Accounting history and accounting progre (1)

1. IIn nttrro od du uccttiio on n Anthony Hopwood, in his critique of historical accounting research “The

Archaeology of Accounting Systems” (1987), characterised most of the historical studies in the field published by the mid-1980s as having “adopted a rather technical perspective delineating the residues of the accounting past rather than more actively probing into the underlying processes and forces at work” (Hopwood, 1987, p.207). As Hopwood perceives it, “accounting has more frequently been seen as becoming what it should be. A teleological trajectory of development has provided a basis for understanding changes in the accounting craft. ... [A] relatively unproblematic progressive and functionalist interest has been imposed all too readily on the residues of the accounting past” (Hopwood, 1987, p.206).

Although Hopwood gives few specific references to justify this criticism, a progressivist tendency can indeed be detected in central works of historical accounting research. For example, in his pioneering history Accounting Evolution to 1900, A.C. Littleton describes accounting in the following terms:

Accounting is relative and progressive. The phenomena which form its subject matter are constantly changing. Older methods become less effective under altered conditions; earlier ideas become irrelevant in the face of new problems. Thus surrounding conditions generate fresh ideas and stimulate the ingenious to devise new methods. And as such ideas and methods prove successful they in turn begin to modify the surrounding conditions. The result we call progress (Littleton, 1933, p.361).

Littleton does not make specific what he means by “progress”, although he implies that it lies in the ability of accounting to solve present-day problems. Littleton notes that accounting has not been static, and points to the growth in professional audits and the expansion of cost accounting as evidence of how accounting helps to solve emerging problems of business planning and control. He claims to show how “accounting originated in known circumstances in response to known needs; it has evolved and grown in harmony with its surroundings; its changes can be explained in terms of forces current at the time” (Littleton, 1933, p.362). Littleton’s historiography is a dynamic one: accounting “came from definite causes; it moves toward a definite destiny” (Littleton, 1933, p.362).

This last statement appears to support Hopwood’s accusation that the view of accounting history adopted by historians such as Littleton seems to embody a teleology: a belief that accounting has some ultimate end to which it is tending. The path to this ultimate end may not be a direct one, suggesting that accounting changes could be assessed by the extent to which they work towards the ultimate end (they would in that sense be “progressive”) or move away from the end (they would in that sense be “regressive”). But even if we believe that accounting has some ultimate end, what could it be? In my own studies of accounting’s history, I This last statement appears to support Hopwood’s accusation that the view of accounting history adopted by historians such as Littleton seems to embody a teleology: a belief that accounting has some ultimate end to which it is tending. The path to this ultimate end may not be a direct one, suggesting that accounting changes could be assessed by the extent to which they work towards the ultimate end (they would in that sense be “progressive”) or move away from the end (they would in that sense be “regressive”). But even if we believe that accounting has some ultimate end, what could it be? In my own studies of accounting’s history, I

This paper is therefore an attempt to explore what might be meant by describing accounting as “progressive”. I shall undertake this exploration by considering what roles a notion of progress might play in historical research more generally and historical accounting research more particularly. This requires a review of the extent to which accounting historians have in the past appealed to notions of progress. Although there is some evidence of the use of progress as an organising concept in so-called “traditional accounting history”, it tends to be associated with the highly ambiguous notion of evolution. The emphasis placed on evolution as a term describing accounting’s patterns of change has been criticised by the so-called “new accounting history” (Miller et al., 1991; Miller & Napier, 1993). As Keenan (1998) has pointed out, this criticism may itself be open to question as presupposing a rather specific and potentially confused understanding of the concept of evolution. Nervousness about describing accounting change as “progressive” may owe more to the fact that many historical accounting researchers (particularly those working within the “new accounting history” approach) come from social science backgrounds, where claims that evidence reveals a pattern of improvement over time might be held to be inappropriate value judgements.

However, historians of accounting are increasingly aware that social science values are not the only ones appropriate for the study of how accounting has manifested itself, changed and developed through the past (see, for example, Mills, 1993; Fleischman et al., 1996; Parker, 1999). Historical accounting researchers of both the “traditional” and “new” varieties have, as Parker (1999, p.17), notes, been “firmly embedded in the qualitative research methodology tradition”, and even those leaning more towards social science have been suspicious of positivist research for its tendency to explain and predict complex human behaviour in terms of a limited number of factors. More recently, there has been a greater consciousness that modes of historical writing are neither neutral nor “mere” rhetoric, but that different forms of narrative are themselves constitutive of the histories that they tell (Funnell, 1998). From this point of view, narrative forms are not inherently good or bad, rather they are effective or ineffective in persuading the intended audience of the cogency of the story being narrated. Telling a story in terms of progress is often a persuasive and thus an effective way of structuring a small-scale historical narrative. This is so whether we describe a “success” in which accounting, or something affected by accounting, is held to improve, or a “failure” from which we hope to learn lessons to help us avoid mistakes in the future. On a larger scale, where accounting as a whole becomes the subject matter of our histories, it may be more difficult to tell a story of progress, as we seem to

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Na N ap piie err:: Accounting history and accounting progress

face a choice between the equally unattractive options of regarding accounting as eternally changing in a generally improving direction or as tending towards its end.

Prro P og grre essss iin n h hiisstto orryy a an nd hiisstto d h orryy a ass p prro og grre essss

A dictionary definition of progress is: “An advance to something better or higher in development” (Chambers English Dictionary, 1990, p.1168). This definition brings out the two central aspects of progress. First, it is a dynamic concept: a necessary condition for progress is that there should be some change. However, change is not

a sufficient condition: the change must be a change for the better. Progress can be seen as a process of more-or-less continuous improvement, and may in addition be regarded as progress towards some goal or end. Thus the philosopher Robert Solomon (1995, p.722) defines progress as “improvement over time, especially the gradual perfection of humanity”. A strong belief in progress is often seen as characteristic of the eighteenth century Enlightenment in Europe. This is exemplified by such writers as the Marquis de Condorcet, who in the middle of the French Revolution set out his Sketch for a Historical Picture of the Progress of the Human Mind (Condorcet, 1955). An enlightenment view of history as universal progress was expressed by Edward Gibbon in The Decline and Fall of the Roman Empire, where he drew “the pleasing conclusion that every age of the world has increased, and still increases, the real wealth, the happiness, the knowledge, and perhaps the virtue, of the human race” (quoted in Carr, 1964, p.111). 1

As a philosophical idea, progress is particularly associated with Kant and Hegel. In his essay “An Idea for a Universal History from a Cosmopolitan Point of View”, written in 1784, Kant proposed that:

The history of the human race as a whole can be regarded as the realisation of

a hidden plan of nature to bring about an internally – and for this purpose also externally – perfect political constitution as the only possible state within which all natural capacities of mankind can be developed completely (quoted in Burns and Rayment-Pickard, 2000, p.55).

The view of Kant that humanity’s history is a movement towards some ideal state was developed by Hegel, who saw progress as being achieved through conflict between and within ideas and political systems. These would fall apart through their internal contradictions and be replaced by higher forms through a dialectical process. Ultimately humanity would reach a form that contained no internal contradictions: what many writers, most notably Francis Fukuyama (1992), have referred to as “the end of history”.

Hegel’s view of a “universal history” had many unattractive features, as he considered that:

The History of the World occupies a higher ground than that on which morality has properly its position. ... What the absolute aim of Spirit requires and

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accomplishes – what Providence sees – transcends the obligations and liability to imputation and the ascription of good or bad motives, which attach to individuality in virtue of its social relations. ... Moral claims that are irrelevant must not be brought into collision with world-historical deeds and their accomplishment (Hegel, 1956, pp.66-7).

As filtered through Marx and then later both Fascism and Communism, this philosophy that history overrode morality was to provide a justification for many subsequent acts of brutality (Fukuyama, 1992, p.69). However, the implication that progress was inevitable was to appear in a more benign light in nineteenth century Britain, where rapid social and economic change could be made to seem less threatening by locating contemporary developments within a broader narrative of progress and, as the nineteenth century unfolded, a story of evolution.

In his study of the Victorians’ relationship with the past, The Invention of Progress (1989), Bowler notes how narratives of evolution emerged not only in historical writings but also in a wide range of contexts, and suggests that evolution provided “a general progressive scheme designed to create order out of chaos” (Bowler, 1989, p.5). Belief in progress was a badge of optimism about the present and the future. Much general historical writing in the nineteenth century, at least in Britain, reflected this optimism, seeing history as a gradual movement towards contemporary British society, with past institutions and practices being interpreted as primitive precursors of those found in the more developed present. This approach to historical writing was subsequently to be described by Herbert Butterfield (1931) as “Whig History”. Historians would identify the favourable factors that allowed Britain to develop in the fortunate ways that it did, while social scientists could elucidate the underlying laws of progress in society, which might

be expected to turn out to be a generalisation of the Whig interpretation of history (Bowler, 1989, p.27). After World War I, the optimism that had supported a general notion of progress tended to be replaced by a more pessimistic viewpoint. In his study The Idea of Progress, first published in 1920, J.B. Bury tried to uphold the value of progress as “the animating and controlling idea of western civilisation” (Bury, 1920, p.viii), but could not entirely sustain an optimistic outlook. Oswald Spengler’s The Decline of the West (1926) saw in human history not a continuous trend of improvement but rather a recurrence of cycles of growth and decay. Civilisations had a beginning, a middle and an end. While there are echoes here of Hegel’s dialectic, to Spengler it was less clear that the succeeding civilisations embodied a pattern of constant improvement. Indeed, it might make little sense to compare, for example, the world of classical Greece and Rome with the age of medieval Christianity or the European Enlightenment. Not only could we expect any individual civilisation ultimately to decline, but we would have no rational basis for considering its replacement as better or worse than what went before.

Na N ap piie err:: Accounting history and accounting progress

The argument that different civilisations could not be ranked meaningfully undermined the use of a concept of progress at a time when historians and others began to realise the danger of ethnocentrism in the writing of “universal histories”. The tendency of nineteenth century Whig history to take Victorian Britain as normative, and the later tendency of so-called “modernisation theory” (Nisbet, 1969) to do the same for the USA in the twentieth century, increasingly came under attack from those who “questioned the very concept of modernity itself, in particular whether all nations really wanted to adopt the West’s liberal democratic principles, and whether there were not equally valid cultural starting and end points” (Fukuyama, 1992, p.69). As social science came to have an increasing influence on historical research, particularly research into cultural development, the use of a concept of progress (and indeed a concept of decline) was seen as requiring researchers to make inappropriate value judgements as to what constituted improvement or worsening. In a homogeneous culture, such judgements would have reflected a consensus and would not only have gone unchallenged but most likely would not consciously appear to be judgements at all. As cultures became more heterogeneous, the description of a particular change as progressive appeared explicitly to embody a value judgement, which social scientists increasingly wished to avoid making on methodological grounds. Such value judgements, when not avoided entirely, became heavily contested.

One area in which a concept of progress appeared to be still viable was science. An important contribution to our understanding of scientific progress is provided by the philosopher of science Larry Laudan, in his book Progress and its Problems (1977). Laudan argues that the adequacy of a scientific theory or research programme lies in its ability to solve scientific problems. If two theories are compared, one of which solves more and “weightier” problems than the other, then the first theory can be regarded as better than the second. Laudan claims that:

Given that the aim of science is problem solving ... , progress can occur if and only if the succession of scientific theories in any domain shows an increasing degree of problem solving effectiveness (Laudan, 1977, p.68, italics in original deleted).

This focus on problem-solving might provide a way of conceptualising progress in other disciplines and practices, and arguably has already been reflected in historical studies of accounting by Littleton (1933). Laudan notes that many philosophers and historians of science have regarded science (in actuality or as an ideal) as a cumulative system of knowledge. This means that new theories are capable of solving not only the problems solved satisfactorily by earlier theories but also a set of additional problems. A notable exception is Kuhn (1962), who suggests that later theories can be incommensurable with earlier theories. One aspect of this is that some at least of the problems of earlier theories simply do not exist as problems within the later theories, not in the sense that those theories can solve them easily,

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but rather that they are conceptually inexpressible in the terms of the later theories. Laudan attempts to overcome this objection by claiming that progress is not a matter simply of the number of problems solved but also their significance or “weight” (presumably the previously solved problems inexpressible in terms of the later theories are simply not "weighty" enough to count in an assessment of the later theories). This move may not be very satisfactory, but the idea that theories (or indeed practices) can be assessed and compared by their ability to fulfil adequately some function may be a potentially promising one when we come to consider progress in accounting. On the other hand, the link between progress and functionalism in accounting history was precisely what was criticised by Hopwood (1987, p.206).

The idea of progress has been an important feature of Western historiography at least since the eighteenth century, although it came to be questioned in the twentieth century both on empirical grounds, given that civilisation was observed by some to be declining, and on methodological grounds, on the basis that judgements of progress involved making unscientific (and thereby unacceptable) value judgements. However, progress and its associated concept of evolution have continued to be powerful narrative models for the writing of history. In fact, as the philosopher of history Gordon Graham points out in his book The Shape of the Past (1997), progress can be understood has having a range of different “shapes”. Graham identifies three versions of progress by reference to what an “impartial observer” in the present would believe about the past, and about whether or not the observer would hold the same view at any time in the past. This conceptualisation, by locating judgements at the level of individual preferences, attempts to circumvent the objection that progress is a value-laden concept. First, there is “uniform progress”. Here, the observer’s perception is of continuous improvement, or more formally, an observer in the present believes that, for any time in the past, there is a later time when he or she would prefer to live, and in addition the observer would have held this judgement at any past time. Graham contrasts this with “evolutionary progress”, where the observer in the present would still believe that for any time in the past there is a later time when he or she would prefer to live, but this view could not be held at all points in the past. In a model of evolutionary progress, the observer believes that recent history shows uniform improvement, but in the past there have been episodes when things got better followed by periods where they got worse. However, in each succeeding cycle, the best position is an improvement on the best of the previous cycle, and the worst position is also better than the worst of the previous cycle. Finally, Graham describes “revolutionary progress”, where instead of cycles of growth and decay we have long periods of stasis followed by rapid improvement to a new plateau. Graham expresses a personal preference for evolutionary progress as “the most plausible form of progressivism” (Graham, 1997, pp.63-6).

Na N ap piie err:: Accounting history and accounting progress

Graham’s shapes of progress directly raise the question of the connection between the concepts of progress and evolution. The problem here is that the term “evolution” covers a very broad spectrum of meanings. Indeed, Keenan (1998, p.652) suggests: “‘Evolutionary’ is an adjective with a wide application and anything, perhaps, which involves processes and outcomes could be so described”. At its simplest, evolution may signal a process of gradual and continuous change, in contrast to revolution. This seems to be an important feature of Graham’s argument. In the accounting literature, evolution is used in this sense by Bromwich and Bhimani (1989), in their study of changing developments in accounting inside organisations Management Accounting: Evolution not Revolution. However, most users of evolution in the context of accounting history are, as Littleton (1933) was, interested in understanding change in a particular domain as a response to changes in other domains. Here the analogy with biological evolution begins to be drawn.

This analogy is taken further when the outcome of some process of change is presented as a result of a variant of “natural selection”. For example, a change in the economic environment may give rise to new problems that call forth in some way a range of possible solutions. The solution that ends up predominating might

be considered to do so through a process of the “survival of the fittest”. At one level, this may be a satisfactory explanation for the observed outcome. I would, however, suggest that historians will not be satisfied with simplistic evolutionary explanations along the lines that “the fittest solution has survived” (what the American Accounting Association (1977) has described as “Accounting Darwinism” – see also Napier, 1987, p.244) but rather will wish to demonstrate how the outcome actually is superior to its rivals. The assumption that “what is observed is fittest” has been challenged recently by Hoskin and Macve (2000, p.105), who claim:

To say, as [economic rationalists] tend to, that the routines found in the archive must have represented the optimal trade off of costs and benefits (given the decision-making and other uses that economic rationalists wish to attribute to such routines) is empirically empty and essentially tautological. What is still generally missing is an historical explanation for why particular routines and their subsequent modifications were the ones that were actually chosen and why consideration/experimentation was not given to possible alternatives that may have been even more cost-beneficial.

Analogies with biological evolution also become complex when some goal or end to the evolutionary process is imputed. One of the ways in which nineteenth century Christianity tried to accommodate itself to the emerging biological theory of evolution was to claim that evolution was simply the mechanism by which the world was moving towards the completion of God’s plan (Ruse, 1999). The secular variant of this saw evolution as the mechanism by which society progressed (Bowler, 1989). Evolution was broad enough as a concept to accommodate a range of positions from extreme laissez-faire (for example, the “social Darwinist” views

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of Herbert Spencer and others) to more interventionist views such as those of the Fabians and Progressivists. To some, evolution is seen as driving the world towards some desired end point (it is teleological), to others, evolution is a force for unbounded progress. This linking of evolution and progress was perhaps influenced by Darwin’s ideas of “the Descent of Man”: what appears to be a path of improvement from simple organisms through increasingly complex ones to the ultimate sentient organism.

However, it is by no means necessary to a theory of evolution that it embodies any presupposition of increasing or decreasing complexity. Indeed, many modern biological views of evolution (see, for example, Smith, 1993) tend to combine a “local” perspective whereby species in particular environmental niches become dominant because of particular adaptive advantages with a “global” perspective whereby changes in the environment are expected to lead to changes in the range and dominance of species in ways that cannot be labelled simply as “progressive”. There is no reason to expect an environmental change to lead to greater complexity in the dominant species.

To sum up, progress has been a central theme in the writing of history in the Western world for over two centuries. A wide range of historians, from the Universal Historians such as Hegel to the Whig Historians of nineteenth century Britain, saw history itself as essentially progressive. History was written within a narrative framework of progress, demonstrating how problems are solved, challenges overcome and things get better. Metaphors of evolution were often mobilised, although the equivocal nature of the concept of evolution necessitates care in our interpretation of how contemporaries used the term. In the twentieth century, however, a more pessimistic attitude to the world and to humanity on the one hand, and a reluctance to make value judgements on the other, have made the idea of progress less fashionable. It is now necessary to see how the concept of progress and its more recent questioning have had an impact on the writing of accounting history and on our understandings of accounting more generally.

Prro P og grre essss iin n a acccco ou un nttiin ng hiisstto g h orryy The relationship between accounting and progress raises some important questions.

The first of these is the empirical question of how far, if at all, accounting itself is "progressive” at the social level, in the sense that properly functioning accounting contributes to the improvement of society. Certainly many historians of accounting have recognised – as does Littleton (1933) – that accounting impacts on society, and an idealistic view of accounting is that it has the potential of contributing to social improvement through its embodiment of rational calculation. If we pay attention, as did Max Weber among others, to “the ways in which particular forms of calculation help to bring about the rationalisation of the conduct of life in the

Na N ap piie err:: Accounting history and accounting progress

sphere of the enterprise and more generally” (Miller & Napier, 1993, p.635), and we see such rationalisation as in itself progressive, then accounting, as a form of rational calculation, has the potential to be progressive. Of course, if we see the rationalisation of life as a bad thing, then we will be less likely to regard the spread of accounting as evidence of social improvement, and less likely to consider accounting as a possible force for progress. Whatever our position, the criticism of commentators such as Hopwood (1987) is that traditional historians took accounting as unproblematically representing a potential for technical improvement. Broadbent and Guthrie (1992) have described this view in the context of research into present-day accounting practice as “technical accounting”. They refer explicitly to Hopwood (1987) when they state that, under this view, “changes to accounting systems are seen as being progressive and reforms to accounting practices are based on the notion of teleological trajectory. Changes in practice are therefore seen as being manifestations of functional progress and system improvements” (Broadbent & Guthrie, 1992, p.10).

A second question is what might actually constitute progress within accounting. Understanding progress as meaning change for the better, this is certainly a central question that must be addressed by the accounting profession and by both governmental and non-governmental regulators of accounting. It arises implicitly if not explicitly whenever a new or revised accounting or auditing law or standard is proposed. What criteria can we use to decide whether the new regulation is an improvement on the old one, rather than simply being different? Similarly, both academics and “practical” men and women want to satisfy themselves that the technical innovations they develop actually represent improvements on current ideas and practices. To some, progress in accounting was equated with accounting’s becoming more scientific, not in the sense that theories used to understand and explain accounting appealed to scientific analogies, as did positive accounting theory (Watts & Zimmerman, 1986, p.2), but rather in the sense that accounting measurements would be claimed as conforming to the canons of objectivity and realism (Chambers, 1966; Sterling, 1979). Perhaps such innovators would endorse the view put forward by Laudan (1977) that progress can

be assessed in terms of ability to solve more and weightier problems. Mobilising a problem-solving framework, an accounting historian would need to ask at what point in time does a particular problem emerge to which accounting might be a

solution. 2 The pace of innovation in different times and places could be explained, within a framework of “comparative international accounting history” (Carnegie & Napier, 1999), in terms of the emergence at different points of a given problem. For example, the need to account effectively for business combinations emerges as a problem at an earlier time in countries with highly developed capital markets such as the USA and UK, than in countries where not only the way in which business finance is organised but also the legal structure of complex enterprises is different.

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In the latter case, the “business combination” may simply not exist as an object to

be accounted for. In terms of technical progress, claims have been made that accounting has been subject to periods of stagnation or even decline. It would therefore not exhibit the pattern that Graham (1997) referred to as “uniform progress”, with steady improvement from period to period. Raymond de Roover (1955, p.409) contemptuously dismissed the period between the publication of Pacioli’s Summa, the first printed treatment of double-entry bookkeeping, in 1494, and the transition to more sophisticated corporate accounting in the nineteenth century, as an “Age of

Stagnation” (see also Chatfield, 1977, pp.52-61). 3 Edwards (1988, p.vi), noting that “change does not, of course, necessarily mean progress”, gives an example of a relative decline in the quality of financial reports published by British companies during the 1920s, as these tended to disclose less than many financial reports published before World War I.

The suggestion that accounting has declined has been associated particularly in recent years with Johnson and Kaplan’s Relevance Lost (1987). In fact, although these authors argue that management accounting systems had become increasingly inadequate in the later twentieth century, they interpret this “as a relatively recent decline in relevance, not as a lag in adapting older financial accounting systems to modern managerial needs” (Johnson & Kaplan, 1987, p.xii). Accounting methods become obsolescent partly because of changes in the available technologies for accounting – methods developed in the manual or punch card era can be refined greatly in the computer era – but also because of changes in the nature of the problem for which accounting is the proposed solution. Interestingly, this view of decline in relevance incorporates a narrative of technological progress. Both the “Age of Stagnation” argument and the Relevance Lost position are capable of accommodating a long-run view of progress, as stagnation did not last indefinitely, while the diagnosis offered by Relevance Lost stimulated many enterprises to make changes in their cost accounting and management systems intended to remedy the decline in accounting’s relevance (Johnson, 1992).

Furthermore, some historians have pointed to a tendency for accounting changes to follow recurring patterns or cycles. Mumford (1979) noted that the various stages in the growth and decline in interest in price-change accounting in Britain over the 1970s reflected closely similar stages in an earlier cycle in the late 1940s. He put forward his cyclical model “as a blueprint for the next surge of inflation” (Mumford, 1979, p.98), and also in part as a prediction (subsequently fulfilled) that, with the decline in the rate of inflation, price-change accounting would disappear from the agenda of accounting standard-setters, preparers and users.

A cyclical model has also been proposed by Nobes (1991) for UK standard- setting. 4 Nobes specifically addresses the question as to whether UK accounting

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standards in the 1970s and 1980s provided evidence of progress, defining this in terms of the ability of the standard-setter to resolve conflicts, discover unique answers or impose standard solutions (Nobes, 1991, p.271). It is worth noting how by implication Nobes identifies progress in accounting with the ability to solve problems, where solution is defined in terms of obtaining “answers” or at least “consensus”. Nobes adopts a rather Hegelian position by proposing that:

Progress may be inferred in the sense that the [standard-setting] structure contained the seeds of its own destruction ... . The inability of the Accounting Standards Committee to identify or to state or to enforce the “right” answer on various issues led to the pressure to replace it with a body that might be better able to manage some or all of these matters (Nobes, 1991, p.271).

This illustrates a central problem with using a concept of progress in historical explanation: if we focus on a relatively short period of time we might observe a particular pattern of change (improvement, stasis or decline), but this pattern need not be the same as that observed over a longer period of time, within which the shorter period is included. This situation is consistent with the “evolutionary progress” model of Graham (1997) already discussed, and it may underlie the relative lack of explicit statements about progress in much of the traditional writing on accounting history, as against the frequent references to evolution.

However, the “evolutionary progress” model implies one major belief: that, despite the possibility of setbacks in the past on the road to the present, today’s observer believes that the current state of affairs is preferable to that at most if not all points in the past. How far is it reasonable to impute such a belief to traditional accounting historians using the term “evolution” in their work? A relatively brief examination is enough to show how several such historians say very little about the current state of affairs at the time they were writing. Thus Littleton, writing in 1933, brings his book to a close in 1900. Garner, whose classic work Evolution of Cost Accounting to 1925 includes no fewer than nine chapters on the “evolution” of particular features of costing, wrote in 1954. Lee and Parker, whose collection The Evolution of Corporate Financial Reporting was published in 1979, include some material touching on events close to the date of publication, and their main motivation was “inviting the reader to explore certain contemporary problems of accounting through the eyes and pens of historians” (Lee & Parker, 1979, p.viii). However, far from considering the present to be “better” than most times in the past, they contend that “few of the major issues of today are unique. In fact, ... they are often many decades old, and no nearer solution today than they were when first mooted” (Lee & Parker, 1979, p.viii).

Perhaps the most significant advocate of evolution as a structure for thinking about accounting history was the American Accounting Association’s Committee on Accounting History, which reported in 1970. This proposed an objective for historical study firmly in the tradition of “modernisation theory”:

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By observing the evolution of accounting thought, practices, and institutions that has corresponded to evolution in the environment (including economic, social, political, and legal factors), it may be possible to suggest the practices and institutions which are more compatible with the environments of the developing world (American Accounting Association, 1970, p.53).

Of nine specific “examples of historical studies which deserve attention”, no fewer than eight contain the word “evolution”. But despite this predominance of evolution, it is unclear whether the Committee on Accounting History meant much more than “process of change”, with some sense that changes in accounting may be

a function of changes in the environment. It is in this sense that more recent historians seem to appeal to evolution. For example, Jones and Aiken (1995), in their study of British company legislation of the nineteenth century, argue that “analysis of political and social evolution is ... essential for explaining the timing and development of companies legislation of this period” (Jones & Aiken, 1995, p.61). 5

Even if traditional accounting historians have been circumspect about making claims that accounting has progressed, this is how the new accounting historians have tended to characterise their general approach. Thus Funnell (1998, p.156) defends new accounting history by claiming that “accounting history is not the simple story of progressive improvement in response to the emerging needs of society”. The view that traditional accounting history was this simple story of progress is evident from a number of the precursors of the new accounting history. We can observe this view being expressed right from the start by the central influence on the emergence of the new accounting history, Anthony Hopwood. He was a member of a committee set up in 1977 by the British Social Science Research Council to investigate research needs in accounting. One of the main aims of this committee was to stimulate research that moved away from what it perceived as “technical” towards a more socially informed research agenda. The committee was greatly affected by a perception that change was pervasive in accounting, that accounting change was not well understood, and that at least a partial understanding of change could be given by historical studies. However, despite a recognition of the substantial body of historical research in accounting that, even in the mid-1970s, had come into existence:

Most members of the committee nevertheless were dissatisfied with not only the present state of knowledge in the area but also the current directions of historical research. There has been a tendency for technical histories of accounting to be written in isolation of their social, economic and institutional contexts. Accounting seemingly has been abstracted from its social domain with many of the understandings that are available tending to present a view of the autonomous and unproblematic development of the technical. Where efforts have been made to offer alternative perspectives, teleological, evolutionary or progressive notions of change have often been implicit in the understandings presented. ... [M]any members of the committee were

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concerned about the partial, atheoretical and intellectually isolated nature of much historical work in the accounting area (Hopwood, 1985, pp.365-6).

This view of traditional accounting history not only motivated Hopwood in his own substantive historical researches (Hopwood, 1987), but was proposed by Miller and Napier in their paper “Genealogies of Calculation” (1993). The latter paper is open to the objection that many of the examples of traditional historical accounting research that it criticised were rather dated, even at the time the first version of the paper (Miller & Napier, 1990) was written. That Littleton in 1933 may have been rather simplistic in drawing links between social and economic change on the one hand and accounting change on the other, and vague on how accounting fed back to help shape society, does not mean that all traditional historians should have similar views attributed to them.

The key feature of the new accounting history, as stimulated by Hopwood and developed by many others working within a wide number of theoretical perspectives (see, for example, Miller et al., 1991), is that it is a sociological history written by social scientists. Hence, it is driven by a desire to theorise and generalise, rather than to particularise. At the same time, the canons of social scientific research, in particular a nervousness about appearing to make value judgements, have a significant influence on the form of argumentation. This gives rise to a potential paradox, as some of the new accounting historians, while documenting the expansion of accounting and accountants (and related disciplines such as auditing) into new contexts and domains, have felt distinctly unhappy with what they perceive as the confining rather than liberating impact of accounting on modern society. It has been argued forcefully by commentators such as Neimark (1990, 1994) and Armstrong (1994) that the methodological inhibition from making explicit value judgements has tended to lead to tensions if not contradictions in much of the new accounting history, particularly that influenced by the French social theorist Michel Foucault. New historians wish to critique society, and accounting’s role within society, while their theoretical standpoint tends to locate value judgements as relative to beliefs and systems of power extant during the period under study. This undermines the possibility of the very critique that is being sought, as there is and can be no independent standpoint from which any critique may be offered that is immune to accusations that it simply reflects a particular set of values. On the other hand, Foucauldians argue that a Marxist theory of history appeals to Hegelian ideas of Universal History that have long since been exploded.

Perhaps at this stage it is worth appealing to the archive (Fleischman & Tyson, 1997). In an unpublished working paper 6 that formed the basis of thought on historical accounting research of the Social Science Research Council committee discussed by Hopwood (1985), Cyril Tomkins set out his view of the development of accounting. This contains a remarkable echo of Littleton (1933). “Developments in accounting came about in the first place in response to economic

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social and political pressures, but, thereafter, acted as an enabling device to assist further developments” (Tomkins, 1978, p.9, emphasis in original). Moreover, Tomkins exhibits a degree of optimism that is often lacking from the new accounting history:

Despite the current criticisms, the long run record of accounting is distinctly encouraging. There have been occasions when accountants may not have reacted quickly enough to the needs of the day’s society – for example the very slow pace (and sometimes backward steps) of increasing disclosure of information through the nineteenth and twentieth centuries and, more currently, the failure to produce acceptable inflation accounting rules and the lack of new methods to serve the special needs of developing countries where western (USA and UK) accounting practices are often of little direct relevance. However, if we take the broad span of history, accounting has on the whole developed as and when required (Tomkins, 1978, p.9, emphasis in original).

Interestingly, Fukuyama (1992, p.70) suggests that the pessimism of the twentieth century may have been overdone: “We need to ask whether our pessimism is not becoming something of a pose, adopted as lightly as was the optimism of the nineteenth century. For a naïve optimist whose expectations are belied appears foolish, while a pessimist proven wrong maintains an aura of profundity and seriousness”. Is there scope for optimism about accounting, and is it legitimate to tell histories of accounting progress? These issues will be considered in the concluding section of this paper, which develops the theme of history as narrative and hence importantly literary rather than simply a neutral piece of science.

Na N arrrra attiivve ess o off p prro og grre essss Within the study of history more generally, one of the most important debates in

recent years has involved the consideration of the extent to which the writing of history does more than simply provide a “superstructure” (Goldstein, 1976, pp.140-

1) necessary to express in words the objective facts of the past. Indeed, does the way in which history is written – the “narrative” of history – actually give meaning to the past (White, 1987, p.2)? If the latter, is there one “correct” narrative already implicit in past events, or is there the possibility of multiple narratives, and thus multiple meanings? Within the accounting literature, Funnell (1998) has already

examined this debate at some length, 7 and what follows is a very brief sketch of the issues. On one side, there is the view that:

The historical method consists in investigating the documents in order to determine what is the true or most plausible story that can be told about the events of which they are evidence. A true narrative account ... is a necessary result of a proper application of historical “method”. The form of the discourse, the narrative, adds nothing to the content of the representation (White, 1987, p.27).

Na N ap piie err:: Accounting history and accounting progress

The role of the historian is to tell it “as it actually was”. Historians may want to explain why events happened as they did by appealing to some broader theory (and sociologically oriented historians will inevitably wish to take this route), but the historian’s explanations are separate from the historian’s narratives. Indeed, historians face a tension: a “scientific” as opposed to a “literary” approach to history seems to suggest that putting the historical facts into a narrative framework could lead to the danger of diluting objectivity. The aim of the historian, on this view, is not to “tell a good story” (Napier, 1989, p.241), but rather to tell the true story.

However, in recent years strong arguments have been put forward, most notably by Hayden White, that the content and the form of historical narrative are inseparable. Moreover, there is no single true narrative: historical events can be ordered in a narrative – “emplotted” – in different ways. In his seminal work

Metahistory, White proposes a series of standard emplotments 8 that can be taken by historical narratives: romance, comedy, tragedy and satire. In the romance, the hero of the story triumphs over the world: “it is a drama of the triumph of good over evil, of virtue over vice, of light over darkness, and of the ultimate transcendence of man over the world” (White, 1973, p.9). In the satire, whose principal style is irony, it is the world that triumphs: “in the final analysis, human consciousness and will are always inadequate to the task of overcoming definitively the dark force of death, which is man’s unremitting enemy” (White, 1973, p.9). Comedy and tragedy, on the other hand, offer some hope of at least provisional victory over the world, the difference being the form that this victory takes. In comedy “hope is held out for the temporary triumph of man over his world by the prospect of occasional reconciliations of the forces at play in the social and natural world”, while in tragedy “there are intimations of states of division among men more terrible than ... at the beginning. Still, the fall of the protagonist and the shaking of the world he inhabits ... are not regarded as totally threatening to those who survive ... . There has been a gain in consciousness for the spectators” (White, 1973, p.9).

To White, the choice of emplotment for a historical narrative is a choice of historical explanation. As the same set of historical evidence is open, at least in principle, to different emplotments, it can be explained in different ways. In a later work, White links emplotment specifically to stories of progress:

When Kant turned to the consideration of what could be known from the study of history, so as to be able to determine what mankind could legitimately hope on the basis of that knowledge, he identified three kinds of equally pertinent conclusions. These were that (1) the human race was progressing continually; (2) the human race was degenerating continually; and (3) the human race remained at the same general level of development continually. He called these three notions of historical development “eudaemonianism”, “terrorism” and “farce”, respectively; they might just as well be called comedy, tragedy, and irony (if considered from the standpoint of the plot structures they impose upon

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the historical panorama), or idealism, cynicism, and scepticism (if considered from the standpoint of the world-views they authorise) (White, 1987, p.65).

So a view of general progress is emplotted as comedy, one of decline as tragedy and one of stasis or recurrence as satire.