Historical innovations in the regulation of business and accounting practices: A comparison of absolutism and liberal democracy

Abstract

This historical review article draws upon two theoretical models to compare state regulatory innovations pertaining to business and accounting practices in two contrasting periods: the Colbert Period, a period of absolutism under Louis XIV in seventeenth-century France; and the period of liberal democracy in the United States in the early twentieth century, during which the US federal government sought to expand its power over the regulation of unregulated capitalist activity. These two contrasting periods of state intervention in business and accounting practices can be characterized as innovations whose underlying design was conditioned by contemporary circumstances. The theoretical models employed include that of Miller (1990), who maintained that a primary "reason of state" (i.e. "political rationality") justifying intervention in business and accounting practices during the Colbert period was "military competition" between France and other European powers. The second theoretical model employed is based on Clarke (2004), who argued that there is cyclicality to reasons of state focusing on "restoring economic stability" in the face of economic crises. This article identifies innovations in the regulation of business and accounting practices that have helped states to obtain the economic resources necessary for the exercise of sovereignty while maintaining social order within their national boundaries.

The Enlightenment as determinant of accounting change: The case of royal estate bookkeeping during the reign of Catherine II

“…The purpose of studying accounting history is not simply to record new facts – ‘ a chronology of who did what and when ’, but a search for patterns of development and causes behind changes in methods recording the facts of economic life, including those connected with the work of social, institutional and contextual forces (Boyns and Edwards, 2013). There are different views on the forces that contribute to the development of accounting methodology and practice (Baker and Quere, 2015; Littleton, 1933; Miller and Rose, 1990; Napier, 2001, and others). In recent years, accounting history studies based on Foucault’s theory have shown the greatest potential.…”

“…Modern research in accounting history identifies various economic, cultural and political factors as the key determinants for the development of accounting methodology and practice (Baker and Quere, 2015; Littleton, 1933; Miller and Rose, 1990; Napier, 2001, and others). As a social practice, accounting is affected by different philosophical and political ideas.…”

New public management a re-packaging of extant techniques?

“…Typically, the journals detail the role of accounting, and in particular accounting and regulation practices effecting utilities, including the electricity sector. Baker and Quéré (2015), for example, note how US power companies engaged in somewhat creative practices, leading to accounting scandals in the late 1920s and early 1930s. Their earlier work (Baker and Quéré, 2014) highlights poor corporate governance practices at these same companies, which might have further contributed to these accounting scandals.…”