مکتب آمریکایی و تئوری حسابداری مالی - قسمت 3: آدام اسمیت، ظهور و سقوط سوسیالیسم، و نظریه حسابداری ایروینگ فیشر

A previous paper (Part 1) rejected the conventional wisdom that America was ‘born capitalist’ and the historians’ consensus that it had become capitalist by the early-19th century; another (Part 2) rejected Chandler’s thesis that the ‘modern business enterprise’ brought a ‘ new form of capitalism’ to America from the 1840s. The accounting evidence suggests that America began to make the transition to capitalism around 1900 in a period of intense conflict between ‘ capital and labour’ generated by ‘big business’ from the 1880s, a process not completed until the 1920s. This paper (Part 3 ) examines the consequences for America’s political ideology and financial accounting theory. America’s exceptional transition, it argues, explains the history of its political ideology, and this history explains Irving Fisher’s theory o f accounting. Section A argues that America lagged behind Britain because it started from a society of simple commodity producers and semi-capitalists, which created a n exceptional ideological problem for its ruling e lite. Big business generated hostility from workers, farmers and small employers – expressed in labour movements, ‘populism’, socialism, and ‘progressivism’ – and created an ideological problem by contradicting the ‘independent producer’ ideology of workers and farmers, and the ‘individual liberalism’ of small manufacturers and merchants, both underwritten b y Adam Smith’s Wealth o f Nations.The paper argues that Smith’s theory of price articulates as semi-capitalist accounting, which explains his popularity in America until the appearance of big business i n the 1880s. Socialism and progressivism became political forces in America from 1900 to around 1920. Progressivism produced ‘corporate liberalism’, the ideological counter to socialism that corporations could be made ‘socially responsible’ by government regulation and ‘publicity’ to ensure they earned only ‘ fair’ returns, but this left two problems. First, socialists argued that no profit was ‘fair’, and second, fear of the ‘labour danger’ made American financial reports secretive and conservative. Section B argues that Irving Fisher responded to these problems with a theory of accounting, which he developed as a refutation of Marx and the American brand of socialism advocated by Eugene Debs, the threateningly successful presidential candidate of the Socialist Party of America. An important but neglected reason for socialism’s abrupt collapse around 1920, it argues, was that the socialists lost the intellectual argument with the middle classes, and that Fisher’s theory played an important role in this defeat. Fisher was a vigorous self-publicist, strongly influenced the teaching of economics and accounting in the universities and, the paper argues, changed the language of American accounting. Fisher claimed that accounting practice supported h is theory of ‘capital’ and ‘income’, but the paper shows he did not understand double-entry bookkeeping or the accountants’ ‘ cost theory of value’, and therefore divorced accounting from the reality of business transactions. As his theory underlies the FASB’s framework, the paper concludes that Fisher’s legacy to the world is a pathological theory of financial accounting.

In 1776, British colonists in North America boldly declared their independence, and Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations . Smith’s book did not cause the American Revolution, but it did have a major influence on America’s political economy and ideology. In 1976, during the bicentennial celebrations of its publication held at Glasgow University, Professor George Stigler opened his banquet speech: ‘‘I bring you greetings from Adam Smith, who is alive and well and living in Chicago’’ (quoted in Meek, 1977, p . 3). Stigler did not exaggerate. The Wealth of Nations ‘‘was destined to become the Bible of the liberal bourgeoisie’’ (Meek, 1977 , p . 3 ) and America became the bastion of competitive free market capitalism. Was this because Smith discovered the theory that unlocked the secret of prosperity, the view of Stigler and most economists? Alternatively, did Smith conquer America because he theorised the early stages of Britain’s transition to capitalism, which accurately described America’s exceptional mode of production from the late 18th century to the end of the 19th century, as argued here? Articulating Adam Smith’s theory of price as a system of accounting, the paper concludes it was exceptionally influential in America precisely because it was not a theory of ‘capitalism’, if we define this, as Marx and Weber did, as the calculative mentality we observe in modern accounts (Bryer, 2000, 2006 ). 1 An earlier paper (Part 1) rejected the conventional wisdom that America was ‘born capitalist’, and the consensus amongst historians that it had become capitalist by the mid-19th century; another (Part 2) rejected Chandler’s view that ‘managerial capitalism’ was responsible for the ‘modern business enterprise’. The accounting evidence suggests that America began to make the transition to capitalism around 1900 during a period of intense conflict between ‘capital and labour’, generated by the appearance of ‘big business’ from the 1880s, a process it did not complete until the 1920s. This paper (Part 3) examines the consequences for America’s political ideology and financial accounting theory. Part 1 argued that the language of accounting is an ideology, a key ‘language of real life’ that articulates a calculative mentality, which is the ‘economic base’ of a corresponding political ideology. This paper shows that the accounting evidence in Parts 1 and 2 correlates with the history of America’s political ideology by first showing that Adam Smith’s theory of price articulates as semi-capitalist accounting. It then argues that an important reason for the delay in America’s transition to capitalism compared to Britain, which had advanced capitalism by 1900, was starting from a society of simple commodity producers and semi-capitalists, which created a serious ideological problem for ‘big business’ capitalists and politicians. This exceptional starting point, it argues, explains Smith’s powerful influence over American political ideology, and the problems it encountered following the appearance of big business from the 1880s explain Irving Fisher’s theory of accounting. In short, the paper argues that big business created an ideological problem for Smith’s theory that required a change in the language of accounting to solve. America’s exceptional transition to capitalism, it therefore concludes, explains its exceptional political ideology, which explains its exceptional financial accounting theory. The paper proceeds as follows. Section A first outlines a history of America’s political ideology from the Revolution (1775– 1783) to the 1870s. It shows that the political leaders of America’s simple commodity producers (idealised by Thomas Jefferson) and semi-capitalists (idealised by Andrew Jackson) embraced Adam Smith’s Wealth of Nations . I t explains Smith’s popularity by the correspondence between his semi-capitalist analysis of ‘capitalism’ and the social reality suggested by the accounting evidence of Parts 1 and 2. Second, it analyses the ideological problem big business created for America’s ruling elite. Smithian rhetoric dominated American political ideology until ‘big business’ generated hostility from workers, farmers, and small employers, and the brutal repression of labour by corporations and the government pushed reformers into politics, generating a wave of ‘Populism’ that swept the country from the 1880s demanding government intervention. Populism’s defeat opened the door to socialism, which became threateningly popular in the early 20th century. Socialism became attractive because many workers and farmers shared a labour theory of value, and workers, farmers, small employers, and socialists, agreed with the need for government regulation of large corporations, but this contradicted Smith’s anti- monopoly, free market, individual liberalism. Even though it attracted a relatively small number of votes, socialism was a political force in America until around 1920, as was its close relative, ‘progressivism’, the label historians attach to the network of organisations and coalitions that appeared around and alongside socialism proposing and demanding reform of American society ( Lichtenstein et al., 2000, p . 208). Highlighting the work of the National Civic Federation, the section concludes that the socialist threat forced big business leaders and leading politicians to seek an ideological counter. Their answer was ‘corporate liberalism’, the idea that corporations could be made ‘socially responsible’ by appropriate government regulation, particularly ‘publicity’, which meant that businesses would earn only ‘fair’ returns ( Sklar, 1988 ). This left two problems: first, the socialists’ argument that no profit was ‘fair’, and second, because disclosing profit could exacerbate social and labour unrest, the practical problem that corporate reports had to be secretive and conservative. Section B argues that Irving Fisher’s theory of accounting responded to these problems and made a seminal contribution to their solution. First, that Fisher’s education at Yale encouraged him to join the intellectual crusade launched against Marx in the late 1880s, to seek to fulfil his desire to be famous by, in part, undermining socialism. Second, that Fisher produced his theory of ‘capital’ and ‘income’, ostensibly to correct Adam Smith’s theory of capital, but implicitly and explicitly as a criticism of Marx and the American brand of socialism advocated by Eugene Debs, the remarkably successful presidential candidate of the Socialist Party of America through the first two decades of the 20th century. Third, that Fisher’s ideological contribution was to reconcile the calculative mentalities of simple commodity producer, semi-capitalist, and money capitalist. Fourth, that although Fisher claimed accounting practice supported his theory, particularly double entry bookkeeping (DEB), he did not use or understand DEB, or the accountants’ ‘‘cost theory of value’’ they shared with Marx ( Paton, 1922 , p . 491), which separated his accounting from the reality of transactions and events. Fifth, that Fisher’s failure to articulate his income statement and balance sheets using DEB shows that he failed in his mission to define ‘capital’ and ‘income’ consistently, and that his theory of interest divorced accounting from objective reality, legitimating conservative and secretive accounting. It concludes by exploring a neglected possible explanation of the collapse of socialist support around 1920 – that it had lost the intellectual argument with the middle classes. 2 It is plausible, it argues, that Fisher’s theory helped to reconcile the middle classes to capitalism by undermining support for socialism, recruiting them through the university teaching of economics and accounting, influencing their ideology by changing the language of accounting. Fisher was a vigorous self-publicist who became famous across America. There is no doubt that his theory began ‘‘the colonization of accounting by economics’’, or that the ‘‘main currents of twentieth century accounting thought can be viewed as the ‘legacy’ of Irving Fisher’’ ( Hopwood, 1992 , pp. 128–130; Mouck, 1995 , pp. 43, 47, 55–67). Through a string of accounting theorists, particularly Paton (1922) and Canning (1929) , Fisher’s theory underlies the FASB’s conceptual framework. The paper concludes that American history has therefore given the world a pathological theory of financial reporting. It outlines some questions for research.

Parts 1 and 2 used Marx’s theories of the transition to capitalism in England, colonisation, and ideology, to construct and test an accounting history model of America’s transition to capitalism that they used to explore the historical links between its ideology and accounting. They examined and rejected the hypotheses that (a) America was born capitalist or became capitalist by the early 19th century or, alternatively, (b) it first appeared on the railroads as ‘managerial capitalism’. The accounting evidence suggests America became capitalist around 1900 in the midst of intense social, economic and political conflict, and caught up with Britain’s advanced form by the late 1920s. This paper (Part 3) argued that the history of America’s political ideology reflected its accounting history, which supported the hypothesis that Fisher’s theory of accounting was the product of an ideological crisis caused by its exceptional transition to capitalism. There is no doubt that Fisher designed his theory as an attack on socialism, or that it impressed contemporary economists, politicians, the big business class, and economic and accounting theorists and teachers. It is therefore plausible that his theory impressed the middle classes and helped ensure that the values of ‘Americanism’, of ‘‘equality, freedom, individualism, populism, and laissez-faire’’ (Lipset, 1996 , p . 18), continued to include ‘laissez-faire’, and do not end with ‘collectivism’. The papers have argued that this required more than political or economic rhetoric; that it took America’s exceptional history to produce its exceptional theory of financial accounting, which helped to reproduce an exceptional ideology; that America’s ruling elite needed and were given a new ‘language of real life’ grounded in a new theory of accounting. Whether the model and evidence are helpful depends on whether they have produced an ‘interesting’ history, that is, allow us to understand important features of the past and their links to the present. The papers have argued that accounting history illuminates the causes and consequences of the American Revolution, the nature of American slavery, its Civil War, the causes and timing of its transition to capitalism, its labour history, and the history of its political ideology. However, there is much research to do to further test and either reject the model or refine it to turn a plausible history into a convincing explanation, and in using it to understand capitalism today. More work is needed investigating the archives for historical evidence of the capitalist mentality (see Parts 1 and 2), in tracing political influences on Fisher, and his influence on the language of American politicians, business leaders, the investing classes, the middle class, and the workers, and investigating the consequences on accounting practice, management accountability, and investing behaviour. Fisher’s theory, for example, could explain the apparent ideological paradox of why ‘‘the United States has been transformed from a nation of small capitalists [sic] into a nation of hired employees; but the ideology suitable for the nation of small capitalists persists as if that small propertied world were still a going concern’’ ( Mills, 1951 , p . 34). Its acceptance by the middle classes could explain why, particularly from the 1930s in the face of a revival of militant trade unionism, ‘‘big business began to promulgate and use the image of the small businessman’’ ( Armstrong, 2005 , pp. 22–26; Mills, 1951, p . 44). In Fisher’s theory, corporations are useful legal entities, aggregations of individuals in pursuit of self-interest, not qualitatively different from small entrepreneurs. Big business leaders can, therefore, without embarrassment clothe themselves in the ideology of small business and the family farm and support ‘free competition’, use ‘‘its image to ... [pursue] the political interests of larger business’’, to justify its position in the community ( Mills, 1951 , pp. 35, 36), to freely draw on Adam Smith’s theory even while they subvert it. The influence of Fisher’s theory could help to explain the continuing American love affair with Adam Smith today and the ideological power of corporate capital. The key question, however, is whether Fisher’s theory has realised its pathological potential. Did it create the ‘‘big mess’’ that Hatfield and others saw in American accounting during the 1920s (1928, quoted in Zeff, 2000, p . 133), and did this contribute to the stock market crash in 1929? Bryer (2011) argues it did. A vital question is Fisher’s influence on accounting today. Following his fall from grace in 1929, economists and accounting theorists shunned his work. Schumpeter predicted he would be seen as America’s ‘‘greatest scientific economist’’ (1948, p . 219), and in 1958 Hirshleifer rehabilitated Fisher’s intellectual reputation, following which economists, accounting scholars, and regulators, began to take his work seriously again, and ‘‘economists today regard him as the greatest American economist through his lifetime’’ ( Allen, 1993 , pp. 16–17). They revere him as a noted ‘‘scientist’’ (Allen, 1993, passim; Dimand and Geanakoplos, 2005). Not just economists, ‘‘the public still think and work with concepts and theories that he helped to develop and refine’’ ( Allen, 1993 , p . 17, emphasis added). Importantly, Fisher influenced accounting academics, practitioners, and regulators. His neoclassical theory influenced Hatfield (1909), Paton (1922) and Canning (1929) (Bryer, 2011; Chambers, 1971; Lee, 1979; Mouck, 1995; Whittington, 1977), and through them and others it underlies the FASB’s conceptual framework. Understanding this framework as the product of American history could explain why the world divides over the purpose of financial reporting, why global convergence around US GAAP has proven difficult (Camfferman and Zeff, 2007). Whether effective global accounting standards are likely or even possible depends, in part, on whether Fisher’s theory is pathological. Important questions for research are whether the FASB’s conceptual framework helped to produce ‘Enronitis’ around the turn of the millennium, and the ‘credit crunch’ of 2007? Evidence that it did would support the hypothesis that American accounting theory is the pathological product of the exceptional history of its ideology, of ‘Americanism’.