Bryer, Rob. (2006) Capitalist accountability and the British Industrial Revolution : the Carron Company, 1759-circa. 1850. Accounting Organizations and Society, Vol.31 (No.8). pp. 687-734. ISSN 0361-3682

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Abstract

The paper argues that accounting historians can help us to understand the origins of the British Industrial Revolution (BIR) by explaining the contribution of accounting to financial success. It re-examines the archive of the Carron Company (hereafter, 'Carron') from its formation in 1759 to around 1850 to explore the theory derived from Marx that class conflict, the capitalist mentality, its social relations of production, and accounts, drove the BIR. It shows that, contrary to the currently accepted view that Carron's early financial accounts were a 'shambles', its partners used integrated financial and management accounts based on double entry bookkeeping to impose capitalist accountability on their managers and workers. The paper argues that zealous accounting was critical to Carron's financial success because accountability for capital drove orgamisational and technical innovation and it underlay the partners' early social solidarity. Carron's partners worked collectively during the company's difficult formative period up to the 1780s, using accounts to hold the managing partner and his subordinates accountable to them for the circulation of capital and to conduct class war against their workers. From the 1790s, the managing partner exploited a weakness in Carron's system of corporate governance to understate its profits to demoralise other partners into selling their shares to give him control, which he used to divert a disproportionate share of its accumulating wealth to him and his family. The paper concludes that Carron's history supports the Marxist theory that accounts played an important role in fuelling the BIR by giving capitalists a technology for controlling production for profit, what Marx called controlling the 'valorization process', and for promoting the social cohesion of capital. It calls on accounting historians to test this theory by revisiting the archives of other leading BIR firms, so that we can construct a history of this pivotal shift in the trajectory of world economic development on solid empirical foundations. (c) 2006 Elsevier Ltd. All rights reserved.

Item Type:	Journal Article
Subjects:	H Social Sciences > HG Finance
Divisions:	Faculty of Social Sciences > Warwick Business School
Journal or Publication Title:	Accounting Organizations and Society
Publisher:	Pergamon-Elsevier Science Ltd.
ISSN:	0361-3682
Date:	November 2006
Volume:	Vol.31
Number:	No.8
Number of Pages:	48
Page Range:	pp. 687-734
Identification Number:	10.1016/j.aos.2006.05.002
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
URI:	http://wrap.warwick.ac.uk/id/eprint/32870

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