‘In one way or another, this century will be the one in which we learn to account for our planet. Because unless we start accounting for our transaction with the earth we will bankrupt it for all future human habitation.’ Gleeson-White 2011 p.254.

I have just finished reading Jane Gleeson-White’s (2011) book Double Entry- How the merchants of Venice shaped the modern world and how their invention could make or break the planet. I was drawn to read this book after listening to a talk with the book’s author on ABC radio. Although I only heard the tail end of the talk, the notion of this book intrigued me. In the talk Gleeson- White (2011) stated that Double Entry suggests that the current way we measure our Gross Domestic Product (GDP) is destroying our planet, however if we were to take into account the environment as part of our GDP we could desist the destruction and start rejuvenation.

It has probably become apparent through previous entries to my blog that I grapple with the notion that it is difficult to argue a case for the environment as income earnings usually trumps environmental sustainability. I felt that by reading Gleeson-White (2011), my cognitive dilemma would be quelled. If my synthesis of her book is right, then I believe I now understand why monetary gain trumps environmental protection and how we can change this ingrained notion in our society.

In Double Entry Gleeson-White (2011) traces the history of accounting and its journey into today’s society controlling beast. Although I found at times Gleeson-White’s (2011) history of accounting difficult to follow due to lack of interest in the subject and lack of understanding, I believe I can sum up her discussion of how Pacioli’s invention of double entry led to today’s environmental destruction.

With the invention of double entry bookkeeping by Venice merchant Pacioli, the ability to measure ones capital gain (or loss) became a possibility. According to Gleeson-White (2011), it was this invention that sparked the Renaissance due to the ability of high earners to pay for the architecture and art. Although this revolutionised the way business and earnings were achieved, it wasn’t until the industrial revolution that double entry became common place along with the ability to tinker with one’s books. Thus the profession of accounting was born along with regulation bodies and the emergence of capitalism. Double entry had developed from a small invention used by merchants to an overarching tool that was used by businesses and eventually governments to measure their capital and therefore their overall worth. Unfortunately, measuring one’s capital, as Glesson-White (2011) points out, does not measure those things that do not hold monetary value, like education and the environment.

Eventually, with the rise of accounting double entry was used to measure a nation’s success. The use of GDP for calculating the profits and loss of a nation and thus developing a budget was first used by the British government to calculate the cost of World War Two. Despite the universal use of GDPs and budget developments today, calculating a nation’s worth and spendings was only to be used to calculate the effect of the war, and was not to set ‘a precedent’ (Gleeson-White 2011 p.185). Despite this warning, it was a precedent.

Following the evolution of accounting into the twentieth and twenty-first centuries, Gleeson- White (2011) mentions the many scandals and downfalls of businesses and the economy due to the fallibility of the human condition and therefore the manipulation of the double entry system. She shows that with a society that has a large focus on capital, when businesses and nations are subject to human dishonesty and greed the fall is rather large. Particularly when large corporations are tied up with governance and individual investments.

Through the journey of the evolution of accounting and the rise of capitalism, Gleeson- White (2011) brings the reader to our modern day world. We have become a society that measures the tangible while the intangible becomes second class. With the mention of Robert Kennedy’s speech in 1968 she shows how our evolution into a society who values profit has given us an inability to measure those things that give us life and give life meaning. In other words, the environment and society itself. However, she suggests that although through double entry we have ruined the planet, we can use this tool to rejuvenate.

Gleeson-White (2011) paints a vivid picture of the way we are currently treating our planet. One could put it into a metaphor of stealing. We take from our planet what we want and need and use it for our own purpose, yet we do not pay for what we take. We leave it in a state of dishevelment and do not believe we ‘owe’ nature anything. We get it all for free. According to Gleeson-White (2011) what we do with the resources that we take from nature is worth more to the national GDP than the actual resource itself. We do not pay for the cost of destruction as a result. However, she believes that if nature and society were included in the GDP, we could rejuvenate and avert environmental ruin. Gleeson-White (2011) suggests that if we put a monetary value on the ecosystem services that nature provides, the GDP of many nations would look very different as well as the state of the environment. Gleeson-White (2011) offers the following examples; tropical mangroves are worth US$1000/ for their ecosystem services , yet when cleared for shrimp farm the value is US $200/hectare. The WWF’s Living Planet Survey showed that the ‘ecological debt’ that we owe to the planet as a result of our activities is US $4 trillion to US $4.5 trillion each year. An amount, according to Gleeson-White (2011), far greater than the loss of the current global financial crisis.

What I believe Gleeson-White (2011) is saying is that we need to treat nature like we would someone who provides us with goods and services. We need to start paying nature for what we take. That means we need to start placing a monetary value on the services offered to us by nature and the only way to do that is by putting natural resources and their destruction into the double entry system of nations. Those of us who care for the environment for its own sake and for ecosystem services need to stop fighting capitalism and use it to our own advantage.  It certainly would be interesting to see how we would value and treat our environment if this was the case. I would imagine rather differently.

 

Gleeson J 2011 Double Entry- How the merchants of Venice shaped the modern world and how their invention could make or break the planet Allen and Unwin, Sydney.