Column: Books and Writing

The stories that numbers tell: Jane Gleeson-White’s Double Entry

Jane Gleeson-White is a doyenne of the Australian literary scene. She is the author of two books on literature (Classics and Australian Classics), the fiction editor at Overland magazine and the blogger behind Bookish Girl. It is only natural, therefore, that her new book should be about … double entry accounting.

Yes, you read it correctly. Double Entry traces the introduction of double entry accounting to Europe in the fifteenth century, through to the role it played in the industrial revolution and its adoption by post-war economies as a means of measuring gross domestic product. The book has the same flair for making intricate concepts accessible that is evident in Gleeson-White’s other work. So far from being a dry, academic treatise on what one could be forgiven for thinking was a dull topic, this is a frequently engrossing history of a concept integral to modern, market-driven economies.

Double entry accounting, the practice of keeping separate tallies of income and expenditure so net profit can be derived, has driven the quantification of our lives. This quantification is exemplified by the ‘cost/benefit’ concept – as if something’s worth can be neatly subtracted from its cost of production to give its total value. It’s an empiricism Gleeson-White doubts in Double Entry:

[a]ccounting’s use of numbers gives it an air of scientific rectitude and certitude, and yet fundamental uncertainties lurk at its heart. Indeed, accounting is as subjective and partial as the art of storytelling, the other meaning contained in the word “account”.

This subjectivity is amply displayed in the collapse of Enron and One.Tel. Both companies boasted squeaky clean account books before they collapsed, yet the ethical turpitude behind this ‘health’ had me spitting obscenities.

Enron’s spectacular profits were dependent on massive debts not recorded on the company’s books. Instead, the debt was recorded in (off-the-books) subsidiaries or ‘special purpose entities’ (SPEs) and partnerships. Enron’s debt was not US$13 billion as it appeared in its accounts. It was actually US$38 billion. It had understated its debt by a phenomenal US$25 billion.

This ‘understatement’ was made possible by double entry accounting. Gleeson-White explains how mathematics was originally taught as a branch of astrology with reputed connections to black magic. Given how accounting was deployed by Enron and other such companies, I wondered if the connection was ever severed.

The co-existence of clean books and bankruptcy is just one of the many ironies that Double Entry explores. For example, double entry accounting was popularised in the west by a Franciscan monk: a member of an order pledged to poverty and the rejection of worldly things. Yet the monk – Luca Pacioli – was nothing if not worldly. A voracious networker in a time when success depended on patronage, he counted Leonardo da Vinci and Leon Battista Alberti among his friends.

In a further irony, contrary to popular media representations of Islam as ‘backwards’, Double Entry makes clear the debt Western economies owe to Arabic learning. Prior to the introduction of Hindu-Arabic mathematics, the West was reliant on the abacus to calculate and Roman numerals to record transactions, a system that left no trace of how the final result was derived. In contrast, Hindu-Arabic numerals ‘made possible what we now take for granted: the adding, subtracting, multiplying and dividing of Hindu-Arabic numerals on paper with a pen’. Merchants were the first to adopt this revolutionary way of calculating, while scholarly, Christian Europe rejected and even outlawed it. When I asked Gleeson-White about this paradox, she said:

We do forget that the Muslim Arabs were once the great merchants and mathematicians of the Mediterranean, at a time when Europe was stagnant and its intellectual life relatively primitive. By the 9th century, an Arab merchant could cash a cheque in Beijing on his account in Baghdad. By 1200, Arab merchants were the most sophisticated mathematicians of the Mediterranean … If we look closely, this paradox is equally contained in the Christian world, which has seen both great commercial enterprise, accomplishment in science, and ‘anti-modern’ thinking, such as the current thinking of the creationists. It’s just that the media mostly does not portray thinking like creationism as ‘primitive’ and ‘anti-modern’.

So is Jane Gleeson-White – writer, editor, economist, critic, parent – a Renaissance woman?

Lovely thought. But actually, having just spent time with some Renaissance men – Luca Pacioli, Leon Battista Alberti, Piero della Francesca and Leonardo da Vinci – I’d rather be described as a 21st century woman … I’d rather be part of a 21st century move to reintroduce words to the realm of numbers, to translate the language of numbers denominated in money that drives the global economy back into words. Or at least to show that the stories numbers tell are as partial and selective as any story told in words.

Double Entry makes that partiality abundantly clear.

S.A. Jones is a Killings columnist, and the author of the novel Red Dress Walking and of numerous essays. Her goal for 2012 is to finish her current novel Isabelle of the Moon and Stars whilst holding down a full time job and her grip on reality.

• Jane

5 Responses to The stories that numbers tell: Jane Gleeson-White’s Double Entry

1. Claire Corbett
   12:27 pm, January 23, 2012 Reply

   This sounds fascinating. I’m looking forward to reading this book, which seems all too timely with the world economy in such a parlous state.

2. Mary Bosman
   8:42 pm, January 27, 2012 Reply

   my husband is reading Jane’s book I wanted to comment in that Jane dedicates her book to her father Michael whom I think I worked with as a very young woman at Charles A Ord & Minnett in Hunter Street Sydney 1957. If I’m correct can Jane please comment? TIA

3. S.A. Jones
   1:39 pm, January 28, 2012 Reply

   Mary – I’ll bring your comment to Jane’s attention. Cheers.

4. Jane GW
   11:32 am, January 29, 2012 Reply

   Thanks for letting me know SA Jones – yes, Mary, my father did work at O&M in the 1950s. I’ll let him know about your comment too. Amazing. cheers, Jane

5. deb collins
   9:37 pm, June 12, 2012 Reply

   Jane, i found your book fascinating. It’s rare that I want to go out and buy ten copies and send them off to people I know who I imagine would also love it. An extraordinary feat to condense that research into such a readable and engaging book..only 3 years of work!Wow.
   I was in some ways ‘dreading’ the end of the book but you left me with a heightened optimism and a keen interest to source out possible think tanks and groups who might be working in this area.
   I am creating a series of Environmental Dialogues and would love to use some of your research and be linked in to current work. Do you have networks in Australia or Oz that you could easily share with me?
   thank you so much for one of the best reads I have had in a long time.
   deb collins
   btw we went to school together-different years and I saw your mother at the Sydney writers festival (but missed your session), your mother looked just the same and very well.
   best wishes for a long and fabulous career

1. 
   Reading with a vengeance
   

   Caroline Hamilton
2. 
   Ever-decreasing circles: Overland and the modern submissions model
   

   Laurie Steed
3. 
   History in the service of fiction: Anna Funder’s All That I Am
   

   S.A. Jones
4. 
   Literature and politics: a debate
   

   Estelle Tang