How accounting forced transparency on the aristocracy and changed the world


1 Like

Be careful- it starts with balancing your books, and ends with poisoning west London’s water supply.

One big problem with the invisibility of accounting these days is that we get crackpot economic theories adopted by mainstream economists that make absolutely no sense in terms of simple accounting. Account statements are to money and finance as free body diagrams are to physics. You can build a massive edifice, but in the end, the books must balance.
The current economic synthesis used by political decision makers, our new aristocracy, simply ignores all issues of accounting, so we get things like tax cuts and unfunded wars that are somehow going to make everyone richer. There seems to be a consensus that rich people will invest their money in providing goods and services for which there is no market, and that is somehow the way they manage to become and stay rich.
Maybe we need a few more accountant heroes.


Actually, one of the first victims of the 2008 crash was accounting rules. I think its called “GAAP”: “Generally Accepted Accounting Principles”, and the rules under GAAP were loosened so drastically in late '08 that the accounting of banks these days is in fantasy land (in short, mark-to-myth replaced mark-to-market). All that to say yes, this piece is spot on that accounting is the light of transparency and thus dishonest accounting, which has risen almost to art form these days, is its opposite.

The author appeared on CSPAN2 to talk about his book. Watched some of it a few days ago. Very good economic and cultural history.

Last year a email had an excerpt from an interesting book on the subject published in 2011, Jane Gleeson-White’s Double Entry: How the Merchants of Venice Created Modern Finance.

This topic was automatically closed after 5 days. New replies are no longer allowed.