The Reckoning: Financial Accountability and the Rise and Fall of Nations

by Jacob Soll

In September 2008, just as I was finishing a book about the French King Louis XIV’s famed finance minister, Jean-Baptiste Colbert, I found something remarkable: Colbert commissioned miniature golden calligraphy account books for the Sun King to carry in his coat pockets. Twice a year, starting in 1661, Louis XIV would receive these new accounts of his expenditures, his revenues, and his assets. It was the first time a monarch of his stature had taken such an interest in accounting. Here, then, it seemed, was a starting point of modern politics and accountability: a king who carried his accounts so that at all moments he might have some reckoning of his kingdom. I was at least as startled to learn next just how short-lived this experiment was. For as soon as Colbert died, in 1683, Louis—consistently in the red due to his predilection for costly wars and palaces like Versailles—discontinued the account books. Rather than tools of administrative success, Louis came to see his account books as illustrations of his failings as a king. He had created a system of accounting and accountability, and now he began breaking up the central administration of his kingdom. This made it impossible to unify the accounts of each ministry into one clear, central register, as Colbert had done, and for any minister to effectively critique, let alone understand, the king’s financial management. If good accounting meant facing the truth when the news was bad, Louis, it seemed, now preferred ignor...

As it ever was.

Over and over again, good accounting practices have produced the levels of trust necessary to found stable governments and vital capitalist societies, and poor accounting and its attendant lack of accountability have led to financial chaos, economic crimes, civil unrest, and worse.

Capitalism and government, it seems, have flourished without massive crises only during distinct and even limited periods of time when financial accountability functions.

People have known how to do good accounting for nearly a millennium, but many financial institutions and regimes have just chosen not to do it.

Accounting brought with it a fundamentally different way of thinking about political legitimacy: Balanced books equaled not just good business but also good government.

正名定義

In the sixteenth century, with the decline of the Italian republics and the rise of the great monarchies, the interest in accounting faded.

The age of discovery and shift of the spice trade from Venice to Portugal.

What this book shows is that financial accountability functioned better when accounting was seen not simply as part of a financial transaction but also as part of a moral and cultural framework.

Humble citizens and slaves were educated and employed as bookkeepers. For the most part, Athenians preferred public slaves as comptrollers and auditors because they could be tortured on the rack and freemen could not.

Curious.