Calculating Profit: A Historical Perspective on the Development of Capitalism
Accounting, Organizations and Society, Vol. 35, No. 2, pp. 205-221, February 2010
52 Pages Posted: 21 Nov 2010
Date Written: March 19, 2010
The paper introduces the notion of different methods of calculating and analysing profitability as signatures of capitalism at different stages of development. Its point of departure is Bryer’s thesis of the capitalist mentality, which is subject to theoretical and empirical critique and developed in new directions. Interactions between the development of the productive forces and the socialisation of capital ownership jointly impact on these signatures, such that profit calculations are historically contingent. Aspects of feudalism, particularly restrictions on usury impacted upon accounting calculation, retarding their development. In the industrial revolution calculations reflected the scale and scope of specialised investment in plant, whilst the progressive socialisation of capital prompted a separate set of calculative practices. It was only in the twentieth century, with the unification of large scale industry and finance capital that the modern notion of profitability as return on capital employed finally developed.
Keywords: transition feudalism capitalism return on capital accounting calculation
JEL Classification: B1, B11, B14, B24, M40, N33, N53, N63, N83, P16
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