The Accountant’s Economic Revolution

It is nothing new for members of environmental or socialist movements to call for revisions to the capitalist system…. it is however something else when the Institute of Chartered Accountants of England and Wales (see - ICAEW) does so. The ICAEW is a professional membership organisation, supporting over 138,000 chartered accountants around the world. The highly paid members of ICAEW provide the financial and business knowledge to support individuals, organisations and communities in their goals of achieving economic success. The ICAEW and its accounting members play important roles in ensuring the smooth running of capitalism – so when they debate changing the capitalist model we should give them our serious attention.

In the ICAEW members’ magazine, Nicholas Shaxson  argues that it is time to create wealth for society – not for shareholders (“In Step with Society”, Economia, Issue 3, 2012, pp. 41-45). Is the ghost of Karl Marx giving them this direction?  And as if this forthright assault on the holy grail of free enterprise was not enough, Nicholas goes on to quote from Keynes regarding what is in essence the sine qua non of Modern financial markets – the separation of ownership and operation of capital: 

“But experience is accumulating that remoteness between ownership and operation is an evil in the relations among men, likely or certain in the long run to set up strains and enmities which will bring to nought the financial calculation.”

Accountant's join the Revolution

Keynes wrote those words for the Yale Review in June 1933 in an article with the title National Self-Sufficiency. The year 1933 was of course in the middle of the Great Depression of the 20^th century. We are now in the middle of another great depression – one that will not be the greatest of the 21^st century if we pursue capitalism-business-as-usual.

By bringing ownership and operation together physically,  any social and environmental gains made by an operation will be appreciated and valued first-hand by the owners. At the moment it is only the immediately electronically-transferred economic gains - the money - that remote shareholders get to know first-hand.