ECONOMIC CLASS, SOCIAL STATUS, AND EARLY SCOTTISH CHARTERED ACCOUNTANTS

Accounting Historians Journal, The, Dec 2004 by Lee, Tom

VICTORIAN CLASS SYSTEM AND PROFESSIONAL PROJECTS

Studies of the Victorians reveal the economic class system to be one of their unique innovations [Wilson, 2002]. Class is the means by which they perceived individuals climbing a social hierarchy, with education as much as economics a vital ingredient in the resultant re-distribution of individuals in society. Wilson characterizes the Victorian class system as fluid and anyone with money, luck, and panache could penetrate it. This was particularly true of professions where education created intellectual capital to convert into economic and social rewards, and power. Victorian professions are therefore relevant illustrations of Weber's pyramid in action, with economic class, social status, and political power interacting through time.

The Victorian period also witnessed considerable change in the economic structure of Scotland. There was economic prosperity from the 1850s until the 1870s, a brief recession in the 1870s, and then further industrial expansion in "North Britain" from the 1880s as it became the "world's workshop" during the growth of Empire [McCaffrey, 1998; Devine, 2000]. In this period, demand for public accountancy services expanded to include corporate audits in areas such as banking, insurance, railways, local governments, as well as industries such as steel and shipbuilding. Investigation, liquidation, and reconstruction services also added to traditional areas such as court-related services, arbitrations, and actuarial work. Walker [1993] illustrates these changes in the leading Edinburgh firm of chartered accountants, Lindsay, Jamieson & Haldane, in which there were eight clerks in 1857 and fifty-four in 1887.

Institutional public accountancy in Scotland in the second half of the 19th century also changed significantly as illustrated by Walker [1988] with respect to the Society of Accountants in Edinburgh (SAE) and Kedslie [1990] in relation to the SAE and its equivalent bodies, the Institute of Accountants and Actuaries in Glasgow (IAAG) and the Society of Accountants in Aberdeen (SAA). These writers based much of their analysis on the concept of economic class as an analogy for social status. They observed, for example, that many of the early SAE members had origins above that of a mid 19th century public accountant and typically were categorized with lawyers in terms of economic class. IAAG members, on the other hand, were usually associated with the mercantile community in mid century - this group having considerable social status in the West of Scotland. For Edinburgh and Glasgow accountants at this time, therefore, it was vital in their professional projects not only to convert their expertise into monetary rewards, but also to maintain their social status with, respectively, lawyers and merchants. As part of these projects, they attempted social closure through examination and training, and established credentials that signaled a structured social inequality [Macdonald, 1984].