Reviews
line; and why elites still take neoliberal ideology for granted, even
in the wake of events that, some argue, have discredited neoliberalism. On those questions Cahill has nothing at all to say. Cahill’s work
leads to the conclusion that neoliberalism is caused by…neoliberalism.
Certainly policies can be path dependent, but from a book such as
this, one would have wanted to see some investigation of what the
mechanisms of path dependence are. Why did the financial crisis not
lead political elites to rethink their assumptions? In a book with the
subtitle “On the Durability of Embedded Neoliberalism,” we need
some attention to that question.
Moreover, even on its own terms, the book is unconvincing. For
example, Cahill sees the weakness of unions as suggesting a class explanation for neoliberalism. However, Ronald Reagan’s and Margaret
Thatcher’s attacks on labor were wildly popular at the time, including
among wide segments of the working classes. Cahill surely knows
this, as he has read all the literature on neoliberalism, but he does
not try to work through what it implies for his class explanation.
The analysis in most of the book remains at this level.
The book does not feature any new data or historical evidence,
so it must be judged on its ability to deliver convincing new interpretations and arguments—and on that score, it is sorely lacking.
Monica Prasad
Northwestern University
doi:10.1017/eso.2015.26
Published online June 3, 2015
Jacob Soll. The Reckoning: Financial Accountability and the Rise and Fall of
Nations. New York: Basic Books, 2014. xvii + 276 pp. ISBN 978-0-465-03152-8,
$28.99 (cloth).
In his recent book, The Reckoning: Financial Accountability and the
Rise and Fall of Nations, Jacob Soll recounts the development and
adoption of financial accounting. The practice was first adopted by
merchants, traders, and ambitious political leaders. Actors from these
groups had great incentive to adopt these practices, assuming that
they correctly perceived the costs and benefits of adoption. The earliest adopters appear to have been wildly successful. Caesar Augustus,
Soll tells us, solidified the Julio-Claudian dynasty due largely to his
faithful accounting practices. Augustus used “accounting as a tool
of management and legitimation” (p. 2). Many more would follow,
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employing accounting as a means of personal empowerment. The
Medici family rose to power by the employment of strict accounting measures—and fell as these practices degraded. King Louis XIV
prized accounting’s efficacy, and later feared political fallout that
accompanied an increase in accessibility to information that was formerly scattered and private. Accounting was a double-edged sword
that forced frugality on the wealthy and powerful.
Accounting was also a favorite tool of many Enlightenment-era
professionals. Merchants were among the first to learn that a failure to
keep good accounts might lead one’s business toward failure, or at
least prevent it from expanding. This lesson is exemplified by the rise
of publicly traded corporations. In a world of trade dependent largely
on voluntary exchange, businessmen learned that accounting was an
indication of good faith to investors. Sometimes, these professionals,
in love with the clarity and efficiency of accounting, promoted its
adoption by the state. Strict accounting quickly came to both constrain the leviathan and increase its efficacy. Whereas state actors had
previously used good accounting to better allocate state wealth toward
their own ends, the public turned the purpose of state accounting on
its head by demanding that government make its accounts public.
As accounting practices became widely adopted, creative accounting
methods became a source of hiding financial misdeeds. Such was the
case, for example, with maneuvering by Robert Walpole, as he helped
enable one of the earliest recorded bailouts with his rescue of the
South Sea shareholders. Throughout the modern capitalist era, the
same accounting methods that allowed for complex forms of production and exchange also proved to be drivers of instability and redistribution when employed unethically.
In presenting his argument, Soll leaves the reader with conclusions
worthy of consideration for a broader narrative. Soll shows that doubleentry accounting was not generally accepted as a practice until the
Enlightenment. A major impediment to its adoption was a general mistrust of persons whose occupation involved the handling of large sums
of money. Medieval Christianity’s emphasis on the immorality of money
and profit was the primary source of this impediment. As Soll points out,
even Cosimo de’Medici saw these accounting methods “as a lower and
even immoral discipline” (p. 38). Not coincidentally, the Medici family
was closely tied to the Catholic faith. Also not a coincidence, the family
faded from history as poor accounting methods precipitated its decline.
This attitude was present to a lesser extent in Dutch and English
societies, in which business blossomed under systems that constrained
state power. Many in these societies even respected mercantile ventures. This fits well with a narrative growing in popularity, exemplified
by Deirdra McCloskey’s Bourgeois Dignity (2010) and Joel Mokyr’s
Reviews
The Enlightened Economy (2009), that assigns a culture friendly to
commercial values an essential role in promoting early industrial
development. The narrative also contributes to our understanding of
the development of transparency that is requisite for liberal institutions. As noted earlier, the revelation provided by the account books
of the state constrained the ability of kings and statesmen to act without regard to the income of the state. It also limited the ability of those
inside the state to employ its funds for personal gain. Once accepted,
accounting provided a clearer picture of politico-economic reality.
In all, Soll tells a story of an object that might be used to promote
financial openness or destruction. This tool first arose as a means of facilitating exchange and honest record keeping. As time passed, it came to
be used for financial deception and political conflict. When used toward
these latter ends, accounting serves to diminish trust. In his conclusion,
Soll makes a passionate call for accounting culture to be embedded with
“piety, ethics, civic politics, and art” (p. 208). A society with accounting is not made better off if the accounting is used toward short-sighted
ends. Only an ethic of mutual respect and honesty, along with a responsive legal system, can protect us from such malemployment.
James Caton
George Mason University
doi:10.1017/eso.2015.28
Published online June 3, 2015
George Bryan Souza. Portuguese, Dutch and Chinese in Maritime Asia,
c. 1585–1800: Merchants, Commodities and Commerce. Farnham, Surrey, UK
and Burlington, VT: Ashgate, 2014. xx + 326 pp. ISBN 978-1-4724-1700-8,
$165.00 (cloth).
By the closing of the sixteenth century, the arrival of Europeans in the
East opened a new and long-lasting stage of trade between Europe and
Asia. Portuguese, English, Dutch, French, Danes, and Swedes all
established companies to carry out long-distance trade with Asia
through the Cape of Good Hope. Whether affiliated with companies
or not, Western traders also engaged in trade connections between
different ports in Asia, an activity formerly dominated by Chinese
merchants. Portuguese, Dutch and Chinese in Maritime Asia, c.
1585–1800 offers thirteen essays focusing on the roles of Western and
Eastern merchants in the changing nature of Asian markets and the
development of trade in new commodities. All but one of the essays
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