Memory, Transaction Records, and The Wealth of Nations

51 Pages Posted: 22 Aug 2007 Last revised: 22 May 2014

Sudipta Basu

Temple University - Department of Accounting

Marcus Kirk

University of Florida - Fisher School of Accounting

Gregory B. Waymire

Emory University - Goizueta Business School

Date Written: September 21, 2009

Abstract

Adam Smith hypothesized that impersonal exchange was necessary for a society to develop specialized division of labor and create wealth. Douglass North and Vernon Smith argue that successful developed economies are the result of institutions. We hypothesize and provide evidence from ethnographic data that the basic accounting technology of recording transactions is associated with more extensive impersonal exchange and increased specialization in the division of labor. Our intuition is that extensive impersonal exchange requires reliable memory of trading partners’ past behavior to sustain trust and encourage reciprocity when a group expands beyond the size of traditional hunter-gatherer groups. Our findings are consistent with the hypothesis that transaction records are necessary for the emergence of complex economies as suggested by the archaeological evidence of recordkeeping in Mesopotamian societies 10,000 years ago.

Keywords: Recordkeeping, accounting history, economic development and institutions

JEL Classification: M40, M41, M46, O10, N20, G20, D20

Suggested Citation

Basu, Sudipta and Kirk, Marcus and Waymire, Gregory B., Memory, Transaction Records, and The Wealth of Nations (September 21, 2009). Accounting, Organizations and Society, Vol. 34, No. 8, 2009. Available at SSRN: https://ssrn.com/abstract=1008879 or http://dx.doi.org/10.2139/ssrn.1008879

Sudipta Basu

Temple University - Department of Accounting ( email )

Philadelphia, PA 19122
United States
215.204.0489 (Phone)
215.204.5587 (Fax)

Marcus Kirk

University of Florida - Fisher School of Accounting ( email )

Warrington College of Business
PO Box 117166
Gainesville, FL 32611-7166
United States
352-273-0222 (Phone)

Gregory B. Waymire (Contact Author)

Emory University - Goizueta Business School ( email )

Goizueta Business School
1300 Clifton Road
Atlanta, GA 30322
United States
404-727-6589 (Phone)
404-727-6313 (Fax)

Paper statistics

Downloads
428
Rank
54,050
Abstract Views
2,724