Soft on markets

I have started into literature that takes a critical approach to accounting and finance.  A good place for me to hang out a bit, and see what I can do with 30 years of finance experience.  

For me, accounting as much as anything has some quality of baseline truth or inviolable structure. In college, I was surprised to see that in addition to rational organization of free labor and separation of business from the household, Max Weber attributed the rise of capitalism in the west to double-entry bookkeeping (Weber, 21-22).  At the time it seemed oddly mundane. In business school I finally learned some accounting , and quickly in work that followed I saw the discipline as a remarkable system that created a pervasive lingua franca to tie together almost everything going on in an organization. When accounting was corrupted, like Enron, it threw the whole economic system into question.  Accounting would answer questions like whether Donald Trump is actually wealthy or just faking it in spectacular fashion. When you are in an environment where the same rules don't apply or the information is not available--like China--it greatly amplifies the sense of disorientation. 

Accounting works according to a mix of common practice, something like Common Law, and formal rules--importantly, rules developed outside governmental structures and therefore insulated from democratic pressure. Accounting rules carry assumptions and values that are easy to leave unexamined.  The most basic premise of double-entry bookkeeping--that every asset is offset by an obligation of the same size--sounds like a primarily moral argument, and I'm not sure I can unpack its implications. Critical studies of accounting will take the word accounting literally with different meanings, and treat it both as counting and recording, and taking account for and of, and documenting or creating accountability.  What are you accounting for, and to whom.  In standard business school thinking, it's pretty simple--economic returns, created by the organization for the benefit of owners. But in the organization, there are other people to be accountable to, and other things to be accountable for.

Farzana Aman Tanima, Judy Brown, and Jesse Dillard did a study of microlending programs that addresses accounting and accountability critically. Microlending programs have been celebrated as vehicles for advancing women in impoverished environments and providing them with new grounds for independence and dignity.  They are also seen as cost-effective, loans not grants so they are repaid, a strategy that allows the program to leverage investment dollars for a more extensive impact. It's cheaper than outright giving people money or providing services. The system works depends on accountability systems that hold the borrowers accountable for making payments on their loans, which is then reinforced by borrower group which allow the microfinance institution to have a level of collective accountability, and which provide a structure for borrowers to hold each other accountable.  They self-police.  A prime example of a capillary disciplinary tool.    

Tanima and her co-authors point out how this system serves to create entrepreneurs, in effect neo-liberal subjects, who serve to extend market logics deeper into communities--again, a disciplinary tool that works at a very local level deeply integrated with the social fabric. Tanima et al's primary critique is that microlending is a neo-liberal alternative to providing a true social safety net, and that in developing women as entrepreneurs prepared for the global marketplace, the programs do nothing to develop them as citizens able to advocate for themselves and engage in political action founded on their interests.  

The authors turn to Gender and Development studies for an alternate set of values by which they evaluate microlending--hold it accountable.  For GAD, the goal is to produce empowered citizens, not entrepreneurs.  Those citizens will be capable of organizing to gain access to "rights, resources, and accountability"   In fact they would replace programs to promote entrepreneurs with programs to critique the claims of and legitimacy of markets. They argue that the value of the borrower groups is that they could be--and I think they would say should be--a platform for developing empowered citizens. 

In this study, Tanima et al point out that the accountability in the microlending programs is one-way--the women are accountable to the lender for both repayment of the loan and also for retooling themselves as neo-liberal subjects.  There is no accountability going the other direction, from the lender to the borrower. These authors argue that "accountability should hold powerholders--MFIs, donors, governments and global development institutions--answerable for their commitments to pro-poor development and women’s empowerment."  

This simple idea seems to me very useful.  In any organization, there could be a lot more mutual accountability. As a thought experiment on budgeting, I'm trying to workout how administrative leaders could be accountable to others in the organization, on terms the other community members define, rather than accountability defined by the leaders. In those cases, the choice of the bases for accountability will in all likelihood extend leadership dominance of discourse through other means. 

While I don't argue with Tanima, Brown and Dillard's argument that microlending functions as a disciplinary tool that supports a neo-liberal order, I do find myself resisting some implications in their arguments. The core criticism here is that the women would be better off abandoning their forays into the market in favor of advocating for a social safety . The authors would probably not say that microlending or similar entrepreneurial activity should be cast aside completely in favor of pure welfare statism, but there seems little room for legitimacy of these market-oriented ideas. I'm not sure where any entrepreneurial activity would stand if development organizations in fact concentrated their resources on training women to critique this markets and entrepreneurship, identify damages related to them, and express the overriding importance of collective social programs. 

At this point, I just have to admit that I am soft on markets.  I think it is great for people to develop businesses, even if it is just freelance work.  I always encourage people thinking about this direction.  There is dignity in providing for yourself directly.  Creating a business or an independent income is challenging and intellectually rewarding.  It provides freedom.  DIY culture is built on this.

There probably partly reflects my poor life choices, which have resulted in spending most of my life in entrepreneurial and freelance roles.  If I had played it smart, I'd have a steady job and a guaranteed pension.  Instead, have I just made lemonade from lemons, made do?

I was horrified by Reagan and Thatcher, and Blair and Clinton, as neo-liberalism came in.  But a critique with no breathing room for markets leaves me cold.  Part lies is this intolerance for markets and the lack of acknowledgement that markets are to some extent creative and generative (as well as destructive). While not necessarily an element of this article, in the critiques of neo-liberalism I sometimes see resistance to quantifying activity and performance.  Measurement is not the only thing that matters, but it does provide an entry point to understanding an organization that we need.  I like that I can look at audited financial statements and tell some things about an organization--sometimes specific history, sometimes a general sense of where some of its effectiveness lies or is lacking.    

What I found interesting about my reaction to this article is that it was so much an emotional reaction. It felt like something was being rejected here that I was not prepared to let go of. I approach big bureaucracies with ambivalence at minimum, and look for the spaces where people can act in freedom.  One of those spaces is where they are working for themselves, and finding their partners and collaborators.  

Tanima, F. A., Brown, J., & Dillard, J. (2020). Surfacing the political: Women’s empowerment, microfinance, critical dialogic accounting and accountability. Accounting, Organizations and Society, 85, 101141.

Weber, Max (1958). The Protestant Ethic and the Spirit of Capitalism. Charles Scribner's Sons.