( )Critical Perspectives on Accounting 2000 11, 131]153doi:10.1006/cpac.1998.0329Available online at http://www.idealibrary.com on

A CRITIQUE ON THE CLASSIFICATION OFCONTEMPORARY ACCOUNTING: TOWARDS A

POLITICAL ECONOMY OFCLASSIFICATIONTHE SEARCH FOR

OWNERSHIP

TONY BOCZKOU

Hull Business School, University of Lincolnshire and Humberside,Cottingham Road, Kingston upon Hull, Hull, HU6 7RT UK

This paper is a critique on contemporary accounting1 classification stud-ies. It suggests that such studies have thus far provided an inadequateassessment of and explanation for extant international contemporary ac-counting diversity. This paper locates the discussion within a neo Marx-ian political economy, and explores how notions of structure and hierar-chy central to the institutional traditions of economic liberalism and thesocial priorities of capital have increasingly invaded the classification andunderstanding of contemporary accounting diversity. It contends that suchclassification studies are a product of capitalist desires to import andassimilate increasingly distant realms of business life into thecapital]labour value relation/contemporary accounting}capital relation.Furthermore, this paper suggests that such classification studies fail torecognise the impact of such social, political and economic arrangementsas they are increasingly reupholstered and redistributed by the changingpriorities of capital, resulting in a limited appreciation of the constitutivepower of capital and its influence on contemporary accounting.

2000 Academic PressQ

Introduction

In todays increasingly global society, an understanding of contemporaryaccounting, its social context, its political influence, its economic conse-quence, and its international diversity cannot be reduced to a simple

Address for Correspondence: UE-mail: tboczko@humber.ac.uk

Received 21 December 1997; revised 10 November 1998; accepted 10 December 1998

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study of culture and society. It cannot be reduced to a study of derivedsocial and institutional values and arrangements. It requires a far moredetailed examination of the underpinning pressures that assist in forgingsuch social interrelationships and institutional interdependencies. It re-quires an appreciation and understanding of how the complex socialpriorities of such institutional arrangements are increasingly affected notonly by the territoriality of inter-state politics, or the social pressures ofthe labour market processes, but also by the increasing internationalmobility and changing character of capital. As suggested by Castells( )1989 ...it is difficult to deny that processes of globalisation favourcapital rather than labour and the nation state as they come to occupy

( )different spaces and times p. 45 .Whether culture and society are seen as simple anthropological no-

tions, or complex constructs increasingly imported into the comprehen-sion of abstract representations of social action, they are not staticproducts of antiquity. They are neither isolated nor protected from thetemporal and spatial consequences of the capital mobility. Indeed, nei-ther culture, as a system of value based beliefs, or society, as acollective of interdependent institutional arrangements are impervious tothe ravages of capital accumulation. They possess neither permanencenor sustainable stability. They are intrinsically ephemeral} influenced notonly by the chaotic nature of political and economic change, but per-haps more importantly, by the increasingly complex social pressures andpriorities of capital2.

To be clear, this paper does not challenge the existence of a closeinterrelationship between culture, society, and its derived social and

(institutional arrangements. For example, see Weber, 1949; Schrank &)Abelson, 1977; DAndrade, 1984; Swidler, 1986. It does, however, reject

ingenuous interpretations of society that seek to reinforce an underpin-ning anthropological interpretation of culture and society whilst nonethe-less implying the existence of a mythical mechanistic relationshipbetween subjectively and artificially compartmentalised aspects of polity

(and economy Parsons & Shils, 1951; Inkeles & Levison, 1969; Hofstede,)1980; Hofstede & Bond, 1988 . Indeed, it rejects the willingness of

functionalism to assert that both culture and society can be isolated,objectified, interpreted, and managed by the imposition of a false senseof structure and hierarchy. This paper contends that such portrayals ofculture and society are a product of the priorities of capital, and thusfail to appropriately reflect the sociopolitical ambiguities of such socialstructures and hierarchies evident in contemporary society. Indeed, theyignore notions of reflexivity central to the understanding of social actionin a global society characterised by institutional hybridity, and socialheterogeneity. They thus fail to fully appreciate how social and politicalarrangements are constantly reupholstered, reconfigured and redistributedby the global pressures of capital mobility.

In rejecting the over simplistic thesis of contemporary accounting aseither culturally or socially specific, this paper offers a discussion withina predominantly neo Marxian political economy3. It argues that the

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identification and classification of contemporary accounting diversity byreference to social and institutional values and arrangements merelycontributes to extending contemporary myths of neutrality, objectivity,faithfulness, and impartiality so important to sustaining the powerfulsocial influence of capital. Not only does it encourage the institutionali-sation of contemporary accounting as an elementary by-product of suchsocial and institutional values and arrangements, it also assists suchinstitutional arrangements in camouflaging the social influence of opera-tions predominantly derived from the increasingly competitive priorities

( )of capital. Indeed, as suggested by Cairns 1997 , such simplistic classifi-cations of contemporary accounting are ...of little relevance in the

( )complex world of the 1990s p. 306 . It is in this context that thispaper seeks to be regarded as a corrective. It seeks to offer a re-con-textualisation of contemporary accounting within a framework of politicaleconomy}within an understanding that seeks to transcend assertions ofcontemporary accounting as a symbolic representation of social actionprincipally mediated through, and legitimated by the socio-political priori-ties of capital.

Following the introduction the second part of this paper provides acritical interpretation of contemporary accounting as a created symbolicspace primarily coloured by the increasingly chaotic priorities of capital.It explores how the ownership of contemporary accounting has, despiteits unity in difference quality become increasingly embroiled in themarket politics of international capital. In the all encompassing conflictand crisis symptomatic of the increasing dominance of commercial capi-tal, the escalating use of fictitious4 capital and the chaotic structuralflexibility associated with its international mobility.

The third part of this paper explores how the structural flexibility ofcapital as a system of social relations increasingly disciplined by its owninternational mobility, has influenced, and indeed continues to influenceunderstanding of contemporary accounting diversity. The fourth part ofthis paper explores how the dominant rationality of economic liberalism}conditioned by the priorities of capital}has resulted in the promotionof classifications that fail to adequately represent extant internationaldiversity in contemporary accounting. It comments on four established,

( )and in a liberal context fairly conventional classification studies, con-tending that in the absence of any critical cognisance of the eristic,de-stabilising consequences of capital, such studies merely recycle thefunctionalist structures of market driven economic liberalism.

The final part of this paper provides comment on the need for apolitical economy of classification} the need to go beyond the complexand powerful social and political influences sanctioned by the prioritiesof capital that intercede in the development of contemporary accounting.It offers some suggestions as to how a more critical and reflexiveapproach to the classification of contemporary accounting could assist indispelling the institutional mythologies and fallacies that have for solong limited such studies. Moreover, it suggests that such an approachcould facilitate an abandonment of the constraints imposed by processes

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of capital accumulation, and thus provide not only a greater appreciation( )of ...what is really happening in the world Cairns, 1997, p. 316 . An

appreciation that could if only in a small restricted way assist in ame-liorating or diffusing some of the more negative effects of capitalsincreasing commodification of the social.

Contemporary Accountinga Unity in Difference

Inasmuch as contemporary accounting plays a central role in portraying,evaluating and governing the extensive and expanding domains ofeconomic and social life, it is socially and politically significant. As

( )suggested by Arrington and Francis 1993 , contemporary accounting is;

...intimately wedded to economic efficiency and capital growth, is impli-cated in a range of urgent moral issues that surround us today; aneconomically ravaged environment, a de-skilled labour force, the socialdysfunctions of corporate power, the arbitrariness of the market as a

( )distributor of goods and life chances p. 106 .

It enables social and economic activities to be rendered knowable,(measurable, accountable and manageable at a distance Boczko & Will-

)mott, 1998 and in turn is frequently mobilised to adjudicate economic( )claims between competing constituencies Tinker, 1985 . Increasingly as-

sociated with, and conditioned by the reflective assumptions of economicliberalism such understandings, however illuminating, nonetheless fallshort of recognising the significance of the social relations that privilegea fictional impersonality, rationality and neutrality of the marketplace asa favoured medium of economic activity. They take no consideration ofthe shared politico-economic struggles and associated demands that in-creasingly shape contemporary accounting as an information commodity.

Traditionalist descriptions such as ...an artefact residing in the domain( )of the social Hopwood, 1987, p. 213 , and ...an ancient practice with

( )a distinctive modern power Hoskin & Macve, 1994, p. 64 , may providean opportunity to locate contemporary accounting within its socio-histori-

( )cal context see Parker, 1981; Nobes, 1982; Miller et al., 1991 , however,such analysis fails to acknowledge the aesthetic flexibility, political utilityand social context of contemporary accounting. A politically contrived

(representation that favours some groups rather than others Cooper &)Puxty, 1996 , contemporary accounting provides a mechanism through

which selected aspects of a consciously constructed accumulation processsustained as a particular system of social relations can be defined,

( )mediated and legitimated Bryer, 1995 . Moreover, contemporary account-ing has become reified as a collection of objectified techniques}aproduct of the competitive socio-economic tendencies of modernity, andthe increasing dominance of capital. Yet despite modernitys ...increas-

( )ing preoccupation with modes of representation Harvey, 1990, p. 20 ,and capitals increasing dependency on such abstract visualisations, con-

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temporary accounting is, contrary to the illusions of liberal economics(...anything but a neutral and unbiased technical activity Gray et al.,

)1996, p. 51 .Socially reified as providing an all encompassing representation of

economic activity, contemporary accounting has become explicitly impli-cated in modes of social regulation5 }as systems of monitoring andcontrolling economic activity, and, regimes of accumulation6 }as systems

7 ( )of rational calculation Colignon & Covaleski, 1991 . Thus locating con-temporary accounting within a stable, utility maximising environmentassumes the possibility of an apolitical analysis of market place wheretransactions are seemingly engaged in freely by autonomous buyers andsellers enjoying equal rights. Little appreciation or reference to thepower and influence of the social relations of capital is made. Suchanalysis rejects the overwhelmingly normative context of social struc-tures central to the social utility of contemporary accounting and theneo pluralist framework within which these transient institutional ar-rangements are selectively created and destroyed. Only in abandoningthe reflective symbolism8 closely associated with the functionalism ofeconomic liberalism can the pervasive influence of contemporary ac-counting as a social mechanism closely implicated in capital accumula-tion be revealed. Only by relocating the discussion to a setting mostclosely associated with a Marxian critique of bourgeois political economy,can the significance of such social relations be revealed. Social relationsthat are rooted in and principally concerned with the promotion ofcalculated distributional advantage}or profit accumulation. Indeed, mov-ing beyond the comfortable assumptions of market competition helps toreveal how the economic utility of contemporary accounting is primarilycoloured by an unacknowledged affinity with the priorities of capital. Italso helps to reveal how contemporary accounting has become deeplyimplicated in the erratic socio-political geography of capitals turbulentsearch for profit and gain}a symbolic space adopted, supported andrefined as a means of objectifying and adjudicating claims of capital inits single-minded desire to accumulate further capital. Not only hascontemporary accounting become conditioned by the endless and inces-sant reorganisation of regimes of accumulation, it has become closelyassociated with the increasing commodification9 of society and the tem-poral and spatial displacement10 of capital itself, its internationalisationand indeed fictionalisation.

Whilst utopian and idealist characteristics such as representationalfaithfulness, objectivity and neutrality may appeal to those of a traditio-

( )nalist persuasion Watts & Zimmerman, 1978, 1986; Soloman, 1991 ,such rhetoric fails to appreciate the social dynamic of contemporary

( )accounting and the politics of its social construction Hines, 1988 . In-creasingly developed as an active technology of capital accumulation,and directed towards preserving and enhancing already dominant social

( )structures and hierarchies Dillard, 1991 , contemporary accounting has(become purposive rather than being inherently purposeful Burchell et al.,

)1980 . It clearly possesses no aesthetic qualities other than those as-

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signed by human agency. Hence in privileging the priorities of capital,contemporary accounting provides a created symbolic space throughwhich temporal and spatial fixes to capitals accumulation crises can beselectively translated and communicated. Thus it has become inextricablyconnected to capital as a tool of social domination that seeks to rein-force not only dialectical pressures of social history but also the contra-dictions that emerge from the intractable problems of social conflictassociated with the marginalist11 ideals and the economics of monopolycapitalism. Consequently, contemporary accounting has become neithersecondary nor derivative to the social and institutional framework withinwhich it has become firmly embedded} it has become an integral part

( ) 12of the post neo Fordist global culture of capital.Indeed, in facilitating the appearance of naturalism in the social rela-

tionships of capital, contemporary accounting continues to serve to notonly provide a rationale through which the inherent difficulties of capital

( )accumulation and surplus appropriation can be resolved Tinker, 1985 ,but to also disguise capitals increasingly turbulent reorganisation ofsociety. As a manufactured product of the growing inter-relationshipsbetween modes of regulation and regimes of accumulation, the growingmutual dependency of the social arrangements of capital on increasinglysophisticated models of representation has clearly contributed to sustain-ing contemporary accountings social and political utility13. Moreover, ithas assisted in concealing the ontological nature of contemporary ac-

( )counting Bryer, 1995 . Thus in legitimating the actions of often selectand elite social groups, thereby ...amplifying their considerable power in

( )society Richardson, 1988, p. 388 , contemporary accounting has be-come seen as inseparable from the social, political, and economic inter-

(ests it serves Merino & Neimark, 1982; Cooper & Sherer, 1984; Tinker)et al., 1991 . Indeed by homogenising activities in a manner that dis-

guises the inequality of capitals relentless transformation of the society( )Eagleton, 1991 , contemporary accounting has become seen as centralto the maintenance of a monopoly capital as a dominant social hege-

( ) 14mony Cooper, 1980 . A mechanism increasingly cultivated as ideologi-cally neutral, through which the advancement of such selected vested

(interests continues to be defined, mediated, and legitimated Power,)1994 .

Understood in this way, contemporary accounting has thus becomeinextricably connected to the troubles and priorities of capital and deeplyembedded in the very social system within which it is utilised to

( )engender and sustain a false consciousness of objectivity Dillard, 1991 .Indeed, it has become overwhelmingly related to and influenced by thetransformative and speculative logic of capital. An integral part of anadjudication process of exchange that not only seeks to create marketsbut also help sustain belief in such markets and thus provide acceptableoverviews that ensure the reproduction of existing relations of power( )Willmott et al., 1993 . It has become cultivated as a capital specificcommodity primarily endorsed by the dominant priorities of capital in itsincreasing expansion into, and transformation of, the very fabric of

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society, and authenticated by the demands of the institutions and al-liances competing for survival within the increasingly international mar-ket place. Hence, only by problematising contemporary accounting asmore than merely a symptom of and response to the crisis of capitalaccumulation that emerge through tensions with and between hierarchi-cal, market, and commutarian principles of social order, can the

(socio-political context of contemporary accounting be revealed Puxty et)al., 1987 . Indeed, only by locating contemporary accounting beyond the

( )chaotic domain of post neo Fordist global capital, beyond its increasinginternational mobility, can the influence of capitalisms systemic contra-dictions on contemporary accounting as a created representation of capi-

( )tals temporal and spatial displacement Boczko, 1997 be made visible.Thus classification studies which fail to accommodate or acknowledgeany notion of the social hybridity and reflexivity advocated by theincreasingly international priorities of global capital15 must be interpretedwith caution for three very important reasons.

First, many of these studies whilst not explicitly, often implicitly sup-port a functionalist and somewhat positivist interpretation of contem-porary accounting, rejecting without critical comment, the socio-politicalnature of contemporary accounting. Second, many of these studies,perhaps unsurprisingly, only reinforce extant socio-economic perceptions,beliefs and structures. These again neglect to consider the powerfulinfluence and effect of capitals increasingly flexible and fictitious struc-ture on the technology of contemporary accounting. Third, whilst societyand culture may legitimately influence the processes through which theeffects of capital accumulations conflicts and crises are visualisedthrough contemporary accounting, their influence is increasingly inde-terminate and transitory}constrained by the powerful vested intereststhat compete in the international capital accumulation process. This is animportant point, and needs emphasising.

Whilst the society or culture specific thesis may be plausible insome limited context, for example in respect to the development andadaptation of territorial schemes of regulation, it is unlikely that such athesis could be used to formulate rational explanations of internationalcontemporary accounting diversity. Contemporary accounting has becomeincreasingly cultivated as a capital specific commodity}as an increas-ingly accumulation specific commodity authenticated by the fundamen-tals of capital accumulation. Influenced in some limited context by cul-turally derived modes of regulation, this influence has become increas-ingly diluted or negotiated away by the demands of the institutionsand alliances competing for survival within the increasingly internationaland fictitious regimes of capital accumulation. The created symbolicspace of contemporary accounting, has thus become primarily seen as aselected visualisation of the accumulation process, a result of demandsby the dominant and legitimating interests inherent in regimes of capitalaccumulation rather than a product of social and cultural idiosyncrasies.Contemporary accounting may well be influenced by the social, but ithas increasingly become a captured product of capital. Thus the use

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of social determinism}of institutional values and arrangements condi-tioned by the priorities of capital in understanding contemporary ac-counting diversity must therefore be regarded with cautious suspicion.Such attempted interpretations are perhaps the anathema of theeconomic}a fallacy born out of the idealism of economic liberalism,and the increasing ontological insecurity16 associated with the increasingsocial consequences of the changing character of the priorities of capital

( )on the global system see Harvey, 1988; Giddens, 1981 .

The Priorities of Capitalfrom Conflict to Crisis to Chaos

In its broadest sense, capital is an institutional system founded oncommodity production and exchange}a system that has been, andindeed continues to be variously defined and interpreted17. An oppressiveand heterogeneous process of accumulation that increasingly fragmentsand alienates sections of the very society in which it is embedded,capital is more than merely a simple collection of transferable resources.Indeed, it is more than a collection of productive resources18. It is aninstitutional system through which processes of differentiation and ratio-nalisation are legitimated}an institutional system through which tech-nology and organisational structures increasingly develop ...subordinate

( )to the needs of capital accumulation Clegg & Dunkerley, 1980, p. 5 .Ephemeral, transitory and influenced less by the priorities of socio-eco-nomic need than by the erratic and often disorganised interventionism

( )of market mechanisms Lash & Urry, 1987 , the institutional context ofcapital, its increasingly fictitious nature and international mobility, isneither predictable, nor in any ordinary sense stable. It is founded on asocial mobility that has been, and indeed continues to be constrained

(by few discernible physical, political, or technological boundaries Palloix,)1975, 1977 . An invasive and dominating institutional system in which all

the advanced economies of the world have become increasingly impli-( )cated Harvey, 1990 .

Capital is thus dynamic, not because of the mythologised capacities ofinnovation, but because of the coercive laws of competition and thecontradictions of class struggle endemic within its social interrelation-

( )ships Meegan, 1988; Hyman, 1991; Lovering, 1991; Bonefeld, 1993 . It isdeliberate, not because a distinctive historical geography founded on asingle-minded desire to accumulate further capital, but because of itsenforced notions of opposition, rivalry and market competition. And, it isdestructive, not because of its search for speculative profit and gain, butbecause of its endless and incessant expansion, reorganisation andtransformation of the very society within which it is embedded. It is thistransformation process that charms and disguises, creates and destroysneeds and wants, excites and exploits desires and fantasies, and trans-forms time and space, that is ultimately malevolent, derelict of con-science and responsible for its very own ever increasing crisis of accu-mulation19. Indeed it is this turbulent and erratic search for profit and

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gain} for new products and markets, new technologies, new spaces andlocations, new processes of organisation and control that has increas-ingly produced the very crisis of accumulation that capital seeks toescape. A crisis in its transformative capacity that has increasingly un-dermined territorial autonomy, and national stability and self sufficiency.It has expanded international dependency on the erratic flows ofsocio-economic resources and information, and encouraged an increasingpreference for accumulation strategies founded on flexible and fictitious

( )regimes of capital Harvey, 1990 . An institutional restructuring in whichthe priorities of capital have become increasingly divorced from, andless a function of the competitive character of productive capital, andmore a consequence of and thus dependent on the international trans-

( )ferability of fictitious capital Cerny, 1994 . A sustained restructuringthrough which not only has much of the geographical and temporalflexibility of contemporary capital accumulation been achieved, butthrough which social commodification, economic subordination and envi-ronmental abuse have been, and indeed continue to be rationalised.

20 ( )Indeed, whatever delimiters Savage & Warde, 1993 are used to ac-commodate capitals complex transformation and reorganisation, capitalseristic desire to import and assimilate increasingly distant realms ofbusiness life into the capital]labour value relation21 as part of its turbu-lent search for gain has become increasingly dependent on a structural

22 (flexibility associated with fictitious capital Harvey, 1990; Hirst &)Thompson, 1996 . A structural flexibility increasingly conditioned by the

vast intermediary economy of commercial capital23, sustained by anincreasingly international service sector, and managed through the in-creasingly abstract representations of contemporary accounting.

Such an observation however, does not seek to diminish the socialand economic influence of productive capital. It only suggests that thestructural flexibility of capital, its dependency on commercial capital andits derivative construct} fictitious capital}has become an increasingly

( )significant component of the global culture of post neo Fordist capital.A reflexive flexibility so deeply entrenched within the turbulent priorities

( )of post neo Fordist global capital that it has become almost totallyreliant on contemporary accounting as a selected symbolic visualisationof its accumulation process. It is perhaps unsurprising therefore thatfrom the late 1960s/early 1970s through to the 1980s and 1990s on-wards, the analysis and understanding of contemporary accounting diver-sity has almost totally been conditioned by the erratic needs and priori-ties of capital. By the political effects of increasingly dominantmarket-based regulatory structures, and the economic consequences ofan ever competitive and ever uncertain international environment24.

The Limits of TraditionUnderstanding Contemporary AccountingDiversity

( )With few notable exceptions Puxty et al., 1987; Robson et al., 1992 , the

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vast majority of contemporary accounting classification studies have his-torically been influenced by an all too often functionalist analysis domi-nated by the institutional dogma of economic liberalism. An analysis inwhich contemporary accounting has been conceived to be formed pri-marily through and on behalf of the structural interrelationship of capital

( )} through the local social and institutional values and arrangementsconditioned by demands of the accumulation process.

(In this context consider the classification studies of Mueller 1967,) ( ) ( ) ( )1968 , Siedler 1967 , Previts 1975 and the AAA 1977 , the cluster

( )studies of Price Waterhouse 1973, 1975/6, 1979 . The empirical studies( ) ( ) ( )of DaCosta et al. 1978 , Frank 1979 , Nair and Frank 1980 , and Goo-

( ) ( )drich 1982 , and the judgemental studies of Nobes 1983, 1992 , Gray( ) ( )1988 and Rebmann-Huber 1988 . And, the increasingly culturally orien-

( ) ( ) ( )tated studies of Jaggi 1975 , Watts 1977 , Gray 1985, 1988 , Harrison( ) ( ) ( )and McKinnon 1986 , Salter and Niswander 1988 , Belkaoui 1989 ,

( ) ( ) ( )Thomas 1989 , Perera and Matthews 1990 , Belkaoui and Picur 1991 ,( ) ( ) 25Perera 1994 and Gray and Vint 1995 . From the traditions of inductive

analysis with its evaluation and comparison of variations in accountingtechniques to the traditions of deductive26 analysis with its explorationof derived institutional arrangements, few of these classification studieshave been tempted to stray far from the sanctity of liberal marketorthodoxy. Indeed, few of these classification studies have been temptedto explore contemporary accounting diversity by reference to issuesother than those directly related to or contained within the increasinglycompetitive structures of the priorities of capital. Thus in seeking toclassify contemporary accounting by reference to social and institutionalvalues and arrangements clearly conditioned by the demands of accumu-lation, such classification studies have emphasised narrow concerns re-lated to the mechanical, the procedural and the technical aspects ofcontemporary accounting. Indeed, in considering contemporary account-ing to be no more than a functionalist/capitalist reflector, such classifica-tion studies have failed to acknowledge contemporary accounting asanything other than a biased created visualisation increasingly sanc-tioned by the priorities of capital. They have simply extended the under-standing of existing institutional or cultural dogma, thus maintaining themyths of neutrality and representational faithfulness pivotal to the tradi-tion of economic liberalism.

Consider further the following widely cited studies27 in more detail:( ) ( ) ( )Mueller 1967, 1968 , Nobes 1983 and Gray 1988 .

( )Muellers 1967 study identified four distinct patterns of contemporaryaccounting development. Guided by a pre-occupation with the functional-ist arrangements of economic liberalism, Muellers classification wasclearly dominated by an underlying belief in the sanctity and rationalityof established socio-economic institutions. A belief very much evidentfrom language used by Mueller to differentiate his judgmental group-ings; the macro economic pattern, the micro economic pattern, the inde-pendent discipline pattern, and the uniform accounting pattern. Thissomewhat market driven theme was developed still further in Muellers

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( )1968 groupings of business environments. Mueller maintained that sucha range of four judgmental groupings was ...sufficient to embrace( )contemporary accounting as presently known and practised in various

( ) (parts of the world p. 2 , and proposed a ten country grouping Mueller,)1968, pp. 92]95 . Based almost entirely on the deductive analysis of

factors such as; stage of economic development, stage of businesscomplexity, shades of political persuasion, and reliance on particularsystems of law, Mueller concluded that varied combinations of suchfactors would lead to the development of different schemes of contem-porary accounting. Whilst undoubtedly correct, Muellers analysis wasnonetheless restricted by a consideration of socio-functional issues andstructures dominated by and promoted through the demands of themarketplace. Nobes continued this socio-functional approach in his 1983hierarchical classification of fourteen essentially Eurocentric capitalistcountries. Again located within a narrow rationalistic desire to embedcontemporary accounting into the social and institutional arrangements

( )and values of economic liberalism, Nobes 1983 study was again un-doubtedly coloured by the structural constraints of the priorities ofcapital. A prerequisite founded not only on an uncritical acceptance ofthe social, political and economic arrangements, but also on the beliefthat all self interested economic transactions must rely on some underly-ing bond to remain coherent. Although Nobes classification contained a

( )far greater degree of discrimination than Muellers 1967 study, theadoption of Muellers prescriptive micro/macro arrangement resulted inNobes study providing merely a refined elaboration of rather than an

( ) 28improvement to Muellers 1967 earlier formulation .(Nobes did provide some amendments to his 1983 classification Nobes,

)1992 , suggesting that ...such classification studies should be regarded( )as no more than a historical statement Nobes & Parker, 1995, p. 71 .

( )However, Feiges Feige, 1997 comment that the structural constraintscontained within such classifications should nonetheless mean they

( )should be ...treated with caution p. 119 is still relevant. Inasmuch assuch classification studies artificially compartmentalise highly complexand value derived social activities and processes, classification studies ofthis type disregard the interrelationships of such social activities andprocesses; social activities and processes that are increasingly condi-tioned by the complex plethora of national and international factors.Although Mueller, and indeed, Nobes, did acknowledge an interconnect-edness between features of the broader economic environment, businessorganisations, and national institutional factors, the importance they as-

(cribed to such factors was fundamentally flawed see Aitkin & Islam,)1996 . This resulted in a failure to acknowledge and accommodate the

increasingly powerful and vested interests associated with the processesof capital accumulation, and thus produced a misleading analysis of therelationship between contemporary accounting and the social environ-ment. Indeed whilst some limited empirical support has been offered in

( ) ( )respect to both Muellers 1967 classifications, and Nobes 1983 classi-

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fications, their classifications remain suspect, extremely limited and es-( )sentially hypothetical Radebaugh & Gray, 1997 .

By focusing less upon the institutional territoriality of contemporarynation states and more on the generic socio-cultural values perceived to

( )be operationalised in accounting systems, Grays 1988 suggested classi-fication study promised to depart from the predominantly institutionalistnature of previous classification studies. In the event, however, Graysstudy simply extended a relationship between the cultural environment

( )29and contemporary accounting earlier hypothesised by Jaggi 1975 . Bysubsuming the cultural contextualisation of contemporary accountingwithin a framework predicated on existing institutional relationships and

( )arrangements, Grays 1988 classification did not depart from thesocio-functional terrain of economic liberalism. Indeed, despite Salter and

( )Niswanders 1995 contention Grays classification provides a ...work-able theory to explain cross national differences in accounting structure

( ) ( )and practice p. 394 , Grays 1988 classification study did little toilluminate the influence of the competitive and chaotic priorities ofinternational capital. Whilst it is undoubtedly the case that institutional

( )and cultural factors do in a limited context condition contemporary( )accounting Boczko & Willmott, 1998 a focus upon such a vinculum

merely distracts attention from contemporary accounting as a socialconstruct increasingly conditioned by the consequences and structures ofcapital accumulation. Such institutional arrangements, as products of theincreasingly endemic pressures of capital accumulation merely assist incamouflaging the realities of capitals power over the social. Indeed suchclassification studies not only fail to accommodate the overwhelminginfluence of the priorities of capital on contemporary accounting, butalso fail to acknowledge the de-stabilising effects of capital and itsincreasing commodification of human society. To locate the true owner-ship of contemporary accounting requires a wholesale rejection of suchuniformed naivete and incessant historicity associated with economicliberalism. It requires recognition of the social totality}recognition ofthe inherent structures of power and control. Indeed, it requires acritical political economy of classification}one that rejects extant ar-rangements that merely emphasises the political and economic dynamicsof capital. A political economy of classification that not only seeks to becognisant of the eristic effects of capital, but also suggestive of howsuch classifications of contemporary accounting may be used to counter,ameliorate, or even defuse some of the negative effects of the prioritiesof capital.

Towards a Political Economy of Classification

Political economy30 is part of a long tradition of criticism of contem-porary social order. Whilst many variants of political economy exist, it isessentially characterised by attempts to engage with prevailing social

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structures, and has become increasingly associated with a Marxian ana-lytical approach, or more vaguely a dialectical orientation.

In understanding society to be comprised of complex arrangement ofinterrelationships and interdependencies that contains numerous fissuresand distortions, political economy rejects the idealism of systemsthinking, the positivism of contemporary science, and the prioritisation ofeither the local or the global. It does not take apparent social structures,social processes, or accepted social history for granted, but seeks tounderstand how ideology and history conceals processes that in oneway or another influence, oppress, and/or control others. In essencepolitical economy does not search for the causes of observed socialphenomena. Nor does it seek to satisfy itself with the interpretation ofmeanings of social action. Political economy is fundamentally criticalbecause it aims to destroy the illusion of observed reality, and asksubstantive questions approximately extant social processes and struc-tures. It seeks to ask questions not about the nature of issues, but thecircumstances within which such issues arise, and reveal the variousways in which social processes operate as dominating and controllingstructures in defining, mediating, and legitimating knowledge of socialactivities. Indeed, it directs attention towards the fundamental nature ofinstitutional arrangements and seeks to explore notions of power, class,and conflict between such social constituencies exposing where appropri-ate the inherent contradictions and underlying myths of such arrange-ments.

Political economy is thus an epistemic tradition that not only seeks to( )reveal ...the nature of oppressive social structures... but ... point to

(ways in which they can be combated through praxis Harvey, 1990, p.)32 . It seeks to understand the nature of the power relations that

mutually constitutes the production, distribution, and consumption of( )resources Mosco, 1996 , and illuminate how specific sets of social

relationships facilitate the control and reproduction of extant structuresof social domination. It is thus an analytical agenda that rejects theWeberian view that value neutrality can adequately define the relation-ship between the socially moral and the economically sustainable, andseeks to understand social change as a process of ...historical interac-

(tion... rooted in socio-economic conflict Clement & Williams, 1989, p.) ( )7 . It seeks to ...go beyond... the ... technical issues of economic

efficiency and engage with basic moral questions of justice, equity, and( )public good Golding & Murdoch, 1991, p. 18 , and is thus reflexive,

praxilogical and dynamic, encapsulating three fundamental imperatives31.First, a normative context that seeks to go beyond conventional valuejudgements, and leave behind a neo classical economic agenda thatelevates the efficiency of economic wealth maximisation over and abovethe equity of social distribution. Second, a descriptive nature that seeks

(to go beyond the ...ideologies of the status quo Cooper & Sherer,)1984, p. 221 , beyond simple rationalisations of the established view,

and understand the consequences of how symbolic representations im-pact on social action. And, third, a critical intent, that seeks to escape

T. Boczko144

the dominance of accepted theories and recognise not only the con-tested nature of such representations but also questions extant conceptsof what is or what is not in the public interest.

In this respect, a purposeful classification of contemporary accounting}a purposeful political economy of classification cannot be constructedupon the deductive/ inductive idealism of conventional market basedanalysis. It cannot be structured merely on issues concerned with, orrelated to the accumulation, regulation, realisation, and distribution ofprofit. It requires a more radical context of analysis. It requires:

1. a recognition of the role of the market mechanism in the exploita-tion of entrenched power relations;

2. an acknowledgement of the vast constituency of conflicting inter-( )ests that such mechanisms accommodate Tinker, 1985 ; and

3. an understanding of how the impact of unequal exchange inherentwithin the priorities of capital alienates large factions of the mar-ketplace.

Thus a political economy of classification demands a radical de-em-phasising of the market mechanism, and a rejection of contemporarymarket arrangements and institutions as the prime units of social analy-sis. It demands an acknowledgement of the wider social context ofcontemporary accounting} to accommodate issues of social alienationassociated with contemporary market relations, and illuminate the under-pinning politics of externalised wealth appropriation associated with thepriorities of capital. A repositioning of contemporary accounting from its

( )narrow and unfortunately widely accepted character as a symbolicspace constructed through and enacted by the priorities of capital, to amore emancipated notion of contemporary accounting. It requires adenunciation of the traditional orthodoxy associated with the rationalityof conventional accounting or marginalist entity accounting, and anacceptance of a more critical dialectic of social constituency/emancipatoryaccounting32, one that is cognisant of contemporary accountings unityin difference quality. An acceptance of a dialectic that is accommodat-ing to and sympathetic of the more radical and progressive notions of

( )contemporary accountings role in social conflict Lehman, 1992 , political( )subordination, and economic alienation Tinker, 1985 . A critical dialectic

that is more accommodating of the role of contemporary accounting inissues related to, or emergent from:

1. the development and maintenance of social/human rights;2. the increasing international subordination of productive labour;3. the consequences of increasing social and ecological degradation;4. the social consequences related to sustainable human development;5. the increasing displacement and alienation of factions of society;

and6. the consequences of national/ international public policy changes.

Classifying contemporary accounting diversity by reference to whether

Classification 145

or not extant accounting practices provide for the measurement anddisclosure of such issues, or whether extant accounting regulatory struc-tures facilitate or constrain the acknowledgement of such issues wouldnot only provide an opportunity to move beyond the historionics ofcapital, but also provide for the possibility of locating contemporaryaccounting diversity within a social context that transcends the imposedinstitutional constraints of capital. Thus a purposeful political economy ofclassification requires more than a simple acknowledgement of the com-plex interrelationships and chaotic interdependencies between social, po-litical, and economic institutions and arrangements. It requires more thana superficial accommodation of the endemic social pressures definedand mediated through contemporary accounting at the behest of thepriorities of capital. It requires first and foremost a radical abandonmentof the artificiality of either deductive or inductive analysis and a movetowards classification in context. A classification that seeks to neitherprioritise or elevate either context or content, but seeks to simultane-ously question the nature and underlying circumstances within whichsuch accounting practices arise, and, the fundamental nature of contem-porary accounting regulatory arrangements.

Moreover, a political economy of classification requires a critical appre-ciation of the underlying function and purpose of what is beingclassified} that is the real social context of contemporary accounting,but moreover a radical rethink of the structure and focus of how it isclassified} that is a rejection of the structural functionalism of economicliberalism. It requires a constructive acknowledgement of the reflexivesocial role of contemporary accounting}a constructive restoration of thesocial function of contemporary accounting together with ...all the con-

( )flicts and allegiances it entails Lehman, 1992, p. 152 . A restoration ofthe social function of contemporary accounting that transcends the artifi-cial economic and political confines of capital. A rejection of the in-tractable eclecticism of the conventional and traditional and a recogni-tion of the pragmatic realities of the radical. More crucially a politicaleconomy of classification requires an acknowledgement that the owner-ship of contemporary accounting lies beyond the priorities of economicflows and capital accumulation, beyond the nationalistic sovereignty andterritoriality of political regulation and within the complex constituencyof the social.

Conclusion

Underpinning the discussion in this paper has been a desire to exercisethe ghost of economic liberalism. A call to reject the structuralismimposed the complexities of accumulation and the increasing internatio-nal priorities of capital that have for so long dominated the understand-ing of diversity and classification of contemporary accounting. Suchclassifications have thus far concerned themselves with very narrowlydefined functions and characteristics of contemporary accounting, and

T. Boczko146

have consequently provided a less than adequate reflection of ...what is( )really happening in the world Cairns, 1997, p. 316 . Moreover, they

have merely endorsed extant liberal economic rhetoric contending con-temporary accounting to be a created visualisation}a symbolic represen-tation of the accumulation process irredeemably linked to the eristicpriorities of capital.

This paper has also contended that such classification studies have inessence contributed to and assisted in creating and perpetuating anideology of accumulation, whose chaotic consequences have still to befully recognised in mainstream contemporary accounting literature. Onlyby moving beyond the eristic features of capital can the true diversityof contemporary accounting be revealed. Indeed, only through the devel-oping of a critical political economy of classification which:

1. rejects the uncritical naivete, uninformed structuralism and the in-cessant historicity of economic liberalism;

2. rejects the artificiality of deductive/ inductive analysis; and3. recognises the notion of social totality, and the need for classifi-

cation in context;

will an understanding of contemporary accounting diversity be madepossible. A political economy of classification that transcends the priori-ties of capital, surpasses the territoriality of the political and locates thetrue ownership of contemporary accounting within the social.

Notes

1. The term contemporary accounting is used here to describe a ...regulated institutionalprocess, a constructed model... for reporting and communicating the impact of tem-poral and spatial displacements on economic activity and associated regimes of accu-

( )mulation Boczko, 1997, p. 13 . The discussion is thus concerned with contemporaryaccounting as an external reporting mechanism for profit orientated organisations.

2. The term priorities of capital is used here to emphasise the accumulation drivenstructural and institutional arrangements that seek to privilege, prioritise, and indeedlegitimate the accumulation of further capital.

3. The term political economy is used here in the context of ... a study of socialrelations, particularly power relations that mutually constitute the production, distribu-

( )tion and consumption of resources Mosco, 1996, p. 25 . It is in essence ... the( )study of control and survival in social life p. 26 .

4. The term fictitious capital was historically used to describe capital that did notproductively employ labour, however, in a contemporary context it has become in-creasingly associated with an escalating use of credit. Indeed as Marx put it fictitious

(capital is ... some kind of money bet on production that does not yet exist Marx)quoted in Harvey, 1990, p. 107 . In this context it is perhaps best described as any

( )financial instrument including derivative instruments other than the tangible commod-ity of money. In a contemporary context such instruments are often associated with

( )schemes of risk reduction and risk diversification. See also Harvey 1982, Ch. 9 .( )5. The term mode of regulation refers to ...the institutional ensemble laws, agreements ,

and the complex cultural habits and norms which secure capitalist reproduction. Itconsists of formal and informal rules that codify the main social relationships( )Neilsen, 1991, p. 22 . It includes, ...institutions and conventions which reproduce agiven accumulation regime through law, state policy, political practice, rules of negoti-

(ation and bargaining, culture of consumption and social expectations Amin, 1994, p.)8 .

Classification 147

( )6. The term regime of accumulation refers to ...set s of regularities at the level of thewhole economy enabling a more or less coherent process of capital accumulation( )Neilsen, 1991, p. 22 . It includes, ... norms relating to production and management,forms of exchange, principles of wealth accumulation, and patterns of consumption

( )and demand Amin, 1994, p. 8 .( )7. For a detailed discussion on this issue see Weber 1947, 1961, 1968 .

( )8. A reflective theory of representation Hall, 1997 understands the use of signs andsymbols to mirror the world that they purport to describe. Or, as suggested by

( )Boczko and Willmott 1998, p. 1 ...its truth is assumed to be cleansed of power thatmight otherwise defile or distort its accounts.

9. The term commodification is used here in a Marxian context to describe the( )...way capital ism carries out its objective of accumulating capital or realising value

( )through the transformation of use values into exchange value Mosco, 1996, p. 140 .In a conventional context this presumes an increasing use of competitive markets, animportant issue in the accumulation process since the most common embodiment of

( )capitalism is as ...an immense collection of commodities Marx, 1976, p. 126 .10. The term temporal and spatial displacement is used here in the context of the

increasing international movement of capital as a product of time]space compression( ) ( )Harvey, 1990 , or time]space distanciation Giddens, 1991 .

11. For a detailed discussion on the marginalist value theory underpinning contemporary( )accounting see Tinker 1985, in particular Part 3, Chs 9]12 .

12. The term Fordist or Fordism is synonymous with formalised and regulated massproduction, and a Keynesian mode of regulation}an accumulation structure thatemerged under the hegemonic umbrella and leadership of USA after World War II( )Esser & Hirsch, 1994 . This Fordist accumulation structure is often associated withthose social theorists who seek to analyse social and structural change as a series of

(transitions from one form of social capital to another. See for example Aglietta, 1979;Piore & Sabel, 1984; Lipietz, 1985, 1987; Boyer, 1988; Freeman & Perez, 1988; Harvey,

) ( )1990; Jessop, 1991. Such social theorist suggest that the post neo Fordist regimeemerged out of a crisis of accumulation that was characterised by a running out ofoptions to handle the problems of over accumulation. Distinguished by a flexibility in

( )both productive capital and distributional capital, the post neo Fordist structure ofaccumulation has become synonymous with a mobility of capital founded on flexible

( )accumulation Harvey, 1990 , and an increasing structural dependency on international( )capital Smith, 1984 . It should, however, be noted that such functionalist explanations

(of social change are by no means widely accepted. For example, see Rusty, 1989;)Clarke, 1990; Bonefeld & Holloway, 1991; Pollert, 1991; Psychopedis, 1991.

13. The term social and political utility is used here to emphasise that capitalism isdefined by the partially free flow of factors of production and by the selectiveinterference of the political machinery in the market. For a detailed discussion see

( )Wallerstein 1991 .14. The term cultivated is used here in preference to the term developed to indicate

the manufactured and ideologically biased nature of contemporary accountings repre-sentations.

( ) ( )15. For example see classification studies by Jaggi 1975 , Burchell et al. 1985 , Harrison( ) ( ) ( ) ( )and McKinnon 1986 , Cushing 1987 , Gray 1988 , Belkaoui 1989 , Belkaoui and Picur

( ) ( )1991 and Perera 199416. The term ontological insecurity is used here as a product of created representations

or symbolic spaces were such ... created space replaces effective space as the( )overriding principle of organisation Harvey, 1988, p. 309 .

17. In a historical context, the social character of capital accumulation has been inter-preted using many alternative socio-economic paradigms. Such interpretations haveincluded:

v economic liberalism with its concerns with private economic interests and market( )freedom see Smith, 1976; Friedmann, 1977 ;

v economic sociology with its concerns with the relationships between economic and(non economic institutions see Durkhiem, 1933, 1938; Parsons, 1937, 1951; Parsons et

)al., 1953; Weber, 1978; Polanyi, 1944, 1977 ; andv Marxian political economy with its concerns with the influence of power structures

( )and social relations in economic life see Marx, 1967, 1976; Ricardo, 1973 .

( )18. In a Marxian context only productive capital is true capital Harvey, 1990 , andcreated by labour in a process of commodity transformation. In this context, money

T. Boczko148

( )capital and/or finance capital is seen as the created symbol of productive capital,and commercial capital is seen as the process through which the accumulation ofproductive capital, and increasingly in a industrial context, finance capital is mobilised.

19. History is littered with fraught attempts at identifying, minimising and were possiblealleviating, if only temporarily, the causes of these crisis of accumulation. Given the

(foundations of capital accumulation rest on both the rational ordering of space Marx,) ( )1967; Harvey, 1990 , and time Marx, 1976; Landes, 1983 , it is unsurprising that

attempts to mitigate the impact of these crisis of accumulation continue to beformulated in the context of Marxs circuits of capital. Such attempts have oftencomprised of schemes that not only combine characteristics of spatial and temporaldisplacement, but increasingly the fictionalisation of capital.

20. Such delimiters include neo Marxist Regulation School approach, the neo SmithianFlexible Specialisation approach, the neo Schumpeterian approach, the disorganisedcapital thesis, or, the Flexible Accumulation approach. For the neo Marxist Regulationschools socio political account and its emphasis on the increasing tension between

( )social modes of regulation and regimes of accumulation see Aglietta 1979 and( )Lipietz 1985, 1987 . For the neo Smithian Flexible Specialisation account and its

emphasis on the structural relationship between dominant economic and political( ) ( ) ( )institutions see Sabel 1982 , Piore and Sabel 1984 , Sabel and Zeitlin 1985 and

( )Hirst and Zeitlin 1989, 1991 . For the neo Schumpeterian approach, based predomi-nantly on the premise of technological determinism reminiscent of Kondratievs long

( ) ( ) ( )wave theory, see Freeman et al. 1982 , Schumpeter 1987 , Dosi et al. 1988 , Freeman( )and Perez 1988 . For the Disorganised Capitalism thesis, and its emphasis on an

increasing disorganisation of regimes of accumulation emerging out of the materialconditions associated with the powerful structure of class politics see Lash and Urry( ) ( )1987, 1993 and Offe 1985 . For the Flexible Accumulation approach and its increas-ing emphasis on the impact of time]space compression and the increasing dominance

( )of fictitious in regimes of accumulation see Harvey 1987, 1990, 1991 and Harvey and( )Scott 1988 .

21. I am indebted to the external reviewer for this observation.( ) ( )22. Harvey 1990 uses the term flexible accumulation as a descriptor of a post neo

Fordist regime of accumulation.23. In this context commercial capital is seen as an intermediary economy between

( )productive capital and money capital see Thrift, 1987 . It provides much of therationale and impetus for the reduction of trade barriers, the creation of new markets,and continued justification for speculation. Some Marxist theorists suggest that theimportance of commercial capital has been reduced as barriers to capital productionare removed by capitals internationalisation. This paper rejects this scenario andsuggests that commercial capital through its symbiotic relationship with the new

( )international division of labour and the rise of the service class Sassen, 1991 , hasbecome increasingly important as the global culture of capital has imposed its schemaon the accumulation process.

24. In an accounting context such economic consequences can be seen to have promotedincreasing discussion on, and concern with issues related to:

v the rapid growth and development of complex business combinations and consolida-tion;

v the valuation and recognition of tangible and intangible assets;v the uncertainty of income recognition due to price changes and exchange rate

fluctuations; andv the increasing use of derivative financial instruments.

25. Such classifications of contemporary accounting diversity are founded on an analysisof individual accounting practices from which ...development patterns or groupingsare then identified and finally explanations keyed to a variety of economic, social,

( )political and cultural factors are proposed Radebaugh & Gray, 1997, p. 67 .26. Such classifications of contemporary accounting diversity are founded on the identifi-

( )cation of relevant environmental including cultural and social factors which are thenlinked to national accounting practices from which ...international groupings or devel-

( )opment patterns are proposed p. 67 .27. These studies have been selected merely as representative examples of the conventio-

nal econometrically orientated classification studies.( )28. Nobes 1992 has suggested that the strength of Muellers classifications was its

Classification 149

( )pioneering nature... and ... its consideration of the context and development of...( ) ( )contemporary ... accounting systems Nobes, 1992, p. 42 .

( )29. Many accounting researchers including Burchell et al. 1985 and Harrison and McKin-( ) ( )non 1986 have pursued this suggestion. Indeed, Belkaoui and Picur 1991 contend

that ...the culture of a given country determines the choice of its accounting tech-( )niques and the perception of its various accounting phenomena 1991, p. 118 .

30. For an interesting and indeed extensive review of the theories of political economy( )see Caporaso and Levine 1992 .

( )31. For an interesting discussion on a political economy of accounting see Tinker 1980 .For a full and insightful exploration of such imperatives in relation to contemporary

( )accounting see Cooper and Sherer 1984 .32. For a detailed discussion of conventional accounting, marginalist entity accounting,

(social constituency accounting, and emancipatory accounting see Tinker 1985, Part 4,)Ch 14 .

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IntroductionContemporary Accounting a Unity in DifferenceThe Priorities of Capital from Conflict to Crisis to ChaosThe Limits of Tradition Understanding Contemporary AccountingTowards a Political Economy of ClassificationConclusionNotesReferences