“‘The history of Bookkeeping is the history of Civilizations.’” The political life of any Nation can also be discerned from the economic life or social life of that Nation. Political Science relies on mathematics to make quantitative analysis and to draw conclusions from the data. Economics operates on the same logic, except it is done to study economic performance and provide statistical models outlining the past and future of national economies. The increasing complexities of political life as well as economic life enabled the need for issuances of Currency to govern the social relations of everyday life. Nowhere is the opening sentence so readily apparent than in Accounting, where the longstanding purpose has been to record, track, monitor, and process the movements of Currency for everyday goods and services.

The early 20^th century saw the rise of alternative political-economic systems competing against Liberal Capitalist Parliamentary Democracy or “Neoliberalism.” While political and economic concepts were being put forward by the opposition, one must realize that not enough effort was made to develop the financial concepts that would have made the political and economic ones intertwined with each other. The Liberal Capitalist model of Accounting has consistently been Double-Entry Account Bookkeeping, a centuries-old methodology that originated in Italy during the Renaissance and whose origins possibly predate it to Ancient Rome. Double-Entry Account Bookkeeping readily accommodated Neoliberalism’s financial aspect, the Fractional-Reserve Banking System, and its economic aspect, the Market/Mixed Economy.   

The problem was not that the forces opposed to Neoliberalism were unaware or ignorant of the ideological tendencies associated with Double-Entry Account Bookkeeping. The Soviet Union and CMEA/Warsaw Pact countries, Fascist Italy, the German Reich, Imperial Japan, and the People’s Republic of China all recognized in one form or another that Double-Entry Account Bookkeeping represented a sort of financial fifth column among their Accounting Professions. It was less about whether the Accountants and Bookkeepers are in lockstep with Pan-Germanic Socialism, State Corporatism, National Syndicalism, Marxism-Leninism-Maoism, or even State Capitalism. Rather, it was more about whether it is tangibly possible for an alternative accounting system to even exist.

The Soviets were among the foremost proponents of an alternative accounting system, followed by the Maoists and the Pan-Germanic Socialists. The Soviet Union and the Eastern Bloc countries relied on the “Material Product System (MPS),” a Marxist-Leninist analogue to the Liberal Capitalist “United Nations System of National Accounts (UNSNA).” Both MPS and UNSNA were implemented during the Cold War to provide accountants, economic planners, economists, and political scientists with accounting techniques to model the economic activities of their nations and compare them against other nations. But instead of “Gross Domestic Product (GDP),” the Soviets and Eastern Bloc relied on the “Net Material Product (NMP).”

In the People’s Republic of China, the Maoists realized that a new Balance Sheet can be developed to facilitate the implementation of a distinct methods of financial reporting. It will not only modernize the traditional Chinese accounting system, but also lay the foundations for the rise of Planned/Command Economies. Meanwhile, Pan-Germanic Socialism had recognized the potential problems that could arise from the levying of Rents and Interest Rates as measures to regulate the Inflation/Deflation Rate. There was a consistent belief that to achieve the abolition of Rents and Interest, an alternative conception of finance more suited to Syndicalist, Corporatist, Socialist, and even State Capitalist models of economic life was needed.   

These seemingly disparate conclusions were later accompanied by a variety of Environmentalist and Feminist concerns about Double-Entry Account Bookkeeping. The former insisted that Double-Entry Account Bookkeeping devalued the Value of Nature, thereby undermining humanity’s relation to Nature and resulting in our inability to recognize the importance of preserving it for future generations. The latter argued that Double-Entry Account Bookkeeping prevented real women from sustaining themselves through Housework.

These concerns and arguments are all valid from the perspective of Political Science or Economics. In Accounting, however, everything here comes across as being illogical, if not downright ridiculous. Accounting continues to be framed in Neoliberal terms because so many of the developments within the field have been from the Liberal Capitalists themselves. 

More importantly, anyone who tries to apply the Work-Standard in practice will find out that accounting for anything in economic life is going to involve interplay between Arbeit and Geld. There is an “Arbeit-into-Geld” and an “Geld-into-Arbeit.” New Geld gets created from the creation of new Arbeit, while existing Geld is transferred from one set of accounts to another.  

As I had written repeatedly throughout The Work-Standard and The Third Place, the interplay between Arbeit and Geld functions differently from Kapital and Schuld. This is made possible by accounting practices that the Liberal Capitalists have employed for themselves and the apparent absence of one for adherents from all Ideologies compatible with the Work-Standard. For the Second Edition of this Treatise, two new goals are added to the original two from the First Edition:

• How do we go about developing the accounting system for the Work-Standard with the creation of new Geld from Arbeit and the transferring of existing Geld in mind?
• How do we articulate, define, and describe that accounting system, especially when it comes to differentiating it from Double-Entry Account Bookkeeping?
• How do we account for the movement of Geld between different sets of accounts?
• How do we employ the technologies of the Digital Realm and ensure that the alternative accounting system has capabilities beyond that of simple recordkeeping functions?

For the purposes of the Treatise, I had long since described the alternative accounting system as “Nationally-Socialized Accounting Practices (NSAPs)” in reference to the “National-Socialization Principle” associated with the concept of the National-Socialized Enterprise. The term will continue to be used in the Second Edition. Accounting is built on a series of Principles and Assumptions because the numbers presented on a Financial Ledger are meaningless without proper context. Context is always important in every aspect of the Accounting Period.

The overarching goal is to provide a straightforward, accurate model for the average layman as well as political scientists, economists, bookkeepers accountants, economic planners, and government bureaucrats and officials to track and record economic life under the Work-Standard. Everything described was written to specifically accommodate the Council Democratic process that will be applied to every Enterprise within the Nation.

Categories: Work-Standard Accounting Practices

Tags: Accounting, Bookkeeping, Economics, Finance, Philosophy, Politics, Psychology, Socialist Finance, Taxes, Third Place, Work-Standard, Work-Standard Accounting Practices