From: Tony Tinker (TonyTinker@msn.com)
Date: Mon Nov 04 2002 - 14:32:23 EST
BACK TO JERRY: 7887: FROM TONY TINKER . Well, of course, we agree that c is not a category in traditional accounting. You suggest that in conventional accounting, the valuation of fixed capital "often begin with historical cost". OK, but do you think that in the presence of technological change that (constant) fixed capital should be valued at historical cost or at current reproduction cost? From your perspective, what would be your concerns re these alternative ways of valuing (constant) fixed capital? Do you have a position on how Marx valued (constant) fixed capital? The obvious concern is that with technological change, and inflation, historical cost is a poor proxy for reproduction values (or present value). But accounting must also accomodate other concerns. The Enron et. al debacles speak to these. Accounting measurement procedures must, in part, lead to easily verifiable figures, that cannot easily be distorted to allow looting. Anything other than the 'objectivity' of historical cost opens up greater possibilities in this regard. Historical cost might be irrelevant, but at least it is 'objective' and auditable. As I "Read Marx Politically", I guess I would have to say that Marx today should be alert to the same concerns. It isn't good enough to simply describe these processes; we have to change them (and auditing is in the political frontline for my colleagues). Well, I guess I thoiught that it was OK to address concerns about bookkeeping methods when having a discussion with a Marxist who is an accountant. I certeainly didn't intend to be 'bookkeeping-centric'. Sorry if I was overly sensitive-- it was an act of frustration. The bookkeeping personae is a cultured misunderstanding as to 'what accounting is' that is part of its illusion of technique and objectivity.
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