Accounting: The Language of Morality

Accounting is famously “the language of business”.  But linguist George Lakoff sees it as the language of morality as well.

Keeping the Moral Books

We all conceptualize well-being as wealth. We understand an increase in well-being as a “gain” and a decrease of well-being as a “loss” or a “cost.” This is combined with a very general metaphor for causal action in which causation is seen as giving an effect to an affected party (as in “The noise gave me a headache”). When two people interact causally with each other, they are commonly conceptualized as engaging in a transaction, each transferring an effect to the other.

 

An effect that helps is conceptualized as a gain; one that harms, as a loss. Thus moral action is conceptualized in terms of financial transaction. Just as literal bookkeeping is vital to economic functioning, so moral bookkeeping is vital to social functioning. And just as it is important that the financial books be balanced, so it is important that the moral books be balanced.

 

Of course, the “source domain” of the metaphor, the domain of financial transaction, itself has a morality: It is moral to pay your debts and immoral not to. When moral action is understood metaphorically in terms of financial transaction, financial morality is carried over to morality in general: There is a moral imperative not only to pay one’s financial debts, but also one’s moral debts.

You would think Lakoff’s observations would generate some interest among accountants, but I guess not–I searched Google Scholar for papers citing Lakoff’s Metaphor, Morality and Politics and found none in accounting journals!  But it’s definitely worth thinking about, and  I’d like to make a few points.

First, as the phrase I highlighted suggests, Lakoff sees accounting as a metaphor for accounting, by which he means that one thing is understood as another.  In this case, financial transactions are one thing, and then we import the ideas from that domain into the domain of morality. But it seems to me that Lakoff has this, well, not quite backwards, but sideways.  A standard definition of morality is as a code specifying what people should and should not do.  In ordinary language, then, the domain of morality is itself the domain of obligation.  Financial obligations are just one type of obligation.  So saying that we import terms from financial accounting into the domain of morality seems less apt than saying that both domains focus on obligation, and thus both use similar language.

Second I want to highlight a conundrum I’ve been facing as I flesh out a theory of moral accounting.  On the one hand, I argue that by mining existing accounting principles, I’ve unearthed 7 Moral Accounting Principles (The MAP) that are as universal as moral principles can be:

To hold people accountable in a moral way, we must (1) hold the right parties accountable, (2) to the right extent, (3) on the right basis, (4) under the right standards, (5) with good judgment, (6) in a way that is effective in improving behavior, and finally, (7) let someone else handle the job if they can fulfill 1-6 more completely.

I’m currently working with Tamara Lambert and Marietta Peytcheva to document the universality of these principles, but for now I’ll just say that not many people seem to be marching with protest signs saying “Hold the Wrong People Accountable” or “Down with Good Judgment”.  Also, when we present people with scenarios violating these principles, they consistently see such behavior as “bad”.

But here’s the conundrum:  I’m also arguing that a good understanding of moral accounting would help people understand morality more clearly.  But if they already intuitively and universally adopt The MAP,  how is training in moral accounting supposed to help?

The answer, I think, lies in the fact that everyday moral language is rich enough to allow a great deal of useful moral intuition, but still leaves a lot of room for improvement.  Moral philosophers try to improve on everyday moral language by clarifying the various factors that might make an act moral or immoral and explain why.  They end up with a gazillion terms like supererogatory (an act that is not obligatory, but still morally laudable), and my favorite distinction this week, between two types of desert (meaning deservingness of reward or punishment, spelled like a sandy expanse but pronounced like an after-dinner treat):  retrosert captures the backward looking notion that they deserve reward or punishment for what they’ve done, while prosert captures the forward-looking notion that we might reward and punish now (or promise now to do so later) to shape future behavior.

Accounting language does something similar, but rather than focusing on the what and how of morality, we focus on the what an how of holding people accountable.  For example, in non-profit accounting we distinguish between liabilities (you must do this), restrictions (you can’t do that), and general obligations (you must use remaining assets to pursue your mission).  Within liabilities, we distinguish deferred revenue (obligations to customers that are central to operations) and debt.  All of these distinctions help us hold people accountable for the range of claims, all of which have different implications for desert, and all of which require different accountability systems to enforce.

So here’s how I’m resolving this conundrum.  Everyday moral language reflects enough accounting knowledge to allow pretty good intuition about accountability.  But training in accounting (and specifically moral accounting) refines that intuition and is thus useful.

There’s one last minor issue to clean up.  The distinction between retrosert and prosert comes in a book review that is primarily about “revisionism”.  As my new colleague John Doris puts it:

“Revisionism,” I’ll say, designates views maintaining that some part of “ordinary thought” requires repair, and theorizing can repair it. The assumptions being: (1) theorizers can accurately characterize ordinary thought, (2) ordinary thought needs improvement, and (3) theorizers can perspicuously articulate the needed improvement.

The problem with revisionism is that as soon as philosophers start coining new terms, they may have simply changed the topic of conversation.  Doris quotes Hare (1957):

[S]ince what we are trying to do is to give an account of the work “good” as it is used—not as it might be used if is meaning and usage were changed—this reference is final…If by an arbitrary definition…[the revisionist]…gives the word a different function from that which it now has, then he is not studying the same thing any longer; he is studying a figment of his own devising.” (1952: Ch. 5, sec. 8).

So if moral accountants start arguing about the distinction between moral revenue and moral gains, are we now just having a completely different conversation than what Lakoff has in mind?  I don’t think so, because moral accounting isn’t really creating new moral language–it’s simply using pre-existing accounting language to talk about how to hold people accountable for moral obligations.  So my conundrum is resolved only if I really am sticking closely to existing accounting language (so a term like “moral revenue” is really just a form of revenue as accountants think of it, not simply “a figment of my own devising”), and if the term “obligation” really does mean the same thing in accounting and morality.