Ktismatics

2 February 2007

Crunching the Numbers (Crosby continued)

Filed under: Culture, Ktismata — ktismatics @ 3:29 pm

At last! Double-entry bookkeeping, what Matthaus Schwartz, 16th-century accountant to the Fuggers’ banking operations, called “the magic mirror in which the adept sees both himself and others”! (Pay attention, Erdman, this will be on the test.)

In the Middle Ages there were no accounts receivable or payable, little lending, and no accountants. There were no companies apart from the individual owners. Financial records looked like diaries, keeping track of transactions in narrative form. Increased trade and complicated business arrangements revealed the critical shortcomings of traditional record-keeping.

Around 1300 some Italian accountants began using double-entry bookkeeping. The first step was to post assets and liabilities separately; by mid-century accountants in Bruges were lining them up in parallel columns, making them easier to compare. Balancing the books was a hit-or-miss, more-or-less affair. Pacioli, a Franciscan and a close friend of Alberti the master teacher of perspectival painting, wrote the state-of-the-art reference book on all things mathematical in the late 1400s. Pacioli devoted an entire section of this masterwork to double-entry bookkeeping. He recommended that a firm just getting started with the new technique should take an inventory of assets (goods, properties, cash) and liabilities. The books were to be three in number: the memorandum book (a detailed record of every transaction), the journal (income statement), and the ledger (balance sheet). Each book was to be marked with “that glorious sign from which all enemies of the spiritual flee, and before which all the infernal pack justly tremble: the Sign of the Holy Cross.” Then came the arduous task of balancing: income with outgo, assets with liabilities, net income with change of assets. If income exceeded outgo, all was well. If not? “May God protect each of us who is really a good Christian from such a state of affairs.”

Crosby observes in conclusion:

Double-entry bookkeeping did not change the world. It was not even essential for capitalism. It was not an intellectual masterpiece like Copernicus’s model of a heliocentric universe, and literati and cognoscenti have scorned bookkeepers’ ledgers as no more glorious than the sawdust and shavings on the floor of a carpenter’s shop… But our tastes affect the development of our culture and our societies less than our practices do. Bookkeeping has had a massive and pervasive influence on the way we think.

Double-entry bookkeeping was and is a means of soaking up and holding in suspension and then arranging and making sense out of masses of data that previously had been spilled and lost… Money is never middle-ish. Every time an accountant has divided everyting within his or her purview into plus or minus, our inclination to categorize all experience as this or as that has gained validation… Precision, indispensible to our science, technology, economic and bureaucratic practice, was rare in the Middle Ages, and even more rarely quantitative. In the past seven hundred centuries bookkeeping has done more to shape th perceptions of more bright minds than any single innovation in philosophy or science.

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22 Comments »

  1. Jeez…This is cool. My professor mentioned double-entry book keeping once in a lecture – in passing, mind you – and I’ve been left intrigued ever since. I’ve tried to find information on it, but not to much avail. I actually figured you might hit upon the topic. Thanks. I feel more enlightened. This actually makes me want to buy the book and read the whole chapter, though! It sounds like its essentially antoher move toward the human’s “view from nowhere” (which game man a view of the whole that belonged to God, essentially, I think), which – as evidenced by the term “double” in the title – also leads to lots of questions about representation in art and philosophy.

    In other words, I think it sounds similar to what was happening with Giotto and the clock…and which eventually became more fully obvious all that was going on with Copernicus and Galileo. The visual distinction of figures in a painting, as whole bodies in themselves (from the viewpoint of the audience of the painting) corresponds here to our view of the whole globe…which was originally a view only from the imagaination, from “nowhere”.

    I had intuited this before, in relation to double-entry book keeping, but didn’t really understand the phenomenon of the book keeping itslef enough to really see what was going on there. Still feel like I need to learn more about it, though, as I mentioned. All in all…THANKS.

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    Comment by Jason Hesiak — 2 February 2007 @ 6:57 pm

  2. Speaking of all this stuff…has anyone besided myself found it interesting that it was around the time of Giotto’s life when the desert fathers of Jewish mysticism arose in Southern Spain…in a whole different place. It almost seems like God was placing a little clue in Spain – the opposite to what was happening in Italy – that would remain hidden and be long forgotten, but would be a reminder of what was happening. It seems like this kind of thing happens a lot. Max Plank happened not too long after Newton, really (in the big view of history). Postmodernism began to happen soon after Sputnik. Socrates reminded everyone that we know nothing right before Alexander conqured the whole known world. And God Incarnate died on a Cross (his da-Sien was un-“there”-ed) just as the Roman Empire was doing something similar in their own way.

    There seem to be hints of this coming together and breaking apart relationship in the Bible…which seems to be such a big driving force of much of our history. When David is at the height of his kingdom it was a sin to take a census. Whereas it was a command while Isreal was wandering like lost nomads through the desert.

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    Comment by Jason Hesiak — 2 February 2007 @ 7:09 pm

  3. Oh, forgot to mention…sorry…by desert fathers in S. Spain I was referring to the Jewish mystics. Meant to call them out by name, but got to going on the rest of all that crazyness…

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    Comment by Jason Hesiak — 2 February 2007 @ 7:27 pm

  4. “View from nowhere” — The late medievalists came up with a standardized “grammar and syntax” for visually representing any entity’s financial condition. A statement of accounts is “subjective” in the sense that it describes the world from the perspective of the particular individual or company. But because the representational architecture is standardized, it’s conceivable that you could represent the financial situation of the whole world with the same double-entry system — which is your point, I think. It’s like representing the whole solar system on a grid in a “view from nowhere.”

    It’s interesting to think about the relationship between balance sheet and income statement. The balance sheet (assets and liabilities) shows a steady-state picture of the subject in isolation, as an economic “self.” The income statement is a dynamic representation, summarizing the subject’s flows and exchanges in the outside financial environment. The economic self is the aggregate net result of every individual exchange (revenue – cost). To what extent does this model characterize the human self as the net result of every social exchange? That there is no core self outside of our interactions with others?

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    Comment by ktismatics — 3 February 2007 @ 11:04 am

  5. The Jewish mystics were also fascinated with quantification and visualization. The kabbalah is based on mystical numerology of perfect numbers, 666 and so on. To read Scripture kabbalistically you would have to inspect the text visually, looking at the letters rather than just hearing them. Then you need some kind of formalized translation scheme: letter to numerical value to mystical meaning of the number. It’s another manifestation of the Greek orientation to numbers as pointers to the Ideal rather than as a tool for actually counting stuff up.

    It’s also interesting to think about the Jews’ participation in what was happening in Europe. Their ghettoization kept them isolated for a long time before they finally got involved. Spain finally pushed the last of the Muslims and Jews out of the country in 1492 — now why does that date ring a bell? Now the Jews are big contributors to Enlightenment-inspired realms of endeavor, whereas the Muslims?

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    Comment by ktismatics — 3 February 2007 @ 11:44 am

  6. But as you said, for the Jewish mystics, numbers were symbolic and not just informational. The quantitative numbers, rather than constituting the Jewish mystical world, pointed to a hidden one beyond that was the source of this one. Also, though, one of the primary things the Jewish mystics are known for is a view of the world that is not purely visual. The Sefer Yetzerah is known for its “four stages of creation” that lead to a unity of perception by of all five senses in the same time and place. I’ve experienced this. It was weird :)

    http://jasonhesiak.blogspot.com/2007/01/standing-in-door.html

    All in all…in my reading of Jewish mysticism, I’ve felt like they were taking what was given to them (the quantification that was occuring at the time), a particular context, and pointing beyond with it. Rather than actually contributing to the quantification, really.

    Kind of like how what Michelangelo did with perspective is quite complex, and yet simple. He took it as given. But then as well he exploded it, broke it to pieces. His David is for a particular point of view. And yet in his architecture you see doubled columns rather than single ones for your eye to fix on, as an example. Just about every architectural element of his hand seems to be hanging in the balance, as if it is about to fall or split apart, and yet as if there’s some central “logos” to it that holds it together in the here and now.

    At his Laurentian library…on the front door into the vestibule is very fat, alive and life-giving fishes of the sea. The prime architectural element of the inside, however, is a reminder that stands like The Raven above the door from the vestibule to the library…it’s a big bull’s skull, staring right at you…looks like it came from the desert. By the way, then, once you get into the library, the pattern on the floor and ceiling is an interweaving of these two figures inside of a square. But the skull appears on the orthogonal axis – central to our human experience – while the fish appear in the corners of the square – marginal to our human experience but actually holding the pattern together.

    All that to say…I don’t think its an argument as to whether there is a core self outside of our interactions with others (BTW what you said about the self and the accounting of his financial reality is VERY interesting). I think that the pattern on the floor and ceiling of Michelangelo’s library is a picture of what’s happening…particularly if taken in the context of its being built a generation after the invention of perspective (in a sense the invention of the subject). Every day new cells come to life in our body and many cells die. We are all born. We all die. Same things actually end up “happening” to us all. “What has been always will be. What will be always has been”, said a famous modern Jewish mystic architect who was borrowing from his Proverbs :)

    As for your paragraph above about Jews and Muslims, ect. See what I said above about Jewish mysticism. In other words…I’m not so sure about that. Really, though, I’m not negating what you said. Really, I’m just not sure. I’m not sure if I don’t know the history well enough, or if we are interpreting events differently. For an interesting link (one Jewish man against another…Daniel Libeskind vs. Larry Silverstein):

    http://arts.guardian.co.uk/news/story/0,11711,1317187,00.html

    :)

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    Comment by Jason Hesiak — 4 February 2007 @ 12:53 am

  7. Oh…also. The Sefer Yetzerah was known for breaking the mold from previous Jewish mystical trends and treating the Ten Seiferot as dynamic “emmanations” that manifested themselves in actual reality rather than as more static and unchanging Forms that fill the merely changing and shifting “vessels” of physical reality.

    Also – question. If the idea of numbers as pointers to an ideal is Greek, then what is the notion of numbers as an informative tool for addition? Roman?

    Also…BTW…in relation to the above stated relation between the Sefer Yetzerah and previous Jewish mystical ideas…I view BOTH as coming in one Greek package…one pre-alphabetic and/or pre-Socratic (dynamic emmanations) and the other post-alphabetic and/or post-Socratic (unchanging ideal Forms).

    See:
    http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=6316

    “She argues that Greek thought and Greek architecture share a common ground in the amazing fabrications of the legendary Daedalus: statues so animated with divine life that they had to be bound in chains…” In this book/essay she closely examines the shift from Athena’s statue being placed in chains – but having a static appearance – during the city’s processional to the big yearly worship feast/ritual on the Acropolis…to her statue’s appearing more dynamic but in need of no chains to hold it down. This shift happened right around or just before the life of Socrates.

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    Comment by Jason Hesiak — 4 February 2007 @ 1:14 am

  8. Using numbers as a portal to a spiritual dimension — isn’t that similar to the icon painters using visual representation as a a portal to the spiritual? More in keeping with a medieval idea. Aquinas read the Jew Maimonides and the Muslim Averroes, both of whom were medieval Aristotelians in Islamic Spain. Aquinas learned from their synthesis of Aristotle and theology and brought it with him to Paris. He formalized medieval exegetical practice into the “fourfold method” Which arose in medieval Jewish practice around the same time. This, it seems to me, is high medieval: formalizing a mystical idealism in philosophical and mathematical terms. The move to the modern is to pay attention to the physical realm for its own sake, not as a portal to another realm. Crosby’s book shows some of the transition during the 13th – 16th centuries that would lead to the kind of de-mysticized, modern exegesis of somebody like Calvin.

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    Comment by ktismatics — 4 February 2007 @ 6:32 am

  9. Jason – Your thoughts about Michelangelo are intriguing. In double entry bookkeeping, the “balance sheet” consists of two columns of figures without a central column. The balance is the relationship that holds between the two columns, a relationship that is not itself visible in the columns, a relationship that is one further degree of abstraction beyond the numbers, a relationship of perfect Equality. This perfect abstract Equality is represented in the newly-invented symbol of =, which is two parallel lines without a line between them. Their perfect equality is recognized by an abstraction that does not appear, an abstraction that exists in the empty gap between the two visible lines.

    I will return to your other insights later, and I will also look at the links.

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    Comment by ktismatics — 4 February 2007 @ 10:28 am

  10. You asked whether counting is Roman. I think it’s Hebrew. In Genesis 1 the narrator lines up the days of creation sequentially and assigns them numbers: one day, the second day, etc. Along with everything else, Genesis 1 is the story of the creation of counting.

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    Comment by ktismatics — 4 February 2007 @ 10:40 am

  11. Aaahhh…the equal sign…cool. Another intersting thing about the gap between the two columns is that they are horizontal…”imagine Michelangelo’s David lying horizontal” :)

    And as for counting being Hebrew…yeah, I guess for the Greeks counting was essentially geometry, which isn’t really counting. But – I had in mind Roman numerals. They imitate a man’s counting on his hand…? I have felt like modern counting, taking into account the physical for its own sake, had Roman worship practices in its ancestry. The Romans were idolators in ways that the Greeks were not.

    ?

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    Comment by Jason Hesiak — 4 February 2007 @ 8:13 pm

  12. First, the numbers. As you’ll surely agree, Roman numerals are hard to manipulate and to line up in columns. The switch from Roman to Arabic numerals was a necessary condition for the development of sophisticated mathematical operations. The Arabs didn’t invent this numbering system; the Hindus did, sometime around the 6th century AD. The number zero first appeared in Indian documents around the 10th century AD. India produced great mathematicians, but I think their interests were abstract — like the Greeks.

    As to the use of numbers in practical tasks like counting tangible things, the Romans were surely more practical and materialistic than the Greeks. Roman culture was some combination of Greek and pagan. The ancient pagan cultures were, I think, materialistic in the sense that they believed that matter had existence independent of mind/spirit. Some of the Greeks did too (e.g., the Epicureans) and I think they probably had more influence on Roman thought than did Plato. Aristotle, despite his reputation as a realist, reads a lot like a Plato disciple.

    I think, though, that Hebrew culture too is quite materialistic. Nowhere in Hebrew worldview do you get a sense that the material world is a shadow or imperfect manifestation of the spiritual. Nowhere do you have a sense of the Hebrew God operating in immaterial realms transcending heavens and earth. All that separation of matter and spirit seems to be New Testament, which feels like a combination of Hebrew materialism and Platonic idealism.

    Okay, it’s not quite that black and white, but you understand my point I think. The pre-Socratics, the Hebrews, and the pagans all were more materialistic than the classic Greeks. The European pagan cultures underlying the Roman was also pagan-materialistic. The Reformers were looking at Hebrew texts directly, without seeing through the Greek idealist lenses that the medieval exegetes wore. And I’d think surely some of that Hebrew materialism influenced the way the Reformers and the Enlightenment scientists looked at evidence: not just as imperfect reflections of the ideal, but as real in and of itself.

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    Comment by ktismatics — 5 February 2007 @ 3:35 pm

  13. Well, for one I think you are trying to point out some general patterns in world history that can be helpful in its interpretation…and so to in guiding us in the now. I would agree in general that the Greeks and Hindus had something in common that distinguished them from other pagan cultures, as well as from the Hebrews. As for the Romans, I think the Etruscans become important here; and I would certainly agree that Roman numerals don’t lend themselves so well to abstraction, bird’s eye view calculation and columnation…a fact that I think points to a greater context of our conversation, such as theological conversations about narrative (often supported by Roman Catholics…such as N.T. Wright). So, yes, in general I think I see your point.

    I think there might for me, however, be a “however” – or 2. I would say that IF you view the ancient Hebrew, classical Greek and pagan and even modern cultures through the lense of the question of materialization…you would come through on the other side making statements like the ones you made above. And I think they would be accurate. But I think it is a more prime question to first ask questions of ORDER, and from there go to questions of materiality. What do I mean by that. I mean that…with very few exeptions (Gnostics, Stoics), all of those cultures and subcultures within them viewed themselves as dealing with the same “stuff” from, in the end, a very similar place (as mortal humans made up of all that “stuff”). They may have had different names for many of the different varieties of the “stuff” that makes up realtiy, in all of its forms, masks places and roles. What to the Hebrews would have been “the One true God” to the Greeks might have been “The Unknown God”, but it was all the same stuff.

    I think the question then becomes how, when one BECOMES a Hebrew, or an Etruscan, or a Babylonian, or a modern European, or an ancient Hebrew, how all the different forms, varieties, places masks and roles of the various realities of reality RELATE to each other. What is their ORDER? What is primary; what “comes first”, and how does one “orient” one’s self? If modern, “I think, therefore I am”. And ancient Hebrew has a mind, but he views its relation to his “heart”/emotions – and materiality – quite differently; and for this Hebrew reality “certainly” doesn’t START or hinge off of his own mind.

    Along similar lines, and on the flip side…if we start with a question of ORDER, I don’t think we end up necessarily describing even the moderns as “materialistic”. It wouldn’t even be possible for him to have the RELATION or ORIENTATION to “materiality” that a modern does in fact have if he does not first orient himself TO that materiality by IDENTIFYING himself with/in his own “mind”/think-ing.

    That’s besides the simple fact of history that modernity’s secularization/materialization was a slow process; and that it is questionable I think whether at any point IN that history did secularization/materialization constitute the central characteristic of what we would now call “modern”. I say this in the context of our own having looked back upon modern history after the secularization has occured.

    As well if we start with a question of order, I would have a hard time describing the pre-Classical Greeks as essentially more or less “materialistic” than the post-Socratics. I think Socrates, Plato and Aristotle did a lot of TRANSLATION of what was happening before them…and I also think that this act of translation very radically re-ordered what was the same reality – and as re-oriented the Greek man TO this reality. You could probably even parallel the modern re-ordering with the Socratic one…in terms of how man came to identify/orient himself with the 2 new shifts that happened at those times. I mean, Socrates QUESTIONED whether “definitions” existed, but with “irony”…which meant something hidden and sacred “coming across” this this sensible realm in a mysterious way, in a sense on its own. And it DIDN’T mean man’s “definition” of himself (a part of reality he knows); it in fact meant the opposite, it seems.

    But THAT doesn’t necessarily mean that Socrates “was less materialistic” (I don’t think). I think one could argue that Socrates was re-telling the myth of Orpheus, or Narcissus. In any case the myth of Prometheus is pertinent, precisely because the moderns, Hebrews and classical Greeks were playing with the same “stuff”.

    Now, to be fair, I think this is exactly what you were getting at by saying that its not so black and white. That’s why I started my first paragraph the way I did. Yet, I think it is still an important question in and of itself where you BEGIN your line of questioning…?

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    Comment by Jason Hesiak — 6 February 2007 @ 7:30 am

  14. Sorry that was so long…

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    Comment by Jason Hesiak — 6 February 2007 @ 7:30 am

  15. I think I follow and agree. I’m trying to extend the line of questioning established by Crosby: what are the precursors to the quantification of modern Western civilization? Crosby traces the transition across the high Middle Ages in various realms: clocks, maps, music, plastic arts, accounting. I’m looking at the Reformation and the Enlightenment as ways of looking at the stuff of the world as something to be looked at and understood in its own right, not as imperfect manifestations of invisible perfections that, by looking beyond them, be understood intuitively. The ideal/mystical understanding remains a concurrent stream running through Western civilization, a stream that may be getting more attention in an era when modernity is increasingly subjected to critique. But my focus is with Crosby on the “main stream” of modernity: its empiricism.

    Have you read Saving the Appearances by Owen Barfield? I’ve been looking at it again in light of your comments. Barfield sees in modern science a kind of idolatry in which a thing’s appearance is (mistakenly) regarded as its reality. He contrasts this view with the Greek and medieval “participation”: an unbreakable link between the raw thing perceived; the perceiver’s cognitive/linguistic representation of the thing; and the spiritual reality in which thing, representation, and mind all are embedded. Barfield wants to “save the appearances” of raw things from modern idolatry without returning to what he regards as primitive participation. In trying to imagine different ways of seeing the appearances, Barfield contends that the Biblical Hebrews did not “participate” in the way that the Greeks and medieval Europeans did. Maybe I’ll post a little bit on this contrast today..

    I read your description of your mystical experience in Chicago — it sounds portalic. Though in this series of posts I’ve concentrated on “the grid” of a uniform reality, I too am interested in alternate realities. I’ll go comment on your site about it.

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    Comment by ktismatics — 6 February 2007 @ 10:03 am

  16. Sweet. I have not read that book Saving Appearances, but that’s a phrase I’ve heard from my professor…in the context of a conversation about Dante, interestingly. It sounds like Barfield and I are in similar places. Although, honestly, I might go so far as to say – although I’m not advocating a return to a primitive religous practice – that I think of pretty much all human activities IN LIGHT OF the ancient idea/practice of participation. I would be interested to hear how you think of the Jews as NOT doing that. I was JUST LAST NIGHT reading Exodus 30 and 31, in which God is dictating to Moses how Aaron and his sons are to worship (the garments, the temple, the altar(s), ect); and I would have a hard time NOT thinking of that as “participation”…I’m here thinking partially of Rene Girand. I seems like this difference of ours in our views of ancient Hebrew worship is key to what seems to be our difference(s) in this conversation…?

    And “portalic”…I like that :)

    Jason

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    Comment by Jason Hesiak — 6 February 2007 @ 6:48 pm

  17. Oh, and I left a comment to your comment on my “portalic” post, just FYI.

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    Comment by Jason Hesiak — 6 February 2007 @ 6:49 pm

  18. Balancing the books was a hit-or-miss, more-or-less affair.

    For some of my clients this method still holds true….

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    Comment by Jonathan Erdman — 6 February 2007 @ 11:28 pm

  19. Accounting Question:

    You have $10 and you start a company.
    What is your first accounting entry?

    Ok, I’ll give you half of the entry:
    Debit Cash: 10
    Credit ???

    Like

    Comment by Jonathan Erdman — 6 February 2007 @ 11:58 pm

  20. Jason — I will hopefully get back to the Hebrews tomorrow.

    Jonathan — You mean for the company? I thought it would go like this:
    asset: cash = $10
    liability: equity = ($10)

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    Comment by ktismatics — 7 February 2007 @ 6:13 pm

  21. Correct.

    Here’s the philosophical side:

    What is “equity”?

    Equity seems to represent the worth of the company. But if the cash refers to something concrete in the real world – the $10 cash that I hold in my hand – what does the equity correspond to? The cash? But that’s already spoken for in the cash account? Or do both accounts correspond to the same entity?

    Another thought….
    What happens when an economy goes to a cashless based system, or some hybrid. At that point no money changes hands, but it is simply a game of financial statements: We trade debits and credits amongst ourselves based on how much a third party (banks) say that we possess. It works to precision, but we can’t help the feeling that we have been building a house of cards….

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    Comment by Jonathan Erdman — 7 February 2007 @ 7:02 pm

  22. When every asset has a corresponding debit, then the whole system resolves itself at zero. It’s kind of nihilistic.

    I remember when the US currency abandoned the silver standard, replacing it with a purely paper floating system. If I could survive that psychic trauma, I’m sure I can survive getting rid of the paper, which isn’t worth the paper… it’s… written on…

    Can you build a virtual house of cards on those computer card games?

    Like

    Comment by ktismatics — 7 February 2007 @ 7:47 pm


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