From the first time I came across the Francis Bacon quote, I’ve loved it:
If a man will begin with certainties, he shall end in doubts; but if he will be content to begin with doubts he shall end in certainties.
That’s why it’s been my “favourite quote” on my Facebook profile ever since I’ve had a Facebook profile. I’ve never been a fan of oversimplification, of the black-and-whiting of life. Dealing with ambiguity is an essential human skill.
I’ve had a fascination with the way value is described ever since my father told the then-teenage me this:
The only truth on a balance sheet is the cash position. Everything else is a conventional representation.
Trying to read economics at university became a teensy bit more interesting as a result, as a part of me kept wrestling, arguing, disagreeing with what I was required to learn.
There are a lot of people out there who have helped me learn how to think and learn how to learn. They number in their thousands: people who’ve written things I’ve read; more recently, as we move into video as interaction, people who’ve said things I’ve heard, shared things I’ve watched them share; people who’ve taught me; people who’ve engaged in discussion with me, often over meals. Thousands of people who’ve influenced how I think. As you would expect, their influences have been uneven, some very much more than others. A handful, perhaps fifty, have really helped me think.
One of them is Joi Ito. You can therefore imagine why I found this recent post by him, on reinventing bookkeeping and accounting, fascinating.
It reminded me of an Eric Klieber post I’d read many years ago, helping me realise that traditional accounting was built to look at things retrospectively and that only physical things were catered for with any degree of accuracy.
More recently, I’ve been quite taken with some of the stuff Charlie Bean has been sharing, particularly when it comes to how we measure economic activity. If you haven’t done so already, it’s worth spending time reading the whole of the Bean Report on UK economic statistics. We live in a world where barely one per cent of one of the biggest countries in the world pays any tax; where a major country can almost double its GDP by “statistical revision”.
How we impute and account for value affects everything we do, as individuals, as firms, as economies, as society. In a hyperconnected world where people, capital, capabilities, relationships and ideas can and do migrate at speed (and I say this despite recent attempts to build walls preventing any and all of this migration: sorry, this bird has flown — — in such a world, it becomes imperative that we have tools that are fit for purpose.
That’s also one of the reasons I spend time reading what people share over at Evonomics. Rory Sutherland introduced me to what was going on there, and though I’ve only lurked there since, I’ve lurked regularly. I like being challenged in my thinking.
So if you’re interested in reinventing bookkeeping and accounting, do join the conversation here where Joi started the thread, we shouldn’t be fragmenting conversations. I’ve already commented there with the links I’ve shared with you here.
Ideas around distributed ledgers and blockchains and smart contracts and AI get even more interesting when you start considering their use in trasnforming substantial things. Things like 700 year old accounting systems.
We live in interesting times.