Accounting Principles for a Democratic Economy
This book is about accounting in an alternative libertarian socialist economic system. It explores what information and transactions we need to enable democratic and effective financial decisions by those affected by the decisions. Based on the economic model, participatory economics, the author proposes a set of accounting principles for an economy comprised of common ownership of productive resources, worker and consumer councils, and democratic planning, promoting the model’s core values.
The author tackles questions such as how accounting could be organised in an economy with no private equity owners or private lenders and creditors that is not based on greed and competition but instead on cooperation and solidarity. A large part of the book is focused on issues regarding investments; thus, he asks how and on what basis decisions are made about the allocation of an economy’s production between consumption today and investments that enable more consumption in the future, and how investments are accounted for. He also considers how investments in capital assets and production facilities would be decided, financed, and valued if they are not owned by private capital owners and if allocation does not take place through markets but through a form of democratic planning. In answering these questions and more, the author demonstrates that alternative economic systems are indeed possible, and not merely lofty utopias that cannot be put into practice, and inspires further discussion about economic vision.
By applying accounting to a new economic setting and offering both technical information and the author’s bold vision, this book is a comprehensive and valuable supplementary text for courses touching on critical accounting theory. It will also appeal to readers interested in alternative kinds of economies.
Table of Contents
List of Exhibits
About the Author
History of Accounting
Outline of the Book
Chapter 1: Participatory Economics
The Case against Markets
Annual Participatory Planning
Chapter 2: Accounting in a Participatory Economy
Accounting Entities, Prices and Transactions
Chapter 3: Consumers and Consumption
Consumer Accounts and their Internal Relations
The Categorisation of Goods and Services for Consumption
Saving and Borrowing
Public Service Systems and Collective Consumption
Consumer Research and Development
Chapter 4: Worker Councils and Production
Accounting of Financial Transactions
Shared Support Units
The Categorisation and Allocation of Labour
The Categorisation of Goods and Services in Production
Rejected Goods and Services
Fulfilling Production Plans
Chapter 5: Investment and Long term Development
Long term Development Planning
Investment Planning: Consume or Save
The Accounting of Capital Assets
User Right Fees
Chapter 6: The Society Account
Consumption and Investment
Price Differences and Trade Balances in International Trade
Appendix 1: Accounting Primer
Appendix 2: Investment in a Capitalist Market Economy
Anders Sandström is a trained accountant with a degree from Uppsala University. He lives in Stockholm, Sweden, where he works as the treasurer at Sveriges Arbetares Arbetslöshetskassa (SAAK), an unemployment office historically connected to the Swedish syndicalist trade union, Sveriges Arbetares Centralorganisation (SAC). Before his sabbatical and political turnaround in 2000, Anders worked as an audit junior at the international audit firm KPMG and later as Head of Accounting and Group Financial Controller in different companies. In 2010 Anders co-founded Parecon Sverige, an advocacy group for participatory economy, which is an economic system developed as a viable alternative to capitalism.
"Many people might assume that accounting is a capitalist tool, but it can be made radically democratic. We need to build businesses and societies that are fairer and greener, and this beautiful book explains how we might use anarchist practices to get there." — Professor Martin Parker, Lead for the Bristol Inclusive Economy initiative, Department of Management, Bristol University, UK.
"Anarchist Accounting? Is this some kind of joke? In his provocative book Anders Sandströmexplains that it is no joke, but something anarchists need to take seriously if they want to advance their cause.
Anarchism preaches that when freed from perverse institutional incentives which make acting in the social interest contrary to one’s personal self-interest, most people will choose to act in solidarity with others. What Sandströmadds to this traditional anarchist "wisdom" is the observation that in order to do so people need the information necessary to determine what behavior on their part would actually advance the social interest. Sandström, a life-long professional accountant turned anarchist, applies accounting principles to a post-capitalist economic "model" known as a participatory economy to demonstrate how to give people the information they need to act in solidarity with one another.
Anarchist Accounting is a must read for anyone interested in making libertarian socialism more than a "faith based" initiative." — Robin Hahnel, Professor Emeritus, The American University, Washington DC, Visiting Professor, Department of Economics, Portland State University, Portland Oregon, Co-Director, Economics for Equity and the Environment and author of Economic Justice and Democracy: From Competition to Cooperation.