IDEAS home Printed from https://ideas.repec.org/a/eee/aosoci/v34y2009i8p895-917.html
   My bibliography  Save this article

Memory, transaction records, and The Wealth of Nations

Author

Listed:
  • Basu, Sudipta
  • Kirk, Marcus
  • Waymire, Greg

Abstract

Adam Smith hypothesized that impersonal exchange was necessary for a society to develop specialized division of labor and create wealth. Douglass North and Vernon Smith argue that successful developed economies are the result of institutions. We hypothesize and provide evidence from ethnographic data that the basic accounting technology of recording transactions is associated with more extensive impersonal exchange and increased specialization in the division of labor. Our intuition is that extensive impersonal exchange requires reliable memory of trading partners' past behavior to sustain trust and encourage reciprocity when a group expands beyond the size of traditional hunter-gatherer groups. Our findings are consistent with the hypothesis that transaction records are necessary for the emergence of complex economies as suggested by the archaeological evidence of recordkeeping in Mesopotamian societies 10,000 years ago.

Suggested Citation

  • Basu, Sudipta & Kirk, Marcus & Waymire, Greg, 2009. "Memory, transaction records, and The Wealth of Nations," Accounting, Organizations and Society, Elsevier, vol. 34(8), pages 895-917, November.
    • Handle: RePEc:eee:aosoci:v:34:y:2009:i:8:p:895-917
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0361-3682(09)00062-2
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Richard Macve, 2002. "Insights to be gained from the study of ancient accounting history: some reflections on the new edition of Finley's The Ancient Economy," European Accounting Review, Taylor & Francis Journals, vol. 11(2), pages 453-472.
    2. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
    3. Smith,Vernon L., 2009. "Rationality in Economics," Cambridge Books, Cambridge University Press, number 9780521133388.
    4. Townsend, Robert M, 1989. "Currency and Credit in a Private Information Economy," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1323-1344, December.
    5. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1251-1288.
    6. Baker, Matthew & Miceli, Thomas J., 2005. "Land inheritance rules: theory and cross-cultural analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 56(1), pages 77-102, January.
    7. Erik O. Kimbrough & Vernon L. Smith & Bart J. Wilson, 2008. "Historical Property Rights, Sociality, and the Emergence of Impersonal Exchange in Long-Distance Trade," American Economic Review, American Economic Association, vol. 98(3), pages 1009-1039, June.
    8. Douglass C. North, 1991. "Institutions," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 97-112, Winter.
    9. Demsetz, Harold, 2002. "Toward a Theory of Property Rights II: The Competition between Private and Collective Ownership," The Journal of Legal Studies, University of Chicago Press, vol. 31(2), pages 653-672, June.
    10. Kenneth E. Boulding & Martin Pfaff & Janos Horvath, 1972. "Grants Economics: A Simple Introduction," The American Economist, Sage Publications, vol. 16(1), pages 19-28, March.
    11. Douglass C. North, 2005. "Introduction to Understanding the Process of Economic Change," Introductory Chapters, in: Understanding the Process of Economic Change, Princeton University Press.
    12. B. S. Yamey, 2005. "The historical significance of double-entry bookkeeping: Some non-Sombartian claims," Accounting History Review, Taylor & Francis Journals, vol. 15(1), pages 77-88.
    13. Salvador Carmona & Mahmoud Ezzamel, 2007. "Accounting and accountability in ancient civilizations: Mesopotamia and ancient Egypt," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 20(1), pages 177-209, January.
    14. Martin A. Nowak & Karl Sigmund, 2005. "Evolution of indirect reciprocity," Nature, Nature, vol. 437(7063), pages 1291-1298, October.
    15. Yamey, Bs, 1964. "Accounting And The Rise Of Capitalism - Further Notes On A Theme By Sombart," Journal of Accounting Research, Wiley Blackwell, vol. 2(2), pages 117-136.
    16. George J. Stigler, 1951. "The Division of Labor is Limited by the Extent of the Market," Journal of Political Economy, University of Chicago Press, vol. 59, pages 185-185.
    17. Salvador Carmona & Mahmoud Ezzamel, 2007. "Accounting and accountability in ancient civilizations: Mesopotamia and ancient Egypt," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 20(2), pages 177-209, April.
    18. Matthew Baker, 2008. "A structural model of the transition to agriculture," Journal of Economic Growth, Springer, vol. 13(4), pages 257-292, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Forsberg, Per, 2023. "Symbols in wood as a means of reciprocity: Accounting and social cohesion in pluralistic economies," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 96(C).
    2. Mullins, Daniel A. & Whitehouse, Harvey & Atkinson, Quentin D., 2013. "The role of writing and recordkeeping in the cultural evolution of human cooperation," Journal of Economic Behavior & Organization, Elsevier, vol. 90(S), pages 141-151.
    3. Murphy, Tim & O’Connell, Vincent, 2017. "Challenging the dominance of formalism in accounting education: An analysis of the potential of stewardship in light of the evolution of legal education," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 44(C), pages 1-29.
    4. Basu Sudipta & Waymire Gregory B., 2019. "Historical Cost and Conservatism Are Joint Adaptations That Help Identify Opportunity Cost," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 9(1), pages 1-13, March.
    5. Yannick Lemarchand & Laure Pineau-Defois & Cheryl Mcwatters, 2011. "Comptes et récits de la maison Chaurand, retour sur les liens entre comptabilité et capitalisme," Post-Print hal-00650546, HAL.
    6. Barker, Richard & Schulte, Sebastian, 2017. "Representing the market perspective: Fair value measurement for non-financial assets," Accounting, Organizations and Society, Elsevier, vol. 56(C), pages 55-67.
    7. Macve, R.H., 2015. "Fair value vs conservatism? Aspects of the history of accounting, auditing, business and finance from ancient Mesopotamia to modern China," The British Accounting Review, Elsevier, vol. 47(2), pages 124-141.
    8. Erb, Carsten & Pelger, Christoph, 2015. "“Twisting words”? A study of the construction and reconstruction of reliability in financial reporting standard-setting," Accounting, Organizations and Society, Elsevier, vol. 40(C), pages 13-40.
    9. Murphy, Tim & O’Connell, Vincent & Ó hÓgartaigh, Ciarán, 2013. "Discourses surrounding the evolution of the IASB/FASB Conceptual Framework: What they reveal about the “living law” of accounting," Accounting, Organizations and Society, Elsevier, vol. 38(1), pages 72-91.
    10. Venky Nagar & Madhav V. Rajan & Korok Ray, 2018. "An information-based model for the differential treatment of gains and losses," Review of Accounting Studies, Springer, vol. 23(2), pages 622-653, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrés Rodríguez-Pose & Michael Storper, 2006. "Better Rules or Stronger Communities? On the Social Foundations of Institutional Change and Its Economic Effects," Economic Geography, Taylor & Francis Journals, vol. 82(1), pages 1-25, January.
    2. Servátka, Maroš & Tucker, Steven & Vadovič, Radovan, 2011. "Words speak louder than money," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 700-709.
    3. Robbert Maseland, 2013. "Parasitical cultures? The cultural origins of institutions and development," Journal of Economic Growth, Springer, vol. 18(2), pages 109-136, June.
    4. Radygin, Alexander & Simachev, Yury & Entov, Revold, 2015. "The state-owned company: “State failure” or “market failure”?1," Russian Journal of Economics, Elsevier, vol. 1(1), pages 55-80.
    5. Mukherjee Deepraj & Dutta Nabamita, 2013. "Do Political Institutions and Culture Jointly Matter for Financial Development? A Cross-Country Panel Investigation," Global Economy Journal, De Gruyter, vol. 13(2), pages 203-232, June.
    6. Claudia Williamson & Rachel Mathers, 2011. "Economic freedom, culture, and growth," Public Choice, Springer, vol. 148(3), pages 313-335, September.
    7. repec:hal:spmain:info:hdl:2441/f0uohitsgqh8dhk980ea412b5 is not listed on IDEAS
    8. Rachel L. Mathers & Claudia R. Williamson, 2011. "Cultural Context: Explaining the Productivity of Capitalism," Kyklos, Wiley Blackwell, vol. 64(2), pages 231-252, May.
    9. Soto-Oñate, David & Torrens, Gustavo, 2023. "Institutional-cultural coherence and economic development: The case of the Spanish regions," Journal of Comparative Economics, Elsevier, vol. 51(1), pages 41-89.
    10. Harrison, Jane L. & Montgomery, Claire A. & Jeanty, P. Wilner, 2019. "A spatial, simultaneous model of social capital and poverty," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 78(C), pages 183-192.
    11. Gao, Xiang & Long, Cheryl Xiaoning, 2014. "Cultural border, administrative border, and regional economic development: Evidence from Chinese cities," China Economic Review, Elsevier, vol. 31(C), pages 247-264.
    12. Daniel Horn & Hubert Kiss Janos & Sára Khayouti, 2020. "Does trust associate with political regime?," CERS-IE WORKING PAPERS 2013, Institute of Economics, Centre for Economic and Regional Studies.
    13. Katarzyna Growiec & Jakub Growiec, 2016. "Bridging Social Capital and Individual Earnings: Evidence for an Inverted U," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(2), pages 601-631, June.
    14. Roberta Dessì & Salvatore Piccolo, 2008. "Two is Company, N is a Crowd? Merchant Guilds and Social Capital," CSEF Working Papers 202, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 12 Jul 2009.
    15. Oasis Kodila-Tedika & Julius Agbor, 2016. "Does Trust Matter for Entrepreneurship: Evidence from a Cross-Section of Countries," Economies, MDPI, vol. 4(1), pages 1-17, March.
    16. Dincer, Oguzhan C., 2011. "Trust and schooling in the United States," Economics of Education Review, Elsevier, vol. 30(5), pages 1097-1102, October.
    17. Phillip LeBel, 2008. "Managing Risk in Africa Through Institutional Reform," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 36(2), pages 165-181, June.
    18. Tausch, Arno, 2018. "The return of religious Antisemitism? The evidence from World Values Survey data," MPRA Paper 90093, University Library of Munich, Germany.
    19. Katarzyna Growiec & Jakub Growiec & Bogumil Kaminski, 2017. "Social Network Structure and The Trade-Off Between Social Utility and Economic Performance," KAE Working Papers 2017-026, Warsaw School of Economics, Collegium of Economic Analysis.
    20. Qin, Wei & Liang, Quanxi & Jiao, Yan & Lu, Meiting & Shan, Yaowen, 2022. "Social trust and dividend payouts: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 72(C).
    21. Elvin Afandi & Nazim Habibov, 2016. "Social trust and use of banking services across households in 28 transitional countries," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 43(4), pages 431-443, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:aosoci:v:34:y:2009:i:8:p:895-917. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/aos .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.