CAPITAL - Accounting for Capital

The contributions of Rob A. Bryer

 (Paper presented to the Historical Materialism Conference, Sydney, 27 July 2013)

My work with Marx explores whether accounting can help us understand and test the quintessence of his thought, particularly the central principle that the origin of all surplus is unpaid labour.

Rob. A. Bryer,  ‘Marx and accounting’ (1999)[1]

My first uncertainty has been what to call this paper – ‘Accounting for capital’ or ‘No accounting for capital’. What follows moves in and out of the approaches implied by those alternatives, with ‘accounting’ both a matter of measuring the return on investment and of holding capital to account for the havoc it unleashes through its need to expand. The implications of ‘capital’ are so multiplex that every effort to define it is caught in conceptual disputes within bourgeois economics, among Marxists and between schools of accounting, intricacies integral to introducing the work of Rob A. Bryer.

A straw poll among my contacts has not come up with anyone who had heard of him, apart from two Sydney academics who had rented him a room at Royal Leamington Spa in the late 1970s. So the unicorn of a Marxist Professor of Accounting does exist. I regret not knowing about his work when preparing The Essence of Capitalism in the late 1990s, or when trying to make sense of the continuing blockage in the expansion of capital. I stumbled upon him late last year in a footnote to an article on accounting practices in early nineteenth-century Britain[2] as I began sorting out when and how value became self-valorising. No author has been more stimulating. None has presented more challenges.

            A further uncertainty is how to introduce Bryer’s engagement with the materialist conception of history. How would you outline the four volumes of Marx’s Capital to an audience who knew next to nothing about that work? Bryer is not Marx yet the task is no less forbidding. A summary of nearly a million words is not so much difficult as pointless. Indeed, I might just as well read out the titles of his twenty-seven articles. Hence, I have decided to encourage a wider readership by dropping a payload of incendiaries to disturb, in the manner of Marx, Nietzsche or Freud, and in keeping with Bryer’s combative style. I shall do so by taking three of his most contentious positions: the first on how to define capital/ism; the second on what he calls the ‘spurious’ transformation problem; and the third on when did the U.S. of A. became capitalist. The three topics intersect around his emphasis on social capital.

Look! No maths!

While editing volume two of Capital, Engels grumbled about Marx’s shaky grasp on commercial arithmetic:

The preparation of this chapter [XV] for publication presented no small number of difficulties. Firmly grounded as Marx was in algebra, he did not get the knack of handling figures, particularly commercial arithmetic. Although there exists a thick batch of copybooks containing numerous examples of all kinds of commercial computations which he had solved himself. But knowledge of the various methods of calculation and exercise in daily practical commercial arithmetic are by no means the same, and consequently Marx got so tangled up in his computations of turnovers that beside places left uncompleted, a number of things were incorrect and contradictory.[3] 

As the manager of the English branch of his family business, Engels had absorbed the ‘daily practical’ experience required to correct Marx’s howlers. This once, I feel that my level of understanding is closer to Marx’s than to that of Engels.

Before going further into Bryer’s life and works, I should warn you that my knowledge of accounting did not get off to a good start. On leaving school in 1959, I joined the accounts branch of the then Commonwealth Department of Social Services. I enrolled for Accounting I at the university where the lecturer spent three hours on Wednesday nights with his back towards the class as he wrote on the blackboard. No quantify of No-Doze could keep any of us awake. I quit after the first term, retreating into Public Administration I. As soon as I earned any income from my pen I knew I had to hire a tax accountant. These days I add up the income and expenses for the quarterly GST statements but rely on an accountant to submit the annual income tax returns. I know what deprecation means but do not trust myself with a spreadsheet. This aversion to ‘sums’ weakens my investigation of capital expansion. In addition, I am not equipped to evaluate the ‘accounting’ parts of Bryer’s articles.

In preparing The Essence of Capitalism in the late 1990s, I did venture into the disputes over how to report intangibles, notably brands and goodwill. Bertell Ollman joked about his being an innumerate on the editorial board of Critical Perspectives on Accounting, which had started in 1989 as a Marxist scholarly journal, with several Australian advisors. Had I not been so tunnel-visioned in pursuit of malpractice, I might have noticed Bryer’s early articles there. I did see some non-Marxist academic heavyweights contributing to debates about ‘value’, uneasy at the subjective nature of their own definitions. I took away enough to see the implosion of the dot.com boom coming. The Bulletin had rejected my article but then rang up wanting it after the bubble burst.[4] I knew how to tell a ledger from leger-de-main.

The little more I now know about the language and concepts of accounting I have absorbed from studying Bryer. Hence, there is no point in asking me to evaluate his defence of British practice as objective against the subjectivity of U.S. Financial Accounting Standards Board (FASB). My prejudices are all on his side but they are worth less than a share in Jodee Rich’s One.Tel. Bryer has convinced me that a critique of political economy can be neither materialist nor historical unless it engages with accounting practices.

Accounting generates little enthusiasm on the far Left, where it is seen as training servants of capital, ever more so since the arrival of fee-paying Schools of Business. Marxists need to lift our gaze from the flies around the honey pot of corruption[5] to see that the expansion of capital is shaped not just by fraud but through acceptable accounting practices. Bryer shows that ENRON followed the subjective assumptions of the FASB (2004b). Marxists have neglected the weight that Marx gives to swindling in the tussles between capitalists to carve up surplus value while it is being realised as profit.[6] An average rate of profit is never an absolute but, like the law of its falling rate, operates tendentially, with accounting malpractice among the counter-tendencies.

I have been bashing on for forty years about the need for the Left to get into ‘capital history’ to balance ‘labour history’ as a step towards writing history as class struggle. Nonetheless, my essay about ‘Capital’ around the year 1913 in the National Museum catalogue for the Canberra centenary exhibition gave no thought to accounting until it was too late to acknowledge how inadequate book-keeping and auditing practices remained twenty years after the crash of 1893. The best I could do after reading Bryer was to add a segment to an on-line version. I hope that that insertion means that I am not too old to learn.

At one level, a list of Bryer’s articles should be enough to send historical materialists scurrying after the pieces directly related to their research topics. Having studied his 1,800 pages, I recommend total immersion. An example drawn from the 2012 Historical Materialism conference illustrates the benefits that flow from using accounting to write history, an altogether different enterprise from chasing up the stories of accounting practices.

Last year, Dick Bryan and Mike Rafferty proposed that the past thirty years of financialisation had added to the risks facing investors. Bryer’s interrogation of accounting practices across three centuries, and not only in the United States, makes their claim hard to accept. The nature and sources of risk have altered, but there has rarely been so much as a single decade within even one nation-market-state where investors could be confident about the numbers they were getting from the managers or auditors of their money-capital. Bryan and Rafferty pay almost no attention in their 2006 book to the way investors might evaluate risk through accounts and audits, citing only one accounting article, and that about cotton mills around 1900.[7] Bryer is not alone in documenting the effort that the directors and/or managers had put into concealing as much as they did know from shareholders, for example, the Royal Mail case from the late 1920s revealed that the empire’s most distinguished auditor had signed off on the use of reserves to pay dividends. More common was the practice at Coats and Co. in restricting dividends to retain reserves for expansion, or to weather downturns.[8] Transparency improved after the U.K. Securities Exchange Acts of 1933 and 1934 and more so with the UK Companies Act of 1948.  Britain’s High Court remains reluctant to second guess decisions by boards of directors.

Curriculum vitae

Bryer does not promote himself as an historian of accounting. He is, of course, across the technical and conceptual matters pursued by scholars who delight in showing that few practitioners of double-entry bookkeeping bothered to calculate profit, or even to draw out annual balances from the debit and credit entries.[9] Rather, he pictures himself as an accounting historian, that is, an historical materialist who investigates accounting practices in order to write the history of capital. He uses the ways that businesses have kept their books to determine when the expansion of capital came to dominate economic life. Specifically, he looks for when capitalist farmers began chasing a return on investment (ROI) and not just a surplus. Although Bryer’s incursions into the metamorphoses of modes of production are what interest me most, I shall not here dig into their rich lode for the revolution in capital afater  1800.

One reason why Bryer’s contributions are not better known is that he has not produced a book around their themes. Although a selection of essays would be welcome, the best solution would be for four volumes, one each on the accounting history of British economy since feudalism; a second on the US of A; a third one on Marx(-ism) and accounting; and a fourth exposing the subjective nature of the accounting standards promoted by the U.S. profession. Appendix II has grouped Bryer’s articles under these four heads. Since the essays need editing to remove repeats of information and reasoning, Bryer perhaps feels that it is more important to push into new fields, as he has done since 2012 on U.S. capitalism, rather than to reshape what he had made available. The benefits from his four pieces on the U.S. of A. more than outweigh any loss from a reluctance to take the time to integrate his pieces on Britain.

Before embarking on a survey of capital through accounting, Bryer had contributed to the struggle against Thatcherism by analysing the books of the steel industry and Britain’s state-owned enterprises. (see his chapters in Fighting Closures, 1984) He remains an activist by intervening in disputes over accounting standards.

Warwick Inc.

A working-class lad from Exeter, Bryer graduated in 1977 from the University of Warwick where, since 1991, he has taught accounting in its school of business. That institution resonates in this, the golden jubilee year of The Making of the English Working Class by Warwick’s foundation professor of history, E.P. Thompson, who oversaw the publication of a philippic, Warwick University Ltd, in 1970, to storm out in protest against the university’s takeover by business.[10]

In a quirk of fate, Warwick Business School has become the base for a critic of capitalism, rigorous and substantial, at once historically informed and penetratingly conceptual. Had Thompson been around for a further twenty years there is an outside chance that he might have learned some Marxism from Bryer. However, Thompson’s ‘perturbed spirit’ is likely to be as hostile to a Marxist accountant as it was to the Business School or to Marx’s method, smacking, as it must, of theory and economic laws.

Historical materialists have much more to learn about exploitation from Bryer than from Thompson who was innocent of political economy, if not actively hostile to its prominence.[11] The gulf between them is obvious from the latter’s most cited article, ‘Time, Work-Discipline, and Industrial Capitalism’ (1967),[12] which includes nary a word on labour-time as the measure of value, or on turnover times, or production periods. He pictures time’s being spent rather than labour-time’s being purchased, alongside the cliché about time being money instead of units of labour-time finding their universal equivalent in money. Thompson does not reject the labour theory of value but proceeds as if it never existed, as indicated by his giving no footnote to any of Marx’s writings, unlike Brian Harrison a few pages on in the same issue for his essay on ‘Religion and Recreation in Nineteenth-century England’. Thompson would not have had to delete more than a couple of turns of phrase from The Making of the English Working Class had Marx never written Capital. Thompson’s maxim that class is a relationship not a thing has been a soporific to generations of students seeking the lazy option of writing about the past without an inkling of political economy. For the working class, class consciousness is the experience of responding to being treated as a thing, as a factor of production, that is, variable capital. That Thompson’s repulsion at the laws of capital expansion has not turned off many labour historians tells us something about the triumph of bourgeois hegemony over that redoubt in academe.

Bryer is orthodox on the labour theory of value (1994a), the transformation problem and valorisation, even though he arrives at those positions by novel routes. As an historical materialist, he puts class struggle front and center, in line with Rodney Hilton, Robert Brenner and Ellen Meiskins Wood, breaking from G. Cohen to support Wood on whether the social relations of production are the economic base. He thereby recognises why ‘accounting is an essential element of the political organisation of surplus extraction.’[13] In addition, he stresses the differences between the formal and the real subordination (‘subsumption’) of labour to capital. How to relate that pair to absolute and relative surplus value and then all four to simple and expanded production is one of the more daunting tasks when pursuing the revolution in capital.

By contrast, the post-Foucauldian Richard H. Macve confuses the exploitation of labour with the creation of capital. Although Marx shows that capital is the product of its own reproduction, he does not imagine that capital is the immediate result.  For Bryer, ‘Marx’s sojourn in production is based on this “double result” by chapter 5, that “Capital cannot therefore arise from circulation, and it is equally impossible for it arise apart from circulation”.’[14] Labour does not directly produce capital, or even profit, but, rather supplies the surplus value from which the agents of capital must still secure their profits and, only after that battle, are able to reinvest to accumulate more capital. This circuitry reminds us that the class struggle within capitalism is never confined to the points of production of surplus value.

Unlike the generality of academic Marxists, Bryer has never sought to make a name for himself by colonising a crack in Marx’s edifice to announce how cleverer he is than its architect. On the contrary, Bryer has devoted himself - ‘virtually alone, but undaunted’, as he puts it - to demonstrating how capitalism and accounting are ‘consistent’ with Marx’s critique of political economy, a quod erat demonstrandum which alienates neo-classicals and post-Foucauldians alike, as it will neo-Ricardians. Despite Bryer’s being ever ready to accept that ‘we need further research’, one colleague learnt first hand that ‘Rob feels most at home with passionate, in-your-face discourse, no quarter asked or given.’[15] Bryer is unmoved: ‘Though it would be nice to agree about something,’ is as much as he will concede, pointing out that, because ‘the theories contradict each other on fundamental issues, compromise does not seem tenable’. His style of presentation matches his refusal to extract the best from all possible stews, instead taking his stand with Marx who never concealed his contempt for Ricardo’s epigones who had voided their master’s voice:

The last form is the academic form, which proceeds historically and, with wise moderation, collects the ‘best’ from all courses, and, in doing this, contradictions do not matter; on the contrary, what matters is comprehensiveness. All systems are thus made insipid, their edge is taken off and they are gathered together peacefully in a miscellany. The heat of apologetics is moderated here by erudition, which looks down benignly on the exaggerations of economic thinkers, and merely allows them to float as oddities in its mediocre pap. Since such works appear only when political economy has reached the end of its scope as a science, they are at the same time the graveyard of this science.[16]

The sterility of disputes over the value to be added by dividing pin-heads is perhaps behind Frank Stillwell’s pleas for a pluralist fusion under the banner of heterodox political economy – not its Critique?. The obverse danger threatens when he recommends the higher journalism of J.K. Galbraith’s The Great Crash to understand the current crisis in the expansion of capital.[17]

We can now introduce Bryer’s three provocations: 1. capital/ism defined; 2. the transformation non-problem; and 3. the re-dating of U.S. capitalism.

1. Defining capital/ism

Keenest for a conference of historical materialists is Bryer’s attention to ‘social capital’. On the need to refine the Marxist treatment of capital I am with him all the way as I labour to specify how and when capital became the product of its own reproduction. ‘Why?’ it did so is a question we dare not ask for fear of being snared by the Great Satan of teleology. Bryer’s investigations of the zig-zags towards capitalism kept me going through his hundreds of pages. At last, here was an author who took the defining of capital as pivotal to Marxism. As befits an historical materialist, Bryer has learnt by doing, deepening his grasp of how capital expands by finding fresh facets to dissect before integrating the results with a refashioning of the concepts that he had deployed to reach the new level of relative knowledge.

No one does a better job than Bryer at refining the definition of capitalism whereas the attempts by most Marxists are almost as gestural as those from bourgeois ideologues who either make one element represent the whole, or toss wage-labour, credit, factories and steam-engines into the pot after the manner of the witches in Macbeth, Act 4, sc I:

Surge in trade, divided skill,

Navvy’s spade, exchange of bill,

Engine’s steam, and low piece-rate

Goldsmith’s loan and factory gate

For a mode of powerful trouble.

Like a hell-broth boil and bubble.

No shopping list of causes can explain a putative industrial revolution, let alone the revolution in capital. Bryer’s accounting history provides a means to redeem the concept of capital-within-capitalism from the thicket of quasi- and pseudo-definitions whose proponents seldom stop to define ‘capital’. Beyond asserting that it is a relationship and a process but not a thing,[18] Marxists are as guilty here as anybody, indeed, more so, since we are supposed to know best on this topic, if no other.

Were we anywhere other than at a conference of historical materialists, I should have to risk insulting my audience by explaining that, for Marxists, ‘historical’ is not a narrative - neither grand, nor petit - about the past, anymore than materialism is the celebration of greed or a reduction of ‘sensuous human activity’ to organic matter. To say that Marxism is an historical science is to say that nothing human is universal, eternal or natural,[19] a rule which applies to concepts[20] as much as to the actualities in which they deal: ‘For each mode’, Bryer notes, ‘there is a different mode of accounting and mode of accountability.’[21] In 1994, he analysed three broad phases of demesne farming in order to track developments in manorial accounting,[22] and has since provided tools for identifying the shift between each stage in the movement towards social capital and then within its engrossment and geographic spread.

Whether the historical applies to every crevice of the natural world need not derail us here since it is sufficient to be confident that viewing human history as an unbroken arc provides, as Marx quipped, a ‘very impressive method – for swaggering, sham-scientific, bombastic ignorance and intellectual laziness. ‘[23] Materialists, therefore, periodise more exactly than into three, five or six modes - give or take the Asiatic. In regard to capitalism, Marx talks of ‘Period One’ with its ‘sediment’ from previous modes and ‘Period Two’ when capital has become the ‘product of its own reproduction’.[24] Lenin set out ‘three principal stages in the history of monopolies’ within the forty years up to 1903 by when, ‘capitalism has been transformed into imperialism.’[25]

If this level of understanding of the import of periodisation for a materialist conception of history is a commonplace among Marxists, it is not so widely understood why Marx’s social capital is on an altogether different plane, both in actuality and in thought, from Eva Cox’s mantra. For a start, social capital is far from sociable. Bryer contributes to periodisation by showing why social capital is unique to the capitalist mode, a defining characteristic, necessary but not sufficient for capital to become the product of its own reproduction. Relentless expansion proved possible once joint-stock companies with limited liability allowed more individual capitals to be socialised. Social capital matches social labour just as free capital does free labour. At a terminological level, capital moves from the plurals of individual capitals and socialised ones to the singular of social capital, which is a unity of competing capitals, some individual but mostly socialised. Bryer is adamant that ‘total social’ is not the mere adding up of individual and socialised capitals – not an aggregation - but rather the outcome of one of those qualitative leaps so treasured by us dialecticians. Social capital is capital-within-capitalism, the result of the revolution in capital.

Bryer establishes a test for what is and what is not capitalist, in short, for recognising the triumph of a new mode. A basis for refutation is available according to whether a farmer or firm is calculating a Return on Investment. Accounting history points to a way for Marxists to deflect Karl Popper’s accusation that Marxism can never be a science because it offers no means for refuting its propositions. The   practice of accounting history also supplies the criterion that allows us to decide when the pursuit of ROI has become generalised through expanded reproduction. Too few account books survive from before 1800 to let us decide how many proprietors passed Bryer’s test. Popper’s requirement for a science is not that its practitioners demolish their own premises, merely that their methods include some means for so doing.[26]

Bryer’s test is clear-cut for whether particular farmers were agrarian capitalists: is the farmer content to gain a surplus or is he trying to improve the return on investment (ROI)?[27]  That principle applies to every owner or controller of productive property - whether banker, manufacturer or merchant - who must reinvest most of their earnings if they are to continue as capitalists against competitors, an imperative intensified in the era of oligopoly. Most investors remain caught in what Marx calls ‘a Faustian conflict between the passion for accumulation and the desire for enjoyment’, so that they do not always live by ‘Moses and the Prophets: Accumulate! Accumulate!’,[28] but dabble in both splendour and speculation. That their risk-taking in the days before limited liability might have cost them their fortunes,[29] in no sense dilutes Bryer’s acid test for determining whether they had been performing as the personifications of capital, as suggested by Flieschman in the three-way debate. (2005a)

2. Transformation transfigured  

At our initial gathering in 2011, Mike Beggs invited us to stop worrying about the transformation problem.[30] From the floor, Rick Kuhn reacted with one of the standard defences. Three years before, Bryer had stood the problem on its feet to argue that there is no problem.[31] No one who reads his sixty pages will be able to stop worrying or to regurgitate either the old-time hymns or the ‘tautological’ New Interpretation.[32] For Bryer, the ‘transformation problem’ is one of several ‘spurious problems’ created by economists, including Marxist ones. In the Abstract to his ‘Marx’s accounting solution to the “transformation problem” ’, Bryer contends that, far from Marx’s having failed to transform values into prices, he ‘theorised capitalist accounting to solve the reverse of the economists’ problem’, so that his triumph is to reveal ‘how capitalists transform the general rate of profit and prices of production into socially necessary labour time.’

On encountering this transmogrification of transformation, I had to have a cup of tea, a Bex and a nice lie down. Somewhat restored, I read how economists refuse to see that Marx’s solution to the transformation problem is, first, historical, secondly, reliant on capitalist accounting, and, thirdly,

presupposes the ‘really difficult’ history of ‘total social capital’, capitalists functioning as a living collective, demanding the general rate of profit, and competing individual capitalists using accounts to control their labour processes to transform prices of production into socially necessary labour times, which they account for at what accountants today call standard or target costs. (2008: 4)

If the capitalist treats profit as surplus value ‘the price of production = cost price + profit = k + p = k + s; i.e. in practice it is equal to the value of the commodity’. (Marx, Capital, v. 3, Penguin, p. 309)

Marx did not need to perform a mathematical transformation to know that under total social capital and competition, capitalists would value constant and variable capital at the cost price necessary to equalize the required return on capital.

In short, … capitalists would transform the general rate of profit and price of production into the money value of socially necessary labour in production.  (2008: 40)

Despite Bryer’s disparagement of ‘mathematical transformation’, he supplies five pages of hieroglyphs. My low level of maths means that assessing that usual method of grappling with the ‘transformation problem’ is beyond me. The most I can manage is to evaluate the coherence of the versions being presented, which, in Bryer’s case, sets out a line of reasoning which Marxists cannot ignore.

One ground for a positive response is that I remain persuaded by the labour theory of value as the keystone to a critique of capital expansion. A second, and exogenous appeal is Bryer’s historical materialist approach in standing Marx back on his feet for, as Marx reminds us, ‘mysteries which mislead theory into mysticism find their rational solution in human practice and the comprehension of this practice.’[33] Or, as he later wrote in one of a series of letters to Engels about accounting:

The method of businessmen is, of course, partly based on illusions and even greater than those of the economists; on the other hand it [accounting] rectifies the latter’s theoretical illusions by means of practical ones.[34]  

Nothing is more practical to capitalists than winning the class struggle for the hourly extraction of surplus value from the units of labour-time they purchase; that fact is the substance of the Manifesto’s claim that ‘[t]he written history of all hitherto existing society is the history of class struggles’.[35] Sad to say, no matter how much we enjoy having our prejudices confirmed, they do not an argument win.

3. Not born on the Fourth of July

Elizabeth Humphrys’ paper at the 2012 conference accepted that settler Australia had been born capitalist.[36] But what if Britain had not been capitalist in 1787 when the First Fleet set sail? That is one more challenge from Bryer’s investigations. His approach encourages my current effort to identify the revolution in capital as a counter to the bourgeois propaganda for an industrial revolution which – it now seems - never quite happens, and against the technological determinists for whom nothing else much matters.[37]

Instead of delving into what has been awry with the ‘transition’ debate, I trust that I can excite interest in Bryer’s ‘accounting history’ by summarising his most recent work which focuses on north America from early settlement to the Enron collapse. The conclusion, which will make many of you bristle, is that the United States did not become capitalist until the first twenty years of the twentieth century. Yes, you heard right – between 1900 and 1920. To reach this position, Bryer relies on evidence from a minority of US progressive scholars such as Michael Merrill,[38] and on the business history establishment around Alfred Du Pont Chandler, although he shunts aside Chandler’s claims for the transformative impact of railroad managers. Bryer contributes no primary research into the actualities of these business practices or class struggles, just as I lack the depth of scholarship to evaluate his use of secondary sources. No Grand Canyon opens in the line of argument.

I have yet to absorb all the implications of Bryer’s argument about capital’s not becoming fully operational in the U.S. of A. for some sixty years after it had become so in the United Kingdom. Nothing he reports conflicts with what I had picked up while working on the corporate form taken by social capital around 1900 for The Essence of Capitalism. The difficulty I have is not with his conclusion about the US of A. My panic is how to integrate that birthdate for U.S. capitalism with the current consensus that ‘the industrial revolution’ did not become fully operational in England until the dawn of monopolising capitals around 1870.[39]  In short, is there a bridge between the two, and, if so, on which concepts is it built? More clues to a its construciton, I suspect, are in Bukharin’s Imperialism than in Lenin’s Imperialism but more still in his The Development of Capitalism In Russia.

Apart from the revisions that Bryer distils from secondary materials, his originality is in dissecting a clutch of US economic and accounting authors in the decades before the Great Depression, integrating evidence about changes in the economy with shifts in bourgeois ideology and practices, and all viewed through the prism of Marx’s critique. The result is as sound a model for a materialist history of ideas as Dobb’s 1937 Political Economy and Capitalism. Pivotal to Byrer’s investigation is how class struggles around the moment of the U.S. breakthrough into fully operational capitalism contributed to economic nostrums which continue to grease the redirection of accounting principles and practices. Bryer contends that a 1906 work by Irving Fischer laid a foundation for the rewriting of accounting rules as subjective. Across 600 printed pages, Bryer surveys accounting ideas and performance to explicate his opposition to the recent pressure on the rest of the world to adopt U.S. accounting precepts. (2013c and d)

Marxian slips

Before you rush off to engage with Bryer, a few minor caveats are advisable regarding his manner of presentation. Sometimes, his choice of words slowed my taking the most from his insights. These phrases range from the mundane to the conceptual. When he writes ‘According to Marx’s theory’ he usually means no more than ‘from a Marxist perspective’, and often says as much by way of elegant variation. Indeed, ‘theory’ regularly means hypothesis. Unlike Thompson, he is not averse to theory.

More worrying are terms which carry ideological burdens. Highest among these possible sources of confusion is Bryer’s stress on ‘mentality’ as a measure of whether an individual, group or mode is capitalist. Even more than does Max Weber,[40] Bryer is not one to mistake a ‘mentality’ for a disembodied idea but recognises a set of social practices around record-keeping for the purpose of securing a Return on Investment. He offers a cute metaphor about account books being the superstructure stretched over a base of exploitation.

The second concerns is that in recent years, Bryer has displaced  ‘social capital’ with Marx’s penchant for ‘total social’. If total is not aggregate, why affix either qualifier? The differentiations are between individual, socialised and social. If ‘total’ is not meant to convey aggregate, but refers to the dissolution of barriers to the flows of money-capital through as wide as possible a market, then to write about ‘total social’ is at best redundant and at worst misleading. Bryer has given up referring to ‘semi-capitalist’ and ‘capitalistic’ for the early elements of the individual and the socialised capitals. As uneasy as I am with ‘total social’, my real annoyance is that I cannot come up with a term that are more apposite to the revolution in capital and easier to use when explaining that upheaval. His earlier trio of individual/socialised/social limited the likelihood of misunderstanding ‘social’ as no more than a larger version of socialised.

A further troubling but widespread slip is to activate the categories as Bryer does in upending the transformation problem:

History created the general rate of profit and total social capital, which now requires individual capitalists to make the transformation from market prices to values rather than, as usually understood, to make the transition from values to prices. (2008:. 4)

His subsequent sentences make it clear that he means that the transformation problem had been solved in practice across a couple of hundred years of class struggle - not by the Platonic form of History with a capital-H descending from the heavens:

The history of the general rate of profit is the history of the socialisation of capitals – beginning in England in the late 16^th century, growing from the late 17^th century, but flowering from the middle of the 19^th century, and spectacularly as total social capital from its end. [i.e. by 1900]

The history of social capital is the ‘really difficult’ interconnected histories of merchants, farmers, landlords, peasants, workers, industrialists, joint-stock companies, capital markets and accounting. (p. 23)

This mixing of social classes with the institutions that their numbers create illuminates the materialist concept of history, ‘consistent with Marx’s theory’ that ‘history’ does nothing, since it can be made only by real living people.[41]     

Bryer’s troubling expressions are outweighed many times over by the richness of his concepts and data. Whenever I squirmed at a choice of words I found, as I read on, that he had strayed into neither Idealism nor mechanistic materialism.

Trial balance

As outrageous Bryer’s conclusions can seem at first, they are always anchored in evidence and arrived at through a critique of political economy. The re-dating of the triumph of capitalism in the U.S. of A. to the early twentieth century is but the most recent shocker. Even if we end up rejecting one or other of Bryer’s conclusions, the challenges posed by his data and methods will make us more competent as historical materialists. In my case, his writings clear a path towards what I have taken to calling the revolution in capital after 1800 in opposition to the technocratic and other bourgeois notions of an industrial revolution years earlier. In the three-way contest against Richard Fleischman for Adam Smith and Richard H. Macve for the post-Foucauldians over the significance of cost accounting at the Carron Company in the late eighteenth century,[42] Bryer proved that there is no sharper sparring partner. (2005a)

APPENDIX I:   Works by Rob A. Bryer

(1991) ‘Accounting for the “Railway Mania” of 1845 – A Great Railway Swindle?’, Accounting, Organisaitons and Society, 16 (5/6), 1991, pp. 439-86.

(1993a) ‘The Late Nineteenth Century Revolution in Financial Reporting: Accounting for the Rise of Investor or Managerial Capitalism’, Accounting, Organizations And Society, 18, 1993, pp. 649-690.

 (1993b) ‘Double-entry Book-keeping and the Birth of Capitalism: Accounting for the Commercial Revolution in Northern Italy’, Critical Perspectives on Accounting, 4 (1993), pp. 113-140.

(1994a) ‘Why Marx’s Labour Theory is Superior to the Marginalist Theory of Value: The Case from Modern Financial Reporting’, Critical Perspectives on Accounting, 5, 1994, pp. 313-340.

(1994b) ‘Accounting for the Social Relations of Feudalism’, Accounting and Business Research, 24, (1994), pp. 209-228. 

(1995) "A Political Economy of SSAP22: Accounting for Goodwill". British Accounting Review, 27, 1995, pp. 283-310.

(1997) ‘The Mercantile Laws Commission of 1854 and the Political Economy of General Limited Liability’, Economic History Review 50, 1997, pp. 36-54.

(1998a) "The Struggle to Maturity in Writing the History of Accounting, and the Promise’, Critical Perspectives on Accounting, 9, 1998, pp. 669-681.

(1998b) ‘The Laws of Accounting in Late Nineteenth Century Britain’, Accounting History, 31, 1998, pp. 1-40.

(1999a) ‘A Marxist Critique of the FASBs Conceptual Framework’, Critical Perspectives on Accounting, 10, 1999, pp. 551-589.

(1999b) ‘Marx and Accounting’, Critical Perspectives on Accounting, 10, 1999, pp. 683-709.

(2000a) ‘The history of accounting and the transition to capitalism. Part one: theory’, Accounting, Organizations And Society 25, 2000, pp. 131-161.

(2000b) ‘The history of accounting and the transition to capitalism. Part two: evidence’, Accounting, Organizations And Society 25, 2000, pp. 327-381.

2004a) ‘ “Mirror, Mirror, on the wall, which is the fairest value of all?” Fair values in global accounting – ideal way or wrong track?’, 2004 Lecture, Bayreuth.

(2004b) ‘Accounting lessons from Enron: fraud, aggressive accounting or the wrong cnceptual framework’, draft 2004.

(2004c) ‘The Roots of Modern Capitalism: A Marxist Accounting Hsitory of the Origins and Consequences of Capitalist Landlords in England’, Accounting Historians Journal, 31 (1), June 2004, pp. 1-56.

(2005a) ‘Smith, Marx or Foucault in understanding the early Industrial Revolution” A re-examination of management and accounting for capital and labour at the Carron Company’, Presented at Goteborg, May 2005.

(2005b) ‘A Marxist accounting history of the British Industrial Revolution: a review of evidence and suggestions for research" Accounting, Organizations And Society 30 (2005, pp. 25-65.

(2006a) ‘A Political Economy of Accounting and control of the labour process’, Critical Perspectives on Accounting ,17, 2006, pp. 551-598.

(2006b), ‘Capitalist accountability and the British Industrial Revolution: The Carron Company, 1759-circa. 1850’, Accounting, Organizations And Society, 31, 2006, pp. 687-734.

(2006c), ‘The genesis of the capitalist farmer: towards a Marxist accounting history of the origins of the English agricultural revolution’, Critical Perspectives on Accounting 17 (2006, pp. 367-397.

(2008) ‘Marx’s acounting solution to the ‘transofrmatin problem’, Draft 2008.

(2011) ‘A review of John Richard Edwards and Stephen P. Walker, (Eds) The Routledge Companion to Accounting History ( London and New York: Routledge, 2009)’, British Accounting Review ,43, 2011, pp. 324-325.  

(2013a) ‘Part 1: Was America Born Capitalist?’, Critical Perspectives on Accounting, 23, 2012, pp. 

(2013b) ‘Part 2: The rise of the ‘modern business enterprise’, America’s transition to capitalism, and the genesis of management accounting’, Critical Perspectives on Accounting, 24, 2013, pp.  ??.

(2013c) ‘Part 3: Adam Smith, the rise and fall of socialism, and Irving Fisher’s theory of accounting’, Critical Perspectives on Accounting, 24, 2013, pp. ???

(2013d) ‘Part 4: ‘Creating the ‘big mess”: the influence of Irving Fischer’s neoclassical theory of acoucnting on the stock market crash of 1929’, draft

 APPENDIX II   Works of Rob A. Bryer as if in four volumes

 Americanism and financial accounting theory.

·          ‘Part 4: ‘Creating the ‘big mess”: the influence of Irving Fischer’s neoclassical theory of acoucnting on the stock market crash of 1929’, draft

·          ‘Part 3: Adam Smith, the rise and fall of socialism, and Irving Fisher’s theory of accounting’, Critical Perspectives on Accounting, 24, 2013, pp. ???

·          ‘Part 2: The rise of the ‘modern business enterprise’, America’s transition to capitalism, and the genesis of management accounting’, Critical Perspectives on Accounting, 24, 2013, pp.  ??.

·          ‘Part 1: Was America Born Capitalist?’, Critical Perspectives on Accounting, 23, 2012, pp. 

Accounting standards

•  ‘A review of John Richard Edwards and Stephen P. Walker, (Eds) The Routledge Companion to Accounting History ( London and New York: Routledge, 2009)’, British Accounting Review ,43, 2011, pp. 324-325.
•  ‘ “Mirror, Mirror, on the wall, which is the fairest value of all?” Fair values in global accounting – ideal way or wrong track?’, 2004 Lecture, Bayreuth.
•  ‘Accounting lessons from Enron: fraud, aggressive accounting or the wrong cnceptual framework’, draft 2004.

·          ‘A Marxist Critique of the FASBs Conceptual Framework’, Critical Perspectives on Accounting, 10, 1999, pp. 551-589.

·         ‘The Struggle to Maturity in Writing the History of Accounting, and the Promise’, Critical Perspectives on Accounting, 9, 1998, pp. 669-681.

·         ‘A Political Economy of SSAP22: Accounting for Goodwill’, British Accounting Review, 27, 1995, pp. 283-310.

 Marxism and accounting

·          ‘Marx’s acounting solution to the ‘transformation problem’, Draft 2008.

·          ‘Smith, Marx or Foucault in understanding the early Industrial Revolution: A re-examination of management and accounting for capital and labour at the Carron Company’, Presented at Goteborg, May 2005.

·          ‘A Political Economy of Accounting and control of the labour process’, Critical Perspectives on Accounting ,17, 2006, pp. 551-598.

·          ‘Marx and Accounting’, Critical Perspectives on Accounting, 10, 1999, pp. 683-709.

·          ‘Why Marx’s Labour Theory is Superior to the Marginalist Theory of Value: The Case from Modern Financial Reporting’, Critical Perspectives on Accounting, 5, 1994, pp. 313-340.

Accounting and British capitalism

·          ‘The Laws of Accounting in Late Nineteenth Century Britain’, Accounting History, 31, 1998, pp. 1-40.

 ‘The Late Nineteenth Century Revolution in Financial Reporting: Accounting for the Rise of Investor or Managerial Capitalism’, Accounting, Organizations and Society, 18, 1993, pp. 649-690.

·          ‘A Marxist accounting history of the British Industrial Revolution: a review of evidence and suggestions for research" Accounting, Organizations and Society 30 (2005, pp. 25-65.

·          ‘The history of accounting and the transition to capitalism. Part one: theory’, Accounting, Organizations and Society 25, 2000, pp. 131-161.

·          ‘The history of accounting and the transition to capitalism. Part two: evidence’, Accounting, Organizations and Society 25, 2000, pp. 327-381.

·          ‘Accounting for the “Railway Mania” of 1845 – A Great Railway Swindle?’, Accounting, Organisaitons and Society, 16 (5/6), 1991, pp. 439-86.

·          ‘The Mercantile Laws Commission of 1854 and the Political Economy of General Limited Liability’, Economic History Review, 50, 1997, pp. 36-54.

·          ‘Capitalist accountability and the British Industrial Revolution: The Carron Company, 1759-circa. 1850’, Accounting, Organizations and Society, 31, 2006, pp. 687-734.

·          ‘The Roots of Modern Capitalism: A Marxist Accounting Hsitory of the Origins and Consequences of Capitalist Landlords in England’, Accounting Historians Journal, 31 (1), June 2004, pp. 1-56.

·          ‘The genesis of the capitalist farmer: towards a Marxist accounting history of the origins of the English agricultural revolution’, Critical Perspectives on Accounting, 17, 2006, pp. 367-397.

·          ‘Accounting for the Social Relations of Feudalism’, Accounting and Business Research, 24, (1994), pp. 209-228. 

 ‘Double-entry Book-keeping and the Birth of Capitalism: Accounting for the Commercial Revolution in Northern Italy’, Critical Perspectives on Accounting, 4 (1993), pp. 113-140.

See also: Marxism

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