Accounting history and the emperor's new clothes: A response to "Knowing more as knowing less?..."

Accounting Historians Journal, The, Jun 2000 by Tyson, Thomas N

Abstract: Hoskin and Macve (H&M) continue to accredit certain events in the early 1840s as enabling the creation of norm-based accounting and its use to control labor and improve productivity at the Springfield Armory (SA). Although critics have refuted H&M's interpretation of these events and reproached their use of inflated language, H&M maintain their unique perspective with undiminished fervor. This rejoinder further questions the validity of H&M's perspective of U.S. accounting history. It identifies the many conventional business historians who refute it and emphasizes that no other evidence has been presented to indicate that norm-based accounting was ever employed in the U.S. before the early 1900s. It also describes how H&M have tried to Lolster their position by citing several contemporary and more critical scholars who in fact refute it. More substantively, the paper emphasizes that the core debate between H&M and their critics is not simply over the timing of particular events at SA. Rather, it centers on the nature of historical evidence and the distinction between history and historicism.

INTRODUCTION

Hoskin and Macve (H&M) continue to argue that certain events at the Springfield Armory (SA) have been largely unrecognized for marking the first use of accounting to control labor and improve productivity in the U.S. Their core belief, unchanged from earlier papers [H&M, 1988, 1996], is that the confluence of performance norms and managerial discipline first occurred in 1841 at SA and transformed accounting's role from mercantilism to "managerialism." In their latest paper, H&M seek to rebut critics of this uniquely Foucaldian perspective of U.S. accounting history.

In previous papers, I have argued that H&M distorted the historical record [Tyson, 1993] and refuted their contentions that 1 ) norm-based accounting effectuated SA's subsequent productivity increases [Tyson, 1990], and that 2) accounting information was not used for decision-making purposes before the early 1840s [Tyson, 1992, 1998]. Although H&M, in a previous draft, acknowledged that "the historical evidence does indeed illustrate a growing array of sophisticated cost and management accounting practices being developed in the early 19th century," they still misrepresent the historical record and insist that events at SA were transforming.1

In the present rejoinder, I discuss the more substantive issue underlying the debate between the Foucaldian and economic rationalist perspectives of accounting history-the nature and role of historical evidence. The main point of this rebuttal is that no evidence can sustain H&M's theory that accounting was used to discipline labor in the U.S. in the early 1840s. In actuality, norm-based accounting was first employed in the early 1900s when standard costing and other scientific management principles became socially acceptable. Owner/ managers controlled labor and other costs of production at SA and other 19th century establishments by increasing mechanization, utilizing economies of scale, and/or reducing piecework wage rates. Even if owner/managers had wanted to identify star performers and use their methods and productivity as the benchmark for other laborers to emulate, the economic, social, and political climate of the mid-19th century work place precluded the use of accounting for labor control purposes. Skilled labor shortages, the use of internal contracting, and cost-benefit criteria are among the most important factors that explain the absence of norm-based accounting.2

The balance of this rejoinder is organized as follows. The next section describes the key role evidence plays in developing and sustaining theory and identifies the scholars who refute H&M's position on the timing of norm-based accounting. The paper then provides a brief overview of the U.S. industrial work place of the 19th century and explains why human accountability in the form of norm-based accounting was not employed. The concluding section addresses the distinction between history and historicism and explains why H&M's perspective of U.S. accounting history is so untenable.

THE NATURE OF HISTORICAL EVIDENCE

Evidence is a concept central to the empirical sciences. Whether to believe, or even take seriously, a scientific hypothesis or theory depends on the quantity and character of the evidence in its favour [Achinstein, 1983, p. 1 ].

As Achinstein indicated, and most other historians concur, evidence plays a central role in evaluating new theories and testing unproven hypotheses. Although empirical tests cannot be performed to evaluate theories about the past, interpretations that seek to countervail conventional paradigms, like economic rationalism, must utilize historical evidence to gain broader acceptance. Radical antipositivists might argue that evidence in the form of archival records is inherently unable to explain the past because of its subjectivity. H&M (p. 97, ffi. 7) appear to ascribe to this view when they write that: