New Finance, New Accounting

In economic life it has long been the case that whatsoever we think we straightway enact. If we think money and capital can or should be possessed, for example, we will organize our lives to that end. But so, too, if we think that they are mirrors of our being, we will enact that image instead. The world in which money and capital are possessed is a world well known to most people. Less familiar, however, is the world of Rare Albion, in which both money and capital act as mirrors of our behaviour.

The first things these mirrors show us are the consequences of going it alone in economic life, of acting only for oneself. They show that the more global the world’s economy, the less viable self-centeredness becomes. We see the need to take others into account. Far from being utopian, not to do this is to risk incurring unrecorded liabilities on one’s balance sheet or to allow overstated (because merely financial) levels of profit on the income statement.

Although every transaction has two parties, accounting only shows one side of our dealings. To know the context and to see the effect of our economic activity we need to see the other side. But this other side is the rest of humanity. In economic life, one’s every action has its counterpart in the rest of humanity. One’s expense is humanity’s income; one’s income humanity’s expense. One’s asset is humanity’s liability; one’s liability humanity’s asset. In fact, ‘my’ profit is not really mine; nor is ‘my’ net worth. It is one side of one’s relationship with humanity and to understand it properly one needs to see the other side.

Accounting is not separable from the general evolution of humanity and especially not from the most important fact of all: that in becoming individuals distinct from the general community, human beings necessarily became more self-centred. We thus came to see things from the individual’s point of view only, not from that of the wider community, the world’s point of view. We also necessarily became more involved in the material world so that we came to evaluate ourselves in its terms. The result was the unspoken dictum: I am what I possess. But its corollary was severe alienation, especially alienation from oneself. The more this condition matured, the more abstract finance became.

To be in such a world is one thing, however; to be of it is another. One can only go so far along the road of separate existence and material acquisition before one arrives at a point where both separation and material acquisition block the further development of one’s being. Their deeper purpose, however, is to enable us, and society generally, to recognize what is unique about our special contributions to humanity. Once this point is arrived at, however, we have to find ourselves, not in self-assertion, but in valued service – in having our contributions to society recognized and properly compensated.

So it is that here in Rare Albion we do not speak about ‘jobs’ directly, but about people identifying their unique contributions to society and being able to fulfil them and have them recognized both inwardly and financially. Here, we are compensated for what we bring to society. As a result, each one of us necessarily has a job, but the opposite cannot be said: The mere creation of jobs, as became the obsession of politicians and economists in the time before Rare Albion, does not necessarily mean people will find their paths in life or be properly compensated.

Such an approach requires us to see ourselves from outside, then to redescribe the way we want to be, before stepping back into ourselves – a process impossible to accomplish without a specific instrument enabling us to do so. That instrument is accounting, the companion of financing. Not accounting as a means merely to monitor profit and net worth and to minimize taxation. But accounting used to provide us with a reflection of ourselves, and as a means to change ourselves in the light of a different image we may develop of ourselves. That is what is new about accounting and finance in Rare Albion. We left their structures alone, but looked at them from a wider point of view.