Rational Evolution or Socially Constructed Counter-Myth? Cross-Cultural Perceptions of the Development of Chinese Commercial Accounting Up to C.1850 and Its Significance

62 Pages Posted: 10 Jun 2017

See all articles by Keith Hoskin

Keith Hoskin

Warwick Business School

Debin Ma

London School of Economics & Political Science (LSE) - Department of Economic History

Richard H. Macve

London School of Economics & Political Science (LSE) - Department of Accounting and Finance

Date Written: May 20, 2016

Abstract

The recent rapid growth of China’s economy has reopened historical debate about the extent to which it had also prospered during the last Imperial dynasties (the Míng and the Qīng, 1368-1911). Some economic historians have argued that China’s prosperity may have even matched that of Europe, through developing significant market activity on its underlying agricultural base, until ‘the Great Divergence’ sometime in the late 18th/early 19th centuries. Given the recent revitalisation in the literature of Sombartian arguments that Western economic growth was linked to the advent of Italian double-entry bookkeeping (DEB), we question here the extent to which there is justification for the claimed development of a concomitant and indigenous Chinese form of double-entry bookkeeping (CDEB)—conventionally seen as having developed among bankers, merchants and proto-industrialists—and for its significance within that successful Chinese market economy. We sceptically review how far the emerging archival and related historical evidence for the development of Chinese accounting practices and discourses supports the arguments that have hitherto been made for CDEB. Our scepticism reinforces medieval and Renaissance European accounting historiography that continues to indicate that the development of DEB had a textual / pedagogic as well as commercial provenance, and further supports the view that any direct or linear connection between its development from the fourteenth century and that of Western capitalism has become institutionalized as a ‘rational myth’. We comment briefly on the more foundational issue concerning what is increasingly recognised as an Occidentalism that has repeatedly cast the West as ‘modern’ and ‘more developed’; and we also explore how it has in turn influenced the now conventional Chinese expositions about the nature and timing of their historical accounting developments, and led to the creation of a ‘counter-myth’ of CDEB. Drawing inter alia on recent work on original Chinese archives, our aim is to clear away the tangled undergrowth of misconceptions about Chinese accounting history that have accumulated (without a solid evidential base) in the existing literature, and to indicate what we believe are the more important questions that should in future guide Western and Chinese researchers, preferably working collaboratively, in approaching the primary Chinese archival sources as they are increasingly (re)discovered. There is a need to further test the arguments, developed both here and in wider existing research literatures, about the historical roles of accounting microtechnologies in constituting significant domains both of economic activity and of organizational and social structure in both the East and in the West.

Keywords: Chinese accounting, double-entry bookkeeping, writing, Sombart thesis, cross-cultural translation, mercantile capitalism

JEL Classification: M41, N80, N95

Suggested Citation

Hoskin, Keith and Ma, Debin and Macve, Richard H., Rational Evolution or Socially Constructed Counter-Myth? Cross-Cultural Perceptions of the Development of Chinese Commercial Accounting Up to C.1850 and Its Significance (May 20, 2016). Available at SSRN: https://ssrn.com/abstract=2983849 or http://dx.doi.org/10.2139/ssrn.2983849

Keith Hoskin

Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

Debin Ma

London School of Economics & Political Science (LSE) - Department of Economic History ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Richard H. Macve (Contact Author)

London School of Economics & Political Science (LSE) - Department of Accounting and Finance ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 6138 (Phone)
+44 20 7955 7420 (Fax)

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