earlier argued that certain business or government structures have historically
urged for developments in accounting. The Western 'discovery of the new world'
and a move away from feudalism to cities and national governments led to early
forms of modern capitalism. Nevertheless, European long-distance trade at this
stage consisted mostly of individual risky ventures to America or Asia for specu
lative profits. Shares in these ventures resembled short-term gambles more than
long-term investments. The joint-stock company offered a solution to the high
risk, by pooling the risk of different voyages. In turn this led to companies need
ing new accounting practices to assess the profits (dividends) for the different
shareholders.6 Whether advanced accounting cultures led to flourishing econo
mies or economic developments necessitated advanced accounting practices is
not certain. It is only clear that economic developments and developments in
accounting coincided in the early modern world.
Accounting can be divided into two general categories or systems: single-en
try and double-entry. Single-entry is defined by its deviation from double-entry
which has gained a dominant position in the modern world.7 Many scholars view
the invention of double-entry bookkeeping as a crucial development in account
ing, because of some key features, such as the ability to estimate net profit. Little
ton considers double-entry bookkeeping a historical inevitability and argues that
there are three antecedents for double-entry. First, the material, the ideas that
need to be reworked: private property, capital, commerce, and credit. Secondly,
a language, a way of expressing the material: writing, currency (as a common
denominator), arithmetic (a method to combine and summarise currency). Last
ly, the methodology, a systematic plan to organise the material into a language,
which is commonly referred to as accounting.8
Before the quantitative information of the MCC accounting records can be ac
cepted at face value to use in economic or econometric analyses, we must assess
what the meaning and function of these records are. Wai Fong Chua questions the
contemporary normative accounting approach, which assumes that the subject
(accountant) objectively mirrors the objects (the material as defined by Little
ton) in its information processing mechanism (accounting). In this normative ap
proach, humans are perceived as passive objects, independent from the subjects
Koen van der Blij
169
6 Ananias Charles Littleton, Accounting Evolution to 1900. Tuscaloosa, 1981, 207-212.
7 Rosemary E. Boyns, Trevor Boyns and John Richard Edwards, Historical Accounting Records:
A Guide for Archivists and Researchers. Taunton, 2000, 8.
8 Littleton, Accounting Evolution to 1900, 12-13.
