Monday, May 6, 2013

Double Entry by Jane Gleeson-White

This book's full title is Double Entry, How the merchants of Venice created modern finance. This book started off as a well told story and was interestingly written. However, she ends with big rant against corporations. Too bad she goes from being a good historian to being a raving idiot on a rant against corporations.

There is a good interview done by the economist on YouTube. It is only 5 minutes long.

There is a good review of this book at Wall Street Journal. This review concentrates on the history of the double entry method which is the best part of this book. This is also another good review at the Management Today site. This reviewer, Luke Johnson, ends the review with a remark on the deterioration of this book at the end. "It is a shame the book deteriorates into a left-wing diatribe, because the key story - the history of bookkeeping - is an interesting one, and well told."

One of things she talks about and about which I think one of the stupidest ideas I have heard is the one where people look at the worse possible characteristics of a corporation and use the Mental Disorder test and declare corporations psychopaths (by their very nature). Corporations are run by people. To say that we should not expect corporations to behave like a "good corporate citizen" is just giving some business leaders a license to behave badly.

I do not think that we should tie corporations up in so much read tape that they cannot function. However, it is proper to regulate them. For example, government rules about (or against) pollution is decidedly good for society as a whole. We should go after executives who falsify accounting records. (However, putting them in jail for hundreds of years is pointless, but this is a whole other conversation. I think that we can be more innovative than jailing non-violet offenders. It is too bad that we are so set in our ways that if any Judge decides to be innovative in sentencing (beside jail), we talk about cruel and unusual punishment.)

The author seems to just now be realizing that money is not everything. Yes, we do need a certain amount of money to live, but there is a limit to what we need. Of course, people look at this differently and calculate differently what they required, but after a certain amount of money or level of living, we want more than just money. We do want things like pollution control. And, the western world has moved strongly in this direction. We have done a lot to clean up our environment. Yes, more needs to be done, but we have still done quite a lot.

GDP is just money, but I do not decide to stay in Canada just because of its GDP. Life is good in Canada. No, it is not perfect and we do have problems, but I believe we will solve them.

I also do not believe in the redistributions of money. (This is just another form of plunder.) If people get money for nothing it has no value. This is what is wrong with welfare. It was a great idea that did not work. I think we need to get families that have been on welfare for 3 to 4 generations off it so we can spend more time and money on more current problems, like the homelessness problem. Our current welfare programs have done nothing to solve homelessness.

She has a chapter on "How Accounting Could make or Break the World". I think that accounting (or Double Entry Bookkeeping) cannot do everything. If you want to save the world, perhaps you should use other methods. To just view our world through the eyes of an accountant is wrong on so many levels. There is far more to life than money and accounting for it. Sorry, but to make accounting as a view to life is so short sighted.

However, a big problem I see today is that everyone wants things like pension and health case, but they want someone else to work and pay for it. At some point people are going to have to realize that if they want pensions and health care, they will have to work and pay for it themselves.

On my website is how to find this book on Amazon if you care to purchase it. See White. Also, this book review and other books I have reviewed are on my website at Book Reviews.