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Creative accounting in the British Industrial Revolution: Cotton manufacturers and the ‘Ten Hours’ Movement

  • Toms, Steven
  • Shepherd, Alice

The paper examines an early case of creative accounting, and how, during British industrialization, accounting was enlisted by the manufacturers’ interest to resist demands, led by the ‘Ten hours’ movement, for limiting the working day. In contrast to much of the prior literature, which argues that entrepreneurs made poor use of accounting techniques in the British industrial revolution, the paper shows that there was considerable sophistication in their application to specific purposes, including political lobbying and accounting for the accumulation of capital. To illustrate lobbying behaviour, the paper examines entrepreneurs’ use of accounting to resist the threat of regulation of working time in textile mills. It explains why accounting information became so important in the debate over factory legislation. In doing so, it shows that a significant element was the accounting evidence of one manufacturer in particular, Robert Hyde Greg, which had a strong impact on the outcome of the parliamentary process. The paper uses archival evidence to illustrate how accounting was used in Greg’s enterprise and the reality of its economic performance. The archival evidence of actual performance is then contrasted with the figures presented by Greg to the Factories Inquiry Commission, convened by the House of Commons in 1833-1834 to hear witnesses from the manufacturing interest. These sets of figures are compared and contrasted and discrepancies noted. Conclusions show that the discrepancies were substantial, motivated by Greg’s incentives to present a particular view of low profits, high fixed costs, and the threat of cheaper overseas competition. The figures appeared to lend some credibility to the apparent plight of manufacturers and to Nassau Senior’s flawed argument about all profit being earned in the ‘last hour’ of the working day. The consequence was a setback for the Ten Hours movement, leading to a further intensification of political struggles over working conditions in the 1840s.

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File URL: http://mpra.ub.uni-muenchen.de/51478/1/MPRA_paper_51478.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 51478.

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Date of creation: 15 Nov 2013
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Handle: RePEc:pra:mprapa:51478
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  1. Allen, Robert C., 2009. "Engels' pause: Technical change, capital accumulation, and inequality in the british industrial revolution," Explorations in Economic History, Elsevier, vol. 46(4), pages 418-435, October.
  2. repec:cup:cbooks:9780521892926 is not listed on IDEAS
  3. Toms, Steven, 2008. "Calculating Profit: A Historical Perspective on the Development of Capitalism," The York Management School Working Papers 41, The York Management School, University of York.
  4. Philip Richardson, 1989. "The structure of capital during the industrial revolution revisited: two case studies from the cotton textile industry," Economic History Review, Economic History Society, vol. 42(4), pages 484-503, November.
  5. Nardinelli, Clark, 1980. "Child Labor and the Factory Acts," The Journal of Economic History, Cambridge University Press, vol. 40(04), pages 739-755, December.
  6. Harley, C. Knick & Crafts, N.F.R., 2000. "Simulating the Two Views of the British Industrial Revolution," The Journal of Economic History, Cambridge University Press, vol. 60(03), pages 819-841, September.
  7. Hoskin, Keith W. & Macve, Richard H., 1988. "The genesis of accountability: The west point connections," Accounting, Organizations and Society, Elsevier, vol. 13(1), pages 37-73, January.
  8. Bryer, R. A., 2005. "A Marxist accounting history of the British industrial revolution: a review of evidence and suggestions for research," Accounting, Organizations and Society, Elsevier, vol. 30(1), pages 25-65, January.
  9. Musson, A. E. & Robinson, E., 1960. "The Origins of Engineering in Lancashire," The Journal of Economic History, Cambridge University Press, vol. 20(02), pages 209-233, June.
  10. repec:cup:jechis:v:60:y:2000:i:03:p:819-841_00 is not listed on IDEAS
  11. Richard K. Fleischman & Thomas N. Tyson, 1993. "Cost accounting during the industrial revolution. the present state of historical knowledge," Economic History Review, Economic History Society, vol. 46(3), pages 503-517, 08.
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