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The religious
The religious imperative of imperative of
cost accounting in the early cost accounting
industrial revolution
357
Warwick Funnell
Kent Business School, University of Kent, Canterbury, UK, and
Robert Williams
School of Accounting and Finance, University of Wollongong,
Wollongong, Australia

Abstract
Purpose – The paper aims to extend research which has sought to explain Britain’s early success as
an industrial power by identifying the influence of religious doctrine of the Dissenting Protestant
churches on the development of accounting practices in the factory. The concern is not with specific
accounting practices but with the social and moral environment which provided the incentives and
permissions that encouraged late eighteenth century English industrialists to develop the practices
that they used.
Design/methodology/approach – The paper draws on the highly influential writings of social
theorists such Weber, Sombart and Tawney to identify the religious doctrines that both motivated and
justified the rational, ideological business practices of prominent businessmen.
Findings – The rise of accounting as a powerful tool of control and discipline was significantly
assisted by the teaching of the Dissenting Protestant churches on “calling”. Religious beliefs provided
permissions, justifications and incentives which underpinned the entrepreneurial energies,
opportunities and successes of the early industrialists. Accounting could be seen to assume almost
the aura and nascent legitimacy of a religious practice, a means of sanctifying practices which were
otherwise reviled by social elites.
Originality/value – Despite encouragement from accounting researchers for histories of accounting
which give greater credence to the reflexivity between accounting and society, this has yet to find a
significant presence amongst the searches for beginnings in cost accounting where economic and
management factors remain the overwhelming focus. Religious beliefs are shown to have been
especially influential in the adoption of accounting practices by early industrialists who were
frequently members of the Dissenting Protestant churches.
Keywords Religion, Accounting, Industrial revolution, Dissenting churches
Paper type Research paper

1. Introduction
Ever since Weber proposed that Calvinist and Puritan teachings had engendered a
“spirit of capitalism” which proved to be the decisive factor in a confluence of forces
leading to the emergence of modern capitalism in eighteenth century England, his
provocative thesis has excited the imagination and research endeavours of generations
of sociologists and historians. Weber’s thesis has been the major challenge to theories, Accounting, Auditing
most especially Marxian, which want almost exclusively to attribute economic factors & Accountability Journal
Vol. 27 No. 2, 2014
as the causes of Ashton’s “first” industrial revolution in the late eighteenth century pp. 357-381
q Emerald Group Publishing Limited
(Ashton, 1963, 1964; Macfarlane, 1989, p. 170; Kitch, 1974, p. xiv). Weber, who 0951-3574
distinguished “modern” capitalism from earlier forms of capitalism, did not argue that DOI 10.1108/AAAJ-03-2013-1269
AAAJ capitalism with its overwhelming striving for gain and wealth was a feature only of the
modern era. On the contrary, he went to great lengths in The Protestant Ethic and the
27,2 Spirit of Capitalism to prove that these features of society and of human motivations
have been present from ancient times. Modern capitalism, however, according to
Weber differed from earlier forms of capitalism not in motive but in the primacy given
to “rational calculation” to achieve the capitalist’s goals. Recently, Bryer (2000a, b) has
358 re-energised this debate with a particular interpretation of Marxist philosophy that
posits a special relationship between early capitalistic enterprises, which adopted a
social (joint) capital, and the capitalistic form of double-entry bookkeeping to enable
the calculation of returns on capital invested.
Following Hopwood’s (1987, 207-208) now often cited contention, which has since
been addressed by a very considerable body of critical historical research, that “(m)uch
of the significance for accounting of the wider economic and social setting of the
organisation has been ignored”, the present paper investigates linkages between the
doctrines of the dissenting churches, or non-conformist Protestant churches, in
England in the closing decades of the eighteenth century and at the beginning of the
nineteenth century, and the attraction of accounting as a form of rational calculation
for industrialists who were members of these churches. By identifying these
associations and, thus, the influence of religious doctrine as possibly the most
important, enduring influence on society and business practices, the paper will
demonstrate how social forces might “pass through and thereby transform the
organisation and, in turn,... create organisational practices which can be influential in
the construction of the world of the social...” (Hopwood, 1987, p. 214). Carmona and
Ezzamel (2009, p. 504) have also confirmed that the “role of religion in the history of
humankind can hardly be overstated . . . . Religious beliefs have exerted a major and
lasting influence on human behaviour as well as . . . social activities and institutions”.
The connection in the eighteenth and nineteenth centuries between the emergence of
the middle classes, the growth of industry and business and the rise of groups which
dissented from the established churches, the Roman Catholic Church and the Church of
England, has been long observed by a number of authors (Wilson, 1957; Briggs, 1960;
Ashton, 1964; Hill, 1966a; Mathias, 1969; Rogers, 1981; Weber, 1989; Wykes, 1990;
Langford, 1992 pp. 3,26; Faircloth, 1988). Even though the dissenters or nonconformists
were a minority of the population they were heavily represented in the manufacturing
trades (Wykes, 1990). These included Jerediah Strutt, who invented the rib machine for
producing mesh material so crucial to much of the textile industry, the Unitarian
Wedgwoods, Samuel Olknow and Joseph Priestly and the Quaker families of Cadbury,
Fry, Rowntree, Bryant and May, Huntly and Palmer, Allen and Hanbury, Darby,
Barclay, Gurney and Lloyd (Mathias, 1969; Fitton, 1989). Given the importance
accorded here to the broad influence of religious doctrines on the business practices of
the early British industrialists, the emphasis will be on the social context and its
influence on individuals rather than focussing on specific accounting practices which
have been exhaustively examined in numerous settings elsewhere (Fleischman and
Parker, 1990, 1991, 1992; Hoskin and Macve, 1994; Antonelli et al. 2006; Williams, 1997;
Edwards, 1989; McKendrick, 1961, 1970; Zambon and Zan, 2007; Oldroyd, 2007;
Fleischman et al., 1995; Fleischman and Tyson, 1996; Fleischman, 2009; Boyns, 1993;
Edwards et al. 1995; Boyns and Edwards, 2012).
It can be hazardous for the accounting historian to attempt to separate and assign
relative importance to individual social phenomena when endeavouring to arrive at
historical explanations (see in another, similar, context Samuelson, 1961, p. 109). The religious
McKendrick (1970, p. 45) referred to the “dangerous deceptions of the simplicities of
mono-causal answers...”. Thus, this study recognises that, consistent with Weber’s
imperative of
own declaration (Weber, 1958, p. 91), religion was not the only factor which could have cost accounting
influenced the early industrialists’ approach to management. Religious teachings were
but one aspect of the complex social, economic and political environment which shaped
the morals and behaviour of industrialists and in which they established and operated 359
their businesses. According to McKendrick (1970, p. 45), in trying to explain the
English industrial revolution economic historians have referred creatively to a number
of factors which include the English weather, “the social structure of the work-force,
the psychology of the entrepreneur, the state of technology..., the availability of
capital”.
Despite encouragement from accounting researchers for histories of accounting
which give greater credence to the reflexivity between accounting and society
(Bhimani, 1994a, pp. 400-1, Zambon and Zan, 2007; Hopwood, 1987), this has yet to find
a significant presence amongst the searches for beginnings in management accounting
where economic and management factors remain the overwhelming focus (for example
see Johnson and Kaplan, 1987, Fleischman and Parker, 1991, pp. 368,370; Quattrone,
2004, p. 648, 2009, p. 86; Fleischman et al. 1995, Tyson, 1995, Hoskin and Macve, 1994).
Carmona et al. (1997) observed how, despite the impressive body of research which has
examined the origins of cost accounting practices in the early industrial revolution,
little has been said about the influence of religion in this period. Carmona and Ezzamel
(2006, p. 117) later noted that “(r)esearch on the relationship between accounting and
religion... is in short supply. Until quite recently, there has only been a handful of
scholarly papers in the area...” (see also Carmona and Ezzamel, 2009). While one special
issue on religion and accounting in Accounting History (2006, Vol. 11, No. 2) and two in
Accounting, Auditing and Accountability Journal (2004, Vol. 17, No. 3; 2005 Vol. 18,
No. 2) canvassed a broad range of interactions between religion and accounting, the
period of the British industrial revolution was not a prominent concern of the papers
(see for example Jacobs, 2005; Jacobs and Walker, 2004; McKernan and MacLullich,
2004). Nor, in a comprehensive overview of research which examines the relationship
between religion and accounting, did Carmona and Ezzamel (2009) consider this in the
context of the development of accounting practices in early manufacturing businesses,
either in Britain or on the Continent. Meanwhile, Fleischman’s (2009) valuable survey
of the history of management accounting made no reference to the religious
backgrounds of prominent industrialists in the British industrial revolution, instead
observing that the “entrepreneurial savvy” of the these men meant that “it was
inconceivable that they would fail to appreciate the value of cost accounting . . . ”
(Fleischman, 2009, p. 193).
The role of accounting and accountability practices conducted within religious
communities, for the purposes of those communities rather than in secular pursuits
external to them, has attracted an increasing number of studies (Bigoni et al. 2013;
Carmona and Ezzamel, 2006; Kuasirikun and Constable, 2010; Booth, 1995; Cordery,
2006; Laughlin, 1988; Hardy and Ballis, 2005; Jacobs, 2005; Irvine, 2005; Quattrone,
2004, 2009; Jacobs and Walker, 2004; Irvine, 2002; Abdul-Raham and Goddard, 1998;
Alvarez-Dardet et al. 2006; McPhail et al. 2005) with particular prominence given to an
alleged “sacred-secular divide” paradigm identified by Laughlin (1988) and later said to
be confirmed by Booth (1993, 1995). Laughlin and Booth argue that inevitably in
AAAJ religious organisations, especially the major churches, there is a clash between
religious (sacred) values and profane practices such as accounting, with the latter being
27,2 tolerated only if they do not interfere with the sacred mission of the church.
The stark dichotomy alleged between the sacred and the profane when identifying
the role of accounting in religious organisations has provoked an ever growing number
of studies which have arrived at very different conclusions. Jacobs (2005, p. 192),
360 quoting the work of Studstill (2000), states that the sacred and secular are two extreme
points along a spectrum of possible experiences rather than a binary condition as
envisaged by Laughlin. That the relationship between the sacred and the secular does
not have to be limited to extreme positions, such as those preferred by Laughlin and
Booth, but instead there can be various possible interpretations of the relationship
between sacred and secular activities, is central to much of the work of Niebuhr. For
Hardy and Ballis (2005) Niebuhr provides the means to identify the manner in which
non-religious activities can play an essential role in the fulfilment of the religious
mission. Niebuhr recognises that religious activities are conducted not in isolation from
other human endeavours outside the physical domain of the church but are formed by
social interactions. Hardy and Ballis (2005, p. 246) note that for Niebuhr “the story of
God’s action in history cannot be separated from the stories of individuals and
communities...”.
Stone’s (1962) study of the Norwich Cathedral Priory confirmed that irrespective of
any views that accounting might have been seen as a secular, tainted activity, this did
not prevent calculations of profit. Jacobs and Walker’s (2004) study of the Iona
Community found that members of this religious group do not see any sacred-secular
dichotomy nor antagonism between religious beliefs and accounting practices. Instead,
the Community used accounting tools to inform and sustain religious practices. Similar
results were obtained by Quattrone (2004) with his study of the Society of Jesus in the
sixteenth and seventeenth centuries. In his 2004 study Quattrone also warned of the
need for accounting historians to resist a tendency to attribute overwhelming
importance to economic factors in the use of accounting practices rather than to
dominant social and political ideologies such as religious doctrine. In another study,
Jacobs (2005) demonstrates that John Wesley’s teachings do not concede a division
between the sacred and secular. Instead, Wesley, the founder of the Methodist
movement, saw a close supportive link between the way in which money is utilized and
the moral duty to be accountable for its use for spiritual ends. Evil does not lie in
money of itself but in the misuse of money ( Jacobs, 2005, p. 204). According to Wesley
every believer must “gain all he can, save all he can and give all he can”, every believer
has to use his abilities for helping his neighbour and for God. In this context,
accounting tools become a powerful means for organisations and individuals to be
accountable for the use of money to ensure that it must be utilized for moral ends,
referred to by Roberts (1991) as the individualisation and socialisation of
accountability.
A core understanding of the very considerable body of extant research concerning
the development and use of accounting practices in the English industrial revolution
from the late eighteenth century has been the way in which the technical innovations
and management practices of the early industrialists recognised both the technical
challenges which they faced and their creative, innovative solutions to these
(Fleischman and Parker, 1990, 1991, 1992; Hoskin and Macve, 1994; Antonelli et al.
2006; Williams, 1997; Edwards, 1989; McKendrick, 1961, 1970; Zambon and Zan, 2007;
Oldroyd, 2007; Fleischman et al., 1995; Fleischman and Tyson, 1996). This was clearly The religious
evident in the success of Boulton and Watt’s management of their Soho factory (Roll,
1930; Cule, 1940; Musson and Robinson, 1969; Tann, 1981 Dickinson, 1936; Fleischman
imperative of
and Parker, 1991, 1997). The present paper recognises the undeniable potency and cost accounting
importance of these aspects of the rise of major industrialists but is concerned with
identifying how religious beliefs provided permissions, justifications and incentives
which underpinned the entrepreneurial energies and opportunities of the early 361
industrialists. The paper enhances understanding of the reasons for the dramatic and
early success of Britain as an industrial power by recognising the importance and
contributions of Protestant beliefs in this success through the lives and businesses of
major industrialists, a disproportionate number of whom were members of the
Dissenting Protestant churches. These beliefs are shown to have been manifested in
the management and accounting practices which were introduced to manage new
businesses, in particular ensuring that the new large workforces which needed to be
assembled in factories were managed effectively. The paper does not attempt naively
to argue that a particular religious doctrine led to specific accounting and management
practices. Rather, it will propose that the intent of accounting and other management
practices was not only judged to be consistent with the teachings of the dissenting
churches but, most importantly, that it was incumbent upon the entrepreneur who was
serious about his salvation to use business methods such as modern accounting
practices which would bring the greatest order to ensure the success of his business
affairs. Secular accounting practices, therefore, could be critical to pursuing one’s work
as a calling from God.
The approach taken in this paper is similar to that used by Miller (1990, p. 329) who,
after Foucault, sought to “‘lighten the weight of causality’ without dispensing of it, to
provide explanations in terms of conditions of possibility...” (emphasis added). Instead
of seeking to establish whether Weber and Tawney were correct in asserting that there
was a close relationship between the origins of modern capitalism in England and the
teachings of Protestantism, the paper operates at a less contentious level and will rely
upon the consensus which exists in the literature that adherents to dissenting or
nonconformist religious groups played a prominent role in the industrialisation of
England from the late eighteenth century (Tawney, 1980; Weber, 1958; Windschuttle,
1994, p. 244; Halevy, 1960, p. vi; Kitch, 1974, p. 148). This does not preclude recognition
of the contributions and remarkable achievements made by many members of the
Catholic Church, both in England and elsewhere, which are well documented (see for
example Carmona et al. 1997; Dobie 2008a, b, 2011), and the Church of England.
To accomplish its aims the paper will confirm a link between Protestantism, as
practiced by the dissenting churches, and significant early industrialists and examine
those features of Protestant teachings which were influential in shaping attitudes
towards business and in the application of increasingly sophisticated accounting
practices. It is recognised that it was the teachings of Protestantism generally which
informed the behaviour of industrialists which belonged to the Dissenting churches.
The industrialists who were part of the Dissenting Protestant churches gave greater
prominence to these beliefs by their very considerable successes. As an often socially
isolated and excluded group, as noted in the paper, pedantic and possibly exaggerated
emphasis on particular beliefs which may have been common to all Protestants gave
the Dissenting churches a unique identity to proclaim the earnestness with which they
believed and applied religious teachings.
AAAJ The paper will first provide a brief sketch of the emergence of “reason”, which was
the offspring of empiricism, as a competitor to the influence of the established churches
27,2 during a period in the seventeenth and eighteenth centuries which is now referred to as
the Enlightenment. It will then be shown how the tenor of the Enlightenment and its
associated religious movements, which provided the initial impetus for significant
social and economic changes in England towards the close of the eighteenth century,
362 was given effect through the lives of prominent industrialists. Weber’s thesis that the
teachings of the dissenting churches reinforced the anti-superstition and rationalism of
the secular writers of the Enlightenment is then introduced. This is followed by an
examination of the relationship between the doctrines of calling and predestination and
the sanctification of business. It will then be shown how these beliefs were influential
in justifying practices which were designed to create order by their ability to assist in
disciplining a reluctant workforce and promoting a profitable enterprise. The paper
demonstrates that the use of accounting practices by men whose religious associations
with the dissenting churches promoted the morality of rational, hard headed business
practices as a means to create order and discipline in their factories and other places of
business allowed them to fulfil their obligations to God and to their fellow believers.

2. Protestantism and the emergence of reason

The late seventeenth century and early eighteenth century saw the birth of the
Enlightenment spirit in Europe and in England that expressed itself in an inquisitive
scepticism which probed old myths and took nothing on faith (Mollenauer, 1966;
Stromberg, 1966; Bhimani, 1994b, p. 645; Tinker, 2004). Reason and rationality became
the driving force behind innovation. As an example of a renowned industrialist imbued
with an enlightened spirit, Plumb (1972, p. 17) described Josiah Wedgwood (1730-1795)
as:
[. . .] a man of little or no formal education. By the time he reached maturity he had...
absolute... faith in the efficacy of reason... Everything, he proclaimed, will yield to experiment,
and he possessed an absolute mania for measuring, weighing, observing, recording and
experimenting.
People began to think of nature as a machine which, like any other machine, could be
understood, controlled and improved upon by the application of knowledge, that is
reason (Rogers, 1981; Porter, 1981; Eriksen, 1988; Tawney, 1980, p. 77; Gascoigne,
1994). Realisation by Europeans that they had the power to “open the door of nature in
the workshop, factory, mine, and forge” was for Briggs (1960, p. 19) “the great technical
achievement of the 18th century”. Newton had shown that if God’s laws for the universe
could be penetrated then all of nature was susceptible to understanding for the benefit
of humankind. The Protestant Unitarians held the view that God had set in train a
series of laws which governed the world and all that humankind needed to do to
control the world was to discover these laws through science and reason (Poggi, 1983,
p. 65). No longer were individuals necessarily at the mercy of a capricious nature and
impotently subject to continual cycles of epidemics, famines, wars and early death.
There was a growing hope for life, a more confident trust in effort, a greater
commitment to inquiry and criticism and a stronger interest in social reform
(Hobsbawm, 1991; Gay, 1969). For Stromberg (1966, p. 113) the seventeenth century:
[. . .] had been an Age of Reason... (I)ts major thinkers had striven to perfect a method of
scientific analysis that was careful, rigorous, logical, and naturalistic in that it did not refer
 directly to supernatural causes. God was assumed to exist as an ultimate guarantee of an The religious
orderly universe....
imperative of
The establishment of reason, and not religious beliefs, as the dominant arbiter of cost accounting
scientific endeavour and social relations in the seventeenth and early eighteenth
centuries was to prepare the way for the revolutionary innovations that were to come.
“Reason” became the rationale and motivation for those who were at the forefront of
industrial innovation and development, guiding actions in both their businesses and 363
personal lives (Seed, 1985). The Enlightenment encouraged “a hatred of vague
enthusiasms and of misty ideals and ideas, a determination to apply the test of a
severely critical reason to everything and to reject whatever will not stand the test...”
(Rogers, 1932, p. 352). This also provided the means for social classes previously
excluded from the elite, privileged sections of society, the opportunity to acquire great
wealth and social position. Social advancement was no longer dependent upon the
approval of entrenched, privileged and exclusionary classes but on an individual’s own
efforts, the results of which would be attractive to society. In the late eighteenth
century there were changes which were:
[. . .] social and intellectual as well as technical and economic. They were associated with... the
emergence of new social groups... -the creation of new political pressures and new social
institutions, new modes of thought and action and, above all, the foundation of a new view of
society (Briggs, 1960, p. 20).
The real beneficiaries, and the most effective protagonists of the power of critical
reasoning, were those who were on the fringes of political and social influence and,
therefore, had the most to gain by embracing the spirit of the Enlightenment. Thus, it
was members of the emerging English middle classes who perceived early that the
acquisition of useful knowledge was a way to overcome their enforced preclusion from
high social position and the means of rapidly accumulating great wealth. The profits
from innovation during the industrial revolution created a new wealthy elite from the
lower middle class who gained both social and economic status (Plumb, 1972; Rogers,
1981; Payne, 1974, p. 24; Davidoff and Hall, 1992, p. 18). Leading the way was the
dominating presence of the successful inventors and entrepreneurs, such as James
Watt and William Armstrong who were members of the dissenting churches. Despite
their importance, surprisingly, there has been a comparative reluctance to investigate
the philosophies and beliefs that formed the characters of the new dominant players
and which engendered modes of thought and patterns of behaviour which, in turn, may
have affected their predisposition of the new owners and managers of businesses
towards new accounting and management practices. A notable exception is Bhimani
(1994b, p. 670) who, in a study of three French manufacturers over a period of 200
years, has attempted to bridge the economic and the social by tracing accounting
developments to specific organisational needs and to wider social movements.
The dissenting churches were those non-establishment Protestant churches which
stood in competition with the Church of England and the Roman Catholic Church.
They included Presbyterians, Congregationalists, Baptists, Puritans, Unitarians,
Quakers and Methodists (see Weber, 1958, p. 95). They dissented from the major
doctrines of the main Protestant church, the Church of England. Although there were
many differences in the detailed theologies of these churches they held the common
belief, following Luther’s teaching on “justification” (Quattrone, 2009, p. 651), that
believers could enter the presence of God through their free will, by an act of faith,
AAAJ without the approval of an earthly intermediary, such as a priest. The Quakers became
27,2 known for their love of order and absolute honesty, as did members of all the
dissenting churches (Halevy, 1970, p. 438). This was not only a sound moral practice
but also it was good for business: “The Godless cannot trust each other across the road;
they turn to us when they want to do business; piety is the surest road to wealth”
(nineteenth century Quaker quoted in Andreski, 1983, p. 135).
364 Protestants were quick to see the advantage which could be theirs by construing
consistencies between religious ethics and business (Samuelson, 1961, pp. 151-2).
Protestantism “was not the cause of capitalism, but it gave older and deeper tendencies
a necessary protection. It was the enabling force” (Weber as quoted in Macfarlane,
1989, p.172; Tinker, 2004, p. 446). Protestant teaching:
[. . .] was admirably designed to liberate economic energies, and to weld into a disciplined
social force the rising bourgeoisie, conscious of the contrast between its own standards and
those of a laxer world, proud of its vocation as the standard bearer of the economic virtues,
and determined to vindicate an open road for its own way of life by the use of every weapon...
because the issue which was at stake was not merely convenience or self interest but the will
of God (Tawney, 1980, pp.119-120; see also Tinker, 2004, p.446).
Some writers like Samuelson (1961, p. 102), who possibly has been Weber’s most
persuasive critic, while not disagreeing with the broad proposition that Protestant
countries did tend to be economically advanced earlier than Catholic countries on the
Continent, have set out to demonstrate the folly of giving chauvinistic prominence in
any sociological or historical explanation to one factor (Samuelson, 1961, p. 150).
Samuelson takes particular objection to the proposition that there was a coincidence of
timing between the rise of modern capitalism, Weber’s spirit of capitalism and
Protestant teachings (Samuelson, 1961, pp. 42, 104-107). Others like Tawney,
Robertson (Samuelson, 1961, p. 17; Flinn and Hagen, 1966, pp. 83-4) and Little (1970,
p. 225) disagree with Weber’s thesis that the capitalist spirit was a product of
Protestantism, preferring instead to argue that it only found in “later Puritanism a
tonic which braced its energies and fortified its already vigorous temper” (Tawney in
Foreword to Weber, 1958, p. 7; Little, 1970, p. 2). Despite the variety of reactions which
Weber’s central thesis has produced, there is still a strong common thread of
agreement amongst those writers engaged in the debate that the economic changes of
the late eighteenth century and early nineteenth century were not devoid of religious
influences which had considerable effect through leading industrialists.
Irrespective of whether Protestant teachings were the crucial ingredient in giving
England a head start in the industrial revolution or were merely the outcome of the
rapid rate of social change and a means used to propel and strengthen the
metamorphosis of society, no account can afford to exclude consideration of religion as
one possible factor in the development of capitalist institutions and practices, including
cost accounting, at the close of the eighteenth century in England and the
commencement of the industrial revolution. At the time of the early industrial
revolution religion was still the dominant social force which affected most, if not all,
aspects of people’s lives. Notably, the decades either side of the arrival of the nineteenth
century constituted a period of considerable influence for the dissenting churches. This
was a time, observed the labour activist Francis Place in the mid-nineteenth century, in
which people “became wiser, better, more frugal, more honest, more respectable, more
virtuous, than they ever were before” (quoted in Briggs, 1960, p. 175). In this process The religious
the influence of the dissenting churches was not inconsiderable.
imperative of
3. The entrepreneur and the dissenting churches in the early industrial
cost accounting
revolution in England
A close examination of the lives of the great has traditionally provided historians with
the means to comprehend the past in terms of the way it was then understood. After all, 365
argues Butterfield (1955, p. 2), history is “the essence of innumerable biographies”.
“When one speaks of ‘history’”, observed Turner (1968, p. 91), “often one speaks of
personalities”. Thus, history in its traditional guise is not the product of impersonal,
transhistorical processes. Rather, it is within individuals that “the real birth of ideas
takes place... The reason why things happen is that human beings have vitality.... It is
men who make history” (Butterfield, 1955, p. 1). Largely through the lives of prominent
individuals who might be accomplished scientists, business entrepreneurs or
politicians, Enlightenment doctrines and reformist religious teachings proved to be
powerful forces in bringing great changes to English society. The beliefs of the Radical
politician and manufacturer Richard Cobden (1804-65), for example, were to be major
influences on government policies and improving the lives of the poorest. The greater
an individual’s influence on the economic lives of others, such as prominent
industrialists who employed and housed large numbers of workers and their families,
notably the Cadburys, the greater the impact of religious teachings which may have
framed and directed most aspects of influential lives. They imposed on those
dependent upon them moral and behavioural expectations consistent with their own
beliefs. Thus, according to Bhimani (1994b, p. 638), it is worthwhile to investigate “how
shifts in conceptions of human predisposition may be coterminous with changing
modes of accounting controls”.
In the early industrial revolution in England, the consequences of the actions of
individual pioneering industrialists were particularly significant. These men took a
leading role in all aspects of their businesses and, eventually, in society. Firms were
owned and operated by family dynasties, originating often from the efforts of one man,
and not large companies, with the result that the character of the more prominent and
successful businesses was not infrequently determined by the strong personality of
individual entrepreneurs. In eighteenth century Britain the highly successful,
remarkable businesses established by Mathew Boulton, James Watt and in the
nineteenth century by William Armstrong recognised the impact that one strong,
energetic and brilliant industrialist could have on British business and society. Thus,
understanding the influences which shaped the attitudes and beliefs of early
industrialists provides part of the key to comprehending the way in which businesses
were managed. Weber recognised that it was “the influence of those psychological
sanctions which, originating in religious belief and the practice of religion, gave
direction to practical conduct and held the individual to it” (Weber, 1958, p. 97,
emphasis added).
As pioneers, the early industrialists were confronted by many situations which
required new solutions. Not only did they have to be innovators in technology, they
also had to be able to promote and manage their businesses. However, in their role as
managers, the new industrial entrepreneurs had little to guide them. Extant accounting
practices and treatises, for example, favoured the needs of trading merchants and
landed estates. Apart from some isolated examples, such as the early royal tobacco
AAAJ factories in Spain (see Carmona et al., 1997), until the time of the industrial revolution
the accounting needs of factory-based, large scale manufacturing operations which
27,2 employed large numbers of workers had not been a significant influence in the long
evolution of accounting. In the case of the Strutts’ very successful hosiery business
near Derby, for example, in the late eighteenth century few of their workers had been
brought together in the town (Fitton and Wadsworth, 1958, p. 58). Recent studies have
366 recognised that the practice of accounting for costs was not uncommon amongst
businesses prior to the industrialisation of Britain in the late eighteenth century which
ushered in major changes in the scale and increasing sophistication of costing practices
(King, 2010; Boyns and Edwards, 2012). King (2010)7, p. 385) reminds us that “(d)uring
the industrial revolution, textile businesses were mechanized, and the workers were
gathered in a mill (or factory)... This produced new management problems”. It forced
the early industrialists to take a very active role in developing their own accounting
systems which they were determined would not be accessible to others (Fleischman
and Parker, 1991, p. 371; also see below). Consequently, the purposes served by these
embryonic accounting systems reflected not only the information needs of managers
but also the beliefs and personalities of their originators. Indeed, early industrial
innovations in cost accounting were highly individualistic. In an era when many
industries were the first of their kind and businesses were generally reluctant to give
other businesses access to their management and accounting practices, it was easy to
see as unique the problems which confronted industrialists and, therefore, solutions as
specific to their situation (see for example Wedgwood in McKendrick, 1970). In
contrast, sharing this information was very common amongst institutions such as
voluntary hospitals (see Holden et al. 2009).
Flinn and Hagen (1966, p. 82) have estimated that, at a time when non-conformists
accounted for only about 5 per cent of the population, almost half of the early British
inventor-industrialists had an association with the non-conformist churches (see
Davidoff and Hall, 1992, pp. 13-17 for examples). With the drive toward economic
change coming disproportionately from entrepreneurs associated with minority
groups who were associated with the dissenting churches it is not surprising, therefore,
that it has been long recognised that their contributions should be given prominence
(Ashton, 1963; Mathias, 1969; Payne, 1974, p. 25; Williams, 1997). It was not difficult to
find, observed Weber (1958, p. 35), that:
[. . .] any country of mixed religion brings to light with remarkable frequency... the fact that
business leaders and owners of capital, as well as the higher grades of skilled labour, and
even more the higher technically and commercially trained personnel of modern enterprises,
are overwhelmingly Protestant.
Amongst the reasons which have been proposed for the success in business of people
affiliated with dissenting churches, Ashton (1964), Flinn and Hagen (1966, p. 84) and
Pollard (1965, p. 134) have emphasised the often unconventional education of early
industrialists and the close networks of support which grew within the dissenting
churches. As organisations outside the mainstream, the lives of the members of the
dissenting churches were often blighted by entrenched social proscriptions which
advanced the opportunities of a powerful social and political elite who guarded
jealously and aggressively their privileges which gave them their economic and social
pre-eminence (see Weber, 1958, p. 39). Until 1829, when the repeal of the Test and
Corporations Acts removed legal restrictions on non-conformists, dissenting groups
were socially, economically and legally outside the establishment and excluded from The religious
the opportunities this association made possible. In late eighteenth century England,
the establishment embraced the aristocracy, landed gentry, the Church of England, the
imperative of
medical and legal professions, well established commercial interests beyond mere cost accounting
localised trade, senior members of the defence forces and the civil service (Ward, 1978,
p. 13). An ongoing prejudice against people “in trade” further compounded the social
exclusion of the emerging class of wealthy businessmen and their families (Fitton and 367
Wadsworth, 1958, pp. 109-10,111).
Excluded from the great universities of Oxford and Cambridge, and forced to find
their own way outside the establishment, the non-conformists were driven to establish
educational institutions which emphasised more practical pursuits. Chief amongst
these alternative schools was the Warrington Academy, at which the scientist Joseph
Priestly had been a tutor (Unwin, 1924; Giles, 1984; Hans, 1951; see Edwards, 2011 for
details of academies in the early industrial period), which served as a training ground
for many who later became leaders in the worlds of science, business and political
liberalism (Samuelson, 1961, p. 124; Unwin, 1924; Giles, 1984). One of the largest
non-conformist academies located in the village of Findern provided Jedediah Strutt
with an education which encouraged self-improvement and was to allow him to
become one of the most important innovators in the early British textile industry. It
also provided him with contacts amongst the non-conformists which were to prove to
be very useful, especially those which led to Richard Arkwright (Fitton and
Wadsworth, 1958, pp. 3, 111). Wykes (1990) has pointed out the irrelevance of the
Universities of Oxford and Cambridge, and their training in the classics for the learned
professions and for service to the State, to dissenters who operated in the world of
business.
The social and political alienation of the dissenters closely bound them socially and
in business. They had only each other on whom they could depend for advancement
and success in business. In Weber’s (1989, p. 39) view “(n)ational or religious minorities
which are in a position of subordination to a group of rulers are likely, through their
voluntary or involuntary exclusion from positions of political influence, to be driven
with peculiar force into economic activity”. Economic activity was looked at
disdainfully by the establishment, as tainted by baser motives. These attitudes
provided opportunities for the excluded. At first the more successful that new
manufacturers and businessmen became the greater the threat they presented to the,
often poorer, privileged elites who were even more determined to ensure that the
interlopers would not be accepted. Thus, the networks of individual and family
relationships established amongst the members of the dissenting churches were
critical in providing mutual support and access to resources and finance. These
networks, however, did not necessarily reach across sectarian boundaries. For
example, there was some conflict between the Quakers and the Unitarians in relation to
lifestyle. The Unitarians were encouraged to enjoy the fruits of their labours while the
Quakers expressed forebodings about the consequences of wealth, giving precedence
to the need to live an abstemious, moderate and sacred life.
Membership of a congregation which was regarded as prestigious amongst
members of the dissenting churches and its associated family networks and shared
beliefs engendered a system of mutual trust and co-operation. For the dissenter:
[. . .] admission to the Lord’s supper depended on ethical fitness which was identified with
respectability in business, while no one inquired into the content of one’s faith. Such a
AAAJ powerful, unconsciously defined organisation for the production of capitalistic individuals
has never existed in any other church or religion (Weber quoted in Andreski, 1983, p. 136).
27,2
Regular association with the dissenting churches was taken also as a sign of
respectability and credit worthiness because of the reputation of members of the
dissenting churches for honesty and hard work; a particularly important benefit in an
era of unlimited liability (Seed, 1985; Wilson, 1957; Halevy, 1970, p. 438). Should this
368 trust be betrayed, those guilty and their families would be ostracised without ever any
way back. All were aware of this expectation which created a powerful tool to
discipline. A leading industrialist Samuel Oldknow, for example, was a prominent
member of a Unitarian chapel who depended on networks within the church for capital
to sustain his business ventures with James Watt (Payne 974, p. 25; Davidoff and Hall,
1992, pp. 208,215-6). Without the existence of formal, national capital markets in the
late eighteenth century, “the road to individual advancement usually led not through
the school... but past the altar” (Briggs, 1960, pp. 9, 27). So important was the integrity
of personal and business associations between like minded believers that some
religions, like the Quakers, forbade their members to marry into other religions.

4. High praise for low acts?: wealth, Calvinism and the doctrines of calling
and predestination
The Protestant reformers believed that the relationship between the individual and
God was direct, rather than through the medium of the Church and the forgiveness
dispensed by mercenary priests. This put additional pressures on individuals to take
responsibility for their own behaviour. Protestants were not provided with the
opportunity to have their responsibility absolved by a representative of the church in
the confessional which had long been the practice of the Catholic Church. The
dissenting churches in particular were much less forgiving than the established
churches when it came to matters of personal discipline and morality. For the
Protestant, salvation came through faith and not through works. According to John
Wesley, the founder of Methodism, “all the blessings which God hath bestowed upon
man are of his mere grace, bounty and favour; his free undeserved favour...” (quoted in
Davies, 1965, p. 159). Rupp (1965, p. xxvi) refers to this as an “optimism of grace”, in
contrast to the debilitating damnation of the churches of Rome and England.
Individuals, therefore, were directly responsible to God for their actions and not to a
priestly hierarchy which existed to judge the actions of the striving believer. The
encouragement which the dissenting churches gave to a personal relationship with
God, their contributions to the innovative drive of prominent non-conformists and the
way in which innovations could be given effect through the results of a provident and
productive life were seen by Weber as the consequences primarily of the Protestant
doctrines of calling and predestination (Kitch, 1974, p. 146).
If, as Calvin believed, eternal fate was predestined by God at the time of creation,
then good works could have no effect on an individual’s ultimate end (Halevy, 1970,
p. 402). Unfortunately for the faithful, God provides no incontrovertible assurances of
salvation by clearly identifying those who are among the saved. All that anyone could
do, believed Calvin, was to seek out signs from God that they were among the chosen.
The way advocated by Calvin which was most certain of indicating spiritual destiny
was through the fruits of one’s occupation (see Maltby, 2000 for a discussion about the
virtues of prudence, specially p. 57). Members of the dissenting churches were to
regard whatever work in which they were engaged, whether secular or religious, as
being called to this by God (Weber, 1958, p. 115; Samuelson, 1961, p. 43; Poggi, 1983, The religious
p. 64). Thus, an individual’s work or calling was to be regarded as part of the sacred imperative of
covenant each believer had with God. As a result the elect:
cost accounting
[. . .] is active, not passive; his activity is directed by his intellect, not by habit or feeling; the
timespan of his attention and his effort is lengthy, not brief; he takes charge of his life, does
not drift nor does he trust events to go his way; he plans his existence and takes responsibility
for its temporal outcome, does not bless or curse fate; he struggles to impose order and control 369
over things and people (Poggi, 1983, p. 69; emphasis added).
The faithful were, in the full sense of the term, to immerse themselves in their calling in
order to honour God: in majorem gloriam Dei. Their piety was to dominate all aspects
of their lives. No longer, according to Calvin, were isolated good works to be
substitutes for a life of daily dedication to the work given by God (Weber, 1958, pp. 43,
117). God may have created the world originally but it was up to individuals
subsequently to work with God to fashion and maintain order in the world. This
provided a compelling opportunity for individuals to take up the partnership offered
by God and to pursue their vocation as a direct calling from God. The secular was to be
the source of its own virtues.
The great strength of the contribution of the dissenting churches to modern
capitalism, according to Weber, was the potential ability to recognise secular business
practices as also sacred. No longer would the labours of men and women be always
tainted with God’s judgement on the first inhabitants of Eden (Genesis 4:23). Under
Protestantism, a career in business did not have to lead straight to damnation as
prophesied by earlier theologians who pronounced that “no profession was more
suspect than that of the merchant” (Le Bras, 1963, p. 336; Maltby, 2000; Tinker, 2004).
Business had been regarded by Saint Thomas Aquinas as “justly deserving of blame,
because, considered in itself, it satisfies the greed for gain, which knows no limit and
tends to infinity. Hence trading in itself, has a certain debasement attaching thereto, in
so far as, by its very nature, it does not imply a virtuous or necessary end” (quoted in
Bursk et al., 1962, p. 2121). Unlike the approbation heaped on business by medieval
religious scholars and the Catholic Church (Bursk et al. 1962; see Martin Luther in
Sombart, 1953, p. 27), the dissenting teachings from the seventeenth century promoted
the importance of everyone playing their part in contributing towards the well-being of
their community by diligent application to the work that God had called upon them to
perform, which included business. With all callings, whether secular or religious, the
same in the sight of God (Weber, 1958, p. 81), what mattered were the motives for any
endeavours. Businessmen could know that their practices “were not offensive to God.
On the contrary: they glorified God” (Hill, 1966a, p. 47). Wealth was seen mainly as the
consequence of the businessman’s dedication to his businesses, his self-denial, virtue
and discipline (Weber, 1989; Tawney, 1980, pp. 113-4). The more successful a
businessman, the greater the certainty that he was part of God’s elected. These beliefs
and the behaviour which they elicited and approved were in stark contrast to those of
the Catholic Church which taught that, following Christ’s example, a life of poverty and
rejection of earthly pleasures were the path to salvation.
It was the characterisation of work as worthy, even sacred, in the eyes of God,
especially that associated with business, which Weber saw as the engine which was to
drive modern capitalism. He concluded that:
AAAJ [. . .] the ability of mental concentrations as well as the absolutely essential feeling of
obligation to one’s job, are here most often combined with a strict economy which calculates
27,2 the possibility of high earnings, and a cool self-control and frugality which enormously
increase performance. This provides the most favourable foundation for the conception of
labour as an end in itself, as a calling which is necessary to capitalism... (Weber, 1958, p. 63).
Protestantism sanctioned the practices and results of business, or their “convenient
370 vices” (Tawney, 1980, p. 211), and thereby reconciled to God that which had been
previously irreconcilable (Little, 1970, p. 26; Tawney, 1980, p. 27). Spiritual
condemnation would now be a consequence of the neglect of one’s calling, waste
and extravagance and not the nature of the work performed, with the exception of
occupations condemned as immoral: “sloth and negligence in the duties of our callings,
are a disorder against that comly order which God hath set in the societies of
mankinde... and, indeed, idleness and slouth are the causes of many damnable sins”
(Perkins 1626, quoted in Little, 1970, p. 120). The unashamed profligacy and indolence
of the aristocracy in the eighteenth century provided more than enough telling
examples of the consequences of wasted lives.
Critically, acquisition and accumulation, which were the distinguishing features of
the businessman’s calling, were not to be ends in themselves but the necessary
conditions for the use of money for worthwhile purposes. Notable examples of this
were the construction of villages and schools by industrialists such as Cadbury. This of
course also had significant positive benefits for the industrialist; a better educated,
healthier and settled workforce. Wealth of itself was believed not to imperil the soul,
only its misuse for selfish reasons (Weber, 1958, p. 163). Unlimited dominion over one’s
own possessions was never sanctioned by the church: Communis usus omnuim qual
sunt in hoc mundo (Ownership carries obligations. Use must be for the common good)
(Gilchrist, 1969, p. 52; Aquinas in Parel, 1979, p. 97; Tawney, 1980, pp. 44-5; I Peter 4:10;
Luke 12:48). It was essential, therefore, to the characterisation of business as a sacred
calling that the results of the businessman’s diligence be seen not to have accrued
exclusively to him and his family but also to benefit those who laboured in the
business. This transformed wealth from being a possession and a possible source of
spiritual trouble to another tool of business which had to be used wisely to further the
well-being of others in addition to the owner (Poggi, 1983, p. 42). Accounting facilitated
this transmogrification of affluence by identifying of the profitability of the business as
a measure of both the successful commitment of the owner to their business and the
means to fulfil their obligations to others and, thus, their virtue.
The combination of calling and individual responsibility for one’s relationship with
God proved very fortuitous for the early industrialists who were members of the
dissenting churches. No longer did the standards of spirituality lie outside the
individual. One’s religious beliefs, business practices and daily life were to be seamless.
For businessmen, the most obvious sign of this union was a successful business in
which order and discipline played a leading role. Increasingly, from the late eighteenth
century, accounting practices proved to be the means to contribute to this order in
business. Miller (1990, p. 323) notes that “it was in accounting that... (order) was held to
reside essentially. Order consisted first and foremost in keeping exact books of
account”.
5. Rationalism in practice: accounting and the sanctity of order and The religious
discipline imperative of
Accounting gained greater significance in the early industrial revolution for at least
two main reasons. Most importantly, as noted above, it served pragmatic ends. cost accounting
Accounting was the means with which the businessman could run his ever more
complex businesses more efficiently and profitably by giving visibility to the smallest
details which could affect profitability. This is the role favoured for accounting by 371
Pollard (1965, pp. 245,252) who suggests that, amidst the great uncertainty of the early
industrial revolution, a greater reliance on the means of rational calculation contributed
to the quest for certainty and regularity by providing management with a powerful
means of control (Hoskin and Macve, 1988, 1994; Edwards, 1989). Over and above these
pragmatic roles, accounting also was a source of the order and discipline for which the
faithful in the dissenting churches were to strive. An emphasis on the importance of
discipline in one’s life and work was not a new requirement of Christian teachings but
rather an affirmation of the benefits which this could provide in addressing the
complex, innovative challenges of new industries which required large labour forces
carrying out activities which might be needed to be co-ordinated or synchronised with
other workers, either in timing or process, in advanced production processes.
In the pursuit of the orderliness which for the Protestant had always regarded as an
expression of piousness (see Briggs, 1960, p. 27; Job 10:22; Psalm 50:21; I Corinthians
14:40), orderly record keeping, according to Samuel Johnson in the mid-eighteenth
century, contributed “to the advantage of all who buy or sell, or all who wish to keep or
improve their provisions, of all that desire to be rich and all that desire to be wise” (Preface
to Rolt’s Dictionary of Trade and Commerce as quoted in Yamey, 1949, p. 102). James
Watt, a manufacturer of steam engines and an ardent Presbyterian, stressed the benefits
of orderliness in a letter to his son in 1785 when he advised him to make his
memorandums “in clear and orderly method so that by an index you may easily refer to
them...” (quoted in Musson and Robinson, 1969, p. 207). Most importantly, as noted earlier,
for members of the dissenting churches personal discipline and its associated virtue of
order in business were the ways to please God (Tawney, 1980, p. 213), although “(t)he
pursuit of order was a virtue to be striven for independently of and without reference to
financial benefits” (Miller, 1990, p. 323). Financial ruin was prophesied to result from a
loss of order and to be the consequence of a fall from God’s grace. To reinforce their
church’s teachings, members of the dissenting churches who suffered business failure
were usually shunned by their brethren and forced to relinquish all church offices they
may have held (for examples see Davidoff and Hall, 1992, p. 203).
Order in the businessman’s affairs and favourable results could only be assured if
those who worked in his factories and offices had similar habits of frugality, discipline,
hard work and dedication. Absenteeism, poor work, unpunctuality, improvidence and
indulgence in the pleasures of the world were all signs of disorder and, therefore, were
dangerous to the employee’s soul in addition to jeopardising the success of the
business. To ensure that the often illiterate, religiously unsophisticated employees
applied themselves to their calling, the businessman knowledgeable in the doctrines of
his faith and the expectations that these imposed on behaviour and values, needed to
develop management methods which would create discipline in the factory necessary
to constrain employees in their ungodly ways (see especially Miller and O’Leary, 1987).
Using insights from the work of Foucault, discipline of the workforce can be seen on
two levels which align with the chronological elaboration of early industrial
AAAJ manufacturing in England. The first level of discipline, which corresponds to
Foucault’s principle of enclosure (Macintosh, 1994, pp. 222-3; Foucault, 1977), arose
27,2 from the early need to collect a large number of workers in one location and to ensure
that they arrived for work on time and that they attended to their duties during
common, specified hours (Briggs, 1960, p. 29; Miller and O’Leary, 1987; Macintosh,
1994). Thus, early efforts of control were meant to discipline the body by disciplining
372 the work space. Efficient utilisation of machinery now collected in factories could not
tolerate traditional, unregulated work habits where attendance for work was
determined more by the rising and the setting of the sun than by the insistent demands
of machinery which had to be fed materials and nursed into productivity by a number
of workers in the same place at the same time. Fitton and Wadsworth (1958, p. 103)
note that there was “a great reluctance to enter factories and to submit to factory
discipline”. According to Macintosh (1994, p. 42), Ward (1978, p. 40) and Pollard (1965,
p. 189), this constituted the most pressing problem for nascent modern capitalism.
Wedgwood, for example, found that to “change... (traditional, subsistence) habits was
not easy: nor was it always pleasant. It required exhortation, reward and education to
create a factory system” (McKendrick, 1961, p. 55). Accordingly, Macintosh (1994, p. 15)
thought that the idea of management planning and control systems originated with
Wedgwood.
Factory owners wanted docile, obedient and tractable workers who would bend to
the will of the employer with a minimum of resistance. This could be justified in
pragmatic, financial terms but more powerfully with the religious doctrine of calling.
To achieve this required “the fiercest wrench from the past” (Pollard, 1965, p. 18; Miller
and O’Leary, 1987). Opposition to the collectivisation of work by factory owners,
argues Briggs and Pollard, was only in part attributable to the aesthetics of the work
place and more to do with coming under the “absolute and uncontrolled power of the
capitalist” (Briggs, 1960, p. 62; see also Pollard, 1965, p. 190). Arkwright complained
how he “had to train his work-people to a precision and assiduity altogether unknown
before, against which their listless and restive habits rose in continued rebellion”
(quoted in Pollard, 1965, p. 215). Faced with similar concerns Wedgwood (1730-1795), a
staunch Unitarian and friend of Joseph Priestley, in a letter in 1769 to his partner,
Thomas Bentley, indicated that one of his aims was to “make such machines of the
Men as cannot err...” (emphasis in the original, quoted in McKendrick, 1961, p. 34).
Wedgwood’s potters did not like punctuality, attendance, fixed hours or the scrupulous
standards of care and cleanliness which he required (McKendrick, 1961). Thus,
whereas “Wesley and the Sunday Schools taught the industrial virtues of diligence,
thrift and regularity: Wedgwood’s factory discipline – his bell, his embryonic
clocking-in-system, his rules and regulations – insisted on them” (McKendrick, 1961,
p. 55).
Later, disciplinary procedures endeavoured to discipline both body and mind into
an efficient machine which mirrored those in the factory. This was achieved, argued
Foucault, by using the mechanisms of hierarchical surveillance, and sanctions to
normalise behaviour (Macintosh, 1994, pp. 222-3; Foucault, 1977; Miller and O’Leary,
1987). Once the first level of discipline had been achieved it then made possible the
second level of discipline whereby workers were made to produce products of
consistently high quality with an optimum use of resources. In early attempts to
achieve this, overt forms of coercion such as harsh factory discipline at the hands of
brutal overseers proved of limited success in producing the necessary disciplined
workforce. It was at this time that the teachings of the dissenting churches came to the The religious
rescue by enabling constraints to be imposed on the behaviour and habits of the imperative of
workforce in the name of moral rectitude. This is where the contributions of accounting
have been shown to have been especially important. Discipline of this nature was cost accounting
favoured by the dissenting churches as creating the order which would encourage
higher levels of morality, providence and diligence amongst workers and, fortuitously
the conditions of wealth creation. 373
Through the internalising of control with highly detailed and relentlessly policed
procedures which were heavily justified by religious doctrine, workers were to become
instruments in their own discipline. Behaviour transformation was taking “place in an
array of institutions and within a set of practices which impart particular norms,
values and ideals and which shape emotions, commitments and attitudes” (Foucault as
quoted in Bhimani, 1994b, pp. 638-9). Internalised discipline, achieved through
religious proscriptions, held the prospect of being a far more powerful means of
disciplining a worker than solely external sources of coercion. Value sets which are
socially overarching, and thereby appear to transcend place and motive, provide a far
stronger case for legitimising or rationalising a set of practices or arrangements,
including business methods such as accounting (Little, 1970, p. 6). The doctrines of the
Protestant churches provided, conveniently, strong backing for the harsh discipline in
factories which could be characterised as a form of admonition, very much in the same
manner as a good parent would exercise on a wayward child. The:
[. . .] idea of vocation gave to the modern entrepreneur a plentiful supply of industrious
workers and crystal-clear conscience in exploiting them, while the latter were offered the
prospect of eternal salvation as the reward of their ascetic devotion to work (Weber quoted in
Andreski, 1983, p.136).
Prominent in the search for the means to meet the new challenges of directing and
controlling a large workforce marshalled under the one roof, that is in disciplining both
their bodies and minds, and to compliment religious teachings were new accounting
techniques which were part of a general concern at the time for measurement,
calibration and surveillance in the pursuit of order. Largely as a consequence of
accounting techniques “having appropriated the material means of production, capital
owners... (were) in a position freely to recruit, train, deploy, and discipline the
workforce, and thus to make predictable its performance and the related costs” (Poggi,
1983, p. 24).
According to Poggi (1983), the key to success in business which was to become
closely tied to accounting practices was the wise and fruitful stewardship of time (see
also Briggs, 1960, p. 28; Davidoff and Hall, 1992, p. 26; Kitch, 1974, p. 161). The limited
time on earth each is given by God was to be regarded as precious and given as a trust
from God, for which the businessman would be held accountable. Thus, it was
incumbent upon the businessman to evaluate and monitor his use of time and that of
his employees, for whom he believed he would be held responsible at any heavenly
reckoning. Those who had the religious knowledge, education and opportunity were to
use these to ensure that opportunities were created for others to fulfil their obligations
to God. The more sophisticated factory accounting practices included budgets and
accounting reports which monitored performance by examining the yield obtained
from raw materials (King, 2010, p. 404; Fleischman, 2009, p. 194; Bryer, 2006) were
AAAJ increasingly seen to be able to provide the means to fulfill this obligation, both spiritual
and commercial.
27,2 A contemporary of Josiah Wedgwood, Samuel Oldknow (1756-1828) epitomised the
virtues of the Protestant businessman and the importance of developing a disciplined
workforce justified by religious teachings. He was the foremost manufacturer of
muslins in Britain, chiefly based at Stockport where he established business in 1784
374 (Unwin, 1924; Langford, 1992; Williams, 1997; Fleischman and Parker, 1997). In his
youth, at Rivington, Oldknow came under a minister trained at the Warrington
Academy and he later had strong associations with Unitarians throughout his life
(Unwin, 1924; Giles, 1984). Thus, loans received in 1792 from Henry Norris, a member
of Rivington Unitarian Chapel, indicate that Oldknow continued to maintain links with
the people at the Rivington Chapel, even after he had left the area (SOP Box 2[1]; Giles,
1984). Early in his business life, Oldknow recognised that the task of collecting people
together to produce on a factory basis brought with it new information requirements.
Not only was he aware of the need to protect his property, extant accounting records
show that he was also very concerned with the stewardship of the time for which he
paid his workers (see Williams, 1997, p. 48). It is clear that he used the process of
accounting to keep himself informed of the progress of his various enterprises and of
the contributions of those employed to operate them. Through records of the output of
each spindle employed, as well as the labour cost of each pound of cotton spun and
each hank produced, Oldknow kept an eye on efficiency (Oldknow Papers, SOP 759).
The costs of the key inputs were monitored in terms of the cost price of raw cotton
while the cost of labour was in terms of the total and average wages. Oldknow kept a
summary of each period’s activity as measured by production, sales and efficiency
(Oldknow Papers, SOP 761 (i)). Like the recording angel, he also kept a record of the
behaviour of his employees in a “Report Book” (Williams, 1997, pp. 48-9; Oldknow
Papers, SOP 815). These, taken together, constituted a far more comprehensive set of
measures than just profitability, although this too could be readily determined from the
data.
In the process of disciplining his employees and inculcating them with the same
reverence for the wise use of time, businessmen such as Oldknow not only enhanced
the profitability of his firm but contributed to the salvation prospects of his employees.
Hence, accounting might be able to assume the aura and nascent legitimacy of a
religious practice, a means of sanctifying practices which were otherwise reviled by the
establishment. Wise, tabulated use of time would be indicated by the success of the
business as measured by its, and therefore the businessman’s, increasing wealth.
Increasingly, early businessmen realised that accounting “which treats every moment
in the process of capital accumulation and deployment as a potentially surplus
generating act of exchange, gives material expression to this attitude toward time”
(Poggi, 1983, p. 71). Accounting was the terrestrial equivalent of God’s celestial
reckonings. Scorecards of financial performance, that is accounting reports, at the end
of each year were surrogates of God’s eternal accountings.

6. Conclusion
Accounting historians have long recognised the symbiosis and reflexivity which exists
between accounting and the society in which it is applied and from which it develops,
although the overwhelming concern of these studies has been with accounting as a
response to, and a formative influence on, the economic. The present study has sought
to contribute to the widening debate about the evolution of cost accounting by showing The religious
that the rise of accounting as a powerful tool of control and discipline was promoted
and approved by the teachings of the dissenting churches. Instead of seeking to chart a
imperative of
direct relationship between these teachings and particular accounting practices the cost accounting
intention has been to create circumstances of possibility whereby religious beliefs
provided approvals and motivations which saw accounting practices become an
essential component of a virtuous life for a businessman who sought to be successful. It 375
is recognised that the relationship between the appearance and development of
accounting practices reflects a complex and disparate mix of influences. While studies
have focused mostly on accounting practices as responses to economic forces, this
study has affirmed that accounting practices used to manage new businesses were
formed in an environment in which religious teachings still had a dominant influence
in people’s lives. This applied particularly to members of the dissenting churches who
had to strive against significant social disadvantages as dissenters in order to be
successful. Unlike the dominant social elites who came from the land and the nobility,
the middle classes had no social advantages. Their greatest allies were their own
innovativeness, self-discipline and hard work. Fortunately, their churches saw these as
attributes which were both pleasing to God and necessary conditions for salvation.
As pioneers, in order to operate their businesses profitably, entrepreneurs of the
early industrial revolution in England were forced to develop innovative management
and accounting practices to meet the new demands of their factories, most especially to
discipline their workforce. The alacrity with which they produced effective solutions in
response to their novel problems reflected the strong practical skills required when
there was little to guide the choice of appropriate actions. In the choice of their
management practices they were assisted by supportive religious doctrines of the
dissenting churches. No longer was the businessman seen as merely a necessary evil
but, instead, as a worthy contributor to the wealth of the nation. The profit motive
which had been tainted with the aroma of greed was now promoted as the consequence
of selfless devotion to the businessman’s calling.

Note
1. SOP refers to the Arkwright/Oldknow Collection, Rare Book and Manuscript Library, ERA
Seligman Collection, Columbia University, New York.

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About the authors

Warwick Funnell is Professor of Accounting at the University of Kent. Warwick Funnell is the
corresponding author and can be contacted at: w.n.funnell@kent.ac.uk
Robert Williams is an associate researcher at the University of Wollongong.

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