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A challenge to traditional accounting systems

May 1, 2019 Leave a comment Go to comments

from Peter Söderbaum 

Present accounting systems at the national and organizational level are closely connected with neoclassical economics. The main parameter in national accounting is Gross Domestic Product (GDP). Other macroeconomic indicators are consumption, investments, exports, imports. These variables are all monetary in kind.

But as has (hopefully) been made clear, present threats to mankind are as much, if not more, of a non-monetary kind. Today “sustainable development” has become a key challenge where non-monetary accounting of a tentative or more standardized kind are very much needed. Few people among those who take part in the development dialogue consider GDP and GDP-growth to be a sufficient idea of welfare.

Economics, ideological orientation and democracy for sustainable development

  1. Ken Zimmerman
    May 6, 2019 at 2:22 am
    Reply

    The book is afflicted with a misunderstanding that is common among economists. If economists even consider the topic of culture they usually get it wrong. Söderbaum is no exception. In exploring Kate Raworth’s “Doughnut Economics. 7 Ways to Think Like a 21st Century Economist” (2017), Söderbaum comments “’doughnut economics’ may appear strange, but refers to the embeddedness of the economy in a socio-cultural and ecological realm.” The economy is not “embedded” in a socio-cultural realm. It is the socio-cultural realm. Likewise, the ecological is in the same realm. Culture encompasses everything in human “reality.” Sapiens is culture. Culture’s purpose is to enclose, guide, and protect the species. But as history demonstrates, it can breakdown.

    Söderbaum notes, “Communication is clearly facilitated if there is only one conceptual and theoretical framework. In many situations, orthodoxy represents a common conceptual framework for actors in different roles that will allow them to understand each other. But if our present global society faces problems of new kinds, then orthodox (or mainstream) economics may not be enough, and may indeed be part of the problems faced. The possibility that we need new languages for communication cannot be excluded. I am not in favor of simple explanations of the present environmental crisis (for example the threats of climate change) but I believe that the dominance of mainstream neoclassical economics has a role. Pluralism (rather than neoclassical monopoly) is very much needed.” This is a nice sentiment, but it’s not enough. Yes, we need a common language for communication. That language must emerge from a common culture. That culture can be expansive and mufti-faceted, and certainly flexible enough for all to speak and be understood. But if our species is to survive, we must find a way to create that single tribe, that single culture which from its beginnings allowed Sapiens to survive. Right now, Sapiens is divided so inexorably and rigidly among tribes endlessly at war with one another that survival of the species is unlikely. Academic disciplines finding new ways to communicate and cooperate may be slightly beneficial in this situation, but they are not the solution. The solution must be a change in all areas of human life through building once again a common culture. Climate change, nuclear or biological war, pandemic, political corruption, or one of a hundred other “conflicts” with kill the species, otherwise.

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