Accounting History Review

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The social life of money

Martin E. Persson

To cite this article: Martin E. Persson (2016) The social life of money, Accounting History
Review, 26:1, 45-49, DOI: 10.1080/21552851.2015.1128167

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 ACCOUNTING HISTORY REVIEW, 2016
VOL. 26, NO. 1, 45–49

REVIEW ESSAY

The social life of money, by Nigel Dodd, Princeton, Princeton University Press, 2014,
456 pp., £25 (Hardcover), ISBN 978-0-691-14142-8

Nigel Dodd is a Cambridge University-trained sociologist and currently professor at the London
School of Economics and Political Science. Dodd’s interest in money as a subject of sociological
inquiry spans his academic career. His first book on the topic, The Sociology of Money: Economics
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Reason and Contemporary Society, was published in 1994. The Social Life of Money is Dodd’s
second book following similar themes of inquiry. There are plans for a third, Utopianism and
the Future of Money. The third volume is intended to draw on ideas that connect money
with Utopianism, a link that Dodd presents in this present work, and the possibilities for mon-
etary reform.
Dodd’s central thesis is that the subject of money is too important to contemporary econ-
omic life to be left to economists alone and, whereas money appears in the writings of various
sociologists, it is seldom their main concern. In The Social Life of Money, Dodd takes the 2008
financial crisis and Greek bailout as a starting point to ‘ … stand back and reconsider the
nature of money, particularly its social nature, … to refresh our thinking’ (4). This approach
entails the reconsideration of fundamental questions about money such as its source of
value, role in society and relationship to the nation state. In so doing, the author does not
seek to offer a singular but multiple, often contradictory, perspectives on money.
The volume covers a wide range of scholarship on money from the fields of economics, phil-
osophy, and sociology. The first chapter draws on economic history and is concerned with the
origins of money. Dodd begins by noting that debates around the present and future use of
money tend to drift towards disputes as to its earliest appearance and original purpose. The
caveat is that, whereas one can trace the origins of certain forms of money, doing so does
not help in determining the origins of money in general (i.e. the general idea of money). Inci-
dentally, this observation resonates with similar long-standing debates around the original use
and present implications of double-entry bookkeeping (e.g. Littleton 1933; Gleeson-White
2012; Soll 2014) and, more recently, the discovery of clay accounting tablets in Ancient Meso-
potamia (modern-day Iraq, Syria, and Kuwait).
Having made this distinction between these two categories of explanation, Dodd proceeds
to pick apart the most common account of money in general. This story is the traditional one of
money emerging as a medium of exchange; a historical necessity to overcome transactional
difficulties associated with barter, that is, the trading of goods and services for other goods
and services directly. After having shown that the this traditional account is not without its
own problems and contradictions, Dodd presents alternative stories about the origin of
money such as a mean of paying tribute, a medium of communication, or a method of quanti-
fication.1 The remaining seven chapters consider money as capital, debt, guilt, waste, territory,
culture, and Utopia. Dodd shows a great command of the subject matter throughout, drawing
on a very wide range of thinkers and literatures. A number of these thinkers will be familiar to
accounting scholars – Gilles Deleuze, Jacques Derrida, and Karl Marx to name a few – whereas
others have yet to make a mark in the accounting literature, perhaps most notably Antonio
Negri, Georg Simmel, and Giorgio Agamben.
 46 REVIEW ESSAY

Dodd’s work on the subject of money has received widespread attention. It informs scholar-
ship in the economic sociology literature and elsewhere. The subject of money is, of course,
central to the field of accounting as well. Accounting is a measurement system that deals
with monetary units, whether these units are in the form of current currencies, debt, or
dated prices in the form of capital. The calculative practices that make up accounting also facili-
tate the circulation of money in the private and public sectors (e.g. notions such as decision
usefulness and stewardship both relate closely to the issue of money). Given these parallels,
a natural question is then how The Social Life of Money can inform scholarship in our own
field. I have two thoughts on the matter and one example of how one could pursue this.
First, there appears to be a great overlap between Dodd’s alternative narratives about the
origins and functioning of money and similar narratives in accounting. For example, descrip-
tions of accounting as a medium of communication or a method of quantification abound
in our literature. William A. Paton (1889–1991), one of the earliest and most prominent
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North American accounting theorists of his time, emphasised the function of communication
when offering a definition of accounting, as early as 1940 stating that ‘accounting strives to
measure economic forces in financial terms and to communicate the result of such measure-
ments to interested parties’ (Paton 1940, 87). Jordan (1970) defines accounting in much the
same terms some 30 years later, stating that ‘the purpose of accounting is to communicate
economic messages … ’ (Jordan 1970, 139). Cannon (1962) offers a similar description of the
role of the accountant, stating ‘our task is communication and our objective should be to
make that communication as clear as possible’ (Cannon 1962, 44). What is the significance
of these parallels between ways of thinking about the origins and functioning of money and
accounting? It seems to me that Dodd’s synthesis of various narratives offers a potential start-
ing point to theorise accounting.
Second, Dodd’s fundamental questions about money appear to be the same ones that are
currently being asked in the critical accounting research project: the source of accounting’s
value (or power), its role in society, and its relationship to the nation state.2 Several of the
seven ways of thinking about the subject of money have also been used to think about the
subject of accounting. Accounting viewed in terms of capital, debt, and culture is perhaps
the most obvious. Even now, a tradition of critical accounting research exists that theorises
accounting as a particular culture of calculative devices (e.g. Miller and Napier 1993). There
has arguably even been some scholarship already theorising around accounting and territory,
such as Miller and O’Leary’s (1994) work on the spatial configuration of accounting at Caterpillar
Inc. But, if there are indeed parallels between these two subjects, then what about thinking
about accounting in terms of guilt, waste, or Utopia?
To me, the most intriguing of these new possibilities appears in chapter five, where Dodd
considers scholarship that connects money with waste. Georges Bataille (1897–1962) is the
central thinker of this chapter, although there are various detours to the writings of Jacques
Derrida and Jean Baudrillard. Bataille is primarily known for his contribution to surrealism,
but he began his career as an archivist at the Médailles et Antiques de la Bibliothèque nationale
de France (coin collection at the French National Library), wrote several articles in the field of
numismatics (the study of currency), and his father was a tax collector. Although Bataille’s con-
temporaries dismissed most of his writings during his lifetime, interest in his work has seen a
recent resurgence with the publication of Visions of Excess: Selected Writings, 1927–1939 in 1985.
Bataille’s contribution to economic thought, however, remains largely overlooked.
Dodd’s starting point is his reading of Bataille’s theory of the general economy, developed in
The Accursed Share: An Essay on General Economy (1988), which ultimately leads to the inversion
of the textbook definition of money as a function of utility to a form of waste. To Bataille, the
central economic problem is not scarcity but the over-accumulation of resources. As Dodd puts
 ACCOUNTING HISTORY REVIEW 47

it, ‘[t]he underlying argument … is that living organisms always produce more than they need
… ’ (177).
Three interrelated ideas underpin this proposition. The first is Bataille’s distinction between
two categories of consumption. On the one hand, there is productive consumption. It is the
bare minimum consumption necessary to sustain life and economic activity. On the other
hand, there is unproductive consumption. Most economic activity takes place in this latter cat-
egory. Bataille refers to it as the ‘fanciful use of money’ and it includes all other forms of spend-
ing, such as extravagant sporting events, mindless gambling, and the accumulation of luxury
goods. This latter and predominant form of consumption derives its value precisely because
it is demonstrative and wasteful.3
The second idea is Bataille’s concept of heterogeneous matter, which contains all subjects
considered too taboo for bourgeois society and therefore excluded a priori from most intellec-
tual inquiry (recall that Bataille is writing in the 1940s). Whereas conventional scientific and phi-
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losophical systems, economics included, rest on a homogeneous representation of the world,

this heterogeneous matter escapes all forms of appropriation and classification. As such, unpro-
ductive consumption – money as a form of waste – is a heterogeneous matter that is not con-
tained within society but constantly evades it.
The third idea is Bataille’s unusual concept of the sacred. Bataille makes a distinction here
between a homogeneous rational world, based on a series of calculative devices and the bal-
ancing of accounts, and a heterogeneous non-rational world, which is elusive, uncertain, and
sacred. Whereas humans are captive to productive consumption in the rational world,
money enriches life as a form of waste in the non-rational world. The restoration of the
sacred comes from this gratuitous spending, this accursed share, this ‘ … excessive, nonrecuper-
able part of the economy, which must be either consumed gloriously (in festivals), or catastro-
phically (through wars)’ (176).
Returning to the parallels between Dodd’s reading of Bataille’s theory of the general
economy and the critical accounting research project, I foresee several new avenues for theor-
isation. For instance, in the area of accounting regulation, one could reconsider the spread of
International Financial Reporting Standards. These standards have spread on the premise that
‘high-quality’ financial statements will bring foreign investments to cash-starved local compa-
nies (i.e. the standards help match ‘good’ investors and companies). Nevertheless, an alterna-
tive explanation is possible, based on the proposition that there has been an over-
accumulation of money, in a few wealthy countries, which has necessarily led to its glorious
spending abroad. What would be the implications of such a narrative for how we think of inter-
national accounting standards? Bataille, incidentally, offered an analysis of this kind in his
explanation for the Marshall Plan–the US$13 billion worth of economic support that the
United States gave Europe after the end of the Second World War – as a solution to this
problem of excess (207).
In the area of corporate governance, Bebchuk and Fried (2004) have made the astonishing
finding that there appears to be little correlation between CEO compensation and firm per-
formance. The authors attribute this result to their theory of managerial power: the current cor-
porate structure is such that executives can and will influence their own pay. Bataille’s account,
however, offers an even more intriguing explanation: society is unable to handle the over-
accumulation of resources and therefore wastes it on the compensation packages of CEOs.
There has been no increase in performance because that has never been its intention. The com-
pensation has no utility; its purpose is to be gloriously wasted in demonstrative ways.4
One can even extend Bataille’s theory of the general economy to the basic financial report-
ing function. The late George J. Staubus introduced the idea of decision usefulness in his doc-
toral thesis in the 1960s. Standard setters adopted it in the late 1970s. It has underpinned
 48 REVIEW ESSAY

financial reporting ever since. The premise of decision usefulness is that those methods that
provide the ‘best’ information for investment and credit decisions should underpin financial
reporting (1999).5 However, if money is the excess, the accursed share, that which cannot be
contained within society, this premise becomes nonsensical. The over-accumulation of
resources leads investor and creditors to seek new investment opportunities. The decision-use-
fulness theory, which is supposed to guide these investors and creditors, will lead them to com-
panies that are also suffering from the over-accumulation of resources. ‘Fanciful use of money’
results: the spending on share buy-backs that does nothing but manipulate share prices; the
continuous increase in CEO compensation; and the payment of dividends that returns the
problem to the original investors and creditors. Observations such as these offer interesting
and different starting points for considering the role of accounting in contemporary society,
and it would be interesting to see them tested empirically.
The Social Life of Money is well written and a joy to read. It represents a remarkable accom-
plishment in teasing out and bringing together what are often disparate and contradictory
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thoughts on money. As Dodd cautions us, the narrative that emerges is indeed multiple but
together these narratives form a coherent whole. The book has received considerable attention
in the field of economics and sociology and there is no doubt that Dodd is well on his way to
‘refresh our thinking’ on the subject of money. Accounting scholars will find much of interest
here such as Bataille’s theory of the general economy. I hope that we can take note and that our
own scholarship will eventually become a part of the wider debate on the subject of money.

Notes
1. David Graeber, an anthropologist and one of Dodd’s colleagues at the London School of Econ-
omics and Political Science, offers a recent example of such an alternative account in Debt: The
First 5000 Years (2012), where one of the central arguments is that debt as a means of trade
emerged before the use of barter.
2. Critical accounting research is a loosely defined term, but Broadbent (2002) provides a good start-
ing point of what I have in mind.
3. Bataille first developed this distinction in the chapter ‘The Notion of Expenditure’ in Visions of
Excess: Selected Writings, 1927–1939 (1985).
4. Notice that this conclusion is the opposite of conventional Keynesian economics, where even
futile spending would boost total spending and in so doing stimulate demand (e.g. Keynes
example of burying currency in a mineshaft and then have private enterprise extract it in
order to grow the economy).
5. Among other things, Staubus emphasised the importance of the cash-flow statement in a period
where much work on accounting theory (and standard setting) was focused on the measurement
and determination of income.

References
Bataille, G. 1985. Visions of Excess: Selected Writings, 1927–1939. Minneapolis: University of Minnesota Press.
Bataille, G. 1988. The Accursed Share: An Essay on General Economy. New York: Zone Books.
Bebchuk, L., and J. Fried. 2004. Pay Without Performance: The Unfulfilled Promise of Executive Compensation.
Cambridge, MA: Harvard University Press.
Broadbent, J. 2002. “Critical Accounting Research: A View from England.” Critical Perspectives on Accounting 13 (4):
433–449.
Cannon, A. M. 1962. “Discussion Notes on the Basic Postulates of Accounting.” Journal of Accountancy 113 (2): 42–
53.
Dodd, N. 1994. The Sociology of Money: Economics Reason and Contemporary Society. New York: Continuum.
Gleeson-White, J. 2012. Double Entry: How the Merchants of Venice Created Modern Finance. New York:
W. W. Norton & Company.
 ACCOUNTING HISTORY REVIEW 49

Graeber, D. 2012. Debt: The First 5000 Years. Brooklyn, NY: Melville House.
Jordan, J. R. 1970. “Financial Accounting and Communication.” In Accounting: A Book of Readings, edited by G. G.
Mueller and C. H. Smith, 137–153. New York: Holt, Rinehart & Winston.
Littleton, A. C. 1933. Accounting Evolution to 1900. New York: American Institute of Accountants.
Miller, P., and C. J. Napier. 1993. “Genealogies of Calculation.” Accounting, Organizations and Society 18 (7/8): 631–
647.
Miller, P., and T. O’Leary. 1994. “Accounting, ‘Economic Citizenship’ and the Spatial Reordering of Manufacture.”
Accounting, Organizations and Society 19 (1): 15–43.
Paton, W. A. 1940. Recent and Prospective Developments in Accounting Theory. Cambridge, MA: Harvard University
Press.
Soll, J. S. 2014. The Reckoning: Financial Accountability and the Rise and Fall of Nations. New York: Basic Books.
Staubus, G. J. 1999. The Decision-usefulness Theory of Accounting: A Limited History. New York: Routledge.

Martin E. Persson
Ivey Business School, Canada
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mpersson@ivey.ca http://orcid.org/0000-0002-1878-1525
© 2016 Martin E. Persson
http://dx.doi.org/10.1080/21552851.2015.1128167