Review of the Book:

The Social Conscience
by Michel Glautier

H. William Batt

[A review of The Social Conscience. by , published in London by Shepheard-Walwyn, Ltd., 2007. Reviewed by H. Willilam Batt, Ph.D., Albany, New York, June, 2007]

I have frequently thought of accountants as green eye-shade types who work in back offices making sure that resources are, well, accounted for. A surprise it is, then, to read a book by an established professor of accounting that reaches to the most challenging and wide-ranging issues of our contemporary world. Professor Michel Glautier asks, in his book, The Social Conscience, whether a caring society can exist in a market economy, and whether a market economy is sustainable that denies man's fundamental nature. The subtext of the book concerns the wisdom of integration and evolution of the European Community through transcendent market instruments that oppose the human impulses of a caring and sharing nature which are just as important an element of society.

The author points out that "it has taken the USA at least two centuries to build a nation. . . . By contrast, the European Union is attempting to create one in a relatively short period of time by uniting countries that have their own strong identities." What does this do to family cohesion and to other institutions responsible for the socialization and moral development of a citizenry? The market system functions by encouraging people to function as autonomous rational actors for instrumental gain, and is only one component of civilization. As governments become instruments to foster ever greater economic purposes, social programs are forced to take a back seat or are eliminated altogether. What then is the proper role of government, and what relationship should exist between markets and sovereign authority? This is not an alarmist book, but the concerns expressed are deeply felt and exhaustively explored.

The choices Professor Glautier poses are versions of either conventional socialism or free-market capitalism, and it is quite clear that he is sympathetic to the former if given a choice. He explains that the failures of capitalism to address poverty and hardship rely upon the charity of those more secure; the capitalist system itself offers no guarantees of social justice. Enterprise is its own reward. But a caring society, in contrast, rests upon a pervasive social conscience, and this age-old tradition is jeopardized by the veneration of contemporary mechanistic capitalist designs. While recognizing that capitalism has led to prodigious wealth in the past century, its damaging impacts have been tempered by the persistence of other social structures. As these bulwarks of culture and sensitivity disintegrate, what patterns will emerge on the horizon?

At this point separate chapters examine the condition of education, of government, of religion, and even business as vehicles capable of protecting and preserving a sharing and caring community. As he sees it, none is capable of the task, either individually or collectively. Market behavior, in contrast, has been given every endorsement, buoyed by an ideology that assures its expansion and dominance. Corporations given the status of individual persons more than a century ago now are situated such that they can control political discourse and decisions beyond what courts could ever have envisioned. Regulatory measures pale in their effort to police market abuses. The ideology of comparative advantage makes free trade a byword to fulfilling every material promise, ignorant of any impact upon the natural environment, culture, or upon time dimensions beyond the present. The veneration of economic designs, based on the fictional assumptions of perfect competition, provide a defense of policies that jeopardize social interests beyond immediate gain. An accountant's appreciation of the differences between production capital and finance capital -- a distinction of only recent origin -- leads to his recognition of the failures of markets to distribute wealth in an equitable manner. The transformation of social sharing to paper-based shareholder value is his special bane, one which has transformed corporate culture and behavior in ways that further distort social wealth.

Glautier says that we owe to Marx the insight that class struggle is responsible for producing "two alternative theories of government: one representing a state in which the interests of an oligarchy of wealth are uppermost, the other representing a state in which the interests of the citizens at large, without wealth distinction, are dominant. . . . The substantial difference between these different definitions of the concept of the State as a unified social entity stems from the concept of private property, as a social phenomenon." (p. 201-2) The power of propertied elites, especially by means of their corporate control, has led to the existence of sham democracies, only superficially able to express their will. Due also to a complicit system of media empires, we now have what he calls a "democratic deficit" in nations that for all their posturing have ceased to be responsive to the social conscience. The current war in Iraq is only the most recent travesty plaguing the English-speaking democracies, and leading him to conclude that, "it is inevitable that the time will come when the US Government and the British Government will be brought before the International Criminal Court and will have to answer for war crimes committed in Iraq, including the illegal invasion of that country." (p. 226) The phrase, "of the people, by the people, for the people" has in the author's mind ceased to have meaning in the political affairs of these nations.

The Social Conscience is a treatise that ranges widely, at times too widely in my view, over the challenges faced by contemporary government and politics. The strongest chapters are, as one would expect, those that deal with economics and accounting. One needs to be reminded, perhaps, that Professor Glautier's textbook, Accounting Theory and Practice, has been through seven editions, and an earlier text, Basic Accounting Practice, also had several printings. One is left believing that The Social Conscience is his desire to set down thoughts that an accounting text or his other published journal articles would preclude his addressing. But for all the breadth of his thought, I regret that he seems unaware of the Georgist philosophy that steps outside of the conventional capitalist socialist dichotomy to a genuine "Third Way." Those he knows he sees as "compromises that lead to unsatisfactory solutions in the long-term, because they avoid addressing the central issues and often introduce other and difficult problems." (p. 134) Yet this book is issued by Shepheard-Walwyn Press, the same outlet responsible for publishing the work of Mason Gaffney, Fred Harrison, Robert Andelson, Ronald Banks, and other Georgist writers. Defending public welfare and common interests through reliance upon the social conscience is essential, but Georgists also argue for protecting the commons through law, economic understanding, and community enterprise. The most effective instrument for doing this is the recapture of economic rent for support of public services and welfare, and to jettison reliance upon tax instruments in use today.

One can imagine that an interpretation of accounting history comparable to that which Professor Gaffney has provided for economics could be an extremely valuable addition to the ongoing discourse on economic justice. It could also offer to Professor Glautier a chance to escape from the either - or paradigm of capitalism vs socialism. The Social Conscience has occasional allusions to the place of land, natural resources and or property in fostering wealth and justice, (p. 107, 115, 128), but it never appreciates that the "shareholder value" that presently compromises and corrupts capitalist enterprise could easily be modified to incorporate the Georgist paradigm. What better definition of "shareholder value" could there be than a recognition that all people are shareholders of the earth in all natural resource forms, and that the rent from its use should be rightfully claimed by society as a collectivity!