THE RECKONING by Jacob Soll

THE RECKONING

Financial Accountability and the Rise and Fall of Nations

KIRKUS REVIEW

Soll’s (History/Univ. of Southern California; The Information Master: Jean-Baptiste Colbert's Secret State Intelligence System, 2009, etc.) double-entry bookkeeping in relation to the political and cultural significance of accounting and the rise and fall of nations and businesses.

In his historical analysis, the author examines why modern societies consistently find themselves mired in crises involving not only financial issues, but political accountability as well. Different than entries in a checking account register, double-entry bookkeeping tracks credits and debits in separate columns, thus permitting real-time accounting of the costs and profits associated with particular and aggregated transactions. The author argues that it allows effective management through accountability and auditing. He contends that successful nations have not only been rich in accounting and commercial culture, but have also learned how to build cultural frameworks that have countered the all-too-human tendency to ignore, deceive or falsify. Soll substantiates his thesis by tracing the history of the method from its beginnings, showing how it was used successfully, and then disregarded disastrously, by Florence's de Medici family and, later, France's Louis XVI. The author credits Luca Pacioli's 1494 Treatise as the enduring source that permitted the technique to be adapted for public policy, beginning with the Dutch republic. Some of the founders of the United States, including Robert Morris and Alexander Hamilton, also used the method. Soll stresses the cultural benefits of incorporating accounting into educational curricula during the 19th century, and he explores how standards have been lowered over time, starting with railroad barons' failures to adequately pay to replace aging equipment and ending with the current concept of mark-to-market, in which financial assets are worth what others will pay for them.

An intriguing, well-crafted discussion highlighting a major contribution to political and economic well-being, with an obvious moral for today.

Pub Date: April 29th, 2014
ISBN: 978-0-465-03152-8
Page count: 352pp
Publisher: Basic
Review Posted Online:
Kirkus Reviews Issue: March 15th, 2014




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