions generate fresh ideas and stimulate the ingenious to devise new methods. And as such ideas and methods prove successful they in turn begin to modify the surrounding conditions. The result we call progress. (Littleton 1933: 361)
Littleton is not particularly clear as to what he means by
“progress”, although he implies that it lies in the ability of
accounting to solve present-day problems. Littleton notes that
accounting has not been static, and points to the growth in
professional audits and the expansion of cost accounting as
evidence of how accounting helps to solve problems of business
planning and control. He claims to show how “accounting
originated in known circumstances in response to known needs; it
has evolved and grown in harmony with its surroundings; its
changes can be explained in terms of forces current at the time”
(Littleton 1933: 362). Littleton’s historiography is a dynamic
one: accounting “came from definite causes; it moves toward a
definite destiny” (Littleton 1933: 362).
For a long time, I have found this view of accounting change
a puzzling one. It seems to embody a teleology: a belief that
accounting changes could be assessed by the extent to which they
work towards the ultimate end (they are in that sense
“progressive”) or move away from the end (they are in that sense
“regressive”). But even if we believe that accounting has some
ultimate end, what could it be? In my own studies of accounting’s
history, I have passed through various stages from an initial
idealism, ready to believe that accounting can and does change for
the better, to a more sceptical position, unsure whether it makes
sense to describe accounting as “progressive” and to talk of
“accounting progress” at all.
This paper is therefore an attempt to explore what might be
meant by describing accounting as “progressive”. I shall
undertake this exploration by considering what roles a notion of
progress might play in historical research more generally and
historical accounting research more particularly. This requires a
review of the extent to which accounting historians have in the
past appealed to notions of progress. Although there is some
evidence of the use of progress as an organising concept in
so-called “traditional accounting history”, it tends to be tied up
with the highly ambiguous notion of evolution. The emphasis
placed on evolution as a term describing accounting’s patterns of
change has been criticised by the so-called “new accounting
history” (Miller et al. 1991; Miller & Napier 1993), but, as
Keenan (1998) has pointed out, this criticism may itself be open
to question as presupposing a rather specific and potentially
about describing accounting change as “progressive” probably owes
more to the fact that many historical accounting researchers
(particularly those working within the “new accounting history”
approach) come from social science backgrounds, where claims that
evidence reveals a pattern of improvement over time might be held
to be inappropriate value judgements. However, telling a story in
terms of progress is often an effective way of structuring a
small-scale historical narrative, whether we describe a “success”
in which accounting, or something affected by accounting, is held
to improve, or a “failure” from which we hope to learn lessons to
help us avoid mistakes in the future. On a larger scale, it
becomes more difficult to tell a story of progress, as we seem to
have to choose between the equally unattractive options of seeing
accounting as eternally changing in a generally improving
direction or as tending towards its end.
PROGRESS IN HISTORY AND HISTORY AS PROGRESS
A dictionary definition of progress is: “An advance to something
better or higher in development” (Chambers English Dictionary
1990: 1168). This definition brings out the two central aspects
of progress. First, it is a dynamic concept: a necessary
condition for progress is that there should be some change.
However, change is not a sufficient condition: the change must be
a change for the better. Progress can be seen as a process of
more-or-less continuous improvement, and may in addition be
philosopher Robert Solomon (1995: 722) defines progress as
“improvement over time, especially the gradual perfection of
humanity”. A strong belief in progress is often seen as
characteristic of the eighteenth century Enlightenment in Europe,
exemplified by such writers as the Marquis de Condorcet, who in
the middle of the French Revolution set out his Sketch for a
Historical Picture of the Progress of the Human Mind (Condorcet
1955). An enlightenment view of history as universal progress was
expressed by Edward Gibbon in The Decline and Fall of the Roman
Empire, where he drew “the pleasing conclusion that every age of
the world has increased, and still increases, the real wealth, the
happiness, the knowledge, and perhaps the virtue, of the human
race” (quoted in Carr 1964: 111).1
As a philosophical idea, progress is particularly associated
with Kant and Hegel. In his essay “An Idea for a Universal
History from a Cosmopolitan Point of View”, written in 1784, Kant
proposed that:
The history of the human race as a whole can be regarded as the realisation of a hidden plan of nature to bring about an internally – and for this purpose also externally – perfect political constitution as the only possible state within which all natural capacities of mankind can be developed completely. (Quoted in Burns & Rayment-Pickard 2000: 55)
The view of Kant that humanity’s history is a movement towards
some ideal state was developed by Hegel, who saw progress as being
achieved through conflict between and within ideas and political
systems. These would fall apart through their internal
dialectical process. Ultimately humanity would reach a form that
contained no internal contradictions: what many writers, most
notably Francis Fukuyama (1992), have referred to as “the end of
history”.
Hegel’s view of a “universal history” had many unattractive
features, as he considered that:
The History of the World occupies a higher ground than that on which morality has properly its position. . . . What the absolute aim of Spirit requires and accomplishes – what Providence sees – transcends the obligations and liability to imputation and the ascription of good or bad motives, which attach to individuality in virtue of its social relations. . . . Moral claims that are irrelevant must not be brought into collision with world-historical deeds and their accomplishment. (Hegel 1956: 66-67)
As filtered through Marx and then later both Fascism and
Communism, this philosophy that history overrode morality was to
provide a justification for many subsequent acts of brutality
(Fukuyama 1992: 69). However, the implication that progress was
inevitable was to appear in a more benign light in nineteenth
century Britain, where rapid social and economic change could be
made to seem less threatening by locating contemporary
developments within a broader narrative of progress and, as the
nineteenth century unfolded, a story of evolution.
Peter Bowler, in his study of the Victorians’ relationship
with the past The Invention of Progress (1989), notes how
narratives of evolution emerged not only in historical writings
but also in a wide range of contexts, and suggests that evolution
provided “a general progressive scheme designed to create order
optimism about the present and the future. Much general
historical writing in the nineteenth century, at least in Britain,
reflected this optimism, seeing history as a gradual movement
towards contemporary British society, with past institutions and
practices being interpreted as primitive precursors of those found
in the more developed present. This approach to historical
writing was subsequently to be described by Herbert Butterfield
(1931) as “Whig History”. Historians would identify the
favourable factors that allowed Britain to develop in the
fortunate ways that it did, while social scientists could
elucidate the underlying laws of progress in society, which might
be expected to turn out to be a generalisation of the Whig
interpretation of history (Bowler 1989: 27).
After World War I, the optimism that had supported a general
notion of progress tended to be replaced by a more pessimistic
viewpoint. In his study The Idea of Progress, first published in
1920, J. B. Bury tried to uphold the value of progress as “the
animating and controlling idea of western civilisation” (Bury
1920: viii), but could not entirely sustain an optimistic outlook.
Oswald Spengler’s The Decline of the West (1926) saw in human
history not a continuous trend of improvement but rather a
recurrence of cycles of growth and decay. Civilisations had a
“beginning”, a “middle” and an “end”. While there are echoes here
of Hegel’s dialectic, to Spengler it was less clear that the
succeeding civilisations embodied a pattern of constant
example, the world of classical Greece and Rome with the age of
medieval Christianity or the European Enlightenment. Not only
could we expect any individual civilisation ultimately to decline,
but we would have no rational basis for considering its
replacement as better or worse than what went before.
This incommensurability of civilisations became particularly
significant as an argument against concepts of progress, as
historians and others became increasingly conscious of the danger
of ethnocentrism in the writing of “universal histories”. The
tendency of nineteenth century Whig history to take Victorian
Britain as normative, and the later tendency of so-called
“modernisation theory” (Nisbet 1969) to do the same for the USA in
the twentieth century, increasingly came under attack from those
who “questioned the very concept of modernity itself, in
particular whether all nations really wanted to adopt the West’s
liberal democratic principles, and whether there were not equally
valid cultural starting and end points” (Fukuyama 1992: 69). With
the growing influence of social science on historical research,
particularly research into cultural development, using concepts of
progress (and indeed of decline) was seen as requiring researchers
to make inappropriate value judgements as to what constituted
improvement or worsening. In a homogeneous culture, such
judgements would reflect a consensus and would not only go
unchallenged but most likely would not consciously appear to be
judgements at all. As cultures became more heterogeneous, the
explicitly to embody a value judgement, which social scientists
increasingly wished to avoid making on methodological grounds.
Such value judgements, when not avoided entirely, became heavily
contested.
One area in which a concept of progress appeared to be still
viable was science. An important contribution to our
understanding of scientific progress is provided by the
philosopher of science Larry Laudan, in his book Progress and its
Problems (1977). Laudan argues that the adequacy of a scientific
theory or research programme lies in its ability to solve
scientific problems. If two theories are compared, one of which
solves more and “weightier” problems than the other, then the
first theory can be regarded as better than the second. Laudan
claims that:
Given that the aim of science is problem solving . . ., progress can occur if and only if the succession of scientific theories in any domain shows an increasing degree of problem solving effectiveness. (Laudan 1977: 68, italics in original deleted).
This focus on problem-solving might provide a way of
conceptualising progress in other disciplines and practices, and
arguably has already been reflected in historical studies of
accounting by Littleton (1933). Laudan notes that many
philosophers and historians of science have regarded science (in
actuality or as an ideal) as a cumulative system of knowledge.
This means that new theories are capable of solving not only the
problems solved satisfactorily by earlier theories but also a set
(1962), who suggests that later theories can be incommensurable
with earlier theories. One aspect of this is that some at least
of the problems of earlier theories simply do not exist as
problems within the later theories, not in the sense that they are
solved by the later theories, but rather that they are
conceptually inexpressible in the terms of the later theories.
Laudan attempts to overcome this objection by claiming that
progress is not a matter simply of the number of problems solved
but also their significance or “weight” (presumably the previously
solved problems inexpressible in terms of the later theories are
simply not “weighty” enough to count in an assessment of the later
theories). This move may not be very satisfactory, but the idea
that theories (or indeed practices) can be assessed and compared
by their ability to fulfil adequately some function may be a
potentially promising one when we come to consider progress in
accounting.
The idea of progress has been an important feature of Western
historiography at least since the eighteenth century, although it
came to be questioned in the twentieth century both empirically,
given that civilisation was observed by some to be declining, and
methodologically, on the basis that judgements of progress
involved making unscientific (and thereby unacceptable) value
judgements. However, progress and its associated concept of
evolution have continued to be powerful narrative models for the
writing of history. In fact, as the philosopher of history Gordon
progress can be understood has having a range of different
“shapes”. Graham identifies three versions of progress by
reference to what an “impartial observer” in the present would
believe about the past, and about whether or not the observer
would hold the same view at any time in the past. This
conceptualisation, by locating judgements at the level of
individual preferences, attempts to circumvent the objection that
progress is a value-laden concept. First, there is “uniform
progress”, where an observer in the present believes that, for any
time in the past, there is a later time when he or she would
prefer to live, and in addition the observer would have held this
judgement at any past time. Graham contrasts this with
“evolutionary progress”, where the observer in the present would
still believe that for any time in the past there is a later time
when he or she would prefer to live, but this view could not be
held at all points in the past. In a model of evolutionary
progress, the observer believes that recent history shows uniform
improvement, but in the past there have been episodes of growth
followed by decay. However, in each succeeding cycle of growth
and decay, the best position is an improvement on the best of the
previous cycle, and the worst position is also better than the
worst of the previous cycle. Finally, Graham describes
“revolutionary progress”, where instead of cycles of growth and
decay we have long periods of stasis followed by rapid improvement
evolutionary progress as “the most plausible form of
progressivism” (Graham 1997: 63-66).
This raises the question of the connection between the
concepts of progress and evolution. The problem here is that the
term “evolution” covers a very broad spectrum of meanings.
Indeed, Keenan (1998: 652) suggests: “ ‘Evolutionary’ is an
adjective with a wide application and anything, perhaps, which
involves processes and outcomes could be so described.” At its
simplest, evolution may signal a process of gradual and continuous
change, in contrast to revolution. It is used in this sense by
Bromwich and Bhimani (1989), in their study of changing
developments in accounting inside organisations Management
Accounting: Evolution not Revolution. However, most users of
evolution in the context of accounting history are, as Littleton
(1933) was, interested in understanding change in a particular
domain as a response to changes in other domains. Here the
analogy with biological evolution begins to be drawn.
This analogy is taken further when the outcome of some
process of change is presented as a result of a variant of
“natural selection”. For example, a change in the economic
environment may give rise to new problems that call forth in some
way a range of possible solutions. The solution that ends up
predominating might be considered to do so through a process of
the “survival of the fittest”. At one level, this may be a
satisfactory explanation for the observed outcome. I would,
simplistic evolutionary explanations along the lines that “the
fittest solution has survived” (what the American Accounting
Association (1977) has described as “Accounting Darwinism” – see
also Napier 1987: 244) but rather will wish to demonstrate how the
outcome actually is superior to its rivals. The assumption that
“what is observed is fittest” has been challenged recently by
Hoskin & Macve (2000: 105), who claim:
To say, as [economic rationalists] tend to, that the routines found in the archive mist have represented the optimal trade off of costs and benefits (given the decision-making and other uses that economic rationalists wish to attribute to such routines) is empirically empty and essentially tautological. What is still generally missing is an historical explanation for why particular routines and their subsequent modifications were the ones that were actually chosen and why consideration/experimentation was not given to possible alternatives that may have been even more cost-beneficial.
Analogies with biological evolution also become complex when
some goal or end to the evolutionary process is imputed. One of
the ways in which nineteenth century Christianity tried to
accommodate itself to the emerging biological theory of evolution
was to claim that evolution was simply the mechanism by which the
world was moving towards the completion of God’s plan (Ruse,
1999). The secular variant of this saw evolution as the mechanism
by which society progressed (Brewer, 1989). Evolution was broad
enough as a concept to accommodate a range of positions from
extreme laissez-faire (for example, the “social Darwinist” views
of Herbert Spencer and others) to more interventionist views such
as those of the Fabians and Progressivists. To some, evolution is
teleological), to others, evolution is a force for unbounded
progress. This linking of evolution and progress was perhaps
influenced by Darwin’s ideas of “the Ascent of Man”: what appears
to be a path of improvement from simple organisms through
increasingly complex ones to the ultimate sentient organism.
However, it is by no means necessary to a theory of evolution
that it embodies any presupposition of increasing or decreasing
complexity. Indeed, most modern biological views of evolution
(see for example Smith 1993) tend to combine a “local” perspective
whereby species in particular environmental niches become dominant
because of particular adaptive advantages with a “global”
perspective whereby changes in the environment are expected to
lead to changes in the range and dominance of species in ways that
cannot be labelled simply as “progressive”. There is no reason to
expect an environmental change to lead to greater complexity in
the dominant species.
To sum up, progress has been a central theme in the writing
of history in the Western world for over two centuries. A wide
range of historians, from the Universal Historians such as Hegel
to the Whig Historians of nineteenth century Britain, saw history
itself as essentially progressive. History was written within a
narrative framework of progress, demonstrating how problems are
solved, challenges overcome and things get better. Metaphors of
evolution were often mobilised, although the equivocal nature of
the concept of evolution necessitates care in our interpretation
however, a more pessimistic attitude to the world and to humanity
on the one hand, and a reluctance to make value judgements on the
other, have made the idea of progress less fashionable. It is now
necessary to see how the concept of progress and its more recent
questioning have had an impact on the writing of accounting
history and on our understandings of accounting more generally.
PROGRESS IN ACCOUNTING HISTORY
The relationship between accounting and progress raises many
important questions, and I do not have enough time to address all
of them in detail. The first of these is the empirical question
of how far, if at all, accounting itself is “progressive” in the
sense that properly functioning accounting contributes to the
improvement of society. Certainly many historians of accounting
have recognised – as does Littleton (1933) – that accounting
impacts on society, and an idealistic view of accounting is that
it has the potential of contributing to social improvement through
its embodiment of rational calculation. If we pay attention, as
did Max Weber among others, to “the ways in which particular forms
of calculation help to bring about the rationalisation of the
conduct of life in the sphere of the enterprise and more
generally” (Miller & Napier 1993: 635), and we see such
rationalisation as in itself progressive, then accounting, as a
form of rational calculation, has the potential to be progressive.
Of course, if we see the rationalisation of life as a bad thing,
evidence of social improvement, and less likely to consider
accounting as a possible force for progress.
A second question is what might actually constitute progress
within accounting. Understanding progress as meaning change for
the better, this is certainly a central question that must be
addressed by the accounting profession and by both governmental
and non-governmental regulators of accounting. It arises
implicitly if not explicitly whenever a new or revised accounting
or auditing law or standard is proposed. What criteria can we use
to decide whether the new regulation is an improvement on the old
one, rather than simply being different? Similarly, both
academics and “practical” men and women want to satisfy themselves
that the technical innovations they develop actually represent
improvements on current ideas and practices. Perhaps such
innovators would endorse the view put forward by Laudan (1977)
that progress can be assessed in terms of ability to solve more
and weightier problems. Mobilising a problem-solving framework,
an accounting historian would need to ask at what point in time
does a particular problem emerge to which accounting might be a
solution.2 The pace of innovation in different times and places
could be explained in terms of the emergence at different points
of a given problem. For example, the need to account effectively
for business combinations emerges as a problem at an earlier time
in countries with highly developed capital markets such as the USA
and UK, than in countries where not only the way in which business
enterprises is different. In the latter case, the “business
combination” may simply not exist as an object to be accounted
for.
In terms of technical progress, claims have been made that
accounting has been subject to periods of stagnation or even
decline. It would therefore not exhibit the pattern that Gordon
Graham (1997) referred to as “uniform progress”, with steady
improvement from period to period. Raymond de Roover (1955: 409)
described the period between the publication of Pacioli’s Summa,
the first printed treatment of double-entry bookkeeping, in 1494,
and the transition to more sophisticated corporate accounting in
the nineteenth century, as an “Age of Stagnation” (see also
Chatfield 1977: 52-61).3 Edwards (1988: vi), noting that “change
does not, of course, necessarily mean progress”, gives an example
of a relative decline in the quality of financial reports
published by British companies during the 1920s, as these tended
to disclose less than many financial reports published before
World War I.
The suggestion that accounting has declined has been
associated particularly with Johnson & Kaplan’s Relevance Lost
(1987). In fact, although these authors argue that management
accounting systems had become increasingly inadequate in the later
twentieth century, they interpret this “as a relatively recent
decline in relevance, not as a lag in adapting older financial
accounting systems to modern managerial needs” (Johnson & Kaplan
the available technologies for accounting change – methods
developed in the manual or punch card era can be refined greatly
in the computer era – but also because the nature of the problem
for which accounting is the solution changes. Interestingly, this
view of decline in relevance incorporates a narrative of
technological progress. Both the “Age of Stagnation” argument and
the Relevance Lost position are capable of accommodating a
long-run view of progress, as stagnation did not last indefinitely,
while the diagnosis offered by Relevance Lost stimulated many
enterprises to make changes in their cost accounting and
management systems intended to remedy the decline in accounting’s
relevance (see Johnson 1992).
Furthermore, some historians have pointed to a tendency for
accounting changes to follow recurring patterns or cycles.
Mumford (1979) noted that the various stages in the growth and
decline in interest in price-change accounting in Britain over the
1970s reflected closely similar stages in an earlier cycle in the
late 1940s. He put forward his cyclical model “as a blueprint for
the next surge of inflation” (Mumford 1979: 98), and also in part
as a prediction (subsequently fulfilled) that, with the decline in
the rate of inflation, price-change accounting would disappear
from the agenda of accounting standard-setters, preparers and
users.
A cyclical model has also been proposed by Nobes (1991) for
UK standard-setting.4 Nobes specifically addresses the question as
evidence of progress, defining this in terms of the ability of the
standard-setter to resolve conflicts, discover unique answers or
impose standard solutions (Nobes 1991: 271). It is worth noting
how by implication Nobes identifies progress in accounting with
the ability to solve problems, where solution is defined in terms
of obtaining “answers” or at least “consensus”. Nobes adopts a
rather Hegelian position by proposing that:
Progress may be inferred in the sense that the [standard-setting] structure contained the seeds of its own destruction . . . The inability of the Accounting Standards Committee to identify or to state or to enforce the “right” answer on various issues led to the pressure to replace it with a body that might be better able to manage some or all of these matters. (Nobes 1991: 271).
This illustrates a central problem with using a concept of
progress in historical explanation: if we focus on a relatively
short period of time we might observe a particular pattern of
change (improvement, stasis or decline), but this pattern need not
be the same as that observed over a longer period of time, within
which the shorter period is included. This situation is
consistent with the “evolutionary progress” model of Graham (1997)
already discussed, and it may underlie the relative lack of
explicit statements about progress in much of the traditional
writing on accounting history, as against the frequent references
to evolution.
However, the “evolutionary progress” model implies one major
belief: that, despite the possibility of setbacks in the past on
the road to the present, today’s observer believes that the
points in the past. How far is it reasonable to impute such a
belief to traditional accounting historians using the term
“evolution” in their work? A relatively brief examination is
enough to show how several such historians say very little about
the current state of affairs at the time they were writing. Thus
Littleton, writing in 1933, brings his book to a close in 1900.
Garner, whose classic work Evolution of Cost Accounting to 1925
includes no fewer than nine chapters on the “evolution” of
particular features of costing, wrote in 1954. Lee & Parker,
whose collection The Evolution of Corporate Financial Reporting
was published in 1979, include some material touching on events
close to the date of publication, and their main motivation was
“inviting the reader to explore certain contemporary problems of
accounting through the eyes and pens of historians” (Lee & Parker
1979: viii). However, far from considering the present to be
“better” than most times in the past, they contend that “few of
the major issues of today are unique. In fact, . . . they are
often many decades old, and no nearer solution today than they
were when first mooted” (Lee & Parker 1979: viii).
Perhaps the most significant advocate of evolution as a
structure for thinking about accounting history was the American
Accounting Association’s Committee on Accounting History, which
reported in 1970. This proposed an objective for historical study
firmly in the tradition of “modernisation theory”:
possible to suggest the practices and institutions which are more compatible with the environments of the developing world. (American Accounting Association 1970: 53)
Of nine specific “examples of historical studies which deserve
attention”, no fewer than eight contain the word “evolution”. But
despite this predominance of evolution, it is unclear whether the
Committee on Accounting History meant much more than “process of
change”, with some sense that changes in accounting may be a
function of changes in the environment. It is in this sense that
more recent historians seem to appeal to evolution. For example,
Jones and Aiken (1995), in their study of British company
legislation of the nineteenth century, argue that “analysis of
political and social evolution is . . . essential for explaining
the timing and development of companies legislation of this
period” (Jones & Aiken 1995: 61).5
Even if traditional accounting historians have been
circumspect about making claims that accounting has progressed,
this is how the new accounting historians have tended to
characterise their general approach. Thus Funnell (1998: 156)
defends new accounting history by claiming that “accounting
history is not the simple story of progressive improvement in
response to the emerging needs of society”. The view that
traditional accounting history was this simple story of progress
is evident from a number of the precursors of the new accounting
history. We can observe this view being expressed right from the
start by the central influence on the emergence of the new
committee set up in 1977 by the British Social Science Research
Council to investigate research needs in accounting. One of the
main aims of this committee was to stimulate research that moved
away from what it perceived as “technical” towards a more socially
informed research agenda. The committee was greatly affected by a
perception that change was pervasive in accounting, that
accounting change was not well understood, and that, in principle
at least, an understanding of change could be given by historical
studies. However, despite a recognition of the substantial body
of historical research in accounting that, even in the mid-1970s,
had come into existence:
Most members of the committee nevertheless were dissatisfied with not only the present state of knowledge in the area but also the current directions of historical research. There has been a tendency for technical histories of accounting to be written in isolation of their social, economic and institutional contexts. Accounting seemingly has been abstracted from its social domain with many of the understandings that are available tending to present a view of the autonomous and unproblematic development of the technical. Where efforts have been made to offer alternative perspectives, teleological, evolutionary or progressive notions of change have often been implicit in the understandings presented. . . . [M]any members of the committee were concerned about the partial, atheoretical and intellectually isolated nature of much historical work in the accounting area. (Hopwood 1985: 365-366).
Similar views about traditional accounting history are put forward
by Hopwood in his later paper “The archaeology of accounting
systems” (1987), and by Miller & Napier in their paper
“Genealogies of calculation” (1993).
What is most noticeable about these criticisms of traditional
examples of the “defects” that Hopwood and others claim to
identify. Probably the most articulated critique of traditional
historical writing is provided by Miller & Napier (1993), but this
is open to the objection that many of the examples of traditional
historical accounting research provided were rather dated, even at
the time the first version of their paper (Miller & Napier 1990)
was written. That Littleton in 1933 may have been rather
simplistic in drawing links between social and economic change on
the one hand and accounting change on the other, and vague on how
accounting fed back to help shape society, does not mean that all
traditional historians should be tarred with the same brush.
The key feature of the new accounting history, as stimulated
by Hopwood and developed by many others working within a wide
number of theoretical perspectives (see for example Miller et al.
1991), is that it is a sociological history written by social
scientists. Hence, it is driven by a desire to theorise and
generalise, rather than to particularise. At the same time, the
canons of social scientific research, in particular a nervousness
about appearing to make value judgements, have a significant
influence on the form of argumentation. This is paradoxical, as
many of the new accounting historians have felt distinctly unhappy
with what they perceive as the illegitimate dominance of
accounting in modern society. It has been argued forcefully by
commentators such as Neimark (1990, 1994) and Armstrong (1994)
that this has tended to lead to tensions if not contradictions in
by the French social theorist Michel Foucault. New historians
wish to critique society, and accounting’s role within society,
while their theoretical standpoint tends to locate value
judgements as relative to beliefs and systems of power extant
during the period under study. This undermines the possibility of
the very critique that is being sought, as there is and can be no
independent standpoint from which any critique may be offered that
is immune to accusations that it simply reflects a particular set
of values. On the other hand, Foucauldians argue that a Marxist
theory of history appeals to Hegelian ideas of Universal History
that have long since been exploded.
Perhaps at this stage it is worth appealing to the archive
(Fleischman & Tyson, 1997). In an unpublished working paper6 that
formed the basis of thought on historical accounting research of
the 1977 Social Science Research Council committee discussed by
Hopwood (1985), Cyril Tomkins set out his view of the development
of accounting. This contains a remarkable echo of Littleton
(1933). “Developments in accounting came about in the first place
in response to economic social and political pressures, but,
thereafter, acted as an enabling device to assist further
developments” (Tomkins c.1978: 9, emphasis in original).
Moreover, it exhibits a degree of optimism that is often lacking
from the new accounting history:
nineteenth and twentieth centuries and, more currently, the failure to produce acceptable inflation accounting rules and the lack of new methods to serve the special needs of developing countries where western (U.S.A. and U.K.) accounting practices are often of little direct relevance. However, if we take the broad span of history, accounting has on the whole developed as and when required. (Tomkins c.1978: 9, emphasis in original).
Interestingly, Fukuyama (1992: 70) suggests that the pessimism of
the twentieth century may have been overdone: “We need to ask
whether our pessimism is not becoming something of a pose, adopted
as lightly as was the optimism of the nineteenth century. For a
naïve optimist whose expectations are belied appears foolish,
while a pessimist proven wrong maintains an aura of profundity and
seriousness.” Is there scope for optimism about accounting, and
is it legitimate to tell histories of accounting progress? I
consider these issues in the concluding section of this paper.
NARRATIVES OF PROGRESS
Within the study of history more generally, one of the most
important debates in recent years has involved the consideration
of the extent to which the writing of history does more than
simply provide a “superstructure” (Goldstein 1976: 140-141)
necessary to express in words the objective facts of the past.
Indeed, does the way in which history is written – the “narrative”
of history – actually give meaning to the past (White 1987: 2)?
If the latter, is there one “correct” narrative already implicit
in past events, or is there the possibility of multiple
has already examined this debate at some length, and what follows
is a very brief sketch of the issues. On one side, there is the
view that:
The historical method consists in investigating the documents in order to determine what is the true or most plausible story that can be told about the events of which they are evidence. A true narrative account . . . is a necessary result of a proper application of historical “method”. The form of the discourse, the narrative, adds nothing to the content of the representation. (White 1987: 27)
The role of the historian is to tell it “as it actually was”.
Historians may want to explain why events happened as they did by
appealing to some broader theory (and sociologically oriented
historians will inevitably wish to take this route), but the
historian’s explanations are separate from the historian’s
narratives. Indeed, historians face a tension: a “scientific” as
opposed to a “literary” approach to history seems to suggest that
putting the historical facts into a narrative framework could lead
to the danger of diluting objectivity. The aim of the historian,
on this view, is not to “tell a good story” (Napier 1989: 241),
but rather to tell the true story.
However, in recent years strong arguments have been put
forward, most notably by Hayden White, that the content and the
form of historical narrative are inseparable. Moreover, there is
no single true narrative: historical events can be ordered in a
narrative – “emplotted” – in different ways. In his seminal work
Metahistory, White proposes a series of standard emplotments7 that can be taken by historical narratives: romance, comedy, tragedy
the world: “it is a drama of the triumph of good over evil, of
virtue over vice, of light over darkness, and of the ultimate
transcendence of man over the world” (White 1973: 9). In the
satire, whose principal style is irony, it is the world that
triumphs: “in the final analysis, human consciousness and will are
always inadequate to the task of overcoming definitively the dark
force of death, which is man’s unremitting enemy” (White 1973: 9).
Comedy and tragedy, on the other hand, hold out some hope of at
least provisional victory over the world, the difference being the
form that this victory takes. In comedy “hope is held out for the
temporary triumph of man over his world by the prospect of
occasional reconciliations of the forces at play in the social and
natural world”, while in tragedy “there are intimations of states
of division among men more terrible than . . . at the beginning.
Still, the fall of the protagonist and the shaking of the world he
inhabits . . . are not regarded as totally threatening to those
who survive . . . There has been a gain in consciousness for the
spectators” (White 1973: 9).
To White, the choice of emplotment for a historical narrative
is a choice of historical explanation. As the same set of
historical evidence is open, at least in principle, to different
emplotments, it can be explained in different ways. In a later
work, White links emplotment specifically to stories of progress:
race was degenerating continually; and (3) the human race remained at the same general level of development continually. He called these three notions of historical development “eudaemonianism”, “terrorism” and “farce”, respectively; they might just as well be called comedy, tragedy, and irony (if considered from the standpoint of the plot structures they impose upon the historical panorama), or idealism, cynicism, and scepticism (if considered from the standpoint of the world-views they authorise) (White 1987: 65)
So a view of general progress is emplotted as comedy, one of
decline as tragedy and one of stasis or recurrence as satire.
Comedy and tragedy are common modes of emplotment in
traditional accounting history. Any narrative that begins with
the identification of some problem (whether this identification is
made by the author or is observed in the historical evidence),
sets out the various attempts at addressing the problem, and ends
with describing how the problem was solved, would be a comedy in
White’s terms. A classic example of this form of narrative is
given by Neil McKendrick’s study of Josiah Wedgwood’s cost
accounting (McKendrick 1970). Here, Wedgwood is faced with the
problem of falling profit margins in a time of economic decline,
which he addresses by experimenting with cost estimation
procedures. These turn out to be successful, and Wedgwood
persists with them. This is a clear story of progress. However,
when Hopwood tells the story of Wedgwood, the conclusion is more
equivocal: “Wedgwood now had available to him the basis of a more
anonymous and continuous form of surveillance. . . . The newly
established accounting system enabled a different set of dynamics
to be set into motion. . . . The organisation could be observed
(Hopwood 1987: 218). There is a more ironic tone to this:
Wedgwood’s innovations may have solved one set of problems from
his personal point of view, but they change, not necessarily for
the better, how others in the organisation are affected by
organisation’s practices.
Traditional accounting histories may also adopt a mode of
tragedy, where an episode of failure is narrated as a “cautionary
tale” from which readers today (and indeed observers in the past)
might learn lessons. Arguably, the mode of emplotment in
Relevance Lost (Johnson & Kaplan 1987) is one of tragedy (even
though some of the “sub-plots” told along the way may in
themselves have the form of comedy). If American business is seen
as the protagonist of the story, then its persistence with costing
methods that were increasingly losing their relevance led, for
some organisations, to bankruptcy, and for others to serious
difficulty. There is, though, a hope that those reading the book
will draw lessons from it and change their costing methods to more
relevant ones. A satirical or ironic approach to narrating the
same events would rule out such hope.
If different emplotments of the same historical evidence are
possible, there is no single true historical explanation. Choice
of emplotment may reflect personal philosophy: as White points out
in the passage quoted earlier, there is an association between
comedy and idealism, tragedy and cynicism, and satire and
scepticism. If a sceptical attitude is regarded as the most
surprising that the new accounting historians, reflecting such
scepticism, appear to find satire the most comfortable mode of
emplotment, and are uneasy with narratives of progress (or indeed
decay). This is well illustrated by the study by Peter Miller
(1991) of the British government’s advocacy of discounted cash
flow (DCF) as a means of increasing the rate of economic growth in
the 1960s. Miller is at pains to stress that issues such as the
extent to which DCF was actually adopted, and the extent to which
its use helped achieve the government’s objective of faster
economic growth, were not the point of his paper, which was to
study how a particular issue is “problematised” and how DCF was
mobilised in various programmes. As he concludes: “The ‘failure’
of the idealised programme within which DCF techniques was
promoted can be seen as intrinsic to the very nature of such
programmes” (Miller 1991: 738). In the final analysis, the world
always triumphs: the characteristic emplotment of satire.
As Berkofer (1995: 126) notes: “Progress as a way of
interpreting and emplotting history is both a methodology and a
moral outlook.” We have already seen how the influence of social
science on history has led to a reluctance to express a moral
outlook, but perhaps the time has come to be less nervous about
this. Naïve optimism may no longer be tenable, but unthinking
pessimism may be too bleak an outlook. The challenge is to
accommodate both an informed optimism and an informed pessimism as
acceptable positions, rather than leaving the arena entirely to
accounting that make use of a progress emplotment, showing how the
environment gives rise to new problems, how individuals and groups
experiment with solutions, and how these solutions either succeed
(from the viewpoint of those developing them) or fail (allowing
lessons to be learnt), are just as valid as stories that claim not
to make judgements of success or failure. Alternative emplotments
are of course possible. It could be argued that Marxist
historical writings in accounting are tragic emplotments offered
as counterweights to comedic or progressive ones: accounting
serves capitalism, but only at the expense of the working class.
Making capital markets work better may be seen by some as a
successful outcome of reform in financial reporting, but making
capital markets work better may to others be simply an
exacerbation of exploitation. Once we give up the belief that
there is only one true narrative, we can accommodate a range of
different explanations and understandings of the same set of
historical evidence.
Progress narratives may be useful on the small scale, where
particular episodes are under consideration, but are they valid at
the level of the “grand narrative” of an overall history of
accounting? It is at this level that I begin to be more nervous
about whether such a “grand narrative”, if it could be written at
all, should reasonably take the form of a story of progress. If
we accept that accounting is a practice that aims to carry out
various functions efficiently and effectively, then it is only to
compare from one point in time to another how well accounting
operates relative to these functions. If the functions of
accounting change dramatically from one period to another, then
such comparisons cannot be validly made. This is an evolutionary
world where, so long as the environment is relatively static, we
may hope to observe progress towards a better fit between
accounting and its environment (particularly as movement towards
such a better fit is helped by human agency rather than relying on
chance). However, once the environment changes significantly, it
no longer makes sense to talk of progress, as a degree of
incommensurability enters into the comparison. The borderline
between a relatively static and a significantly changing
environment is itself not self-evident, and there will doubtless
be cases where use of a progress motif will be problematic rather
than clearly acceptable or inappropriate.
So I would conclude that it is legitimate for accounting
historians to tell their stories in terms of progress when they
are working on a relatively small scale, so long as they recognise
that what is progress for some may be degeneration for others, and
what appears progressive at one point of time may not seem so with
the benefit of hindsight. It is certainly worth examining the
extent to which those involved in changing accounting (not only at
the level of national and international regulation but also within
organisations) attempt to mobilise rhetorics of progress and
improvement,8 and the extent to which these are taken for granted.
is still appropriate, particularly where these involve
teleologies. We simply do not know whether the “end of
accounting” will be its glorification or apotheosis as the
dominant mode of economic calculation, or its literal end in
NOTES
1
As Carr observes in a footnote, this passage appears in the context of a discussion of the collapse of the western Roman empire. Carr stresses that Gibbon was not being ironic in this paean to progress.
2
There is nothing necessary about the extent to which the formulation of a particular problem – its “problematisation” – and the ways in which solutions to the particular problem are pursued – “programmes” – admits or includes accounting (Miller, 1991). Why certain issues are seen at particular points in time as problems of accounting is a legitimate area of historical enquiry.
3
This has been derided as the “after Pacioli, nothing” theory of history by Zan (1994: 296).
4
The Nobes (1991) study has been criticised by Skerratt & Whittington (1992), who argue that the cyclical model is both underdetermined theoretically and non-descriptive empirically.
5
The approach of Jones & Aiken (1995) has been challenged by several writers, among them Maltby (1999), who asserts bluntly that “accounting does not ‘evolve’ ”.
6
A copy of this paper was provided to me by Anthony Hopwood in 1985.
7
These are borrowed from the work of the American literary theorist Northrop Frye (1957).
8
An issue addressed by Miller & O’Leary (1987), in their discussion of how projects of national efficienc y, aiming to improve the life of the individual, and through this the nation, involved innovations in human accounting through processes of standard costing.
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