Extending Schumacher's Concept of Total Accounting and Accountability into the 21st Century: Volume 14

Twenty years after Schumacher's death, the wisdom, warnings and predictions contained in these [his] controversial writings, are seen to be more relevant than ever. Some of his views, such as those on total accounting and accountability, taking not only monetary but environmental and non-renewable resource costs into consideration in policy making, are now at last creeping into the political agenda. (D. Schumacher, 1997, Introduction, p. 17)

This paper reviews the work of E. F. Schumacher, who was a great economist, environmentalist and alternative thinker. He was a seminal influence for the creation of many organisations in the UK that are thriving and increasingly relevant as we appreciate the value of living local, personal, simple, organic, spiritual, integrated and appropriately scaled lives. His influence is considered through four reflective principles (appropriateness, non-violence, spirituality and simplification) and three active ones (local action, simplicity and the integration of the inner and the outer).The consequences of his philosophy are briefly considered in the world of accountancy where mechanisms to include environmental and social factors are often poor. The rise of so-called ‘conscience economics’ may provide ways to redress this imbalance. Can we discover new instruments to complement philanthropy, fair trade, offsetting and other ways to pay the full externalities that are traditionally ignored?

Schumacher recognized that we separate the economic system from natural and social systems at our peril. Following Schumacher's alternative “economics,” my purpose is to understand economics differently by engaging alternative ways of perceiving and knowing. Can we conceive of an economics that embodies the requisite social and environmental values, and can the associated accountings hold the responsible actors justly accountable? I compare the premises and characteristics of Schumacher's Buddhist economics with the prevailing neoclassical formulations, illustrating the narrowness of the current perspective and highlighting the critical issues. I consider the Social and Environmental Accounting project and the extent to which it has been, and potentially will be, able to move accounting, business, and society toward a more holistic conceptualization of accounting and accountability. Assimilating the two economic perspectives in developing a more holistic and integrated accounting is offered as a path to consider on our journey toward an accounting “as if people mattered.”

Social and environmental accounting research manifests varying levels of awareness of critical global problems and the need to develop alternative approaches to dealing with economy and society. This paper explores Buddhist thought and, specifically, Buddhist economics as a means to informing this debate. We draw on and expand Schumacher's ideas about ‘Buddhist economics’, first articulated in the 1960s. Our analysis centres on Buddhism's Four Noble Truths, the Noble Eightfold Path and associated Buddhist teachings. The examination includes assumptions, means and ends of Buddhist approaches to economics; these are compared and contrasted with conventional economics.To consider how thought and practice may be bridged, we examine a practical application of Buddhism's Middle Way, in the form of Thailand's current work with ‘Sufficiency Economy’.Throughout the paper, we explore the implications for the development of social accounting, looking for mutual interactions between Buddhism and social accounting thought and practice.

Scientists are constructing knowledge about global warming by adapting evidence-based disciplines to reflect the Precautionary Principle. It is equally important to communicate the complexities and uncertainties underpinning global warming because inappropriate vehicles for giving accounts could result in defensive decisions that perpetuate the business-as-usual mindset: the method of communication affects how the risk associated with global warming is socialised. Appropriately constructed accounts should facilitate reflective communicative action. Here Beck's theorisation of risk society, Luhmann's sociological theory of risk and Gandhi's vehicle of communicative action (or satyagraha) are used to construct a risk-based accountability mechanism, whilst providing insight into Schumacher's concept of total accountability. These accountability constructs will be illustrated through the lived experiences of South Australian citrus horticulturists in the context of a richly layered narrative of competing discourses about global warming. The reiterative process of theory informing practice is used to construct a couple of dialogical vehicles of accountability.

Sustainable atmospheric management today involves a complex set of issues arising from the deliberate or inadvertent use of the atmosphere as a repository for waste products arising from human activities. Urban pollution affects human health, building materials and vegetation. Acidic emissions and excess nutrients produce both acid rain and dry deposition that affect terrestrial, freshwater and ocean chemistry and ecosystems. The production and effects of atmospheric pollution can transcend national boundaries and thus mitigation will require cooperation on regional and global levels, as well as local action. Global pollution includes greenhouse gases and atmospheric particles which are changing the global climate and affecting human health. While technological solutions will play an important part, the large reductions in emissions necessary to achieve sustainability will involve adopting lifestyles that conserve energy and minimise pollution. These concerns were foreshadowed in the writings of Fritz Schumacher.

If Schumacher's notions of intermediate technology and intermediate size were to underpin the task of visioning a future for our natural resources, it is rather likely that the processes and outcomes to apply would be rather different from those that have driven recent global visioning processes. By way of example, the recent efforts of the World Water Council to engineer a single global vision for the world's water resources provide a setting through which we can consider the relative possibilities for the kind of community-engaged, learning-based visioning process that Schumacher would likely advocate and the ‘old school’ hierarchically and expert-driven alternative that was undertaken by the World Water Council. Visioning is an instrument of community building, so the perspective and tools we use to develop visions are of critical importance to the character and resilience of those communities.

This paper explores through Schumacher's perspective on ‘the proper use of land’: the reasons for, and the means and consequences of, monitoring soil condition in managing agricultural landscapes sustainably. This particular perspective illustrates its argument with soil monitoring initiatives operating at various scales within the global agricultural context. Schumacher's land management goals are health, beauty and permanence, yet productivity is the goal most land managers focus on. The chosen indicators for soil monitoring need to reflect these goals. Hence, the indicators of choice for monitoring soil condition are attributes that can be: easily measured, improve soil productivity or protect the soil. Often attributes that have intrinsic ‘beauty’ (value), maintain ‘health’ (function) in ecosystems and are difficult to measure are ignored as soil condition indicators. The usefulness of information gained through monitoring soil condition is to make decisions that will be relevant for varied audiences and at different points in the decision-making process.

Social auditing is growing within the corporate social responsibility movement. On the one hand, the social audit is a means of attesting corporate compliance with Voluntary Labour Standards. On the other hand, it could become a means of legitimising questionable labour management practices in supply-chain relationships. Social audits are conducted in a wide range of industries, but the largest number of audits is imposed on apparel and shoe manufacturers-suppliers. The number and frequency of audits does not necessarily ensure humane working conditions, or worker empowerment. Here the impact of the garment industry's Voluntary Labour Standards on the workforce in developing countries is critically evaluated. We then propose a worker-oriented participatory framework that reshapes labour standards by eliciting and integrating labour's voice into existing voluntary standards. Hence this discussion uses social audit as a vehicle to demonstrate the implications of Schumacher's concept of the right livelihood on management control systems.

Gordon Boyce, is a senior lecturer in the Macquarie University Department of Accounting and Finance, where he is a member of the Social and Critical Research in Accounting and Accountability Group. His interdisciplinary research encompasses social, critical and interpretive perspectives on accounting. Previous publications include research on environmental and social accounting; public administration, ethics and accountability; interactions between globalisation and accounting; and accounting education. Gordon presently teaches subjects in accounting information systems, accounting and society, social and critical perspectives on accounting and contemporary developments in accounting research.