Tuesday 20 July 2010

Accountants and Activism

Nandor Tanczos, former NZ Green MP, questions potential changes in New Zealand's tertiary funding model, noting:
Right now we need sociologists more than we need scientists. We need philosophers more than we need forex traders. We need activists far more than we need accountants. [emphasis added] There has probably never been a more important time in human history than now to stop and have a good think about where we are going, as we begin to reach the environmental limits of our planet. How predictable, then, that our government should this year launch a renewed attack on universities, and in particular on those disciplines that might help us to do so.
Now, I don't agree with his analysis. If we needed sociologists more than scientists, their wages would be bid up and more folks would then choose sociology over the sciences, and similarly for philosophy versus foreign exchange traders, unless there were strong and differential external benefits across training fields. I'm strictly agnostic about the relative merits of the different professions. But the burden of proof ought to be on the folks positing strong positive externalities for any particular profession over another.

More interesting is his contrasting of accountants with activists, given my morning email inbox. Nandor could perhaps update his views about the extent to which the sets might overlap.
You are warmly invited to attend the 5th Annual Pallot Memorial Lecture, ‘The Significance of Public Sector Accounting as a Form of Constrained Communication’. The lecture will be delivered by Professor Christine Cooper, from the University of Strathclyde. Event details and an outline of the seminar are provided below.

Date: Monday 9th August 2010, 5.30pm – 6.30pm. Refreshments to follow
Venue: Coppertop - Level 2, Commerce Building, University of Canterbury
RSVP: By 4th August to karen.ashby@canterbury.ac.nz or phone +64 3 364 3882 or reply to this email

Drinks, canap├ęs and an opportunity to network with other UC staff and members of the business community will follow this lecture. We look forward to seeing you on 9th August.


It is now well understood that the public sector should produce information which renders it transparent and accountable. Accountability, at first sight, seems to be a desirable characteristic. This lecture discusses the possibility that accountability is extremely complex and that the production of the finest set of public sector accounts cannot make the public sector accountable.


Christine Cooper is a Professor of Accounting at the University of Strathclyde in Glasgow Scotland. Her research interests are concerned with how accounting information or accounting’s theoretical frameworks impact upon our decision making or actions. This has included the audit expectations gap, social and environmental accounting, accounting within trade unions, privatization, taxation, key performance indicators in the public sector, insolvency and taxation. For each of these arenas, Christine has drawn upon various contemporary social theories to inform her work. Christine is co-editor of Critical Perspective on Accounting. Critical Perspectives on Accounting aims to provide a forum for the growing number of accounting researchers and practitioners who realize that conventional theory and practice is ill-suited to the challenges of the modern environment, and that accounting practices and corporate behaviour are inextricably connected with many allocative, distributive, social, and ecological problems of our era. Christine also sits on the editorial boards of several other journals and is a trustee of the Association for Accountancy and Business Affairs which works for an open and democratic society.
Cooper's faculty page is here.

Environmental, social, and triple-bottom-line accounting methods are an area of growing research focus in the Accounting department here at Canterbury.

The Pallot Lecture is Accounting's counterpart to our Condliffe Lecture. Locals attending those two lecture series, along with Management's Hight Lecture, would fully appreciate the great diversity within our College of Business and Economics.


  1. Hi Eric

    amusing piece. Not sure about using price differentials as evidence of social need though. On that basis you'd have to conclude that the world needs world cup soccer players far more than it needs teachers, doctors or farmers. Or men more than women. Or that rich people need food more than poor people do, since they will pay more for it.

    As for accountants versus activists, I didn't say that accountants couldn't be activists, just that the former characteristic is less important than the latter. Without debating the merits of triple bottom line accounting and what so often inaccurately passes for sustainable business practises, if your activist accountant had to choose between becoming a status quo accountant or a non-accountant activist, I'd consider the latter more useful.

  2. @Nandor: If I had to choose between a world without farmers and a world without soccer players, I'd forgo soccer pretty easily. Same for a world without water versus a world without diamonds. But, prices are set at the margin.

    This Parliament is really missing you on civil liberties.

  3. In my personal experience those who followed the science path are not terribly well paid in this country anyway, so you could probably quite easily equate sociologists with scientists (assuming we're basing their value and merit on the price they attract in the employment market.) It's really only the dedicated few who manage to score academic or research posts (mostly PhD level, and they've invested a lot of time and money at university to get that far) that get paid a decent whack. I worked in the science field for nearly 20 years and for the whole time I earned less than the average wage, and I was often on a roster that included having to work weekends and public holidays. So I'd say we already pump out enough science grads to saturate the market. In my first (entry level) IT job I'm already earning more than I ever did in science, and it's a strictly Mon-Fri gig.

  4. Hi Eric. Enjoy your blog btw.

    Isn't that the point though - that what the market will pay for one more sociologist is not a fair proxy for how much we need sociologists as a whole? Market price measures demand, not importance.

    btw this may also have some connection to the problems of using theoretical markets such as contingent valuation and hedonic pricing methods to value the environment.

  5. I suppose it depends what problem you're trying to solve, Nandor. If you want to know the total value to the world of sociologists, you can't tell that directly from just the price. But if you want to know how much one more sociologist would be valued relative to one more engineer, then market prices aren't a bad signal. Well, barring the usual problems of external benefits.

    On valuing the environment, you'd need to combine a price from something like hedonic pricing (which I'll take over CV as it at least reflects a revealed preference) with information on how elastic that price is with respect to quantity to get a measure of consumer surplus over the quantity consumed.

    So hedonic pricing could tell you nicely by how much you need to compensate the neighbours if you build a garbage dump nearby, but wouldn't give you a direct measure of the value that would be lost if the whole country were turned into a garbage dump. For that, you'd need to add in a measure of how much extra folks are willing to pay for "non-garbage-dump" land as the quantity of it decreases: the price elasticity of demand for environmental quality. Just like how folks' willingness to pay for a liter of water will vary a lot with whether they're in the middle of a lake or in the middle of a desert.

  6. What hedonic pricing or cv will not tell you is how close we are to reaching the assimilative capacity of the environment.

    Or for that matter, as Sagoff argues, how much people value ecological services when deliberating collectively as responsible citizens rather than as self interested consumers. I'd argue that he has a strong point, and one which I can observe in my own behaviour when I make use of benefits that I would vote to get rid of. Choice method gets us a little closer perhaps, but I like Sagoff's ideas about deliberative processes.

  7. @Nandor: hedonic pricing won't tell you that unless we've built appropriate environmental pigovean taxes into the system or unless regulatory constraints operate to similar effect. But we're generally running hedonic models for things like "how much do we need to compensate nearby land owners if we're going to build a landfill", not for things like "how much would we need to compensate recreational fishers if a fish stock disappeared entirely."

    I worry about the use of deliberative processes. You've seen Sunstein's work on the severity shift in deliberations, right? I worry that for the few cases of prisoners' dilemmas that get solved by deliberation, you get more instances of group polarization and rather suboptimal results. Prisoners' dilemmas aside, I far more trust individuals in their decision making when they've personal direct skin in the game than when they're deliberating over policies where they may have little influence on the result and bear little of the cost or benefit of whatever policy emerges.