Social Accounting And Double Entry Bookkeeping
In my last post I stated that:
- “Accounting is an elaborate form of social storytelling.”
- “The purpose of accounting is to establish duty.”
In my high school English classes, one topic discussed was story archetypes. A recurring story archetype across many cultures is the Hero’s Journey. This archetype involves several steps, such as a call to adventure, meeting a mentor, various tests, and the hero’s ultimate return to his previous world. Such fantastic narratives may appear to have little to do with the chore of bookkeeping. Bookkeeping is just about tallying assets and liabilities, right?
While accounting processes may not follow the archetype of the Hero’s Journey specifically, I hope to show how they involve recurring steps and imaginative narratives which create a powerful and useful archetypal story.
I will also present the limitations of double entry bookkeeping as an accounting tool. Double entry bookkeeping is useful for maintaining an inventory of exclusive ownership over physical resources, but it is usually not an ideal tool for the political operations of modern money.
Modern money is a virtual informational tool used for the score-keeping of social, political, and productive actions. It serves two purposes:
- Limiting resource access or prioritizing resource use.
- Encouraging(or requiring) participation in social, political, or productive programs.
When double entry bookkeeping is applied to virtual assets and not just physical ones, these informational tools are forced to behave like physical objects. This limits the way we think about resources and hampers our creative problem solving.
It is important that we either adapt double entry bookkeeping practices to reflect actual resource constraints and deliberate social objectives, or develop alternative processes that better reflect the challenges of social resource management. In some cases this just involves a paradigm shift, such as the operational perspective of state money presented by Modern Monetary Theory, while in other cases it may require entirely new tools, for example Collin McKay’s project Deror Currency or my own project Trust Ledger, as well as many others.
In the next two or three posts, I will present specific examples and give more detailed analysis of the ideas stated here.
