by Tom Walker (aka Sandwichman)
(Dan here…this piece is in the middle of a conversation starting in 1997 to now and how we measure up in our capacity or willingness to learn different lessons from the series of financial bailouts of the last thirteen years. The links are necessary to flesh out the argument, but I hope further posts will develop the debate for newcomers. This also marks Tom’s new website Ecological Headstand)
The day before yesterday, while searching for an online copy of an article on the rhetoric of Polish accounting he had cited many years ago, Sandwichman stumbled upon an old email list exchange from thirteen years ago between himself and the inestimable Miracle Max. The exchange illuminates the present economic crisis and the inadequate political responses to it from the left as only “a tiger’s leap into the past” can.
The question Max was addressing was the attitude of the left, broadly defined, toward financial bailouts. At that time, it was South Korea on the block. Max’s instinct was that “we’re going to see more rather than less of these events — crises that fall short of apocalypse but which reflect significant acts of economic exploitation and lost political opportunities.” Who can argue with that? “It seems to me,” Max mused, “that our politics lacks the right response to the current and incipient financial events. By “our” I include both a liberal, muddle-through stance and a radical, sit-back-and-gawk posture.” Thirteen years on and we haven’t learned a bloody thing!
Sandwichman’s reply called for “attention to something the left generally hasn’t been too interested in: accounting standards.” Remember, this was four years before the Enron, Arthur Anderson, etc., etc. debacle. It went on to contrast the much-hyped public drama of bailout negotiations with the arcane minutiae of the behind-the-scenes “technical” discourse of accounting where the conventions of what constitutes the bottom lines are drawn.
Max answered that he’d “like to hear more on the substance of the accounting issues, which really get my juices flowing” and Sandwichman replied that he, too, would like to hear more. “It seems to me that there is a missing link that I’ll call ‘labour accounting within capitalism.’ …I have a sense of what the missing pieces are but the task of pulling the loose threads together is huge. I could write an article or even a book, but I have a sense there is an entire missing sub-discipline here.”
Thirteen years later, the Sandwichman retreated to idyllic Mesa Refuge in Point Reyes Station, California to work on the revision of his manuscript. The gist of that revision was to bring the topic of social accounting – which had been buried entrails of a pair of chapters dealing with other matters – to the fore. The book, Jobs, Liberty and the Bottom Line (an unpublished manuscript), can serve as an introduction to that “missing sub-discipline” but more urgently it stands as an indictment of broad left complacency in assenting to the grammar and vocabulary of a bankrupt model of social accounting, riddled with “wondrous errors and confusions,” whose overt purpose is anathema to the prospects of human emancipation.
“One of the most important points in the whole of political economy,” according to Fred Engels, arose out of the problematic relationship between the ordinary business practice of book-keeping and political economy proper. Simon Kuznets was no flaming radical but he recognized and warned of the “dangerous implications that should be obvious” of fetishizing, in the national income accounts, government itself as the ultimate consumer. Exactly what Kuznets meant by that hinges on an understanding of such arcane points such as how to distinguish between intermediate goods and final goods and just what constitutes “duplication,” which I hope this brief historical note will clarify. The proper response to every assertion that “economic growth is essential” should be “do you want that growth with or without ‘double counting’?”
(Permission granted from Max to use e-mails)