Confession and Bookkeeping: The Religious, Moral and Rhetorical Roots of Accounting (review)

Confession and bookkeeping, at first sight, have an unlikely but important link with the origins and development of capitalism, as a set of business practices and as the conceptualization of such practices. Werner Sombart originally contended that capitalism and double entry bookkeeping (DEB) were inextricably linked as form and content, a theme also developed by Max Weber as part of his analysis of Protestantism and the rise of capitalism.

James Aho's book addresses this important theme and makes a significant contribution. In contrast to Weber, Aho locates the origins of DEB in the rhetoric and practice of the Roman Catholic Church. Medieval merchants used the rhetoric of DEB to justify their behavior in an age when business activity was likely to offend moral sensibilities. Aho therefore takes issue with Weber and, like Sombart, believes that medieval Catholicism encouraged the pursuit of wealth. Aho suggests that Weber wrongly dates the origin of DEB despite his awareness of its use by Catholic merchants in renaissance Italy he concentrates instead on its association with Protestantism. He shows that unresolved elements of the Weber–Sombart controversy revolve around the meaning of the penance ritual, and it is therefore necessary to examine the moral teachings of the confessional and how it impacted on the mind of the merchant.

After introducing these issues in chapter 1, Aho presents the sociology of DEB's development in seven further short chapters. In chapter 2, he examines the history of the Roman Catholic penance from its development from canonical practice to papal law by the fourth Lateran Council of 1215 and subsequent dissemination (an epidemic of scrupulosity was the mass neurotic response). In chapter 3, he explains how DEB satisfied the obsession amongst bookkeepers for completeness and precision but not necessarily for decision making and profit maximizing. He then provides evidence from the chronicles of three Tuscan luminaries, Pacioli, Alberti, and Datini, arguing that their need for arithmetical chronicling was as much neurotic as rational per Weber or Sombart (chapter 4). Gratitude, rather than selfishness, was therefore the prevailing sentiment. Chapter 5 explores the sin of usury, or unearned gain, usually achieved through lending at differential prices showing that DEB was a means of mollifying public concern and assuaging private consciences. Merchants simultaneously sought absolution from the priesthood and began to submit accounts to civic auditors or public notaries. The Roman tradition of contract enforcement through letter writing was reinforced by the ecclesiastical courts, which from the twelfth century gave legitimacy to ledger entries documenting bills of exchange.

The purpose of the daybook was to contain all the facts required to defend claims in court (chapter 6). Chapter 7 presents a fascinating and convincing account of the stylistic relationship between Cirero's rhetoric and Pacioli's DEB. Of great interest to accounting historians in particular is the demonstration that Cicero's rhetorical septenary (Who? What? Where? When? How? How much? In whose presence?) was replicated exactly in Pacioli's description of the daybook and in the confessional interrogations of period priests. DEB thereby helped assimilate otherwise pernicious and sinful activities into the Christian cosmos. These links between Roman rhetoric and practice in accounting, it should be pointed out, are a hitherto unexplored aspect of Renaissance history and accounting history. Chapter 8 shows how the Papal revolution of the twelfth century led to the emergence of medieval commerce, providing a legal umbrella to legitimize mercantile activities and a platform for the development of DEB.

Aho's conclusion then is that the confession produced conditions favorable to the introduction of modern accounting, but by disenchanting business altogether, Protestantism encouraged it even more. The former point is well argued empirically, the latter is more speculative, and there is some imprecision as to which aspects of DEB were specifically promoted by Catholic and Protestant influences. To avoid this, Aho might have spent more time critiquing Weber to acknowledge some detailed points. Weber...