A Genealogy of Myths About the Rationality of Accounting in the West and in the East

33 Pages Posted: 2 Feb 2014

See all articles by Keith Hoskin

Keith Hoskin

Warwick Business School

Debin Ma

London School of Economics & Political Science (LSE) - Department of Economic History

Richard H. Macve

London School of Economics & Political Science (LSE) - Department of Accounting and Finance

Date Written: November 27, 2013

Abstract

Goody (1996: The East in the West) contests the arguments of Weber and others that Western accounting developments — and in particular double-entry bookkeeping ('DEB') which first appeared in Italy around the end of the 13th century AD — provided a new calculative rationality that drove the economic transformations of early capitalism. Recently Gleeson-White’s (2012) best selling Double Entry: How the Merchants of Venice Created Modern Finance attempts to re-establish the myth while a further variation on this theme appears in Padgett and Powell’s (2012) The Emergence of Organizations and Markets. Here we explore how arguments relating to the form of DEB are frequently confused with arguments about its content — and how historically differing modes of its actual use have been treated as 'the same' — and why the various claims for its crucial significance in focusing economic rationality continually re-emerge. We suggest that the wider issues can now more fruitfully be debated in the broader context of parallels and contrasts with the development of the economy in late Imperial China and of its bookkeeping and accounting systems. We explore how the myth of an indigenous 'Chinese double-entry bookkeeping' ('CDEB') appears to have emerged as a counterweight to the power of the perceived rationality of Western DEB.

Keywords: Double-entry bookkeeping, China, myths, economic rationality

Suggested Citation

Hoskin, Keith and Ma, Debin and Macve, Richard H., A Genealogy of Myths About the Rationality of Accounting in the West and in the East (November 27, 2013). Available at SSRN: https://ssrn.com/abstract=2389309 or http://dx.doi.org/10.2139/ssrn.2389309

Keith Hoskin

Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

Debin Ma

London School of Economics & Political Science (LSE) - Department of Economic History ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Richard H. Macve (Contact Author)

London School of Economics & Political Science (LSE) - Department of Accounting and Finance ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 6138 (Phone)
+44 20 7955 7420 (Fax)

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