Short Reviews

 Jacob Soll (2014). The Reckoning, Allen Lane. 

 It is not surprising why enterprises - be they commercial for-profit businesses, or public sector not for profit entities, appear to obsess so much about their financial operations. The answer is simple. Any organisation will only be sustainable into the future if it generates sufficient revenue to cover its costs. While this is ‘bleeding obvious’ to coin a phrase, it is also the case that, for all sorts of reasons, every year thousands of enterprises will make losses, and in some cases continue to do so until they stop trading, sell up, and distribute their remaining assets to their creditors. And, even where businesses are covering their costs, prudent financial management is essential for ensuring operations are organised efficiently, and resources are not wasted. What’s more, businesses also want to know if their capital (their assets) is growing, and to what extent they are accumulating more debt than they can afford to service, and ultimately pay back to the lender. In short, sound financial management is essential for making sure a nation’s scarce resources are used wisely and maximise the well-being and quality of life of its citizens.

A good way to secure a solid understanding of the ‘essentials’ of sound financial management is to examine its evolution, and this means taking a journey into the history of accounting, or book-keeping, as it was often called. So, where do we begin? We can first all say that history is full of stories where people are seduced into spending money on something they may later not want with money they have not yet got. This leads, not surprisingly, to a deep seated and sometimes frantic desire to monitor spending so that there will be a surplus at the end of some designated period, and the wealth of the enterprise grows rather than shrinks.

The need to control the flow of funds, and do it efficiently, goes back a long way. In ancient Greece and Rome – which involves going back 2000-3000 years, the use of money in the form of coins enabled rulers of states, the leaders of communities, and the owners of businesses to calculate their wealth by listing the money the owned and comparing it with the money they owed. It led to establishment of banks, which set up account books, and loaned money to its citizens. Around 600 BC the ancient Greeks also used systems of accounting to assess the efficiency of government programs. The civil servants of the time were required to keep a list of their receipts and expenditure, which could be examined by an appointed group of so-called public accountants, which we now call auditors. Ancient Rome had a similar system of controls over government spending. Auditors were used to verify spending by the treasury, and review spending on not only public works, but also the operation of the Roman army.

During the eleventh and twelfth centuries in England financial management focused more on the feudal manor and the local tradesperson. Subsequent to his invasion of England in 1066, William the Conqueror conducted a survey of every estate from which taxes to be paid were calculated. This led to the creation of the ‘Domesday’ Book of 1068 which, for the first time, provided detailed listing of rents and taxes payable to the King of England. It was called the Pipe Roll. County sheriffs were appointed to collect the rents and taxes, and the monies paid to the King were recorded through the marking of a hazel wood-stick. These ‘tally sticks’ was notched and marked to indicate how much income had been received from each estate or business, and when it was paid. When Sheriffs had collected their money, they would meet with the King’s treasurer where the money would be taken, the Pipe Roll entry marked accordingly, and a receipt issued. This occurred at a table covered by a chequered cloth, hence the term ‘exchequer’ to describe the treasurer’s role in modern British politics.

However, it was not until the fifteenth century that what we now know as accrual accounting was invented. The Italian Renaissance was a period of enormous artistic and commercial vitality, and one of its many innovations was the introduction of double entry book-keeping. In 1494 Luca Pacioli, a mathematician and monk, published a book titled Everything About Arithmetic, Geometry and Proportion (or Summa, its abbreviated Italian title). One of his chapters (called Reckonings and Writings) was on the topic of accounting, and in it he described the fundamentals of an accounting system that we still use today.

 Pacioli identified the journal as the foundation document that lists the details of every financial transaction. It includes the date it occurred, the nature of the transaction, and whether it was a payment or a receipt. He also invented a system of ledger entries. The ledger provided a radical departure from previous book-keeping systems since it enabled the compiler of the books to include an offsetting entry for every transaction. That is, for every entry on the left side of the ledger (a debit entry), there had to be an equivalent entry on the right side of the ledger (a credit entry).

Pacioli also discussed the concept of the trial balance where all the debit entries were tallied and compared with the summary of all the credit entries. His double entry system required that the debits would equal credits. The Venetian System, as it was subsequently called, allowed Italian merchants to do business efficiently because of its superior book-keeping outcomes and its better financial monitoring processes. As trade expanded it spread across Europe and became the standard model for 'keeping the books'.

Another major book-keeping development occurred in England during the Industrial revolution in the eighteenth century. This time it revolved around the management of costs in manufacturing industry. Josia Wedgwood, one of England’s major pottery producers, found that he could better manage his production costs by calculating detailed costings for materials and labour. He also distinguished between overhead costs, fixed costs and variable costs. He identified the ways in which these costs changed as production levels changed and explained how unit costs would fall as total production increased. He could then calculate the savings resulting from large production runs. We now use the term ‘economies of scale’ to describe this process.

In the nineteenth century accounting became a profession through the establishment of the Institute of Chartered Accountants in Edinburgh, and as the industrial revolution accelerated, the demand for accountants increased exponentially. During the twentieth century the globalization of commerce, increasing inter-firm competition, the increasing complexity of corporate taxation, and stringent government regulation have all increased the demand for accounting systems that allow businesses to manage their financial affairs efficiently and provide appropriate information to owners and regulators.

All of the above points, and more, are superbly examined in Jacob Soll's book. The Introduction and Chapter 1 are especially commendable. They provide an excellent illustration of just about everything on the history f financial management. Chapters 2-9 fill in all the gaps.

Bob Stewart 

10 April 2024.

 Jane Gleeson-White (2014).  Six Capitals: The Revolution Capitalism Has to Have, A&U. 

Jane Gleeson-White's book is the perfect companion piece for Jacob Soll's scholarly work. Interestingly, Chapter 1 covers similar ground, but goes a bit further by dividing the historical development of book-keeping and accounting into three stages or waves, which are: · Wave 1: agriculture, writing and single-entry accounting – which begins around 7000BC and ends around 1400AD; · Wave 2: the printing press, double entry book-keeping and the industrial revolution, which runs from the 1400s to the 1900s; and · Wave 3: the information age and digital technology, which begins in second half of the 1900s, and continues to this day.
Jane goes on to make a crucially important point, which is that these days, politicians, bureaucrats, business managers, not-for-profit CEOs, and citizens alike, are focusing a lot more on the wealth and capital of enterprises rather than just profits and surpluses. This is because they increasingly understand that capital is the driver of growth, the catalyst for increases in public value, and the instigator of improvements in citizen well-being. What’s more, it covers more than just financial capital.

According to Jane there are five other forms of capital, all of which add to a nation's capability to enhance citizen well-being: They are:· Manufactured capital and related infrastructure including dams, power sources, roads, and public transport routes· Intellectual capital including knowledge-based intangibles like patents, copyrights, and computer software· Human capital, including people’s skills, capabilities, drive, and motivations· Social and relationship capital, including goodwill, trust, collaborate ventures, partnerships, shared values and norms, and · Natural capital including stable climates, clean water, fresh air, minerals, forests, clean oceans, unpolluted waterways, and related habitats.

In Jane's mind the challenge is to work out the best way of not only building each form of capital, but also placing a tangible (that is, monetary) value on each form of capital. Economists and public policy analysts are, as we speak, working out ways of ascribing a monetary value to both a loss and a gain in any one of these capitals. And as Jane shows, capital growth is the key to increasing levels of prosperity Creating a content strategy is key to the success of your blog. 

Bob Stewart 

16 May 2024.

 Sarah Bakewell (2023). HUMANLY POSSIBLE: Seven Hundred Years of Humanist Freethinking... 

If you want to familiarise yourself with the history of humanist thought, then Sarah Bakewell’s HUMANLY POSSIBLE is the book for you.

According to Sarah it all began in the 1300s when two Italian writers, Francesco Patrarca and Giovanni Boccaccio argued that the best way of understanding the world - and our place in it – was to study literature from a non-supernatural perspective. This emphasis on ‘human studies’ was a radical departure from religious dogma at the time, which claimed a monopoly over what to read and how to lead a good and moral life.

Using ‘human studies’ as her theme, Sarah took the reader on an intellectual journey across the next six centuries, where she brilliantly revealed the key players – so to speak- who challenged the moral and cultural power of Christianity and promulgated the humanist ethos.  They included Lorenzo Valla, who mounted an attacked on the power of the Church, Desiderius Erasmus, who, although being a devoted Christian, believed in living well and wisely in this world, and Francois-Marie Arouet (better known as Voltaire), who argued that reason and enlightenment - and not religion - was the pathway to progress. People. In short, people could ‘live well without divine intervention’ and be ‘morally good without recognising religious authority.

Sarah cited Michel de Montaigne, Pierre Bayler, Anthony Ashley Cooper (the Third Earl of Shaftsbury) and Jeremy Bentham as proponents of humanism, as  was Mary Wollstonecraft who made the case for women’s rights.  According to Sarah, Mary asserted that women, like men, could be ‘fully humanised’, but only if they were educated in matters that went beyond being ‘taught deportment’ and a ‘few flirtatious ways to attract a husband.’

One of Sarah’s most interesting case studies was the one on Willhelm von Humboldt, a Prussian educator, who, in the early part of the nineteenth century was given the job of redesigning the empire’s education sector. Wilhelm was not only sceptical about religion’s role in shaping people’s character but was also uncomfortable with the state seeing itself as the ‘moral and ideological arbiter’ for people’s lives.’ He preferred to take a humanistic approach, having formulated the view that ‘the seeds of morality lie in people’s ‘own natural disposition to kindness and fellow feeling.’ He went on to say that that things like love and justice ‘harmonise sweetly and naturally with our very humanity.’

Willhelm reckoned that whenever the state enforced a particular belief, it ‘denied people the right to be fully human.’ And, according to Wilhelm, the government’s role was to ‘provide the conditions for a decent life, protect individual freedoms, while simultaneously ensuring that the choices people make did no harm to fellow citizens. And when it came to education, Wilhem argued that the primary goal was to ‘create human beings with moral responsibility, a rich inner life, and intellectual openness to knowledge.’ For Wilhelm, skill development should always be a subsidiary goal.

Sarah followed up with a discussion of John Stuart Mill, whose guiding philosophy centred on two values close to the heart of Wilhelm. They were personal growth and individual freedom, which were the foundation stones of political liberalism. Like Wilhelm, John believed that the state ‘had no business’ telling citizens what they should think or do. Rather, its role was to give people the space and opportunity to maximise their capabilities, while making sure that in the process they minimised harm to others. John was a strong proponent of free speech, and the unfettered right to challenge religious traditions and beliefs.

Sarah also examined the writing of Matthew Arnold, Thomas Huxley, Charles Darwin, Lesley Stephen, Robert Ingersoll, and Betrand Russell, all of whom argued that a world without religious domination - where reason, freedom, and social progress mattered more - was something to be celebrated.

Sarah ended her book on a melancholy note by highlighting the anti-humanist movements that emerged during the nineteenth and twentieth centuries, where unimaginable atrocities were committed in the name of ideologies that promised perfect societies. They included classless Communism, racially pure Nazism, authoritarian Fascism, and puritanical Nihilism. But she reminded readers that despite the tendency of homo-sapiens to wage war to settle disputes, reason, love, and the pursuit of happiness would win out in the end.

In Sarah’s mind there was always room for a ‘rich life’, free from dogma and dictatorship, which she reckoned was encapsulated in the 2022 version of the International Declaration of Modern Humanism. 

What more could you ask for! 

Bob Stewart 

22 September 2024

Michael Hogan (1987). The Sectarian Strand: Religion in Australian History, Penguin Books.

Meredith Lake (2020). The Bible in Australia: A Cultural History, New South Publishing. 

These days, most Australians are ambivalent about organised religion.  Recent surveys undertaken by the Australia Bureau of statistics (ABS) suggest that more citizens than ever before do not identify as religious, while a good proportion of those who do identify as religious are irregular churchgoers.

In 1971 the ABS found that 87% of Australians identified as Christians, with another 1% affiliated to either Buddhism, Hinduism, Islam, or Judaism. Just under 7% ticked the no-religion box, with the remainder undecided.  And Gallop Polls around this time found that about 40% of Christians attended Church on a regular basis.

By 2021 (50 years later) religion appeared to have lost its spiritual grip. An ABS census found that only 44% of Australian identified as Christians with another 9% identifying as either Buddhist, Hindu, Muslim, or Jewish. And, most interestingly of all, 39% of Australians reported no religious affiliation.  Australia was fast becoming a post-Christian society where secularism ruled.

 While these surveys reveal many insights into Australia’s changing national character, they do explain how powerful Christianity might have been in influencing the values, beliefs, and social attitudes of citizens over the last 230 years or so. Many attempts have been made to answer this question, with two of the most informative being Michael Hogan’s 1987 book The Sectarian Strand: Religion in Australian History (Penguin Books), and Meredith Lake’s 2020 study, The Bible in Australia: A Cultural History (New South Publishing). 

Michael made five important points about the role religion has played in Australia’s social and political development.

First, Christianity and its underlying moral principles shaped the social order of the nation, which was essentially conservative.

Second, Christianity not only occupied the spiritual space of individuals and families, but also wriggled its way into many legal spaces.   According to Michael the precedent was set soon after the first fleet had arrived in early 1788. The first two chaplains – Richard Johnson and Samuel Marsden - were not only ministers and “guardians of the public order”, but also took on the roles of magistrate and ‘secular’ judges”.

Third, by the second half of the 19th century Christian schools were being established at a rapid rate, which set the scene for the growth of church-sponsored schooling. This was especially noticeable throughout the twentieth century, with every denomination being represented.

Fourth, Christianity was a significant player in public discourse and the ‘game’ of politics. It began in the 1920s when some radio stations came under the control of the church’s hierarchy. It continued into the 1950s when the Catholic church had, as part of its anti-communist initiative, established its very own political party, the DLP. Sectarianism was everywhere.

And, finally, Christianity had become increasingly segmented, with the Catholic-Protestant divide increasing exponentially.  New variants also emerged, with the Church of the Latter-Day Saints, the Jehovah Witnesses, the Exclusive Brethren, and ‘charismatic revivalism’ being particularly prominent.     

Michael also found that Christianity was not universally adopted by the locals. A secularist thread had been weaving its way through Australia’s cultural fabric since the middle of the 19th century. His observation was prescient, and in 2021 just under 50% of all Australian aged 21-30 reported they had no religious affiliation.

But, on balance, Michael believed that Christianity had set the moral tone of the nation. In his mind, religion was always “close to the centre of Australian history”, and had helped to shape nearly every institution, including “the family, the class structure, the school system, the modern political party system, the pattern of pressure group activity, the terms of Federation, the very self-concept of nationhood, and the rhetoric of political debate.”  

Meredith also explained the impact of Christianity on the Australian social order but approached it from a different perspective. Her focus was the Bible, and the ways in which it had not only captured the minds of true believers, but also how its stories became embedded in the collective psyche and popular culture of the nation. 

Meredeth set the scene by inviting readers to consider two competing myths about the place of religion in Australian society.  The first was that Australia had always been a “doggedly secular society and culture”. The second was that Australia had been a “straight forwardly Christian nation” ever since it was invaded by British colonists. But when it came to separating the facts from the myths, Meredeth, like Michael, reckoned that Christianity had a major impact on Australia culture, noting that even in the 2020s the Bible still “got under the Australian skin.”

According to Meredith the Bible had always been “more than a book” which was evident with the arrival of the first fleet. “Hundreds of   scriptures” were “distributed at the discretion of the chaplain”, and many convicts had “tattoos based on the Bible etched into their skin.   One convict was marked with proverb 14:9, which said “Fools mock at sin.”  Meredith also noted that South Australia’s early development was underpinned by a coterie of Protestants whose aim was to create a ‘civilisation’ based on Christian morality. 

By the 1860s the Bible had found its way into nearly every nook and cranny. Isaac Livermore, a ‘Bible colporter” who had “travelled the length and breadth of Tasmania” distributing the holy book, reckoned that “scarcely a family could be found without at least one volume of the sacred volume.”  Churches were appearing everywhere during the 1870s, which led Anthony Trollope – a well-known English writer – to observe that “wherever there is a community there arises a church, or more commonly churches.” Anthony concluded that he had not only found a “visibly Christianised settler society”, but also a commitment to religious teaching that was “stronger… that it is at home.” 

For the next 60 years or so biblical texts were used to validate numerous social causes, be it mass access to formal education, the enhancement of women’s rights, the regulation of alcohol use, the support of trade unions, and the alleviation of poverty. Meredith also reported that Christian prayers were incorporated into parliamentary affairs, and new members were sworn in with “an oath on the Bible.” And during the 1940s “scriptural arguments” were used to both advance and critique the national government’s White Australia policy and concomitant immigration restrictions.

Meredith viewed the 1950s as something of a golden age for Christianity in Australia, where sacred texts were embedded in the public consciousness. Cecil D, DeMille’s The Ten Commandments, broke all box-office records, while the 1959 visit of American evangelist, Bill Graham, generated records attendances. One of his Melbourne Cricket Ground ‘crusade’ events attracted just over 140,000 devotees.

Meredeth conceded that from the 1960s onward Australian had become less religious, but also asserted that the Bible’s influence on social and political affairs has remained strong. She additionally noted the ways in which biblical narratives have been appropriated by many Aboriginal communities.

Meredith wrapped things up by arguing there were good reasons for the Bible’s continued relevance, one of which was its “enduring ability to inform moral and ethical values. In Meredith’s mind the Bible was still a source of “inspiration, power, and practical wisdom.” 

Michael and Meredith had a point. Neither of them disputed the fact that contemporary Australia is, outwardly, a secular society. For instance, close to 40% of all citizens had no religious affiliation, with another 20-30 percent rarely attending church services. But they both argued that this decline in religiosity had done little to undermine the impact of our Christian heritage. Christianity was never proclaimed the ‘state religion’, but it has, as Michael and Meredith showed, been a major influence on Australian culture and values despite frequent parishioner apathy and spirited competition from secularist groups and non-believers. Our continuing concern for egalitarianism, fairness, and support for the disadvantaged were seen to be three examples of Christianity’s influence on the everyday conduct of ordinary citizens. 

In short, Michael and Meredith reckoned that modern-day secular Australia was built on the back of Christian traditions. In their minds, to argue otherwise was to mess with the historical facts. Despite my secular inclinations, I tend to agree. 

Bob Stewart 

26 September 2024

TBC