Accounting Organizations andSociety, Vol. 12,No. 3, pp. 235-265, 1987. 0361-3682187$3.00+.

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Printed in Great Britain Pergamon Journals Ltd.

ACCOUNTING AND THE CONSTRUCTION OF THE GOVERNABLE PERSON*

PETER MILLER
Division of Economic Studies, University of Sheffield

and

TED O’LEARY
Department ofAccounting, University College, Cork

Abstract

The concern of the paper is historical. It addresses one familiar event within the literature of the history of
accounting-the construction of theories of standard costing and budgeting in the first three decades of
the twentieth century. A different interpretation of this event is offered from that commonly found. This is
seen to have significant implications for the relevance of historical investigation to the understanding of
contemporary accounting practices. Instead of an interpretation of standard costing and budgeting as one
stage in the advance in accuracy and refinement of accounting concepts and techniques, it is viewed as an
important calculative practice which is part of a much wider modern apparatus of power which emerges
conspicuously in the early years of this century. The concern of this form of power is seen to be the con-
struction of the individual person as a more manageable and efficient entity. This argument is explored
through an examination of the connections of standard costing and budgeting with scientitic management
and industrial psychology. These knowledges are then related to others which, more or less simultaneously,
were emerging beyond the contines of the firm to address questions of the efficiency and manageability of
the Individual. The more general aim of the paper is to suggest some elements of a theoretical understand-
ing of accounting which would locate it in its interrelation with other projects for the social and organisa-
tional management of individual lives.

Accounting has remained remarkably insulated essentially having functional roles in society,
from important theoretical and historical albeit ones which can change (American
debates which have traversed the social sci- Accounting Association, 1970). Little or no sus-
ences. Accounting history, for example, is a con- picion seems to surface that different
text in which one can begin to substantiate this methodological starting points could be enter-
lack of a problematisation of the roles of tained, which could lead to rather different
accounting. A standard concept which guides understandings of accounting’s history.
accounting history is one that sees accounting as There are ripples, however. Recently there
l Earlier drafts of this paper were presented at the Symposium of the Roles of Accounting in Organizations and Society, Uni-
versity of Wisconsin-Madison, U.S.A., July 1984, and at the Accounting Workshop of the European Institute for Advanced
Studies in Management, Brussels, Belgium, December 1984. We are obliged to the participants at both gatherings for very
helpful comments.
We express our thanks especially to Anthony Hopwood for ideas and encouragement, and for suggesting this collaboration.
Ted O’Leary Is grateful for the financial support of the Management Fund and the Development Fund, University College,
Cork We are both grateful to the Symposium Organizers, University of Wisconsin-Madison, for their financial contributions
towards travel costs.

235
 236 PETER MILLERand TED O'LEARY
have b e e n a t t e m p t s to i n d i c a t e t h e d i r e c t i o n s
w h i c h a fully social i n t e r p r e t a t i o n o f a c c o u n t i n g
m i g h t f o l l o w ( B u r c h e l l et aL, 1979, 1980).
T h e s e s e e m to us to b e v e r y useful first steps.
O u r c o n c e r n in this p a p e r c a n b e d e s i g n a t e d
historical. W e are c o n c e r n e d w i t h t h e
e m e r g e n c e o f s t a n d a r d c o s t i n g a n d b u d g e t i n g in
t h e early d e c a d e s o f this c e n t u r y a n d t h e w a y this
can b e r e l a t e d to o t h e r social practices. To iden-
tify o u r c o n c e r n as h i s t o r i c a l is, h o w e v e r , to b e g
t h e q u e s t i o n as to t h e m e a n i n g and significance
o f h i s t o r i c a l analysis. Care is n e e d e d in formulat-
ing an a p p e a l to an h i s t o r i c a l v i e w p o i n t f r o m
w h i c h to u n d e r s t a n d c h a n g e s in a c c o u n t i n g
t h o u g h t a n d p r a c t i c e . T h e r e are a n u m b e r of
q u i t e different w a y s in w h i c h to u n d e r s t a n d t h e
c o n t r i b u t i o n o f an h i s t o r i c a l p e r s p e c t i v e . O n e
r e q u e s t v o i c e d f r o m t i m e to t i m e is for m o r e his-
t o r i e s ( s e e e.g. Parker, 1981, p. 290; Solomons,
1968, p . 17). T h e s e w o u l d , it is suggested,
u n c o v e r t h e h o w and t h e w h a t o f a c c o u n t i n g .
What, for instance, was actually a c c o u n t e d for in
a p a r t i c u l a r firm in t h e early n i n e t e e n t h century?
It is t e m p t i n g to rally a r o u n d this call. It has an
i n n o c e n t a p p e a l a n d w o u l d a p p e a r to have u n d e -
n i a b l e force.
In o n e s e n s e w e have n o o b j e c t i o n to t h e call
for m o r e facts. H o w e v e r , t h e s i m p l i c i t y o f t h e
r e q u e s t can b e misleading. W e w o u l d like to
p r o p o s e a different a g e n d a for t h e i n t e r p r e t a t i o n
o f a c c o u n t i n g ' s past, o n e w h i c h casts a different
light o n t h e u n d e r s t a n d i n g o f a c c o u n t i n g prac-
tices. This is o n e w h i c h w e feel has c o n s i d e r a b l e
r e l e v a n c e for u n d e r s t a n d i n g a c c o u n t i n g today,
and w h i c h e n a b l e s us to d e v e l o p a t h e o r e t i c a l
u n d e r s t a n d i n g o f a c c o u n t i n g as a social a n d
organisational practice.
O n e c o n c e p t i o n o f a c c o u n t i n g history, w h i c h
a p p e a r s to have a significant level o f a c c e p t a n c e
at t h e p r e s e n t time, is o n e w h i c h sees a c c o u n t i n g
as changing, o r c a p a b l e o f b e i n g c h a n g e d , in
r e s p o n s e to d e m a n d s e x p r e s s e d o r i m p l i e d b y a
c h a n g i n g e n v i r o n m e n t . It is a n o t i o n o f a c c o u n t - "
ing h i s t o r y in w h i c h r e f e r e n c e s to t h e m e t a p h o r
o f e v o l u t i o n are n o t i n f r e q u e n t ( A m e r i c a n
A c c o u n t i n g Association, 1970; Chatfield, 1977;
Littleton & Z i m m e r m a n , 1962; Lee & Parker,
1979; Kaplan, 1984). W h a t is h e r e r e q u i r e d of
a c c o u n t i n g history, it w o u l d seem, is that
( p u r e l y a e s t h e t i c c o n s i d e r a t i o n a p a r t ) it s h o u l d
s e e k to elucidate:
the evolution in accounting thought, practices and
institutions in response to changes in the environment
and societal needs. It also (should consider).., the effect
that this evolution has worked on the environment
(American Accounting Association, 1970, p. 53).
T h e utility o f a c c o u n t i n g history, its p o t e n t i a l in
r e l a t i o n to c u r r e n t t h e o r e t i c a l and p r a c t i c a l con-
cerns, is that t h r o u g h e l u c i d a t i n g t h e r e s o l u t i o n
o f p a s t i n c o n g r u i t i e s o f a c c o u n t i n g w i t h its envi-
r o n m e n t , it c o u l d facilitate t h e m o r e effective
r e s o l u t i o n o f s u c h issues in t h e present. T h e
i m a g e to b e g a i n e d is that a c c o u n t i n g can
e n m e s h w i t h its c o n t e x t in w a y s that are inevita-
ble, given s o m e o v e r w h e l m i n g e n v i r o n m e n t a l
shift, a n d that m a y e v e n b e socially desirable. W e
d o n o t find s u c h an i n t e r p r e t a t i o n o f a c c o u n t -
ing's h i s t o r y to b e persuasive. In particular, t h e
f u n c t i o n a l t o n e o f t h e v e r y l a n g u a g e in w h i c h
a c c o u n t i n g h i s t o r y is d e f i n e d significantly oblit-
e r a t e s t h e p o s s i b i l i t y o f a c c o u n t i n g ' s location,
a l o n g w i t h a range o f o t h e r social p r a c t i c e s , in
r e l a t i o n to m o d e s o f o p e r a t i o n o f p o w e r .
O n e w a y o f c o u n t e r i n g s u c h an a p p r o a c h is to
invert the perspective. Accounting would then
no l o n g e r b e v i e w e d as b e c o m i n g , o r as having
c a p a c i t y to b e c o m e , an i n c r e a s i n g l y r e f i n e d
t e c h n i c a l apparatus. It w o u l d also n o l o n g e r b e
v i e w e d as n e u t r a l b u t r a t h e r seen, o n c e t h e veils
o f c u r r e n t m i s p e r c e p t i o n have b e e n d r a w n back,
to c l e a r l y reflect and to s e r v e c e r t a i n e c o n o m i c
o r p o l i t i c a l interests. Such an a p p r o a c h has
achieved considerable currency when applied
to d i s c i p l i n e s o t h e r than a c c o u n t i n g (see, e.g.
Baritz, 1960; Scull, 1979; StedmanoJones, 1971 ).
W e are n o t p e r s u a d e d b y this line o f a r g u m e n t
either. C e n t r a l to it is a n o t i o n that t h e r e is a
m o r e o r less d i r e c t a n d u n p r o b l e m a t i c r e l a t i o n
b e t w e e n e c o n o m i c a n d / o r p o l i t i c a l interests,
a n d t h e k n o w l e d g e s and t e c h n i q u e s w h i c h are
h e l d to r e p r e s e n t s u c h interests. T h e t e r m s and
c a t e g o r i e s t h r o u g h w h i c h s u c h i n t e r e s t s are rep-
r e s e n t e d are s e e n to have n o effects. W h e t h e r it
is a thesis c e n t e r e d o n a n o t i o n o f k n o w l e d g e as
a " s e r v a n t o f p o w e r " (Baritz, 1 9 6 0 ) o r k n o w -
 ACCOUNTINGAND THE CONSTRUCTION OF THE GOVERNABLEPERSON
l e d g e v i e w e d as r e p r e s e n t i n g class interests, t h e
difficulties remain. T h e n o t i o n o f c o n t r o l in s u c h
a v i e w c o m e s to s u b s t i t u t e for n o t i o n s o f p r o g -
ress o r e v o l u t i o n in s t a n d a r d histories. W h e r e a s
t h e l a t t e r s e e a c c o u n t i n g as p r o g r e s s i n g in t e r m s
o f an u n p r o b l e m a t i c social utility, t h e f o r m e r s e e
h i s t o r y as t h e e l a b o r a t i o n o f b e t t e r and m o r e
subtle forms of control.
It s e e m s to us that t h e r e is a v e r y real n e e d to
d e v e l o p an u n d e r s t a n d i n g o f a c c o u n t i n g a n d its
p a s t w h i c h is d i s t i n c t f r o m t h e s e t w o
a p p r o a c h e s . This is t h e t h r u s t o f o u r a t t e m p t in
this p a p e r , u n d e r t a k e n t h r o u g h a d i s c u s s i o n o f
the emergence of standard costing and budget-
ing w i t h i n t h e a c c o u n t i n g literature, a n d t h e
relation between these and a number of other
r e l a t e d social a n d o r g a n i s a t i o n a l p r a c t i c e s . O u r
c o n c e r n is w i t h a p a r t i c u l a r e p i s o d e in t h e his-
t o r y o f a c c o u n t i n g w h i c h w e see as crucial, a n d
its r e l e v a n c e a n d i m p l i c a t i o n s for u n d e r s t a n d i n g
contemporary accounting.
If o u r c o n c e r n in this p a p e r c a n b e c a l l e d his-
torical, it entails an u n d e r s t a n d i n g o f h i s t o r i c a l
p r o c e s s e s w h i c h is unfamiliar in t h e a c c o u n t i n g
literature. It m a y b e useful to refer to o n e o r t w o
l a n d m a r k s in r e l a t i o n to w h i c h t h e c o n c e r n s o f
this p a p e r m a y b e identified.
The interpretation of historical processes we
h a v e u t i l i z e d takes m u c h o f its i n s p i r a t i o n f r o m
t h e w o r k o f M i c h e l F o u c a u l t and his associates
( C a s t e l e t al., 1982; D o n z e l o t , 1979; Foucault,
1973, 1977, 1981). In n o s e n s e w o u l d w e w i s h
to suggest that s u c h s t u d i e s offer a p a n a c e a for
t h i n k i n g a b o u t a c c o u n t i n g . In any case t h e y d o
n o t d i r e c t l y a d d r e s s a c c o u n t i n g o r for that mat-
t e r e c o n o m i c p r o c e s s e s . But d e s p i t e t h e differ-
e n c e in t h e field o f s t u d y w e feel that t h e r e is
s o m e t h i n g d i s t i n c t i v e in s u c h an a p p r o a c h
w h i c h is useful in an a t t e m p t to u n d e r s t a n d
a c c o u n t i n g as a social a n d o r g a n i s a t i o n a l prac-
tice. C l e a r l y w e c a n d o no m o r e h e r e than p o i n t
to w h a t w e s e e to b e s o m e i m p o r t a n t t h e m e s . A
n u m b e r o f r e c e n t s t u d i e s a d d r e s s t h e s e issues in
m u c h g r e a t e r d e p t h (Sheridan, 1980; C o u s i n s &
Hussain, 1984; B u r c h e l l e t al., f o r t h c o m i n g ; Mil-
ler, f o r t h c o m i n g ) .
Over a period of some twenty years Michel
F o u c a u l t has w o r k e d o n w h a t c a n b e c a l l e d a
237
series o f h i s t o r i e s o f t h e e m e r g e n c e o f t h e
h u m a n sciences. His s t u d i e s have c o v e r e d
m e d i c i n e ( F o u c a u l t , 1973), t h e e m e r g e n c e o f
p s y c h i a t r y ( F o u c a u l t , 1967), a n d t h e p r i s o n
( F o u c a u l t , 1 9 7 7 ) to n a m e just s o m e o f t h e m o r e
i m p o r t a n t . T h e h i s t o r i c a l focus for t h e s e has gen-
erally b e e n o n t h e p e r i o d a r o u n d 1800 w h i c h h e
sees as a c r u c i a l p o i n t in t h e f o r m a t i o n o f t h e
m o d e r n era. O t h e r w r i t e r s in a similar v e i n h a v e
e x p l o r e d t h e p e r i o d c l o s e r to t h e p r e s e n t d a y
( D o n z e l o t , 1979; Castel e t al., 1982). A l o n g s i d e
the historical studies a number of methodologi-
cal issues c o n c e r n i n g t h e u n d e r s t a n d i n g o f his-
torical processes have been addressed
( F o u c a u l t , 1972, 1981). In t h e m o r e r e c e n t
studies an e x p l i c i t c o n c e r n w i t h t h e issue o f
p o w e r has e m e r g e d .
T h e r e a r e t h r e e issues w e w o u l d like to single
o u t for o u r p u r p o s e s h e r e f r o m this vast a n d still
g r o w i n g b o d y o f material. T h e s e c o n c e r n w h a t
can b e c a l l e d a " g e n e a l o g i c a l " q u e s t i o n c o n c e r n -
ing t h e r o l e o f h i s t o r i c a l investigation; an "ar-
chaeological" question concerning the way one
g o e s a b o u t d o i n g history; a n d a thesis c o n c e r n -
ing t h e i n t e r d e p e n d e n c e o f b o d i e s o f k n o w l e d g e
and relations of power.
T h e n o t i o n o f g e n e a l o g y is d e c e p t i v e l y simple.
It c o n c e r n s c e n t r a l l y a q u e s t i o n i n g o f o u r con-
temporarily received notions by a demonstra-.
tion of their historical emergence. The point of
h i s t o r y in this s e n s e is to m a k e i n t e l l i g i b l e t h e
w a y in w h i c h w e t h i n k t o d a y b y r e m i n d i n g us o f
its c o n d i t i o n s o f formation. W h e t h e r t h e t e r m s
be efficiency, r a t i o n a l i t y o r motivation,
g e n e a l o g i c a l analysis h e l p s us to a p p r e c i a t e t h e i r
e p h e m e r a l c h a r a c t e r . But g e n e a l o g y is n o t just a
m a t t e r o f de-bunking, a valuable e n o u g h enter-
p r i s e in its o w n right. It c o n c e r n s also a p a r t i c u -
lar a p p r o a c h to t h e t r a c i n g o f t h e e m e r g e n c e o f
our frequently unquestioned contemporary
rationales. This is o n e w h i c h d o e s n o t entail
l o o k i n g for a single p o i n t in h i s t o r y w h i c h w o u l d
be the point of origin of our current practices.
T h e e m e r g e n c e o f o u r c o n t e m p o r a r y beliefs is
v i e w e d r a t h e r b y r e f e r e n c e to a c o m p l e x o f dis-
p e r s e d events. G e n e a l o g y d o e s n o t l e a d us to
solid foundations; rather, it f r a g m e n t s a n d dis-
t u r b s w h a t w e m i g h t like to s e e as t h e basis o f o u r
238 PETERMILLERand TED O'LEARY
c u r r e n t ideas a n d practices. Applied to a c c o u n t -
ing it m e a n s q u e s t i o n i n g a search for the origins
of a c c o u n t i n g in the i n v e n t i o n of t e c h n i q u e s ,
w h e t h e r in r e c e n t c e n t u r i e s or in antiquity.
O t h e r types of events, such as the political objec-
tives of states, b u t also historical c o n t i n g e n c y ,
particular national c o n d i t i o n s a n d the develop-
m e n t of related disciplines, all e n t e r into the
explanation. G e n e a l o g y o p e n s o u t into a m u c h
less c e r t a i n field than the standard histories of
a c c o u n t i n g w o u l d lead us to believe.
The archaeological q u e s t i o n is historical also.
Its focus is o n o u r m o s t legitimated forms of con-
t e m p o r a r y discourse, and the real historical con-
ditions w h i c h have led to their e m e r g e n c e . It
c o n c e r n s the m o r e sociological aspects of the
e m e r g e n c e a n d f u n c t i o n i n g of discourses as well
as their i n t e r n a l c o n c e p t u a l features. The status
of o u r m o s t legitimated forms of discourse ( l a w
a n d m e d i c i n e , for example, b u t also e c o n o m i c s
a n d a c c o u n t i n g ) are seen to d e p e n d , a m o n g s t
o t h e r things, o n i n s t i t u t i o n a l a n d legal criteria as
well as o n pedagogical n o r m s for their function-
ing. Archaeology directs o u r a t t e n t i o n to these
features of discourse. It also has an epistemolog-
ical aspect. This c o n c e r n s the relationship bet-
w e e n discourses a n d the o b j e c t s to w h i c h they
refer. Again t h e r e is an e l e m e n t of de-bunking.
Applied to o u r c o n c e r n s in this p a p e r o n e c o u l d
for i n s t a n c e say that t h e r e is n o o b v i o u s r e a s o n
w h y w e s h o u l d have c o m e to talk in t e r m s of effi-
c i e n c y a n d standards. Such n o t i o n s do n o t exist
in the o b j e c t itself or in l i m b o w a i t i n g to b e dis-
covered. They are s e e n rather to have b e e n
f o r m e d in a c o m p l e x of relations established bet-
w e e n a h e t e r o g e n e o u s range of discourses a n d
practices. This is w h y w e talk b e l o w of the stan-
dard costing and b u d g e t i n g c o m p l e x , and relate
it to a range of o t h e r discourses and practices
w h i c h share a c o m m o n v o c a b u l a r y and set of
objectives. Standard costing is, w e suggest,
i n t e r t w i n e d w i t h o t h e r attempts w i t h i n the
e n t e r p r i s e and o u t s i d e it to e m b a r k o n a vast pro-
ject of standardisation a n d n o r m a l i s a t i o n of the
lives of individuals. It is, w e argue, to this w e b of
relations established b e t w e e n , for example,
basic technical r e q u i r e m e n t s a n d adjustments,
a n d elaborate forms of philosophical discourse,
that o n e s h o u l d look in trying to u n d e r s t a n d
redefinitions of the p r a c t i c e of a c c o u n t i n g . It is
the positive c o n d i t i o n s of a c o m p l e x g r o u p of
relations w i t h i n w h i c h a c c o u n t i n g exists that w e
s h o u l d address.
T h e third aspect of Foucault's w o r k of rele-
v a n c e to this p a p e r c o n c e r n s the relationship
b e t w e e n k n o w l e d g e a n d power. Foucault's argu-
m e n t s o n this q u e s t i o n are distinctive. He
suggests that w e c a n u n d e r s t a n d the develop-
m e n t of m o d e r n societies in t e r m s of p o w e r , and
the shift in its m o d e of exercise. The b r o a d e s t
shift h e refers to is o n e w h i c h he suggests took
place a r o u n d 1800 and is from w h a t he calls
sovereign power to disciplinary power.
Sovereign p o w e r is identified as a d i m i n i s h e d
form of power. Its u l t i m a t e r e c o u r s e is s e i z u r e - -
of things, of bodies and ultimately of life. Discipli-
nary p o w e r is m u c h r i c h e r a n d entails penetrat-
ing into the very w e b of social life t h r o u g h a vast
series of regulations and tools for the administra-
t i o n of e n t i r e p o p u l a t i o n s and of the m i n u t a e of
p e o p l e ' s lives. The calculated m a n a g e m e n t of
social life is o n e way of designating the form of
o p e r a t i o n of disciplinary power. It c a n b e wit-
nessed, Foucault suggests, in the fields of p u b l i c
health, housing, c o n c e r n s w i t h longevity, b u t
also in the schools, workshops, barracks a n d
prisons.
Foucault's a r g u m e n t s c o n c e r n i n g p o w e r are
closely linked to his investigation of the
e m e r g e n c e of the h u m a n s c i e n c e s (Foucault,
1970). The shift he identifies from sovereign to
disciplinary p o w e r is i n t i m a t e l y c o n n e c t e d w i t h
c h a n g e s in o u r forms of knowledge. His argu-
m e n t is e x p r e s s e d in the f o r m u l a " p o w e r / k n o w -
ledge" and the c o n s t i t u t i v e i n t e r d e p e n d e n c e of
the two t e r m s of the e q u a t i o n m the o p e r a t i o n of
the h u m a n sciences s h o u l d b e u n d e r s t o o d i n
relation to the e l a b o r a t i o n of a range of
t e c h n i q u e s for the supervision, a d m i n i s t r a t i o n
and d i s c i p l i n i n g of p o p u l a t i o n s of h u m a n indi-
viduals. This is seen to take place in particular
i n s t i t u t i o n s and in social relations in a w i d e r
sense. This is n o t to suggest that all i n s t i t u t i o n s
are h o m o g e n e o u s and c o t e r m i n o u s w i t h the
type of a d m i n i s t r a t i o n w h i c h o c c u r s in society at
large. Viewed in t e r m s of p o w e r a n d at the level
 ACCOUNTINGAND THE CONSTRUCTION OF THE GOVERNABLEPERSON
o f c e r t a i n g e n e r a l p r i n c i p l e s for its o p e r a t i o n
t h e r e is n o n e t h e l e s s h e l d to b e an i m p o r t a n t
inter-relation between a diverse range of prac-
tices.
O u r a t t e m p t in this p a p e r to u n d e r s t a n d o n e
p a r t i c u l a r i m p o r t a n t p e r i o d in a c c o u n t i n g ' s his-
t o r y has b e e n i n f l u e n c e d b y t h e s e t h r e e b r o a d
themes. However the historical period
F o u c a u l t ' s r e s e a r c h e s address, t h e i n s t i t u t i o n s
t h e y c o n c e r n , a n d t h e a b s e n c e o f a c l e a r l y identi-
fiable " m e t h o d " m e a n that w e c a n n o t c l a i m to b e
testing a m e t h o d b y t r a n s p o s i n g its field o f appli-
cation. W e h a v e s t u d i e d a different p e r i o d ,
n a m e l y that a r o u n d t h e y e a r 1900, a n d a diffe-
r e n t discipline, n a m e l y a c c o u n t i n g . In o u r pre-
l i m i n a r y investigations w e w e r e l e d to f o r m u l a t e
a n u m b e r o f w o r k i n g p r o p o s i t i o n s , a n d it is t h e s e
which directly inform the paper. These concern
g e n e r a l m e t h o d o l o g i c a l p r i n c i p l e s , an a t t e m p t
to l o c a t e a c c o u n t i n g w i t h i n a w i d e r set o f cal-
culative techniques, and some reflections on the
level o f o u r analysis a n d w h a t w e s e e to b e its sig-
nificance. It m a y b e useful to briefly c o m m e n t o n
the most important of these concerns.
A first a n d g e n e r a l m e t h o d o l o g i c a l p o s t u l a t e
c a n b e c a l l e d " c o n s t r u c t i v i s t " . By this w e m e a n
that w e h a v e b e e n c o n c e r n e d w i t h t h e w a y
a c c o u n t i n g , in c o n j u n c t i o n w i t h o t h e r p r a c t i c e s ,
s e r v e s to c o n s t r u c t a p a r t i c u l a r field o f visibility.
Rather t h a n v i e w a c c o u n t i n g as a n e u t r a l t o o l o f
o b s e r v a t i o n w e h a v e a t t e m p t e d to e x a m i n e h o w
a c c o u n t i n g assists in r e n d e r i n g visible c e r t a i n
crucial aspects of the functioning of the enter-
prise. Q u e s t i o n s o f w a s t a g e a n d efficiency are
e x a m p l e s w h i c h w e a d d r e s s in t h e p a p e r .
A s e c o n d p o i n t w h i c h e m e r g e d in o u r r e a d i n g
o f t h e l i t e r a t u r e w a s that this p r o c e s s o f r e n d e r -
ing visible a l i g h t e d o n t h e i n d i v i d u a l p e r s o n .
M o r e p a r t i c u l a r l y it d i d so b y s u r r o u n d i n g t h e
i n d i v i d u a l at w o r k b y a series o f n o r m s a n d stan-
dards. T h r o u g h s u c h n o r m s a n d s t a n d a r d s t h e
inefficiencies o f t h e p e r s o n w e r e r e n d e r e d
c l e a r l y visible. This was a n o v e l s t e p for a c c o u n t -
ing. It is significant also in r e l a t i o n to t h e issue o f
p o w e r i d e n t i f i e d above. At t h e risk o f b e i n g mis-
u n d e r s t o o d w e shall b e h i g h l y s c h e m a t i c to
r e g i s t e r w h a t w e s e e to b e t h e significant c h a n g e
brought about by the emergence of standard
239
c o s t i n g a n d b u d g e t i n g and t h e i r alliance w i t h
scientific m a n a g e m e n t , t o p i c s w h i c h w e a d d r e s s
in d e t a i l b e l o w . In t h e n i n e t e e n t h c e n t u r y discip-
line w i t h i n t h e e n t e r p r i s e t o o k t h e f o r m o f d i r e c t
c o n f r o n t a t i o n s b e t w e e n t h e w o r k e r and t h e
boss. In t h e e a r l y t w e n t i e t h c e n t u r y , a n d t h r o u g h
t h e c h a n g e s w e will b e r e f e r r i n g to, t h e
e m p l o y e e c o m e s to b e s u r r o u n d e d b y calcula-
t i r e n o r m s a n d standards, i n t e r p o s i n g b e t w e e n
him and the boss a whole range of intermediary
m e c h a n i s m s . W i t h this shift d i s c i p l i n e c o m e s to
b e s e e n to r e s i d e n o t in t h e will o f t h e b o s s b u t in
t h e e c o n o m i c m a c h i n e itself, in t h e n o r m s a n d
s t a n d a r d s f r o m w h i c h t h e w o r k e r c a n b e s e e n to
depart. A c c o u n t i n g is, w e argue, an i m p o r t a n t
a s p e c t o f this d e v e l o p m e n t o f a r a n g e o f calcula-
tive p r o g r a m m e s and t e c h n i q u e s w h i c h c o m e to
r e g u l a t e t h e lives o f i n d i v i d u a l s at w o r k in t h e
early t w e n t i e t h c e n t u r y . It is for this r e a s o n that
w e talk o f s t a n d a r d c o s t i n g as b e i n g l o c a t e d
w i t h i n a significant r e o r i e n t a t i o n o f t h e e x e r c i s e
of power within the enterprise.
A t h i r d issue w e w a n t e d to a d d r e s s is t h e
w i d e r f r a m e w o r k w i t h i n w h i c h c h a n g e s in
a c c o u n t i n g t o o k place. O u r c o n c e r n in t h e p a p e r
is w i t h t h e e n t e r p r i s e and t h e nation, v i e w i n g
t h e s e as d i s t i n c t levels for t h e e l a b o r a t i o n o f a
r a n g e o f t e c h n i q u e s o f s u p e r v i s i o n and administ-
r a t i o n o f i n d i v i d u a l lives. E x t e n d i n g o u r v i e w
b e y o n d t h e e n t e r p r i s e a n d b e y o n d a c c o u n t i n g it
b e c a m e c l e a r to us that an i m p o r t a n t redefini-
t i o n o f t h e tasks a n d o b j e c t i v e s o f g o v e r n m e n t
t o o k p l a c e a r o u n d t h e early y e a r s o f this c e n t u r y .
C e n t r a l to this r e d e f i n i t i o n was t h e e m e r g e n c e
o f t h e social sciences, in p a r t i c u l a r p s y c h o l o g y
a n d sociology. In c o n j u n c t i o n w i t h a c h a n g e d
c o n c e p t i o n o f t h e r o l e o f t h e state, t h e social sci-
e n c e s w e r e a b l e to e n t e r an alliance w i t h t h e
state a n d to u n d e r t a k e a q u i t e n o v e l f o r m of
a d m i n i s t r a t i o n and s u r v e i l l a n c e o f i n d i v i d u a l
lives. C e n t r a l to this p r o j e c t w a s t h e p o s s i b i l i t y
of comparing the capacities of individuals
( h e a l t h , intelligence, l o n g e v i t y ) against specific
standards. It is o u r c o n t e n t i o n that o n e c a n
understand the emergence of standard costing
a n d b u d g e t i n g in t h e e a r l y y e a r s o f t h e t w e n t i e t h
c e n t u r y b y situating it w i t h i n this m o r e g e n e r a l
shift in t h e f o r m o f a d m i n i s t r a t i o n o f social life
240 PETER MILLERand TED O'LEARY
which occurs around the turn of the century.
A f o u r t h a n d final issue c o n c e r n s t h e level o f
analysis w e have u n d e r t a k e n here. W e have
p l a c e d g r e a t e s t e m p h a s i s o n w h a t w e m i g h t call
p r o g r a m m a t i c d i s c o u r s e s as o p p o s e d to
a c c o u n t i n g as it was p r a c t i s e d in p a r t i c u l a r firms.
This is n o t b e c a u s e w e r e g a r d t h e l a t t e r as u n i m -
portant. N o r is it b e c a u s e w e v i e w o u r c o n c e r n s
as e n t i r e l y i n d e p e n d e n t f r o m this m o r e techni-
cal level o f analysis. To clarify o u r views it m a y
h e l p to identify w h a t w e s e e to b e t w o d i s t i n c t
orders of events and the interrelation between
them. T h e o n e w e h a v e c o n c e n t r a t e d o n in this
p a p e r can b e c a l l e d t h e d i s c u r s i v e p r o g r a m m e s
for t h e a d m i n i s t r a t i o n a n d c a l c u l a t i o n o f
activities w i t h i n t h e e n t e r p r i s e and in s o c i e t y as
a w h o l e . T h e o t h e r w e w o u l d call t e c h n o l o g i c a l
and c o n c e r n s t h e actual o p e r a t i o n o f a c c o u n t i n g
practices, their elaboration through particular
p r o c e d u r e s and t e c h n i q u e s . O u r p o i n t is that
t h e s e t w o levels are distinct, y e t c r u c i a l l y
interdependent. A discursive programme (for
t h e c a l c u l a t i o n o f i n d i v i d u a l inefficiences, s a y )
o n l y fulfils its v o c a t i o n w h e n it has as its c o u n t e r -
p a r t an a d e q u a t e t e c h n o l o g y . W h a t t h e p r o g -
r a m m e c o n t r i b u t e s to t h e t e c h n o l o g y is a m o r e
g e n e r a l r e n d e r i n g o f r e a l i t y in a f o r m s u c h that it
c a n b e k n o w n , a r e n d e r i n g visible o f c e r t a i n
activities in a w a y w h i c h is intelligible b y v i r t u e
o f c e r t a i n g e n e r a l categories. A p r o g r a m m e is
also t h e s p a c e for t h e a r t i c u l a t i o n o f p r o b l e m s ,
n e g o t i a t i o n and conflict o v e r interests. T h e r e is,
o f c o u r s e , c o n s i d e r a b l e p l a y in t h e m e c h a n i s m
w h i c h links t h e p r o g r a m m a t i c level w i t h t h e
t e c h n o l o g i c a l . Yet it is p r e c i s e l y t h e l o o s e n e s s of
t h e linkage w h i c h m a k e s it i m p o r t a n t to r e c a l l its
existence.
T h e s e are t h e p r i n c i p l e t h e m e s w h i c h inform
o u r t h i n k i n g in this p a p e r . If t h e y have validity
for t h e u n d e r s t a n d i n g o f a c c o u n t i n g as an organi-
sational a n d social p r a c t i c e t h e i m p l i c a t i o n s are
significant. A c c o u n t i n g c a n n o l o n g e r b e re-
g a r d e d as a n e u t r a l a n d o b j e c t i v e p r o c e s s . It
c o m e s r a t h e r to b e v i e w e d as an i m p o r t a n t p a r t
o f a n e t w o r k o f p o w e r r e l a t i o n s w h i c h are built
into t h e v e r y fabric o f o r g a n i s a t i o n a l a n d social
life. It is a c o n s t i t u t i v e e l e m e n t in a form o f nor-
malising s o c i o - p o l i t i c a l m a n a g e m e n t w h o s e
c o n c e r n is w i t h r e n d e r i n g visible all f o r m s o f ac-
tivity o f t h e i n d i v i d u a l in v i e w o f t h e i r c o n t r i b u -
t i o n to t h e efficient o p e r a t i o n o f t h e e n t e r p r i s e
a n d o f society.
STANDARD COSTING AND BUDGETING
B e t w e e n 1900 a n d 1930 t h e r e a p p e a r s in t h e
a c c o u n t i n g l i t e r a t u r e an initial d e l i n e a t i o n o f
t h e o r i e s o f s t a n d a r d c o s t i n g a n d b u d g e t i n g . This
is a n o v e l e v e n t w i t h i n accounting. At a p u r e l y
t e c h n i c a l level t h e i n n o v a t i o n b r o u g h t a b o u t
was n o t h i n g less than an e n t i r e re-casting o f t h e
d e f i n i t i o n o f c o s t a c c o u n t i n g . Its p r i m a r y con-
c e r n w o u l d h e n c e f o r t h n o l o n g e r b e t h e ascer-
t a i n m e n t o f o n l y t h e actual c o s t s ( N i c h o l s o n ,
1913; Church, 1917; Epstein, 1978, pp. 9 0 -
120), o f p r o d u c t i o n o r o f activities. T h e r e w o u l d
b e an e x p a n s i o n o f d o m a i n to p e r m i t a c o n c e r n
for t h e f u t u r e as w e l l as for t h e past.
T h e v i r t u e o f t h e s e n o v e l p r a c t i c e s lay in t h e i r
c a p a c i t y to r o u t i n e l y raise q u e s t i o n s o f w a s t e
a n d efficiency in t h e e m p l o y m e n t o f r e s o u r c e s ,
w h e t h e r h u m a n , financial o r material, at as m a n y
levels o f analysis as r e q u i r e d . O n e c o u l d , for
e x a m p l e , r o u t i n e l y p o i n t to, a n d analyse, var-
iances o f actual f r o m s t a n d a r d o r p l a n at t h e level
of t h e p r o f i t o f t h e total firm, o r at t h e level o f
m a t e r i a l o r l a b o u r use in p r o d u c t i o n or, i n d e e d ,
at t h e level o f e v e r y a c c o u n t a b l e p e r s o n w i t h i n
t h e firm.
The existing histories note the importance of
t h e i n t r o d u c t i o n o f s t a n d a r d costing. For Sowell
(1973) standard costing entailed the develop-
m e n t o f a set o f t e c h n i q u e s and a t h e o r e t i c a l
r a t i o n a l e for t h e "scientific" p r e d e t e r m i n a t i o n o f
t h e c o s t s o f r a w material, l a b o u r a n d o v e r h e a d ,
as w e l l as for t h e analysis o f t h e v a r i a n c e o f s u c h
c o s t s f r o m t h e actual o r historical costs. Sol-
o m o n s ( 1 9 6 8 ) identifies similar t h e m e s across a
r a n g e o f w r i t e r s , in p a r t i c u l a r H a r r i n g t o n Emer-
son ( 1 9 1 9 ) a n d C h a r t e r H a r r i s o n ( 1 9 3 0 ) .
W h a t i n t e r e s t s us h e r e is t h e w a y t h e e x i s t i n g
histories construe the development of standard
costing. T h e y t e n d to n a r r a t e t h e e m e r g e n c e o f
s t a n d a r d c o s t i n g a n d b u d g e t i n g a c c o r d i n g to
 ACCOUNTINGAND THE CONSTRUCTIONOF THE GOVERNABLEPERSON
t w o d i s t i n c t criteria. O n e of these consists in a
careful a n d detailed e x p o s i t i o n o f the ideas and
t e c h n i q u e s i n the t e r m s of those who, at the
time, h a d d e v e l o p e d o r articulated them. Such
an a p p r o a c h is taken b y Sowell ( 1 9 7 3 ) w h o
declares his task as that of p r e s e n t i n g "in
c h r o n o l o g i c a l succession, those r e l a t e d events,
forces, individuals, a n d ideas that have contri-
b u t e d to a n d / o r have d e v e l o p e d i n t o " (p. 2 ) a
theoretical a n d t e c h n i c a l c o m p l e x called stan-
dard costing. That achieved, t h r o u g h an
i m m e n s e w e a l t h of s o u r c e material c o n s u l t e d
a n d d e s c r i b e d , Sowell e n d s his work. A s e c o n d
approach, w h i c h S o l o m o n s ( 1 9 6 8 ) adopts, is to
c o n s t r u e these n o v e l practices t h r o u g h the lens
of progress, to o u t l i n e the difficult a n d o f t e n
e r r o r - p r o n e paths w h e r e b y c o s t i n g has progres-
sed to its c u r r e n t level of sophistication. Thus,
for example, h e p o i n t s to "weaknesses" i n o n e of
the early o u t l i n e s of a s t a n d a r d costing, that of
Emerson, i n d i c a t i n g its failures in analytic p o w e r
a n d in clarity of t h o u g h t relative to w r i t i n g
w h i c h follows it in time.
W e w i s h i n this p a p e r to place a different
i n t e r p r e t a t i o n o n the e m e r g e n c e of s t a n d a r d
costing. W e do n o t v i e w the d e v e l o p m e n t of
s t a n d a r d c o s t i n g a n d b u d g e t i n g as part of the
u n f o l d i n g of a socially useful theoretical-techni-
cal c o m p l e x , w h o s e u n d e r l y i n g logic is o n e of
progress. W e wish to locate it r a t h e r as an impor-
tant c o n t r i b u t i o n to a c o m p l e x of practices
w h i c h consist i n a form of socio-political man-
a g e m e n t w h o s e c o n c e r n is w i t h individual per-
sons a n d their efficient f u n c t i o n i n g .
Standard c o s t i n g a n d b u d g e t i n g p r o v i d e d
q u i t e n o v e l t h e o r i s a t i o n and t e c h n i q u e w h i c h
s e r v e d to r e n d e r visible the inefficiencies of the
i n d i v i d u a l p e r s o n w i t h i n the enterprise. In
r o u t i n e l y raising q u e s t i o n s of waste a n d ineffi-
c i e n c y in the e m p l o y m e n t of h u m a n , financial
a n d material resources, they s u p p l e m e n t e d the
traditional c o n c e r n s of a c c o u n t i n g w i t h the
fidelity o r h o n e s t y of the p e r s o n . Cost a c c o u n t -
ing c o u l d n o w e m b r a c e also the i n d i v i d u a l per-
s o n a n d make t h e m a c c o u n t a b l e b y r e f e r e n c e to
p r e s c r i b e d standards of p e r f o r m a n c e . With this
step a c c o u n t i n g significantly e x t e n d e d its
d o m a i n , e n m e s h i n g the p e r s o n w i t h i n a w e b of
241
calculative practices a i m e d n o t o n l y at steward-
ship b u t efficiency also.
W e c a n identify the shift e n t a i l e d in the
e m e r g e n c e of s t a n d a r d c o s t i n g d u r i n g the
p e r i o d 1900 a n d 1930 across a n u m b e r of cent-
ral texts of that period. Garcke & Fells ( 1911 )
make the following s t a t e m e n t c o n c e r n i n g the
role of systematic cost a c c o u n t s a n d their rele-
v a n c e for managerial action:
it is only by means of systematic records that leakage,
waste, and fraud can be prevented, and that employers
can know the cost of any article of their manufacture, and
be able to determine accurately and scientifically, not
merely approximately and by hap-hazard, the actual pro-
fit they make or loss they sustain, not only on the aggre-
gate transactions during a given period, but also upon
each individual transaction (Garcke & Fells, 1911, pp. 3-
5).
I n a similar m a n n e r A. L. D i c k i n s o n ( 1908, cited
in Garcke & Fells, 1911, pp. 7--8), states the prin-
cipal o b j e c t s of a m o d e m cost system. T h e y
s h o u l d comprise:
( 1) Ascertaining the cost of the same product at diffe-
rent periods in the same mill, or at the same period in dif-
ferent mills, and so to remedy inequalities in cost by
reducing all to the results shown by the best.
(2) The provision of an accurate, running book of
inventories on hand, so facilitating reduction in stocks
and capital invested to the lowest state consistent with
efficiency.
(3) The preparation of statistical information as to
costs of parts, quantity, and variety of output, relative effi-
ciency of different classes of labour, and relative costs of
labour and material, between different mills and periods.
(4) The preparation of periodical statements of profit
and loss in a condensed form, readily giving directors all
material information as to the results of the business.
T h e s e s t a t e m e n t s are a d m i r a b l e i n their
rigour. It is, h o w e v e r , w h a t is m i s s i n g from t h e m
w h i c h is significant for o u r p u r p o s e s here. Mis-
sing from b o t h is a clear s t a t e m e n t of the pur-
poses that m i g h t b e fulfilled b y standard or pre-
d e t e r m i n e d costs. Missing, as a c o n s e q u e n c e , are
materials dealing w i t h h o w a r o u t i n e t e c h n o l o g y
of s t a n d a r d or p r e d e t e r m i n e d costs m i g h t oper-
ate.
By 1930 t h e r e had b e e n a clear establishment,
in texts o n b o t h sides of the Atlantic, of several
 242 PETER MILLER and TED O'LEARY
n e w p r o m i n e n t a d d i t i o n s to t h e v o c a b u l a r y o f
c o s t s a c c o u n t s keeping. T h e s e are " t h e s t a n d a r d
cost", " t h e v a r i a n c e analysis", " t h e b u d g e t " ,
" b u d g e t a r y c o n t r o l " . This is t h e r u p t u r e w i t h
w h i c h w e a r e c o n c e r n e d a n d its implications.
One way of designating the change would be
f r o m t h e " r e g i s t r a t i o n o f c o s t s o f p r o d u c t i o n " to
" t h e r e n d e r i n g o f all activities c a p a b l e o f suspi-
c i o n as to t h e i r costliness".
Charter Harrison (1930) expresses most
c l e a r l y t h e dissatisfaction w i t h t h e o l d s y s t e m
and t h e p r o m i s e o f t h e new:
The most serious defect of the job-order cost plan was
that it failed, most utterly and dismally to achieve wh a t
should be the primary purpose of any cost system,
namely, to bring promptly to the attention of the manage-
men t the ex istence of preventable inefficiencies so that
steps could be taken to eliminate these at the earliest pos-
sible m o m e n t (Harrison, 1930, p. 8).
A n d again:
one of the primary advantages of standard c o s t s . . , is that
the clerical w o r k involved in the operating of a properly
designed standard cost system is very m u c h less than that
required to operate any c o m p l e t e job-order cost plan.
That this is so is evident w h e n it is considered that w i t h
standard costs we are dealing w i t h the p r i n c i p l e o f
exceptions, that is to say w i t h variations f r o m the stan-
dards (Harrison, 1930, p. 12, emphasis added).
F o r o u r c o n c e r n s in this p a p e r t h e r e is o n e cru-
cial d i m e n s i o n to this innovation. T h e p r i n c i p l e
o f s t a n d a r d c o s t s m a d e it p o s s i b l e to a t t a c h to
e v e r y i n d i v i d u a l w i t h i n t h e firm n o r m s a n d stan-
d a r d s o f b e h a v i o u r . Everyone, in r e l a t i o n to all
activities w h i c h t h e y d i r e c t l y c a r r i e d o u t o r
d i r e c t e d , c o u l d b e r e n d e r e d s u s c e p t i b l e to a
c o n t i n u a l p r o c e s s of j u d g m e n t . This i m p l a n t i n g
o f n o r m s m o r e o v e r c o n c e r n e d n o t just n o r m s o f
p h y s i o l o g i c a l b e h a v i o r for t h e w o r k e r at t h e
b e n c h , b u t also t h e m e n t a l activity o n t h e p a r t o f
t h e e x e c u t i v e . W i t n e s s C h a r t e r H a r r i s o n again:
We have increased the efficiency of the average man
because we have applied the principles of scientific man-
agement to his w o r k - - instead of letting him p r o c e e d
haphazardly w e have set before him carefully determin e d
standards of accomplishment rendered possible by stan-
dardization of conditions, and have given him scientific
training s u p p l e m e n t e d by an efficiency reward. We have
c o m b i n e d mechanical sciences and psychology, w i t h the
result that today every man, woman, and child in this
country is reaping the harvest (Harrison, 1930, pp. 2 7 -
28).
W i t h this s t e p t h e p o s s i b i l i t y o f a k n o w l e d g e o f
e v e r y i n d i v i d u a l w i t h i n t h e e n t e r p r i s e w a s estab-
lished. A visibility and an a l l o c a t i o n o f r e s p o n s i -
bility c o u l d b e a t t a c h e d to t h e individual. T h e
p e r s o n ' s activities w e r e at last r e n d e r e d k n o w a -
b l e a c c o r d i n g to p r e s c r i b e d s t a n d a r d s a n d devia-
tions f r o m t h e n o r m . S t a n d a r d c o s t i n g and
budgeting made possible a pinpointing of
r e s p o n s i b i l i t i e s for p r e v e n t a b l e inefficiencies at
t h e level o f t h e v e r y i n d i v i d u a l f r o m w h o m t h e y
d e r i v e d . T h e h u m a n e l e m e n t in p r o d u c t i o n , a n d
most importantly the individual person, could
n o w b e k n o w n a c c o r d i n g to t h e i r c o n t r i b u t i o n
to t h e efficiency o f t h e e n t e r p r i s e .
T h e significance o f s t a n d a r d c o s t i n g and
b u d g e t i n g as an innovation, h o w e v e r , is n o t o n l y
internal to a c c o u n t i n g a n d t h e o r g a n i s a t i o n a n d
m a n a g e m e n t o f the e n t e r p r i s e . W e suggest that it
should be located alongside the emergence of a
r a n g e o f d i s c o u r s e s a n d p r a c t i c e s w h i c h , in b o t h
Britain a n d t h e U.S.A. in t h e e a r l y y e a r s o f this
c e n t u r y , c o n c e r n e d t h e m s e l v e s w i t h t h e physi-
cal a n d m e n t a l h e a l t h o f t h e p o p u l a t i o n . In t h e i r
c o n c e r n w i t h efficiency t h e s e p r a c t i c e s have a
m a c r o - and a m i c r o - l e v e l c o n c e r n . T h e y t o o k as
t h e i r o b j e c t b o t h t h e h e a l t h a n d efficiency o f t h e
n a t i o n s as a w h o l e , and d e t a i l e d q u e s t i o n s con-
c e r n i n g t h e habits, life-styles and activities o f t h e
individual. T h e u n d e r l y i n g p r e o c c u p a t i o n was
w i t h w a y s in w h i c h m o d i f i c a t i o n s in t h e l a t t e r
m i g h t e n r i c h t h e former, an o v e r t l y political
c o n c e r n in w h i c h t h e h e a l t h and o u t p u t o f t h e
i n d i v i d u a l was r e l a t e d to that o f t h e collectivity.
Standard c o s t i n g can, w e argue, b e r e g a r d e d as
an i m p o r t a n t a s p e c t o f this b r o a d e r c o n c e r n
w i t h e x t a b l i s h i n g n o r m s a n d s t a n d a r d s for t h e
activities of individuals and their implications for
efficiency. At t h e level o f t h e e n t e r p r i s e s t a n d a r d
c o s t i n g a n d b u d g e t i n g c o n t r i b u t e d , w e suggest,
a facilitative t e c h n o l o g y w h i c h e n a b l e d a w h o l e
r a n g e o f activites o f t h e p e r s o n to b e r e n d e r e d
visible and a c c o u n t a b l e . W i t h i n t h e e n t e r p r i s e ,
o n e c o u l d at last literally m a k e all individuals
accountable.
 ACCOUNTINGAND THE CONSTRUCTION OF THE GOVERNABLEPERSON
T h e v a g u e n e s s as to w h e t h e r t h e n o t i o n o f
s t a n d a r d in t h e initial f o r m u l a t i o n s o f s t a n d a r d
c o s t i n g m e a n t an ideal o r an a t t a i n a b l e standard,
and the question of the possibility of actually
l o c a t i n g t h e s o u r c e o f w a s t e s ( S o l o m o n s , 1968,
p. 41 ) are n o t c r u c i a l for o u r p u r p o s e s . F o r it is
neither the truth-value of standard costing nor
its p r a c t i c a l utility w h i c h w e a r e s e e k i n g to
evaluate. Rather, w e a r e c o n c e r n e d to l o c a t e
s u c h a p r a c t i c e as a f o r m o f social p o w e r , an
i m p o r t a n t e l e m e n t o f w h i c h is an ability to sub-
j e c t t h e i n d i v i d u a l to an i n c r e a s i n g l y d e t a i l e d
f o r m o f o b s e r v a t i o n and scrutiny. In its p u r e s t
form, s u c h a t y p e o f p o w e r consists in t h e indi-
vidual a t t e n d i n g to his o r h e r o w n deficiencies. It
is a f o r m o f p o w e r in w h i c h t h e i n d i v i d u a l
b e c o m e s an a u t o - r e g u l a t e d entity, b u t o n e for
w h o m t h e s t a n d a r d s a c c o r d i n g to w h i c h t h e y
j u d g e t h e i r lives h a v e b e e n e s t a b l i s h e d for them.
S t a n d a r d c o s t i n g a n d b u d g e t i n g is, w e suggest,
c e n t r a l to s u c h a p r o c e s s .
THE EFFICIENT N A T I O N AND THE EFFICIENT
INDIVIDUAL
Standard costing and budgeting provided a
w a y o f e x p r e s s i n g in m o n e y t e r m s t h e c o n t r i b u -
t i o n o f i n d i v i d u a l s to t h e c o l l e c t i v e efficiency o f
t h e e n t e r p r i s e . This a l l o w e d d e v i a t i o n s f r o m t h e
n o r m to b e l o c a t e d at t h e level o f t h e individual.
T h e c o l l e c t i v e efficiency o f t h e n a t i o n d u r i n g
this p e r i o d w a s e x p r e s s e d in different t e r m s a n d
w i t h different o b j e c t i v e s in mind. N o n e t h e l e s s
s u r p r i s i n g parallels e m e r g e in t h e a t t r i b u t i o n o f a
visibility to t h e i n d i v i d u a l ( h i s health, intelli-
g e n c e ) t h r o u g h w h i c h t h e i r c o n t r i b u t i o n to col-
l e c t i v e efficiency c o u l d b e d e t e c t e d . T h e r e is a
s i m i l a r i t y also in t h e m a n n e r in w h i c h s u c h
d e t e c t i o n was to b e a c h i e v e d . Statistical devia-
tions f r o m a n o r m w e r e c e n t r a l to this task o f t h e
i n d i v i d u a l i s a t i o n o f difference. A n d a p l e t h o r a o f
techniques of socio-political management were
d e v e l o p e d w h i c h a l l o w e d o b s e r v a t i o n to p e n e t -
r a t e to t h e m i n u t i a e o f t h e e v e r y d a y lives o f indi-
viduals ( A r m s t r o n g , 1 9 8 3 ) in an a t t e m p t to cor-
rect departures from the norm.
W e w a n t to i d e n t i f y h e r e w h a t s e e m to us to
243
be the more important of these concerns and
p r a c t i c e s . T h e s e can b e l o c a t e d at a n u m b e r o f
d i s t i n c t levels. O n e o f t h e s e is w h a t w e call, fol-
l o w i n g o t h e r s (Searle, 1970; Hays, 1959; Haber,
1964), a d i s c o u r s e o f n a t i o n a l efficiency. This
h a d an e x i s t e n c e t h r o u g h p o p u l a r p o l i t i c a l voc-
abulary, j o u r n a l i s t i c writings, as w e l l as t h e state
a n d g o v e r n m e n t a l apparatuses. A s e c o n d con-
c e r n s p h i l o s o p h i c a l a n d s o c i o l o g i c a l writings,
a n d t h e e m e r g e n c e in t h e m o f a n o t i o n that o n e
could actively intervene within society and
w i t h i n t h e lives o f indivuals. T h e g e n e r a l aim to
w h i c h s u c h w r i t i n g s s a w this as c o n t r i b u t i n g w a s
t h e rational a d m i n i s u ' a t i o n o f t h e social and
t h e active p r o m o t i o n o f p r o g r e s s . T h e state was
to p l a y a c e n t r a l r o l e in s u c h a p r o g r a m m e . A
t h i r d level is that o f t h e a c t u a l p r a c t i c e s o f socio-
political management (eugenics, mental
h y g i e n e , m e n t a l t e s t i n g ) in r e l a t i o n to w h i c h
s u c h s c h e m e s o p e r a t e d . As n o t e d a b o v e w e d o
n o t v i e w s u c h p r a c t i c e s as t h e s i m p l e i m p l e m e n -
t a t i o n o f t h e first t w o levels identified. It s e e m s
to us, h o w e v e r , that t h e y c a n b e v i e w e d in t e r m s
o f a n d as r e l a t e d to t h e s e m o r e g e n e r a l sets o f
concerns.
The discourse of national efficiency
A n u m b e r o f w r i t e r s h a v e a r g u e d forcefully
(Searle, 1970; Hays, 1959; Haber, 1964), that t h e
n o t i o n o f efficiency e m e r g e s in t h e early y e a r s o f
this c e n t u r y as a " c o n v e n i e n t label" u n d e r w h i c h
c o u l d b e g r o u p e d a r a n g e o f a s s u m p t i o n s , beliefs
and d e m a n d s c o n c e r n i n g g o v e r n m e n t , i n d u s t r y
a n d social organisation. W h i l s t b e i n g careful n o t
to t h i n k that this n o t i o n o f efficiency is u s e d in
t h e s a m e w a y b y all c o m m e n t a t o r s , n o r that it
p r e s u p p o s e s a g r e e m e n t o n m a t t e r s o f social o r
industrial p o l i c y , it d o e s s e e m to b e a v e r y c o m -
m o n t h e m e in t h e e a r l y y e a r s o f this c e n t u r y . O f
c o u r s e , it is a n o t i o n w h i c h varies n o t just f r o m
o n e field o f a p p l i c a t i o n to a n o t h e r , b u t f r o m o n e
n a t i o n a l c o n t e x t to a n o t h e r .
O n e c a n b e g i n to s u b s t a n t i a t e t h e e x i s t e n c e o f
a d i s c o u r s e o f n a t i o n a l efficiency t h r o u g h jour-
nalistic writings, t h e a r g u m e n t s o f politicians, as
w e l l as m e d i c a l a n d p a c a - m e d i c a l writings. T h u s
t h e British w r i t e r A r n o l d W h i t e ( 1 9 0 1 ) in his
r a t h e r d e m a g o g i c b o o k Efficiency and Empire,
 244 PETERMILLERand TED O'LEARY
most of the material of which had first appeared
in newspaper articles the previous year, proc-
laimed the need for a thoroughgoing reappraisal
of the nation's political and moral values. White
was a polemicist, yet in a Britain which was
stumbling through the successive revelations
and disasters of the Boer War such arguments
were not out of place.
Inefficiency was considered by White to
derive from both physical and moral deteriora-
tion. The middle classes had, he argued, b e c o m e
largely "a class of pleasure-seekers" whilst the
working classes "artificially restrict their labour"
(p.310). Meanwhile drink exercised its
despotism over all social groups. The result was
a softening of the fibre of the ruled and the rulers
alike. But the first element of efficiency, accord-
ing to White, was health (p.95). Here the prob-
lem was seen to be most acute. "Our species", he
proclaimed dramatically, "is being propagated
and continued increasingly from undersized,
street-bred people". (p.lO0). White was refer-
ring here to "Spectacled school-children, hun-
gry, strumous, and epileptic" who "grow into
consumptive bridegrooms and scrofulous brides
•.." (pp. 101-102)• Outside certain institutions
such as the Army, the Navy and the police, the
population was seen to consist mainly in "hospi-
tal out-patients, enfeebled with bad air, seden-
tary lives, drink, and disease." (pp. 107-108). In
short, the nation was rapidly deteriorating and
the State was doing virtually nothing to prevent
this deterioration.
White was only one of many journalists to
suggest the need for a new political alignment,
which would give expression to a programme of
"national efficiency". Such themes, moreover,
were not absent from the arguments and state-
ments of politicians. Whilst an astute politician
such as Roseberry shied away from White's jour-
nalistic excesses, he admitted, however, to being
in "substantial agreement" with White's opin-
ions (Searle, 1970, p.54). The question of
national efficiency was, at heart, one which con-
cerned social organisation. Central here was the
utilisation of Germany and Japan as models or
exemplars of a form of social organisation which
promoted efficiency through the incorporation
of science in the art of politics.
The improvement of the national physique
was one element of a programme of efficiency.
The need for this was seen to be highlighted by
the physical unfitness of those w h o came for-
ward for recruitment for the Boer War. Thus in
Manchester in 1900, 8000 out of 11,000 would-
be volunteers had to be turned away on grounds
of ill-health, and of the remainder 2000 were
declared fit only for the militia (Searle, 1970;
Winter, 1980).
The m o o d that developed around the ques-
tion of physical health was one of pessimism
which at times shifted to hysteria. The concern
was that Britain was breeding a race of degener-
ates, and that this became more acute the further
one went down the social scale. White had
suggested restrictions on marriage to alleviate
the problem ( 1901, p. 111 ). The eugenic move-
ment was the more extreme version of such
arguments with demands for "the sterilization of
the unfit" gaining ground and appearing in polit-
ical debate. This was, moreover, not a matter of
party politics, eugenics appealing to Fabian
socialists and Conservatives alike. The sick had
to be taken in hand both for their own good and
for the efficient functioning of society.
Efficiency was a key-word also in relation to
the machinery of government, education, and
the role of the scientific expert in government.
The purpose of the State was to promote the
"good life" of its citizens and to develop the
moral nature of man (Dyson, 1980, p.192). To
achieve this the application of scientific know-
ledge and training was deemed necessary. It is
not altogether clear whether this meant leaving
key decisions in the hands of experts, or making
politics and public administration itself a sci-
ence. Both lines of argument clearly existed, the
latter finding its institutional form in the found-
ing of the London School of Economics by the
Webbs at the very end of the nineteenth century.
The principle at work here was that "social
reconstructions require as much specialized
training and sustained study as the building of
bridges and railways, the interpretation of the
law, or technical improvements in machinery
and mechanical processes" (quoted in Searle,
 ACCOUNTINGAND THE CONSTRUCTIONOF THE GOVERNABLEPERSON
1970, p . 8 5 ) . Again this w a s a t h e m e w h i c h c u t
a c r o s s p a r t y politics. R o s e b e r r y , t h e l e a d e r o f t h e
"Liberal I m p e r i a l i s t s " c a l l e d for g o v e r n m e n t b y
"scientific m e t h o d s " . Asquith, for his part,
s u g g e s t e d that social r e f o r m s h o u l d b e c a r r i e d
o u t " n o t as a m o r a l q u e s t i o n . . , b u t as a q u e s t i o n
o f social a n d i m p e r i a l efficiency" ( q u o t e d in
Collini, 1979, pp. 83--84).
This o f c o u r s e is n o m o r e t h a n a s u g g e s t i v e
g l a n c e at t h e l i t e r a t u r e w h i c h w o u l d e n a b l e o n e
to s u b s t a n t i a t e t h e e x i s t e n c e a n d d e p t h o f a dis-
c o u r s e o f n a t i o n a l efficiency in Britain in t h e
e a r l y y e a r s o f this c e n t u r y . W e feel it is e n o u g h ,
h o w e v e r , to s u p p o r t o u r a r g u m e n t s that t h e
t e r m efficiency p r o v i d e d a d e g r e e o f c o h e r e n c e
to t h e i d e n t i f i c a t i o n a n d e x p r e s s i o n o f a d i v e r s e
r a n g e o f n a t i o n a l c o n c e r n s . If it is t h e case that
this e n t i t l e s us to talk o f an i d e o l o g y o f efficiency
in Britain d u r i n g this p e r i o d w a s this t r u e also o f
t h e U n i t e d States? It w o u l d a p p e a r that this c a n
b e a n s w e r e d in t h e affirmative, as l o n g as o n e
b e a r s in m i n d t h e different s o c i o - p o l i t i c a l c o n -
t e x t o f A m e r i c a n society. T h e p r o g r e s s i v e era, as
o n e a u t h o r has e x p r e s s e d it, "is a l m o s t m a d e to
o r d e r for t h e s t u d y o f A m e r i c a n s in l o v e w i t h effi-
c i e n c y " ( H a b e r , 1964, p.ix; Hays, 1959). T h e "ef-
ficiency craze" of the progressive era consisted
in "an o u t p o u r i n g o f ideas a n d e m o t i o n s in
w h i c h a g o s p e l o f efficiency w a s p r e a c h e d with-
o u t e m b a r a s s m e n t to b u s i n e s s m e n , w o r k e r s ,
doctors, housewives and teachers..." (Haber,
1964, p.ix). Efficiency in this s e n s e r e f e r r e d to a
p e r s o n a l a t t r i b u t e , to a m e c h a n i c a l p r i n c i p l e o f
t h e o u t p u t - i n p u t ratio o f a m a c h i n e , to a c o m -
m e r c i a l efficiency in t h e f o r m o f profit, a n d to
efficiency c o n c e i v e d as a r e l a t i o n s h i p b e t w e e n
m e n . I n this last, a n d p o s s i b l y for o u r p u r p o s e s
h e r e m o s t i m p o r t a n t sense, efficiency m e a n t
social efficiency, w h i c h in t u r n m e a n t social
organisation.
If o n e c a n s p e a k h e r e o f a " p o l i t i c s o f effi-
c i e n c y " , it w a s a r o u n d t h e issues o f d e m o c r a c y
a n d e x p e r t i s e that this p o l i t i c s c e n t r e d . Scien-
tific w i s d o m w a s t o b e u s e d to a d v a n c e t h e c a u s e
o f " g o o d g o v e r n m e n t " , w h e t h e r at t h e level o f
t h e m u n i c i p a l i t y o r t h e factory. " D e m o c r a c y "
was to m e a n g o v e r n m e n t for t h e p e o p l e b a s e d
i n c r e a s i n g l y o n q u e s t i o n s o f fact, a p a r t n e r s h i p
245
between the expert and the citizen which was
essential to g o o d g o v e r n m e n t ( H a b e r , 1964,
p. 110). Efficient g o v e r n m e n t w a s to b e a c h i e v e d
t h r o u g h e x p e r t g o v e r n m e n t officials a c t i n g in
t h e i n t e r e s t s o f citizens, s i n c e t h e l a t t e r c o u l d n o
l o n g e r realistically a c h i e v e t h e level o f e x p e r t i s e
required:
Citizens of larger cities must frankly recognize the need
for professional service on behalf of citizen interests...
Even efficient private citizens cannot deal helpfully with
expert governmental questions. Efficient citizens will
evidence their efficiency by supporting constructive
efforts for governmental betterment (quoted in Haber,
1964, p.112).
T h e utilisation o f n o t i o n s o f efficiency in rela-
tion to t h e b u s i n e s s o f g o v e r n m e n t c a n b e s e e n
in s u c h b o d i e s as t h e P r e s i d e n t i a l C o m m i s s i o n
o n E c o n o m y a n d Efficiency w h i c h w a s r e p l a c e d
b y a B u r e a u o f Efficiency w h e n t h e W i l s o n ad-
m i n i s t r a t i o n t o o k office ( H a b e r , 1964, p. 1 1 3 -
114). This w a s n o t s i m p l y f e d e r a l c o n c e r n , t h e
states s o o n s e t t i n g u p t h e i r o w n efficiency c o m -
missions. W i n c o n s i n b e g a n in 1911, and b y 1917
at least s i x t e e n states h a d f o r m e d s u c h c o m m i s -
sions. T h e a c h i e v e m e n t s o f s u c h c o m m i s s i o n s
s e e m to h a v e c o n s i s t e d p r i n c i p a l l y in con-
s o l i d a t i n g state agencies, i m p r o v i n g c o s t
a c c o u n t i n g t e c h n i q u e s , a n d in g r a n t i n g m o r e
p o w e r to t h e g o v e r n o r ( H a b e r , 1964, p. 115 ).
T h e g r e a t m e r i t o f t h e n o t i o n o f efficiency was,
h o w e v e r , its pliability, o r at least its ability to
s u p p l y a p o i n t o f focus for a r g u m e n t s c o v e r i n g a
vast r a n g e o f issues. It w a s n o t o n l y social effi-
c i e n c y that w a s o f c o n c e r n in t h e e a r l y y e a r s o f
this c e n t u r y . T h e efficient utilisation o f natural
resources around the principle of conservation
w a s c e n t r a l also. T h e n o t i o n o f c o n s e r v a t i o n , to
b e a c h i e v e d t h r o u g h p l a n n e d and efficient utili-
sation o f natural r e s o u r c e s , a p p l i e d to s u c h
issues as w a t e r r e s o u r c e m a n a g e m e n t a n d t h e
c o n s e r v a t i o n o f forests (Hays, 1959). A n d t h e
elasticity o f t h e t e r m " c o n s e r v a t i o n " a l l o w e d it
to e x t e n d b a c k to t h e q u e s t i o n o f t h e c o n s e r v a -
tion o f h u m a n health. T h e National C o n s e r v a t i o n
C o n g r e s s o f 1910 h a d o r g a n i z e d a s t a n d i n g c o m -
m i t t e e o n "vital r e s o u r c e s " w h i c h c o n c e r n e d
itself w i t h p u b l i c h e a l t h as w e l l as h a v i n g units
 246 PETERMILLERand TED O'LEARY
o n forests, lands, w a t e r s a n d minerals. T w o years
later, the Congress d e v o t e d the e n t i r e t y of its
a n n u a l session to "the c o n s e r v a t i o n of h u m a n
life" (Hays, 1959, p.176). And in 1909 the
National C o n s e r v a t i o n Congress had i n c l u d e d
s p e e c h e s o n the c o n s e r v a t i o n of the morals of
youth, the c o n s e r v a t i o n of c h i l d r e n ' s lives
t h r o u g h the e l i m i n a t i o n of child labour, the con-
servation of civic beauty, the e l i m i n a t i o n of
waste in e d u c a t i o n a n d war, the c o n s e r v a t i o n of
m a n h o o d , a n d the c o n s e r v a t i o n of the Anglo-
Saxon race.
Philosophical and sociological conceptions of
a rationally administered social
These w e r e the m o s t forceful a n d readily iden-
tifiable forms in w h i c h the n o t i o n of n a t i o n a l effi-
c i e n c y a p p e a r e d in the U.S. Again w e feel they
p r o v i d e s u p p o r t to o u r a r g u m e n t that the t e r m
efficiency was a significant o n e in the socio-
political d e b a t e s of the time. W e w o u l d like n o w
to shift the p e r s p e c t i v e to the philosophical a n d
sociological d e b a t e s of the same period. At this
level w e argue that the e m e r g e n c e in the early
d e c a d e s of the t w e n t i e t h c e n t u r y of a particular
sociological and p h i l o s o p h i c a l form of a r g u m e n t
a d d e d legitimacy to, a n d p r o v i d e d a b r o a d
rationale for, the p r o j e c t of n a t i o n a l efficiency.
In particular it c o n t r i b u t e d a theoretical princi-
ple for an art of g o v e r n m e n t f o u n d e d o n two
c e n t r a l notions. The first of these was the affir-
m a t i o n of the possibility of a rationally adminis-
t e r e d and m a n a g e d social order, s o m e t h i n g
w h i c h was to b e u n d e r t a k e n w i t h the aid of a
n e u t r a l a n d o b j e c t i v e knowledge. The s e c o n d
was a specific c o n c e p t i o n of the n a t u r e of the
social relations w h i c h linked the individual to
society. T h e image h e r e was of the individual as
a part of a social m a c h i n e c o n c e i v e d as an
organism.
The sociologist S p e n c e r ( 1 8 7 8 ) had p r o p o s e d
a scientific study of society w h o s e p u r p o s e
w o u l d b e " n o t to g u i d e the c o n s c i o u s c o n t r o l of
societal e v o l u t i o n , b u t rather to s h o w that s u c h
c o n t r o l is an absolute impossibility, a n d that
the best that organized k n o w l e d g e c a n do is to
teach m e n to s u b m i t m o r e readily to the
d y n a m i c factors in progress" (Hofstadter, 1955,
pp.43--44). I n the p e r i o d w e have b e e n addres-
sing h e r e s u c h a r e s i g n e d s u b m i s s i o n to social
laws was b e i n g r e p u d i a t e d in sociological and
p h i l o s o p h i c a l debates. T h e literature of prag-
m a t i s m was c e n t r a l to this repudiation. As o n e
a u t h o r has e x p r e s s e d it:
Spencer's outlook had been the congenial expression of
a period that looked to automatic progress and laissez
faire for its salvation;pragmatism was absorbed into the
national culture when men were thinking of manipula-
tion and control• Spencerianismhad been the philosophy
of inevitability; pragmatism became the philosophy of
possibility (Hofstadter, 1955, p.123).
Pragmatism offered p h i l o s o p h i c a l legitimacy
to a p e r i o d that was b e c o m i n g i n c r e a s i n g l y con-
c e r n e d w i t h the rational, p u r p o s e f u l d i r e c t i o n
a n d c o n t r o l of social affairs. Particularly in the
w r i t i n g s of James p r a g m a t i s m sought to assert:
• . . the fundamental idea of an open universe in which
uncertainty, choice, hypotheses, novelties and pos-
sibilities are naturalized . . . (John Dewey, cited in
Hofstadter, 1955, p. 123).
In seeking to naturalize these c o n c e p t s , the
h o p e was p e r m i t t e d that there was a space
w i t h i n w h i c h h u m a n rationality c o u l d actively
shape a n d reform the social organization.
Pragmatism was primarily an A m e r i c a n
p h e n o m e n o n . I n Britain a similar t h e m e
e m e r g e d t h r o u g h p h i l o s o p h e r s of w h a t w o u l d
b e c o m e the N e w Liberalism in politics
( F r e e d e n , 1978). Here, o n e finds H o b h o u s e
arguing that the h u m a n m i n d m u s t itself b e s e e n
to lie w i t h i n the overall p r o c e s s of evolution. I n
so far as m i n d has e v o l v e d to a c o m p l e x rational-
ity, t h e n it is o n l y fitting that this c o n s e q u e n c e of
the e v o l u t i o n a r y process s h o u l d i n f l u e n c e
f u r t h e r evolution. H u m a n rationality, in its dis-
t i n c t i v e l y scientific form, had p r o v i d e d h u m a n -
ity with: "the vastly i n c r e a s e d p o w e r of c o n t r o l -
ling the c o n d i t i o n s , e x t e r n a l and internal, of
life c o . . . " ( H o b h o u s e , 1911, p.156). For Hob-
house:
the turning-point in the evolution of thought . . . is
reached when the conception of the development of
humanity enters into explicit consciousness as the
 ACCOUNTING AND THE CONSTRUCTION OF THE GOVERNABLE PERSON
directing principle of human endeavour... (Hobhouse,
1911, p.155).
Social science conceived in this manner could
become an instrument which would contribute
to the better control and directing of human
progress. Social science could serve human
n e e d s as n a t u r a l s c i e n c e d o e s , t h r o u g h b e i n g
consciously adapted and harnessed to the pur-
poseful achievement of ends. According to the
American sociologist, Lester Ward:
It is only through the artificial control of natural phen-
momena that science is made to minister to human
needs; and if social laws are really analogous to physical
laws, there is no reason why social science may not re-
ceive practical applications such as have been given to
physical science (Ward, 1918, p.352; cited in Hofstadter,
1955).
The introduction of a space for rational choice
e n t a i l e d t h e p o s s i b i l i t y f o r a n a p p l i e d s o c i a l sci-
e n c e . K n o w l e d g e c o u l d l o c a l i s e . Its f u n c t i o n
could become that of following human rational-
ity, i n o r d e r t o i m p r o v e its e f f e c t i v e n e s s , t h r o u g h
a multiplicity of arenas or sites of action. Social
s c i e n t i f i c k n o w l e d g e s a n d p r a c t i c e c o u l d , as it
were, form partnership with the state, assisting
the latter in the purposeful, deliberate improve-
m e n t o f b o t h t h e s o c i a l o r g a n i z a t i o n , a n d t h e life
a n d b e h a v i o u r o f t h e i n d i v i d u a l w i t h i n it.
This changed conception of the nature of the
s o c i a l a n d t h e p o s s i b i l i t y o f its r a t i o n a l a d m i n i s t -
ration was expressed in the conception of the
social machine and the organic relations which
w e r e s e e n t o l i n k i n d i v i d u a l s t o it. I n B r i t a i n , f o r
example, the Fabian socialist Sidney Webb
would proclaim that:
• . . we must take even more care to improve the social
organism of which we form part, than to perfect our own
individual developments. Or rather the perfect and fit-
ting development of each individual is not necessarily the
utmost and highest cultivation of his own personality, but
the Falling, in the best possible way, of his humble func-
tion in the great social machine (Webb, 1899, p.58; cited
in Freeden, 1978).
And the working-out of a philosophy for what
would become the New Liberalism of British
p o l i t i c s t o o k , as o n e o f its i m p o r t a n t s t r a n d s , t h e
247
dilemma of how the more traditional liberal
ideal of the freedom of the individual was to be
rendered compatible with an organic concep-
tion of the social (Freeden, 1 9 78, p p . 2 5 - 7 5). F o r
H o b h o u s e ( 1 9 1 1 ), s o c i e t y c o n s i s t e d of:
... individual persons and nothing but individual persons,
just as the body consists of cells and the product of cells
... (p.30).
B u t i n t h e s a m e w a y t h a t o n e w o u l d fail t o
u n d e r s t a n d t h e life o f a b o d y b y e x a m i n i n g its
s e p a r a t e cells, s o o n e w o u l d a l s o fail t o u n d e r -
stand society in terms only of individual persons.
We must equally take into account that organic intercon-
nection whereby the living processes of each separate
cell cooperate together to maintain the health of the
organism which contains them all. So, again, to under-
stand the social order we have to take into account, not
only the individuals with their capabilities and achieve-
ments, but the social organization in virtue of which
these individuals act upon one another and jointly pro-
duce what we call social r e s u l t s . . . (Hobhouse, 1911,
p.29).
An important task facing the social reformer
was the redesign of the social organization so
that the cooperation of individuals to produce
social results could work in the least wasteful
way. But unlike Webb's mechanistic imagery, in
which the freedom of the individual seemed to
disappear in the filling of a social role, Hobhouse
argued that:
... the life of the body is not perfected by suppressing the
life of the cells, but by maintaining it at its highest point
of efficiency. Nor is the organism developed by reducing
the cells to a uniform type, but rather by allowing each
type to vary on its own lines, provided always that the
several variations are in the end mutually compatible.
These things are applicable to society, from the widest to
the narrowest form thereof (pp.90-91 ).
These two dimensions to the sociological and
philosophical debates of the time combined
well. A rationally administered social was one in
which a concern with the individual could be
f o r m u l a t e d i n t e r m s o f t h e c o l l e c t i v e g o a l s o f so-
ciety. A concern with individual behaviours was
a concern with society because the two were
248 PETERMILLERand TED O'LEARY
organically i n t e r d e p e n d e n t . Social reform c o u l d
b e c o n c e i v e d in a m a n n e r analogous to the
reform of the enterprise. Both r e q u i r e d the
e l i m i n a t i o n of inefficiencies. P o v e r t y a n d
d e s t i t u t i o n r e p r e s e n t e d losses for the e n t i r e
social body. Issues of social reform m i g h t n o w b e
p r e s s e d n o t o n l y u p o n m o r a l grounds, b u t u p o n
i n t e n s e l y practical o n e s as well ( F r e e d e n , 1978,
p p . 1 1 7 - 1 6 9 ) . It was a m a t t e r of e n h a n c i n g the
efficiency of individuals, a n d of seeking to recon-
struct the bases of their i n t e r a c t i o n s so as to
achieve a m i n i m i z a t i o n of vital wastes (Ritchie,
1891: Hobson, 1914; Ward, 1881 ).
S o m e actual practices o f socio-political man-
agement
Active i n t e r v e n t i o n in the lives of individuals
was a w a y of e n h a n c i n g the r e s o u r c e s of the
nation. Such views w e r e n o t just abstract
theoretical f o r m u l a t i o n s b u t had a real e x i s t e n c e
at the level of practices. Eugenics is o n e e x a m p l e
of such practices. Eugenics was c o n c e r n e d w i t h
the d e t e r i o r a t i o n of the n a t i o n ' s physical stock
and its effect o n the efficiency of the h u m a n
c o m p o n e n t of the n a t i o n ' s resources. Eugenics
p r o v i d e d w h a t m i g h t b e t e r m e d a strategic link
b e t w e e n a c e r t a i n t h e o r y of social administra-
t i o n a n d a c e r t a i n c o n c e p t i o n of h u m a n abilities
(Rose, 1979). A r g u m e n t s c o n c e r n i n g the
d e t e r i o r a t i o n of the n a t i o n a l p h y s i q u e p o s e d the
q u e s t i o n of the m o s t a p p r o p r i a t e m o d e of inter-
v e n t i o n in the o r g a n i s a t i o n of the p o p u l a t i o n . I n
Britain the p r i n c i p a l c o n t r i b u t i o n of the
e u g e n i c s m o v e m e n t (Mackenzie, 1976), was,
perhaps, that it p r o v i d e d a p r i n c i p l e of legitima-
t i o n for a series of o p e r a t i o n s o n those individu-
als s u s p e c t e d of sapping the n a t i o n ' s vigour
t h r o u g h their o w n defects, w h e t h e r in the field
of i n t e l l i g e n c e testing (Sutherland, 1972; Rose,
1 9 7 9 ) or social administration. I n the U n i t e d
States e u g e n i c s d e v e l o p e d further as a "practi-
cal" m o v e m e n t . (cf. Hailer, 1963; Pickens, 1968;
Castel et al., 1982). In 1907, after a n u m b e r of
attempts in the p r e c e d i n g d e c a d e o r so, (cf.
Kamin, 1974, p . l O ) legislation was passed in
I n d i a n a and Michigan p r o v i d i n g for the steriliza-
t i o n of " c o n f i r m e d criminals, idiots, i m b e c i l e s
a n d rapists" (Castel et al., 1982, p.47). Many
states followed suit d u r i n g the following t w o
decades. Much d e b a t e followed such legislation,
b u t the e u g e n i c p r i n c i p l e was u p h e l d in 1927 b y
the U n i t e d States S u p r e m e Court, w h e n it was
held that sterilization fell w i t h i n the police
p o w e r of the state:
It would be strange if it could not call upon those who
already sap the strength of the State for those lesser sac-
rifices, often not felt to be such by those concerned, in
order to prevent our being swamped with incompe-
tence. It is better for all the world, if instead of waiting for
their imbecility, society can prevent those who are man-
ifestlyunfit from continuingtheir kind. The principle that
sustains compulsory vaccination is broad enough to
cover cutting the Fallopian tubes (cited in Hailer, 1963,
p.139).
I n a famous a p h o r i s m the j u d g e m e n t con-
c l u d e d b y stating "Three g e n e r a t i o n s of imbe-
ciles are e n o u g h " ( i b i d ) . E u g e n i c p r i n c i p l e s con-
t i n u e d to spread d u r i n g the first t h r e e d e c a d e s of
this c e n t u r y , so that b y 1931 s o m e thirty states
had passed a sterilization law at o n e t i m e or
another. It s h o u l d b e added, h o w e v e r , that b y
1944 o n l y 42,000 official sterilisations had actu-
ally b e e n p e r f o r m e d .
But it is n o t e u g e n i c s in a n d of itself that con-
c e r n s us here. Eugenics is interesting, rather, as
the m o s t e x t r e m e e x a m p l e of a form of social
m a n a g e m e n t w h o s e c o n c e r n is the efficiency of
the individual. Eugenics u l t i m a t e l y failed as a dis-
t i n c t strand of social m a n a g e m e n t ( R o s e , 1979).
Yet alongside eugenics, initially d e r i v i n g sup-
p o r t from it a n d u l t i m a t e l y s u p p l a n t i n g it as a
form of social m a n a g e m e n t , w e can see d e v e l o p
in the first three d e c a d e s of this c e n t u r y a vast
range of social i n t e r v e n t i o n s w h i c h take as their
target the inefficient individual. Mental h y g i e n e
is an i m p o r t a n t e x a m p l e of such d e v e l o p m e n t s .
In the U n i t e d States in 1909 the National Com-
m i t t e e for Mental H y g i e n e is f o u n d e d w i t h its
aim being:
To work for the protection of the mental health of the
public; to help raise the standard of care for those in
danger of developing mental disorder or actually insane;
to promote the study of mental disorders in all their
forms and relations, and to disseminate knowledge con-
cerning their causes, treatment, and prevention; to
 ACCOUNTINGAND THE CONSTRUCTIONOF THE GOVERNABLEPERSON
obtain from every source reliable data regarding condi-
tions and methods of dealing with mental disorders; to
enlist the aid of the Federal Government so far as may
seem desirable; to coordinate existing agencies and help
organize in each State in the Union an allied, but indepen-
dent, Society for Mental Hygiene, similar to the existing
Connecticut Society for Mental Hygiene (cited in Castel
etal., 1982, p.34).
Rapidly o b t a i n i n g financial support, t h e
results o f its first s t u d y c a r r i e d o u t in a B a l t i m o r e
s c h o o l in 1913 are h e l d to s h o w that 10% o f t h e
s c h o o l c h i l d r e n w e r e in n e e d o f p s y c h i a t r i c
assistance. T h e w a r w a s to add c o n s i d e r a b l e
f o r c e to s u c h d e v e l o p m e n t s , t h e " w a r n e u r o s e s "
p r o v i d i n g n e w m a t e r i a l for o b s e r v a t i o n and
highlighting the relationship b e t w e e n psychic
d i s o r d e r s and e v e r y d a y living c o n d i t i o n s . In this
respect the greatest contribution of the mental
h y g i e n e m o v e m e n t lay in t h e t r e a t m e n t o f th e
p r o b l e m s o f soldiers r e t u r n i n g h o m e .
T h e m e n t a l h y g i e n e m o v e m e n t in A m e r i c a
w as p a r t i c u l a r l y c o n c e r n e d w i t h c h i l d r e n ' s
p r o b l e m s , an d p l a y e d a l e a d i n g r o l e in t h e c h i ld
g u i d a n c e m o v e m e n t w h i c h first f l o u r i s h e d in t h e
'twenties. T h e i m p o r t a n c e o f s u c h d e v e l o p -
m e n t s lay in t h e n e w f o r m o f social m a n a g e m e n t
w h i c h t h e y p e r m i t t e d . In t h e w o r d s o f o n e offi-
cial o f t h e c h i l d g u i d a n c e m o v e m e n t :
the (children's) clinic treats these problems by treating
not only the child through whom they become manifest,
but as well the family, schools, recreational and other
involved factors and persons which contribute to the
problem, and whose disorder the problem may reflect
(cited in Castel etal., 1982, p.35).
It was n o w p o s s i b l e to i n t e r v e n e in th e w h o l e
r a n g e o f b e h a v i o u r s o f t h e s e individuals w h o s e
p e r f o r m a n c e fell b e l o w t h e n o r m . T h e g u i d i n g
p r i n c i p l e was n o t t h e c u r i n g o f disease and th e
e r a d i c a t i o n o f defects, b u t t h e i m p r o v e m e n t o f
t h e h e a l t h o f t h e individual, t h e o p t i m i s a t i o n o f
t h e i r f u n c t i o n i n g . W il li a m W h i t e w a s to state this
p r i n c i p l e cl earl y in his inaugural address to t h e
First I n t e r n a t i o n a l C o n g r e s s o f Mental Hygiene:
Mental hygiene is on this account alone more important
than ever before, and its significance can be seen to be
gradually changing from one of the simple prevention of
mental disease, which is a negative program, to the posi-
249
tive attitude of finding ways and means for people to live
their lives at their best. Medicine has long enough main-
tained as ideals freedom from disease and the putting off
of death. It is time that these were replaced by ideals of
living, of actual creative accomplishment. The art of liv-
ing must replace the avoidance of death as a prime objec-
tive, and if it ever does succeed in replacing it in any
marked degree, it will be found that it has succeeded bet-
ter in avoiding death than the old methods that had that
particular objective as their principal goal. Health is a
positive, not a negative concept (cited in Castel et al.,
1982, p.37).
T h e advantages w e r e e v i d e n t . O n e w as n o w
fully entitled, e v e n r e q u i r e d , to d o s o m e t h i n g to
individuals m a n i f e s t i n g m i n o r d e v i a t i o n s f r o m a
statistical n o r m w h i c h t w o d e c a d e s earlier m i g h t
h a v e passed u n n o t i c e d . O n e c o u l d n o w cl ai m to
b e able to d o s o m e t h i n g , for instance, to c h i l d r e n
w h o m a n i f e s t e d s u c h b e h a v i o u r s as "tantrums,
stealing, seclusiveness, truancy, cruelty, sensi-
tiveness, restlessness, and fears" ( Cast el et al.,
1982, p.38). At least in p r i n c i p l e , t h e r e was
h e n c e f o r t h no limit to t h o s e s p h e r e s o f p e r s o n a l
life w h i c h , o n c e r e n d e r e d visible, c o u l d n o w b e
r e g a r d e d as p o t e n t i a l l y d i s r u p t i v e o f t h e efficient
f u n c t i o n i n g o f t h e individual.
T h e f o cu s for all t h e s e n e w f o r m s o f social
i n t e r v e n t i o n was t h e individual. W h a t t h e y
a c h i e v e d w as to b r i n g to t h e surface all t h o s e
aspects o f an individual's p e r s o n a l life w h i c h
m i g h t b e d e t r i m e n t a l to t h ei r physical and m e n -
tal health, and t h e r e b y to t h ei r efficiency, and to
o p e n t h e s e up to t h e possibility o f a w i d e r a n g e
o f f o r m s o f social m a n a g e m e n t . I n t e l l i g e n g e test-
ing p r o v i d e d a f u r t h e r and i m p o r t a n t d i m e n s i o n
to this o v e r a l l strategy o f r e n d e r i n g visible t h e
l e v e l o f f u n c t i o n i n g o f t h e individual. T h e advan-
tage o f i n t e l l i g e n c e tests was that t h e y s u p p l i e d
an e l a b o r a t e and s u p p o s e d l y o b j e c t i v e m e a n s
w h e r e b y o n e c o u l d d i f f er en t i at e o n e individual
f r o m another. It d i d so w i t h t h e aid o f statistics
w h i c h s e r v e d to s h o w t h e e x t e n t of t h e indi-
vidual's d e v i a t i o n f r o m t h e n o r m ( H a c k i n g ,
1975; Rose, 1979). I n t e l l i g e n c e tests w e r e first
d e v e l o p e d in F r a n c e b y Alfred Binet in 1905,
a l t h o u g h as early as 1895 t h e p r i n c i p l e s w e r e
stated clearly:
we must search with the present knowledge and
250 PETER MILLERand TED O'LEARY
methods at hand for a series of tests to apply to an indi-
vidual in order to distinguish him from others and to ena-
ble us to deduce general conclusions relative to certain
of his habits and faculties... (Binet & Henri, trans quoted
from Rose, 1979, p.8).
I n t e l l i g e n c e tests w e r e i m p o r t e d to t h e U n i t e d
States b y T e r m a n at Stanford, G o d d a r d at t h e Vin-
e l a n d Training S c h o o l in N e w Jersey, a n d Yerkes
at Harvard. M e n t a l t e s t i n g at that t i m e h a d c l o s e
connections with the eugenics movement. The
p r o b l e m s w e r e s e e n to b e t h o s e o f criminality,
p a u p e r i s m , i n d i g e n c e a n d inefficiency, all o f
t h e s e b e i n g a t h r e a t to a w e l l - o r d e r e d social
b o d y . T h e difficulty, h o w e v e r , lay in d e t e c t i n g
s u c h i n s i d i o u s characteristics. F o r w h i l s t a lay-
p e r s o n c o u l d d e t e c t t h e m o s t e x t r e m e a n d man-
ifest forms, h o w w a s o n e to identify t h e high-
g r a d e defectives? T h e i n e x p e r t o b s e r v e r c o u l d
easily m i s t a k e s u c h i n d i v i d u a l s as e n t i r e l y nor-
mal. Mental testing p r o d u c e d a " s o l u t i o n " in its
p r o v i s i o n o f a m e a n s o f s y s t e m a t i c a l l y identify-
ing t h e fine differentiation b e t w e e n i n d i v i d u a l s
across h u g e masses o f individuals. Statistics a n d
the normal curve supplied another important
i n g r e d i e n t in t h e f o r m o f a m e c h a n i s m for iden-
tifying d e v i a t i o n from t h e n o r m ( G a l t o n , 1883;
Hacking, 1975; Rose, 1979; Sutherland, 1972).
In the U n i t e d States t h e q u e s t i o n o f immigra-
tion c o n t r o l offered a suitable e x p e r i m e n t a l
g r o u n d for m e n t a l testing. T h e testing o f "the
g r e a t mass o f average i m m i g r a n t s " in 1912 h a d
r e v e a l e d that 83% o f t h e Jews, 80% o f t h e Hun-
garians, 79% o f t h e Italians, and 87% o f t h e Rus-
sians w e r e " f e e b l e - m i n d e d " . It is w e l l to recall
that f e e b l e - m i n d e d n e s s was a w a y o f qualifying
for d e p o r t a t i o n , and it a p p e a r s that m e n t a l test-
ing significantly i n c r e a s e d t h e n u m b e r o f d e p o r -
tations for this r e a s o n (Kamin, 1974, p. 16).
T h e first w o r l d w a r was a f u r t h e r p o w e r f u l fac-
t o r in e n c o u r a g i n g t h e s p r e a d o f m e n t a l testing.
T h e t e s t i n g p r o g r a m m e , t h e Alpha a n d Beta tests,
w a s a p p l i e d to s o m e t w o m i l l i o n m e n , p u b l i c
i n t e r e s t in s u c h tests b e i n g given a s t i m u l u s
w h e n it w a s r e v e a l e d that t h e " m e n t a l age" o f t h e
average w h i t g e draftee was o n l y 13 (Yerkes,
1921). E x t r a p o l a t i n g s u c h results to t h e e n t i r e
p o p u l a t i o n o f t h e U n i t e d States y i e l d e d a figure
o f s o m e 50 m i l l i o n m e n t a l l y d e f e c t i v e citizens!
( c i t e d in Castel et al., 1982, p.45). A l t h o u g h it
a p p e a r s that s u c h figures w e r e r a p i d l y r e v i s e d
d o w n w a r d , t h e y p r o v i d e d an i m p o r t a n t i m p e t u s
for t h e s p r e a d o f m e n t a l t e s t i n g to o t h e r areas o f
social life.
In Britain t h e w a r also was significant for t h e
d e v e l o p m e n t o f p s y c h o l o g i c a l testing. T h e influ-
e n c e o f t h e w o r k o f C.S.Myers is c r u c i a l here.
Q u e s t i o n s s u c h as fitness in r e l a t i o n to l e n g t h o f
w o r k i n g time, t h e s e l e c t i o n a n d training o f
industrial w o r k e r s , t h e e s t i m a t i o n o f " a c c i d e n t
p r o n e n e s s " as a p e r s o n a l attribute, all s h o w e d
t h e value in b e i n g a b l e to identify t h e p e r s o n a l
p s y c h o l o g i c a l c h a r a c t e r i s t i c s o f t h e individual.
M y e r s d e v i s e d a n d a p p l i e d s e l e c t i o n tests for
m e n using listening d e v i c e s for l o c a t i n g e n e m y
submarines, and worked on problems of the
" w a r n e u r o s e s " . Myers insisted o n t h e
p s y c h o l o g i c a l n a t u r e o f w h a t w a s called "shell
shock" and proposed and practiced
p s y c h o t h e r a p e u t i c m e t h o d s o f t r e a t m e n t . His
p o s i t i o n was e m p h a t i c :
The physiological factors involved in purely muscular
fatigue are now fast becoming negligible, compared with
the effects of mental and nervous fatigue, monotony,
want of interest, suspicion, hostility, etc. The psychologi-
cal factor must therefore be the main consideration of
industry and commerce in the future (Myers, 1920,
pp.V-VI ).
The psychological attributes of the person
w e r e , i n d e e d , to p r o v i d e t h e m o s t fruitful
g r o u n d for t h e e x p r e s s i o n o f c o n c e r n s to impli-
cate the individual within the objectives of the
e n t e r p r i s e and society.
THE FIRM AS A SITE IN THE CONSTRUCTION
O F THE GOVERNABLE PERSON
T h e a m b i g u i t i e s o f t h e w o r d efficiency ena-
b l e d it to o p e r a t e across a series o f d i s p e r s e d
strategies c o n c e r n e d w i t h m a n a g i n g t h e life o f
the person. These ranged from broad political
p l a t f o r m s to p s y c h o l o g i c a l a n d s o c i o l o g i c a l con-
cerns with individuals who deviated from
s p e c i f i e d n o r m s in a v a r i e t y o f ways. W e h a v e
a r g u e d that t h e s t a n d a r d c o s t i n g - b u d g e t i n g c o m -
 ACCOUNTINGAND THE CONSTRUCTIONOF THE GOVERNABLEPERSON
p l e x c a n b e v i e w e d i n t e r m s of s u c h a p r e o c c u -
pation. Standard c o s t i n g a n d b u d g e t i n g , how-
ever, w e r e i n t e n d e d to o p e r a t e w i t h i n a particu-
lar site - - that o f the firm. O u r c o n c e r n n o w is to
identify the w a y i n w h i c h s t a n d a r d c o s t i n g a n d
b u d g e t i n g , i n c o n j u n c t i o n w i t h scientific man-
a g e m e n t a n d i n d u s t r i a l psychology, c a m e to
define the firm as a v e r y p a r t i c u l a r k i n d of space.
It s h o u l d b e o n e i n w h i c h efficiency a n d rational-
ity w o u l d prevail. Such o b j e c t i v e s w o u l d b e
stated n o t just i n t e r m s of the overall o b j e c t i v e s
of the enterprise, b u t at the level of the activities
a n d u l t i m a t e l y m o t i v a t i o n s of the i n d i v i d u a l
e m p l o y e e . Initially the w o r k e r o n the factory
floor, a n d finally e v e r y e m p l o y e e , w o u l d c o m e
to b e identified i n t e r m s of their c o n t r i b u t i o n to
s u c h ends. This was to r e q u i r e a p r o c e s s of con-
tinual m o n i t o r i n g a n d observation. T h e s t a n d a r d
c o s t i n g a n d b u d g e t i n g c o m p l e x was, w e argue, a
c e n t r a l e l e m e n t in s u c h a process.
T h e c r e a t i o n of a s t a n d a r d c o s t i n g w i t h i n the
a c c o u n t i n g literature, a c c o u n t i n g historians
have a c k n o w l e d g e d , o w e s a c o n s i d e r a b l e d e b t
to that m o v e m e n t which, o r i g i n a t i n g i n the
U.S.A., b e c a m e k n o w n as "scientific manage-
m e n t " . A c c o r d i n g to S o l o m o n s ( 1968, p. 37), for
example, o n e c a n n o t read F. W. Taylor's p a p e r of
1903 o n Shop M a n a g e m e n t w i t h o u t n o t i c i n g
that it c o n t a i n s m a n y of the essential e l e m e n t s of
w h a t w o u l d later b e c o m e s t a n d a r d costing.
A c c o u n t i n g historians have d r a w n o u r attention,
also, to a n o t h e r l e a d i n g p r o p o n e n t of scientific
m a n a g e m e n t ideas, H a r r i n g t o n E m e r s o n (see,
e.g. Sowell, 1973, pp. 2 0 6 - 1 9 ; Epstein, 1978, pp.
9 0 - 1 2 0 ) . N o t o n l y did his w o r k o n efficiency
explictly envisage a r e q u i r e m e n t for s o m e t h i n g
akin to a s t a n d a r d c o s t i n g ( E m e r s o n , 1919, pp.
149-172), but apparently he exercised a strong
i n f l u e n c e o n the w r i t i n g s of G. Charter Harrison,
w h o s e 1930 b o o k has b e e n taken as an early
e x a m p l a r of a fully-integrated a n d rationalised
s t a n d a r d - c o s t i n g a n d b u d g e t i n g system (Sowell,
1973, pp. 2 2 0 - 7 0 ) .
Taking scientific m a n a g e m e n t a n d cost
a c c o u n t i n g as an i n t e r l i n k e d c o m p l e x , w e wish
to suggest an e x p l a n a t i o n as to the k i n d of pro-
ject to w h i c h it c o n t r i b u t e d . This was o n e in
w h i c h n o t i o n s of efficiency identified at the level
251
of the i n d i v i d u a l c o u l d c o m e to b e e x p r e s s e d in
m o n e y t e r m s a n d related to e x p e c t e d standards
a n d norms.
U n d o u b t e d l y , the b o d y of t h o u g h t a n d prac-
tice that b e c a m e k n o w n as scientific manage-
m e n t was e n m e s h e d w i t h i n that A m e r i c a n q u e s t
for n a t i o n a l efficiency to w h i c h w e have referred
in the p r o c e d i n g s e c t i o n (Haber, 1964; Hays,
1959). A c c o r d i n g to F. W. Taylor ( 1 9 1 3 , pp. 5 -
7), in the i n t r o d u c t o r y pages of his c e l e b r a t e d
Principles of Scientific Management, the task
was to a d v a n c e n a t i o n a l efficiency t h r o u g h
r e m e d i a t i o n of those vast wastes which, going
far b e y o n d the p o o r use a n d i n a d e q u a t e conser-
vation of n a t u r a l resources, s e c r e t e d t h e m s e l v e s
w i t h i n the dally actions of everyone. Roosevelt
had b e e n p r o p h e t i c , says Taylor, i n r e g a r d i n g the
c o n s e r v a t i o n of n a t u r a l r e s o u r c e s as n o m o r e
t h a n p r e l i m i n a r y to s u c h a w i d e r q u e s t i o n of the
efficiency of the p e r s o n and, thereby, of the
nation.
For Taylor the c o r e of the issue was that,
w h e r e a s wastes of n a t u r a l r e s o u r c e s have an easy
visibility, wastes of h u m a n r e s o u r c e s are h i d d e n :
We can see our forests vanishing, our water-powers
going to waste, our soil being carried by floods into the
sea. We can see and feel the waste of material things.Awk-
ward, inefficient,or ill-directed movements of men, how-
ever, leave nothingvisible or tangible behind them. Their
appreciation calls for an act of memory, an effort of the
imagination. And for this reason, even though our daily
loss from this source is greater than from our waste of
material things, the one has stirred us deeply, while the
other has moved us but little ( Taylor, 1913, pp. 5-6 ).
Scientific m a n a g e m e n t w o u l d take u p o n itself
the p r o j e c t of r e p l a c i n g that vagueness a n d o t h e r
acts of the i m a g i n a t i o n w i t h exact scientific
k n o w l e d g e of the e x t e n t of the wastes caused
t h r o u g h i n a d e q u a t e h u m a n a c t i o n a n d social
organisation. And, it w o u l d also set itself the task
of their systematic elimination.
W e are n o t c o n c e r n e d h e r e to c o n t e s t Taylor's
claims to scientificity. It is, rather, w i t h the way
in w h i c h s u c h claims f u n c t i o n e d that w e are
interested. Lay k n o w l e d g e s and practices of all
kinds, s u c h as trades, crafts a n d traditional prac-
tices, w e r e to b e p l a c e d u n d e r s u s p i c i o n as to the
wastefulness of their m o d e s of operation. As the
 252 PETERMILLERand TED O'LEARY
above q u o t e shows, Taylor was in little d o u b t
that such wastes w e r e vast. G i l b r e t h also w o u l d
illustrate the s h o c k i n g waste t h r o u g h a w k w a r d
a n d b l u n d e r i n g m o v e m e n t s in a trade as old as
bricklaying ( Drury, 1915, pp. 1 0 8 - 1 1 3 ) . Taylor
himself w o u l d p o i n t to the n e e d for a s c i e n c e of
such m u n d a n e tasks as shovelling and pig-iron
handling, u r g e n t l y to replace haphazard m o d e s
of work.
This r e n d e r i n g suspicious of the i n a d e q u a c y
of lay k n o w l e d g e s a n d practices is important. It
h e l p e d to legitimate the a t t e m p l t of scientific
m a n a g e m e n t to appropriate the work-life of the
individual with a v i e w to i n t e r v e n i n g in it in
o r d e r to o p t i m i s e its efficiency. A r o u n d the pil-
lars of efficiency, the n e e d to eliminate wastes,
and the assuredness of s c i e n c e over and a b o v e
informal knowledges, scientific m a n a g e m e n t
sought to establish for itself a right to interfere in
p e o p l e ' s lives. This right was e v e n t u a l l y to b e
taken over b y an army of t e c h n i c i a n s of the social
a n d e c o n o m i c life of the enterprise.
Scientific m a n a g e m e n t reflects the almost
messianic role for the e n g i n e e r i n g profession en-
visaged by some of its leaders in the U.S.A.:
To attain the high efficiency of the atomic energy of the
fish, the high mechanical efficiency of the bird, the high
lighting efficiencyof the firefly,is not an ethical or finan-
cial or social problem, but an engineering problem; and
to the engineering profession, rather than to any other,
must we look for salvationfrom our distinctly human ills,
so grievously and pathetically great (Emerson, 1919, p.
5).
C o u p l e d w i t h its r e j e c t i o n of the m e r i t of lay
k n o w l e d g e a n d practices, the scientific manage-
m e n t literature also reveals a belief i n the possi-
bility of actually i m p r o v i n g the efficiency of the
person. It reflects a p h i l o s o p h y w h i c h refuses to.
accept that greatness and success are solely acci-
d e n t s of birth. "In the future", says Taylor ( 1913,
pp. 6 - 7 ) ,
it will be appreciated that our leaders must be trained
right as well as born right, and that no great man can
(with the old system of personal management) hope to
compete with a number of ordinary men who have been
properly organized so as efficientlyto cooperate.
In the later years of his career Taylor envis-
aged that scientific m a n a g e m e n t w o u l d c o n q u e r
the e n t i r e social space. W h i l e his proposals origi-
n a t e d i n the factory:
It is hoped, however, that it will be clear.., that the same
principles can be applied with equal force to all social
activities: to the management of our homes; the manage-
ment of our farms;the management of the business of our
tradesmen, large and small; of our churches, our philan-
thropic institutions, our universities, and our gov-
ernmental departments (Taylor, 1913, p. 8).
To achieve such an o b j e c t i v e w i t h i n the enter-
prise m e a n t c o n s t r u c t i n g n o r m s or standards of
w h a t efficiency m i g h t mean. I m p l a n t e d w i t h i n
the task p e r f o r m a n c e of the w o r k e r these w e r e
to p r o v i d e a basis for o b s e r v i n g deviations from
expectations. It is in this c o n t e x t that w e can
appreciate the i n t e r s e c t i o n of scientific manage-
m e n t and cost a c c o u n t i n g . For it s e e m s that from
an early date, scientific m a n a g e m e n t w r i t e r s had
r e c o g n i s e d the p o t e n t i a l of an efficiency mea-
sure g r o u n d e d in m o n e y , in costs saved and pro-
fits earned. As early as 1886, for example, H. R.
T o w n e , t h e n p r e s i d e n t of the A m e r i c a n Society
of Mechanical Engineers a n d a m e n t o r of
Taylor's, had w a n t e d to c o n s t r u e the e n g i n e e r as
an e c o n o m i s t ( T o w n e , 1886). For T o w n e , the
true significance of an e n g i n e e r ' s efforts to pro-
m o t e efficiency, s o m e special cases of vital
n a t i o n a l security apart, o u g h t u l t i m a t e l y to b e
j u d g e d in t e r m s of e c o n o m i c s . Efficiencies w e r e
d e e m e d true o n l y if they c o u l d u l t i m a t e l y b e
s h o w n to b e so in t e r m s of costs saved. O n e finds
H a r r i n g t o n E m e r s o n ( 1 9 1 9 ) e c h o i n g these sen-
t i m e n t s later, arguing a n e e d for e n g i n e e r s and
a c c o u n t a n t s to collaborate towards the mean-
ingful e x p o s i t i o n of inefficiencies. It is hardly
surprising, then, that e n g i n e e r s associated w i t h
scientific m a n a g e m e n t s h o u l d have c o m e to
o c c u p y such a c e n t r a l role in the c o n s t r u c t i o n of
standard costing.
T h e w o r k of G. Charter Harrison p r o v i d e s a
way of identifying this b r i d g e w h i c h was estab-
lished b e t w e e n e n g i n e e r i n g and a c c o u n t i n g .
Harrison's claims to title span the professional
b o d i e s of industrial e n g i n e e r i n g , c h a r t e r e d
a c c o u n t a n c y a n d costs a c c o u n t a n c y . To h i m has
b e e n a t t r i b u t e d the w r i t i n g of o n e of the earliest
 ACCOUNTINGAND THE CONSTRUCTIONOF THE GOVERNABLEPERSON
full art i cu l at i o n s o f standard costing, a w o r k o f
w h i c h S o l o m o n s w o u l d say in 1968 that it w a s
still part o f t h e c u r r e n t literature. H a r r i s o n takes
f r o m E m e r s o n ( 1 9 1 9 ) his c o n c e p t o f t h e funda-
m e n t a l d e f e c t o f e x i s t i n g c o s t a c c o u n t i n g prac-
tices. P r i o r to its i n t e r s e c t i o n w i t h scientific
management, cost accounting's prime defect
was that it had:
Failed most utterly and dismally to achieve what should
be the primary purpose of any cost system, namely, to
bring promptly to the attention of the management the
existence of preventable inefficiencies so that steps
could be taken to eliminate these at the earliest possible
moment (Harrison, 1930, p. 8).
In r e c t i f y i n g this d e f i c i e n c y c o s t a c c o u n t i n g
w o u l d e x p a n d its d o m a in . It w o u l d s u p p l y t h e
e n g i n e e r s and t h e i r scientific m a n a g e m e n t w i t h
a facilitative t e c h n o l o g y for e x p r e s s i n g t h e i r
n o r m s and standards in t e r m s o f m o n e y . T h e
e arl i er c o n c e r n o f c o s t a c c o u n t i n g w i t h
t h e r e g i s t r a t i o n o f th e m o v e m e n t s o f w o r k e r s
and materials as t h e y " a t t a c h e d " t h e m s e l v e s to
p r o d u c t i o n (Epstein, 1978, pp. 9 0 - 1 2 0 ) w o u l d
b e a u g m e n t e d . This e x p a n s i o n w o u l d r e f l e c t a
c o n c e p t o f t h e w o r k e r as a l m o s t c e r t a i n l y ineffi-
cient, n e e d i n g to b e e n m e s h e d w i t h i n a
routinely-applicable calculative apparatus
w h i c h standard c o s t i n g w o u l d p r o v i d e .
This alliance o f c o s t a c c o u n t i n g w i t h t h e
e n g i n e e r s was i m p o r t a n t in t h e c o n s t r u c t i o n o f
n o r m s o f efficfency. It p r o v i d e d a w a y for m a k i n g
t h e individual w o r k e r r o u t i n e l y k n o w a b l e and
a c c o u n t a b l e in t e r m s o f w a s t e d actions. And sci-
entific m a n a g e m e n t w a s s u c h an individualising
e n d e a v o u r p a r excellence. It was a m a t t e r o f
c e a s i n g to treat o f w o r k e r s o n l y in t h e a n o n y m -
o u s t e r m s o f groups, classified by tr a d e o r skill.
A t t e n t i o n was to b e paid instead to t h e perfor-
m a n c e o f e a c h individual w o r k e r . T a y l o r i s m
w o u l d insist that e a c h w o r k e r b e s in g l e d out, to
b e r e w a r d e d o r p u n i s h e d o n t h e basis o f his o r
h e r individual p e r f o r m a n c e (Taylor, 1913, p.
121; Haber, 1964, p. 23). W h e n o n e c e a s e s to
deal w i t h m e n in large gangs o r groups, says
Taylor ( 1 9 1 3 ) ,
and proceeds to study each workman as an individual, if
253
the workman fails to do his task, some competent teacher
should be sent to show him exactly how his work can
best be done, to guide, help, and encourage him, and, at
the same time, to study his possibilities as a workman (pp.
69-70).
But o v e r w h o m was this individualisation t o
b e e x e r c i s e d ? It is c l e a r that l e a d e r s o f t h e scien-
tific m a n a g e m e n t m o v e m e n t h ad e n v i s a g e d that
their principles could embrace everyone, with
n o task at all t o o l o w l y o r i m p o r t a n t to escape.
Both p h y s i o l o g i c a l and m e n t a l w o r k w e r e to b e
e m b r a c e d . But d e s p i t e that h o p e, scientific man-
a g e m e n t w o u l d r e m a i n e n t r a p p e d at t h e l ev el o f
fairly m u n d a n e , p h y s i o l o g i c a l tasks ( D r u r y ,
1915). Its first-hand t e c h n o l o g i e s for c o n s t r u c t -
ing norms, s u c h as t h e t i m e and m o t i o n study,
w e r e hardly e q u i p p e d for a n y t h i n g m o r e .
This is p r e c i s e l y w h e r e standard c o s t i n g again
b e c o m e s significant. T o g e t h e r w i t h b u d g e t i n g it
w o u l d s e e m to h a v e p r o v i d e d an i m p o r t a n t
e s c a p e route, a l l o w i n g t h e p r i n c i p l e s o f standar-
dising and n o r m a l i s i n g to m o v e away f r o m t h e
f act o r y floor. At least in p r i n c i p l e t h e y c o u l d
n o w e m b r a c e e v e r y o n e w i t h i n t h e firm. Harri-
son's ( 1 9 3 0 ) standard c o s t i n g t e x t offers, in t h e
t e r m s o f scientific m a n a g e m e n t , a rationale for
s u c h an e n d e a v o u r :
We have increased the efficiency of the average man
because we have applied the principles of scientific man-
agement to his work...
Our accounting methods today are the best evidence
of our failure to apply scientific management principles
to the development of our executives. For the five-dol-
lars-a-day man our accounting records clearly set up the
objective and the accomplishment in comparision there-
with. But when we come to our records for executives
what do we find?... Of accomplishment, it is true that our
profit and loss account tells the story of the ultimate
result, but of executive objectives shown in relation to
the accomplishment, our records are silent... (p. 27-
28).
Standard c o s t i n g had already e n m e s h e d t h e fac-
t o r y w o r k e r w i t h i n a c a l c u l u s o f efficiency. It
s h o u l d n o w m o v e on, b y m e a n s o f t h e b u d g e t o r
profit plan, to d o t h e s a m e for e x e c u t i v e s .
No man can realize his fullest possibilities, whether he be
a five-dollar-a-day trucker in the factory or a five-
 254 PETERMILLERand TED O'LEARY
thousand-dollar-a-year executive, unless he has before
him at all times ( 1) a carefully determined objective, (2)
records showing the relationship between accomplish-
ment and this objective, and (3) if he has failed to realise
the objective, information as to the causes of such failure.
Standard costs furnish the factory superintendent with
this information as regard factory costs, and standard pro-
fit or budget systems give the executive this information
as regards profits (Harrison, 1930, pp. 27-28).
The e n g i n e e r s (e.g. Emerson, 1 9 1 9 ) had envis-
aged that standard c o s t i n g w o u l d b e n o m o r e
t h a n an a p p e n d a g e to their p r i n c i p l e s of scien-
tific m a n a g e m e n t . It w o u l d b e a c o n v e n i e n t cal-
culative apparatus in r e s p e c t of the c o r e data the
e n g i n e e r w o u l d supply. But a c c o u n t i n g ' s facility
to o p e r a t e in t e r m s of m o n e y effected a surpris-
ing m e t a m o r p h o s i s . By c o n c e n t r a t i n g u p o n an
e n d - r e s u l t of m o n e y , a c c o u n t i n g c o u l d standar-
dise efficiency for a m u c h larger group. I n the
case of m o r e " m e n t a l " type of work, it c o u l d sim-
ply express e x p e c t a t i o n s in t e r m s of a m o n e y
o u t c o m e , leaving u n c e r t a i n the q u e s t i o n of the
means.
A line of c o n t i n u i t y can, w e suggest, be estab-
lished from scientific m a n a g e m e n t to standard
costing to budgeting. It is a c o n t i n u i t y w h i c h
c e n t r e s o n the n o r m , o n s u r r o u n d i n g the p e r s o n
w i t h e x p e c t i o n s of behaviour. While scientific
m a n a g e m e n t m i g h t s e e m to have faded into
e x t i n c t i o n , it has n o t d o n e so w i t h o u t leaving a
significant residue, in standard c o s t i n g and
budgeting. If Taylorism and scientific manage-
m e n t m o r e generally had envisaged the enter-
prise as machine-like, cost a c c o u n t i n g , t h r o u g h
the b u d g e t and b u d g e t a r y control, w o u l d pro-
vide a m e a n s for r e n d e r i n g that image opera-
tional. M o n e y w o u l d , as it were, b e c o m e the
c o m m o n c u r r e n c y w i t h w h i c h to integrate and
aggregate the activities of individuals as c o m p o -
nents. For b o t h b r a i n - w o r k a n d physical-work,
i n d e e d for every a c c o u n t a b l e p e r s o n w i t h i n the
firm, standards and deviations t h e r e f r o m
r e c k o n e d in m o n e y c o u l d r e c o r d the indi-
vidual's c o n t r i b u t i o n s , and also their failure to
c o n t r i b u t e , to the e n d s of the m a c h i n e as a
whole. At h a n d was a calculative apparatus
t h r o u g h w h i c h d e e p q u e s t i o n s of responsibility
c o u l d r o u t i n e l y be p r e s s e d u p o n individuals.
But the scientific m a n a g e m e n t - - c o s t a c c o u n t -
ing c o m p l e x was n o t t h e o n l y o n e in the early
d e c a d e s of the c e n t u r y to c o n c e r n itself w i t h the
efficiency of the p e r s o n and their c o n t r i b u t i o n
to collective efficiency. While standard costing
a n d b u d g e t i n g p r o v i d e d the lens t h r o u g h w h i c h
e n g i n e e r s and m a n a g e r s m i g h t gaze at w o r k e r s
a n d m a n a g e r s a n d their inefficiencies, others
w e r e also i n t e r e s t e d to join in the process of
observation. Specifically, these w e r e the early
industrial psychologists. A central figure h e r e
was Hugo M u n s t e r b e r g . He f o r m u l a t e d the task
of industrial p s y c h o l o g y as follows:
Our aim is to sketch the outlines of a new science which
is to intermediate between the modern laboratory
psychology and the problems of economics: the
psychological experiment is systematically to be placed
at the service of commerce and industry (Munsterberg,
1913, p. 3).
What was n o w b e i n g addressed was h o w the
p s y c h e of the w o r k e r m i g h t b e k n o w n and man-
aged, so as to serve efficiency o n an e v e n g r a n d e r
scale than the p r o m i s e of the e n g i n e e r s a n d the
cost accountants. T h e industrial psychologists
c a n be seen as a further g r o u p that w o u l d i n v a d e
the firm, g e n e r a t i n g a n d applying a k n o w l e d g e of
the individual. W i t h this d e v e l o p m e n t c o n c e r n s
of the m i n d as well as of the b o d y w o u l d b e intro-
d u c e d into the p r o j e c t of e n m e s h i n g the indi-
vidual w i t h i n n o r m s of e c o n o m i c p e r f o r m a n c e .
T h e r e seems little d o u b t that the early indust-
rial p s y c h o l o g y literature shares m u c h in orien-
tation w i t h the scientific m a n a g e m e n t - c o s t
a c c o u n t i n g c o m p l e x w e have just looked at.
Industrial p s y c h o l o g y w o u l d also lay claim to
scientific status. And it w o u l d do so in a m o r e
careful m a n n e r t h a n Taylorism. Relative to the
"helpless psychological dilettantism" of others
w h o w o u l d seek to m o t i v a t e the worker,
( M u n s t e r b e r g , 1913, p. 56), it w o u l d t h e r e b y
seek to establish for itself a privileged position.
N o w that it had m o v e d b e y o n d philosophical or
theological speculation, p s y c h o l o g y c o u l d offer
a practical c o n t r i b u t i o n to the goals of civilisa-
tion ( M u n s t e r b e r g , 1913). It w o u l d establish a
laboratory w i t h i n w h i c h to place the p e r s o n as a
s u b j e c t u p o n w h o m e x p e r i m e n t s c o u l d b e con-
 ACCOUNTINGAND THE CONSTRUCTIONOF THE GOVERNABLEPERSON
d u c t e d . This w o u l d place it alongside the n a t u r a l
sciences. Its p e r i p a t e t i c l a b o r a t o r y w o u l d b e the
factory, i n d u s t r i a l psychologists m o v i n g freely
from the o n e to the o t h e r w i t h great ease (Myers,
1920).
I n d u s t r i a l p s y c h o l o g y w o u l d share w i t h scien-
tific m a n a g e m e n t a c o n c e n t r a t i o n u p o n the indi-
vidual. I n d e e d as M u n s t e r b e r g ( 1 9 1 3 ) p o i n t s
out, the e n t i r e p r o j e c t of an applied psychology,
w i t h i n w h i c h industrial p s y c h o l o g y c a n b e sited,
had b e c o m e possible o n l y w h e n psychologists
c a m e to r e c o g n i s e the i m p o r t a n c e of individual
differences. T h e q u e s t for universal laws of the
m i n d , for all of its i m p o r t a n c e , had d e n i e d
psychologists the possibility of b r i n g i n g their
skills to b e a r u p o n the practical w o r l d of affairs:
In practical life we never have to do with what is com-
mon to all human beings, even when we are to influence
large masses; we have to deal with personalities whose
mental life is characterised by particular traits of national.
ity, or race, or vocation, or sex, or age, or special
interests, or other features by which they differ from the
average mind which the theoretical psychologist may
construct as a type (Munsterberg, 1913, p. 9).
It is the i n d i v i d u a l w h o m the psychologist is to
help. His or h e r particular aptitudes or skills are
to b e e x p e r t l y ascertained, so that the
psychologist c a n r e c o m m e n d a p e r s o n - t a s k fit
that is c o n g r u e n t w i t h individual w e l l - b e i n g a n d
the e x i g e n c i e s of efficiency (see e.g. Myers,
1920). A n d m o t i v a t i o n a l difficulties in task per-
f o r m a n c e are to b e s e e n as s t e m m i n g from m e n -
tal traits w h i c h the n o n - e x p e r t c a n n o t effec-
tively diagnose. O n l y b y s u c h i n t e r v e n t i o n s of
the p s y c h o l o g i s t will t h e r e b e avoided that
which
social statistics show with an appalling clearness, what a
burden and what a danger to the social body is growing
from the masses of those who do not succeed and who by
their lack of success become discouraged and embitted
(Munsterberg, 1913, p. 35).
Finally, the early industrial psychologists
share w i t h Taylorism an appeal to efficiency as a
t r a n s c e n d e n t purpose. T h e y too, it seems, w a n t
their e n d e a v o u r p l a c e d b e y o n d the reach of poli-
tics:
255
psychotechnics does not stand in the services of a party,
but exclusively in the service of civilisation (Munster-
berg, 1913, p. 20).
To any p r o j e c t of e n m e s h i n g the individual
w i t h i n n o r m s of efficiency, an e x p e r t psycholog-
ical s e l e c t i o n process, as well as psychological
i n t e r v e n t i o n in i n t e r p r e t i n g task p e r f o r m a n c e
variables, is d e c l a r e d indispensable. Later, as w e
shall see, the b o d y of psychological literature
w h i c h w o u l d e m e r g e in altered form from these
b e g i n n i n g s w o u l d significantly i n t e r s e c t w i t h
b u d g e t i n g a n d standard costing. In so doing, it
w o u l d help to b r i n g into particular relief the
c o m p l e x individuality of the p e r s o n w i t h i n the
firm. This c o n s t r u c t has, w e shall suggest, rein-
forced a rationale for " b e h a v i o u r a l scientists" to
intensify their a t t e n t i o n to m a n a g i n g the organi-
sationally d y s f u n c t i o n a l p r o p e r t i e s of the per-
son.
A GESTURE TOWARDS THE PRESENT
I n so far as the c o n c e r n of this p a p e r is histori-
cal w e w o u l d like it to b e read as a "history of the
present". By this w e m e a n an a t t e m p t to identify
the dispersed e v e n t s w h i c h i n t e r s e c t to establish
o u r c o n t e m p o r a r y , a n d often u n q u e s t i o n e d ,
rationales. This far, h o w e v e r , w e have b e e n
p o i n t i n g largely to n o t i o n s a n d practices w h i c h
have b e e n s u p p l a n t e d or significantly redefined.
W e w o u l d like n o w to try schematically to iden-
tify s o m e of the r e l o c a t i o n s a n d shifts w h i c h
have o c c u r r e d in m o r e r e c e n t times. W e c a n n o t
h o p e in any w a y to d o justice to the r i c h n e s s of
the i n t e r v e n i n g period. It is simply s o m e of the
lines w h i c h e m e r g e o u t of a n d following the
p e r i o d 1 9 0 0 - 1 9 3 0 to w h i c h w e wish to refer.
This is u n d e r t a k e n w i t h a v i e w to locating the
c o n t i n u i t i e s b e t w e e n the p r e s e n t a n d the p e r i o d
w e have addressed above. It also entaills regis-
t e r i n g the effect and i m p l i c a t i o n s of the shifts
w h i c h have o c c u r r e d in the a c c o u n t i n g litera-
ture.
O n e issue w h i c h interests us particularly in
this c o n t i n u i t y of c o n c e r n s , c o u p l e d w i t h a rede-
finition of t e r m s a n d objectives, is the i n t r o d u c -
256 PETERMILLERand TED O'LEARY
t i o n of the n o t i o n of the "behavioural" into
a c c o u n t i n g (Devine, 1960; Bedford and
Dopuch, 1961; Ashton, 1983). O u r suggestion is
that this p r o d u c e d a m o d e r n i s a t i o n of the
a c c o u n t i n g c o m p l e x , b u t o n e w h i c h entailed a
significant c o n t i n u i t y w i t h the c o n c e r n to
e n m e s h the individual w i t h i n a c o m p l e x w e b of
calculative practices. It is n o t that a c c o u n t i n g
simply e x p a n d s its d o m a i n t h r o u g h the intro-
d u c t i o n of the b e h a v i o u r a l w i t h i n its sphere. It is
rather a r e d e f i n i t i o n of the t e r m s a c c o r d i n g to
w h i c h the a c c o u n t i n g c o m p l e x is u n d e r s t o o d
that is at issue. This is a c h i e v e d t h r o u g h incor-
p o r a t i n g w i t h i n the d o m a i n of a c c o u n t i n g a
c h a n g e d n o t i o n of the person. The c h a n g e con-
c e r n s the a t t r i b u t i o n to the individual of a com-
p l e x set of m o t i v e s a n d frustrations, a p o t e n t i a l
hostility to the budget, for example. The indi-
vidual is v i e w e d as a m e m b e r of informal groups
outside, from w h i c h c a n b e d r a w n c o n s i d e r a b l e
s u p p o r t a n d into w h i c h t h e r e is always the
d a n g e r that h e or she may withdraw. In recogni-
tion of such a d a n g e r a c c o u n t i n g comes, w e
argue, to redefine its territory b y i n c l u d i n g
w i t h i n its legitimate s p h e r e of o p e r a t i o n pre-
cisely these c o n c e r n s .
A s e c o n d issue, and o n e w e have referred to
already, c o n c e r n s the level at w h i c h the redefin-
ition takes place. Stated baldly, and as a question,
the issue is this: is o u r c o n c e r n h e r e simply w i t h
discourses? The a n s w e r is clear. The r e d e f i n i t i o n
of a c c o u n t i n g t h r o u g h the i n t r o d u c t i o n of the
b e h a v i o u r a l was carried o u t in r e l a t i o n to very
real practical problems. O n e of the p i o n e e r i n g
studies in this field (Argyris, 1 9 5 2 ) was i n d e e d
u n d e r t a k e n as a r e p o r t to the C o n t r o l l e r s h i p
F o u n d a t i o n itself. C o n c e r n e d w i t h "the p o i n t at
w h i c h m e n a n d b u d g e t s m e e t " the f o r e w o r d
d e c l a r e d clearly the aims of the report:
we hope the report sheds light on one of the most basic
"Control" questions faced by management - - how to
gain acceptance - - the real acceptance of standards and
goals (Argyris, 1952, foreword).
T h e starting p o i n t for the r e t h i n k i n g of a c c o u n t -
ing t h r o u g h the i n t r o d u c t i o n of the b e h a v i o u r a l
was a c o n c r e t e p r o b l e m . T h e f o r m u l a t i o n of the
terms of such an issue was effected, h o w e v e r ,
w i t h i n discourse. It c o u l d n o t b e otherwise. T h e
p o i n t w e w o u l d d r a w from this is that i m p o r t a n t
practical issues p r o d u c e the c o n d i t i o n s u n d e r
w h i c h c e r t a i n p r o b l e m s c o m e to b e expressed.
T h e y do not, h o w e v e r , d e t e r m i n e the t e r m s
a c c o r d i n g to w h i c h they are expressed. O u r con-
c e r n here is w i t h the latter.
A third p o i n t relates to the n o t i o n s of rational-
ity and efficiency, and the e x t e n t to w h i c h the
c h a n g e s w e p o i n t to r e p r e s e n t a c o n t i n u a t i o n of
such a c o n c e r n . O u r a n s w e r w o u l d b e emphati-
caUy affirmative. Yet w e w o u l d again wish to
d r a w a t t t e n t i o n to the redefinitions w h i c h
occur. Rationality itself c o m e s to b e prob-
lematised. All individuals c o m e to b e v i e w e d as
decision-makers, albeit in different respects.
Rationality r e m a i n s as an issue of the relation
b e t w e e n p e r s o n a l and collective efficiency, yet
it is c o n s t r u c t e d a c c o r d i n g to a different c o n c e p -
t i o n of the p e r s o n and a revised n o t i o n of the
organisation.
O u r i n t e r p r e t a t i o n of the i n t r o d u c t i o n of the
b e h a v i o u r a l into a c c o u n t i n g entails a slight
detour. This is t h r o u g h the psychological a n d
sociological f o r m u l a t i o n of an interest in the
h u m a n relations aspect of organisations d u r i n g
the s e c o n d q u a r t e r of the t w e n t i e t h c e n t u r y .
Central here are the H a w t h o r n e investigations
w h i c h e x t e n d e d for five years from 1927 u n t i l
1932 (Mayo, 1933; W h i t e h e a d , 1938; Roethlis-
b e r g e r & Dickson, 1939). T h e familiarity of the
various c o m m e n t a r i e s o n the H a w t h o r n e
researches entails the possible d a n g e r that w e
b e c o m e i n u r e d to the n o v e l t y of their i n v e n t i o n
of an art of g o v e r n m e n t for the enterprise. This
w o u l d b e u n f o r t u n a t e b e c a u s e the reformula-
tion they p r o d u c e d in s u c h a p r o j e c t was pro-
found. The effect of the H a w t h o r n e researches
was to e n a b l e a c o n c e r n to d e v e l o p w i t h the life
of the p e r s o n in all its d i m e n s i o n s as a p r o b l e m
for the collective e n d s of the total organisation.
Roethlisberger & Dickson express this a m b i t i o n
clearly:
In terms of the concept of an industrial organization as a
social system many of the human problems of manage-
ment can be reformulated. A traditional statement of
these problems frequently distorts the actual human situ-
ation in the industrial plant. The workers, supervisors, or
 ACCOUNTINGAND THE CONSTRUCTIONOF THE GOVERNABLEPERSON
executives are often considered apart from their social
setting and personal history and are treated as essentially
"economic men". Simple cause and effect analysis of their
behaviour is substituted for the richer situational context
in which their lives are lived and in which the relation of
mutual interdependence obtains (Roethlisberger &
Dickson, 1939, p. 569).
T h e e m p h a s i s w h i c h e m e r g e s is o n c o l l e c t i v e
goals and m u t u a l i n t e r d e p e n d e n c e o f t h e v a r i o u s
c o m p o n e n t parts o f t h e e n t e r p r i s e . This w a s to
entail a r e c o n c e p t u a l i s a t i o n o f w h a t o n e c o u l d
e x p e c t f r o m b u d g e t s a n d o t h e r f o r m s o f standar-
disation o f m a n a g e r i a l e x p e c t a t i o n s . O n e c o u l d
n o l o n g e r base b u d g e t s and p e r f o r m a n c e stan-
dards solely o n an a s s u m p t i o n o f rational
e c o n o m i c p e r s o n a l m o t i v a t i o n s . T o d o so risked
producing severe unintended consequences
a n d resistances. In p l a c e o f s u c h l i m i t e d v i e w s
m u s t b e p u t t h e p e r s o n c h a r a c t e r i s e d b y senti-
ments, to w h o m m a n a g e r i a l p o l i c i e s m u s t b e
a d d r e s s e d in t e r m s o f t h e i r m e a n i n g s to that per-
so n in t h e i r p a r t i c u l a r p e r s o n a l and social cir-
c u m s t a n c e s . T h e c o n c e r n w i t h efi$ciency and
rationalisation m u s t b e a r t i c u l a t e d w i t h an
u n d e r s t a n d i n g o f t h e possibilities o f s e c u r i n g
c o o p e r a t i o n and a c c e p t a n c e o f m a n a g e r i a l goals.
A negotiative conception of management should
b e s u b s t i t u t e d for o n e b a s e d o n t h e c r u d e impos-
ition o f standards. T h e c o n c e p t o f m a n a g e r i a l
c o n t r o l w o u l d h a v e to b e r e d e f i n e d so as to
i m p l i c a t e individuals w i t h i n t h e c o l l e c t i v e ob-
j e c t i v e s o f t h e e n t e r p r i s e . T o a c h i e v e this o n e
w o u l d h a v e to a t t e n d to a q u i t e different d i m e n -
sion o f t h e e n t e r p r i s e to that p r e v i o u s l y :
A great deal of attention has been given to the economic
function of industrial organization. Scientific controls
have been introduced to further the economic purposes
of the concern and of the individuals within it. Much of
this advance has gone on in the name of efficiency or
rationalization. Nothing comparable to this advance has
gone on in the development of skills and techniques for
securing cooperation, that is, for getting individuals and
groups of individuals working together effectively and
with satisfaction to themselves (Roethlisberger &
Dickson, 1939, pp. 552-553).
E c o n o m i c e n d s are m e d i a t e d t h r o u g h p e r s o n a l
and social s e n t i m e n t s . O n e c a n n o t h o p e to
a c h i e v e t h e f o r m e r if t h e latter are ignored. O n e
257
m u s t c o n s t r u c t a w o r k si t u at i o n w h i c h is also a
social situation. T h r o u g h this o n e will b e able to
i m p l i c a t e t h e p e r s o n a l d i m e n s i o n s o f t h e life o f
the w o r k e r within the e c o n o m i c objective of the
organisation:
Where the work situation is such that it does not allow
the worker's preoccupations or attention to be socially
expressed or directed by conversation or by other
activities, an ideal setting is created for the development
of morbid preoccupations. He is likely to spend his time
brooding about his personal problems or his relations
with his co-workers and supervisors. Where the social
situation is such that it does allow for the social expres-
sion of preoccupation, much brooding about factors inci-
dental to the worker's personal history can be alleviated
(Roethlisberger & Dickson, 1939, pp. 573-574).
N o w of course the c o n c e r n with the personal
d i m e n s i o n o f t h e life o f t h e w o r k e r w as a m u c h
m o r e c o m p l e x issue than t h e s e b r i e f r e m a r k s
suggest. T h e i r r e l e v a n c e for o u r c o n c e r n s h er e,
h o w e v e r , are in t e r m s o f t h e w a y s u c h t h e m e s
p r o v i d e d a basis for t h e r e d e f i n i t i o n o f a c c o u n t -
ing w h i c h w as to o c c u r in t h e third q u a r t e r o f
this century. Put simply, t h e r e d i f i n i t i o n t o o k
place through the incorporation (within the
d o m a i n o f a c c o u n t i n g ) o f just t h e s e p e r s o n a l and
h u m a n r el at i o n s c o n c e r n s .
Argyris ( 1 9 5 2 ) is t h e c l e a r e s t early formula-
tion o f s u c h a c o n c e r n . T h e F o r e w o r d to Argyris'
st u d y r e m i n d s us o f t h e d e f e c t s o f a c c o u n t i n g
t e c h n i q u e s as p r e v i o u s l y c o n c e i v e d . S o m e o f
these, it is argued:
have reached the ultimate state of dwelling within an
electronic tube and emerging only to shake a mechanical
finger at erring human beings (Argris, 1952, foreword).
T h e p o i n t o f Argyris' st u d y was that this c o n c e p -
t i o n o f a c c o u n t i n g m u s t b e drastically revised.
H e d r e w a t t e n t i o n to " w h a t p e o p l e think o f
b u d g et s", distinguishing b e t w e e n "budget
p e o p l e " , "factory s u p e r v i s o r s " and " e m p l o y e e s "
o r " f a c t o r y p e o p l e " . T h e p o i n t o f this categorisa-
t i o n w as to d e m o n s t r a t e that different g r o u p s o f
p e o p l e had different v i e w s o n budgets, o n h o w
t h e y w e r e u s e d and w h y t h e y o f t e n w e r e n o t
met. T h e n e g a t i v e c o n s e q u e n c e s o f b u d g e t s
w h i c h w e r e simply imposed on people w e r e
i d e n t i f i e d cl ear l y by Argyris. P r e s s u r e to m e e t
 258 PETERMILLERand TED O'LEARY
targets laid d o w n in b u d g e t s risked i n c r e a s i n g
tension, r e s e n t m e n t , and suspicion. This w o u l d
o f t e n lead to t h e f o r m a t i o n o f g r o u p s as a w a y o f
c o m b a t t i n g m a n a g e m e n t pressure. T h e real
danger, h o w e v e r , lay in t h e l o n g e r term. In t h e
s h o r t t e r m m a n a g e m e n t m a y r e c o g n i s e th e dan-
gers and r e d u c e t h e pressure. In p r i n c i p l e t h e
g r o u p s h o u l d disappear. H o w e v e r t h e c o n c l u -
sion to w h i c h Argyris c a m e was that t h e r e was a
t e n d e n c y for t h e g r o u p to remain. If it r e m a i n e d ,
it w o u l d c o n t i n u e to cause p r o b l e m s w e l l after
th e initial irritant had b e e n r e m o v e d .
T h e r e m e d y p r o p o s e d was t h e i n t r o d u c t i o n o f
a n e g o t i a t i v e politics for t h e g o v e r n m e n t o f th e
e n t er p ri s e. A n u m b e r o f t e r m s c a m e to o p e r a t e
w i t h i n this b r o a d s p a c e - - c o o p e r a t i o n , bargain-
ing, c o m m u n i c a t i o n . O f c o u r s e as a n e g o t i a t i v e
politics it was w e i g h t e d heavily in t h e favour o f
o n e side. T h e p o i n t h o w e v e r was clear. As far as
b u d g e t s w e r e c o n c e r n e d o n e s h o u l d s e e k to gain
a c c e p t a n c e o f b u d g e t s by all t h o s e w h o m t h e y
affected. A c c o u n t i n g s h o u l d b e r e f o r m u l a t e d so
as to take a c c o u n t o f s u c h factors. T h e w o r k e r as
a c o m p l e x p e r s o n and as a m e m b e r o f an infor-
mal g r o u p s h o u l d b e i n c o r p o r a t e d w i t h i n
a c c o u n t i n g ' s domain.
This shift to a b e h a v i o u r a l c o n c e p t i o n o f
a c c o u n t i n g can b e i n d i c a t e d across a r a n g e o f
writings w h i c h h a v e a p p e a r e d o v e r t h e past t w o
d e c a d e s and m o r e (Caplan, 1966; Hofstede,
1968; H o p w o o d , 1974; Schiff & Lewin, 1974;
Harrison et al., 1981). D e v i n e ( 1 9 6 0 ) w o u l d
argue that t h e b e h a v i o u r a l a s s u m p t i o n s o f ac-
c o u n t i n g n e e d e d drastic revision:
Let us... turn to that part of accounting which is related
directly to the psychological reactions of those who con-
sume accounting output or are caught in its threads of
control. On balance it seems fair to conclude that
accountants seem to have waded through their relation-
ships to the intricate psychological network of human
activity with a heavy-handed crudity that is beyond
belief. Some degree of crudity may be excused in a new
discipline, but failure to recognise that much of what pas-
ses as accounting theory is hopelessly entwined with
unsupported behaviour assumptions is unforgiveable
(Devine, 1960, p. 394).
A n o t h e r w r i t e r (Caplan, 1 9 6 6 ) w o u l d a r g u e that
a c c o u n t i n g as a m a n a g e m e n t t o o l n e e d e d to take
a c c o u n t o f t h e c o m p l e x i t y o f t h e individual's
motivations, t h ei r d i v e r s e n e e d s and desires:
It is possible that the failure of management accountants
to consider the more complex motivating forces which
organisation theory recognizes in the individual contri-
butes to the use of accounting systems and procedures
which produce "side-effects" in the form of a variety of
unanticipated and undesired responses from particip-
ants. For example, many management accounting
techniques intended to control costs, such as budgeting
and standard costing, may virtually defeat themselves
because they help to create feelings of confusion, frustra-
tion, suspicion and hostility. These techniques may not
motivate effectively because they fail to consider the
broad spectrum of needs and drives of the participants
(Caplan, 1966, p. 506).
T h e cl ear l e s s o n was that a c c o u n t a n t s s h o u l d
a c c e p t as r e l e v a n t t h o s e b o d i e s o f k n o w l e d g e
w h i c h h i t h e r t o t h e y h ad o v e r l o o k e d , W h a t
m i g h t h a v e s e e m e d to Harrison ( 1 9 3 0 ) as n o
m o r e than c o m m o n s e n s e , n a m e l y that b u d g e t s
o u g h t to b e set so as to e n c o u r a g e t h e i r achieve-
m e n t , was c o m i n g to b e s e e n as itself r a t h e r a
large t e r r i t o r y for investigation, r e q u i r i n g t h e
m e d i a t i o n o f o t h e r and unfamiliar t h e o r i e s and
c o n c e p t s . I n d eed , o n e m i g h t say, the w h o l e
m e a n i n g o f cost a c c o u n t i n g ' s ef f ect i v en ess was
b e i n g challenged. Instead o f d e p e n d i n g just
upon the technical sophistication of the
a c c o u n t i n g system, e f f e c t i v e n e s s w as c o m i n g to
b e s e e n as crucially d e p e n d e n t u p o n w h e t h e r
t h e s y s t e m w o u l d actually i m p e l p e o p l e to
a c h i e v e d e s i r e d p u r p o s e s ( B e n s t o n , 1963; Cap-
lan, 1966; H o p w o o d , 1973). T h e e n c i r c l i n g o f
t h e p e r s o n w i t h cal cu l at i v e p r a c t i c e s w h i c h
w o u l d r o u t i n e l y c o n s t r u c t o r m o n i t o r his or h e r
c o n t r i b u t i o n s to efficiency, as traditionally
e f f e c t e d by b u d g e t i n g , was s e e n to b e d e p e n d e n t
u p o n an i n a d e q u a t e p s y c h o l o g y .
O t h e r studies w e r e to refine t h e issues at stake
h e r e (e.g. Likert & Seashore, 1963; B e c k e r &
G r e e n , 1962). T h e e n c o u n t e r b e t w e e n t h e per-
so n and t h e b u d g e t was to lead a c c o u n t a n t s to
o b s e r v e t h e organizational life o f t h e p e r s o n at
first hand. Q u e s t i o n s w o u l d b e asked as to t h e
e x t e n t o f t h e r e l e v a n t psychological, sociologi-
cal and o r g a n i z a t i o n t h e o r i e s w h i c h a c c o u n t a n t s
o u g h t to k n o w , and t h e o p t i o n s w h i c h e x i s t e d
 ACCOUNTINGAND THE CONSTRUCTIONOF THE GOVERNABLEPERSON
for c o l l a b o r a t i o n s w i t h the m o r e established
" b e h a v i o u r a l scientists" ( D e v i n e , 1960; Hofstedt
et al., 1970). A n d s o m e s u b s t a n t i v e empirical
studies w o u l d b e carried out. T e n d i n g to take
b u d g e t i n g a n d s t a n d a r d c o s t i n g as p o i n t s of
d e p a r t u r e , s u c h studies w o u l d e x p l o r e the
impact, b o t h u p o n the p s y c h o l o g i c a l w e l l - b e i n g
of the p e r s o n a n d u p o n his or h e r p r o p e n s i t i e s to
m e e t organizational efficiency or goals, of those
"unintended consequences" produced by such
calculative practices ( s e e e.g. Hofstede, 1968;
H o p w o o d , 1973). More k n o w l e d g e was n e e d e d ,
i n o r d e r that the systems a n d their m e t h o d s of
use m i g h t b e redesigned, so as to e n h a n c e the
w e l l - b e i n g of p e r s o n a n d organization. O n e
m i g h t say that the d i s c o v e r y of the m o t i v a t i o n a l
c o m p l e x i t y of the p e r s o n revealed the i n a d e q u -
acy of s u c h as b u d g e t s in p r o c u r i n g i n d i v i d u a l
efficiency. A space was o p e n e d for fresh
a p p r o a c h e s to that e n d e a v o u r . And in a d d i t i o n to
e m p i r i c a l field studies, a c c o u n t a n t s w o u l d c o m e
n o t o n l y to join the p s y c h o l o g i s t in l a b o r a t o r y
o b s e r v a t i o n s of the organizational subject, b u t
e v e n to make s o m e significant a t t e m p t s to con-
s t r u c t similar laboratories of their o w n (see e.g.
Libby, 1981 for a review). A c c o u n t a n c y w o u l d
e n t e r alliances w i t h the o t h e r b e h a v i o u r a l sci-
e n c e s to gaze u p o n a n d to d i r e c t the organiza-
tional life of the p e r s o n .
O n e p a r t i c u l a r e x p r e s s i o n of the shift w e are
referring to h e r e was the re-casting of organisa-
tion t h e o r y t h r o u g h a n o t i o n of the p e r s o n vie-
w e d as a decision-maker. For o u r c o n c e r n s h e r e
this is an i m p o r t a n t d e v e l o p m e n t . It had the
effect of significantly r e d e f i n i n g the p r o j e c t of
m a n a g e m e n t a n d the a t t e m p t to establish
m e c h a n i s m s for the i m p l i c a t i o n of the i n d i v i d u a l
w i t h i n organisational objectives. O r r a t h e r it
r e n d e r e d p r o b l e m a t i c the n a t u r e of the social
b o n d w i t h i n the enterprise.
T h e i n t r o d u c t i o n of the n o t i o n of the p e r s o n
as a d e c i s i o n - m a k e r r e n d e r e d o b s o l e t e the image
of the i n d i v i d u a l as a m a c h i n e a n d s u b s t i t u t e d
o n e of an i n d i v i d u a l capable of choice. This ele-
m e n t of c h o i c e e n t a i l e d i n the n o t i o n of the deci-
s i o n - m a k i n g i n d i v i d u a l p l a c e d the p e r s o n a l
d i m e n s i o n of i n d i v i d u a l b e h a v i o u r at the mar-
gins of the possibility of control. T h e individual,
259
a n d the p r o j e c t of organisational m a n a g e m e n t ,
w o u l d have to e n t e r a p e r p e t u a l series of m o v e s
a n d c o u n t e r - m o v e s . T h e p r o j e c t of m a n a g e m e n t
v i e w e d in these t e r m s c o u l d n e v e r t e r m i n a t e
b e c a u s e the p e r s o n was always s e e n to possess
the possibilities of c h o i c e w h i c h c o u l d b e
organisationally dysfunctional. T h e decision-
m a k i n g p e r s o n is s e e n to have an i n e r a d i c a b l e
e l e m e n t of freedom. The task of organisational
m a n a g e m e n t w o u l d c o m e to b e u n d e r s t o o d as
the s u p e r v i s i o n a n d d e f i n i t i o n of this freedom,
s o m e t h i n g w h i c h c o u l d always b e subverted. An
e x p a n d e d g r o u p of " b e h a v i o u r a l scientists", in-
c l u d i n g at least s o m e a c c o u n t a n t s , w o u l d set
itself the task of a t t e n d i n g to s u c h questions.
O n e c a n locate s u c h a shift t h r o u g h the writ-
ings of Barnard ( 1 9 3 8 ) , S i m o n ( 1 9 5 7 ) , March &
Simon ( 1 9 5 8 ) a n d Cyert & March ( 1 9 6 3 ) . T h e s e
w o r k s w e r e to b e s e e n as having e n r i c h e d the
c o n c e r n s of a c c o u n t a n t s w i t h h u m a n motiva-
tion, a n d they a c h i e v e d rapid r e c o g n i t i o n w i t h i n
the a c a d e m i c a c c o u n t i n g literature (Devine,
1960; Benston, 1963). As early as 1937 Barnard
was l e c t u r i n g o n the d i s t i n c t i o n b e t w e e n per-
sonal e n d s a n d organizational ends. He was to
suggest the e x i s t e n c e o f " a sort of dual personal-
ity", o n e w h i c h was organisational a n d o n e
w h i c h was personal. An i m p o r t a n t issue this
raised was that of their c o n g r u e n c e o n m a t t e r s of
authority. The latter was s e e n to d e p e n d cru-
cially o n p e r s o n a l a c c e p t a n c e and n o t o n p u r e l y
formal criteria:
Ifa directive communication is accepted by one to whom
it is addressed, its authority for him is confirmed or estab-
lished. It is admitted as the basis of action. Disobedience
of such a communication is a denial of its authority for
him. Therefore, under this definition the decision as to
whether an order has authority or not lies with the per-
sons to whom it is addressed, and does not reside in "per-
sons of authority" or those who issue these orders (Bar-
nard, 1938, p. 163).
A u t h o r i t y is interpersonal. T h e individual is s e e n
to b e free to d e c i d e for or against a c c e p t a n c e of
n o r m s , i n s t r u c t i o n s a n d standards; at the very
least they are n o l o n g e r v i e w e d as u n p r o b l e m a t -
ically internalised. T h e r e a c t i o n s of s u b o r d i n a t e s
is s e e n to b e m e d i a t e d b y varying d e g r e e s of con-
viction. W h e r e a s for an organisation:
 260 PETER MILLERand TED O'LEARY
decision is in its important aspects a social process.., the
process of decision in individuals.., is a psychological
process socially conditioned (Barnard, 1938, cited in
Sofer, 1972, p. 165).
March & Simon (1958), Simon (1957) and
C y e r t & M a r c h ( 1 9 6 3 ) w e r e to d e v e l o p this
notion of the decision-making organisation. "De-
c i d i n g " c a m e t o b e v i e w e d n o t as a m o m e n t a r y
a c t b u t as a p r o c e s s w h i c h p e r v a d e d t h e e n t i r e
organisation:
Although any practical activity involves both "deciding"
and "doing", it has not commonly been recognised that a
theory of administration should be concerned with the
processes of decision as well as with the processes of
action. This neglect perhaps stems from the notion that
decision-making is confined to the formulation of over-all
policy. On the contrary, the process of decision does not
come to an end when the general purpose of an organiza-
tion has been determined. The task of "deciding" per-
vades the entire administrative organization quite as
much as does the task of "doing" - - indeed, it is integrally
tied up with the latter. A general theory of administration
must include principles of organization that will insure
correct decision-making, just as it must include princi-
ples that will insure effective action (Simon, 1957, p. 1).
A drastic revision of the concept of "economic
man" was seen to be needed. The revision meant
incorporating the environment and the
psychological attributes of individuals within a
new conception of the individual human being.
C y e r t & M a r c h ( 1 9 6 3 ) w e r e to f o r m u l a t e this
shift in a " b e h a v i o u r a l t h e o r y o f t h e f i r m " w i t h i n
which such a notion of the person and of deci-
s i o n s w e r e c e n t r a l . T h e b u d g e t a n d its ability to
d e f i n e o r g a n i s a t i o n a l o b j e c t i v e s w a s c e n t r a l to
u n d e r s t a n d i n g t h e f i r m in s u c h a m a n n e r . T h e
i s s u e w a s e x p r e s s e d simply. I n d i v i d u a l s h a v e
goals; c o l l e c t i v i t i e s d o not. A m e a n s o f g e n e r a t -
i n g c o l l e c t i v e g o a l s so t h a t t h e y a r e c o n g r u e n t
w i t h p e r s o n a l g o a l s w a s s e e n to b e r e q u i r e d .
The elaboration of organisational goals came
to b e d e f i n e d in a w a y w h i c h s a w t h e m as i n h e -
r e n t l y c o n f l i c t u a l . T h e o r g a n i s a t i o n was, after all,
only a "coalition" of individuals, some of them
organized into subcoalitions (Cyert & March,
1963, pp. 2 7 - 2 9 ) . C o o p e r a t i o n w a s a p r o c e s s o f
negotiation, of bargaining. But human beings
have limited capacities. Control-systems are
n e e d e d to i d e n t i f y t h e c o n s i d e r a t i o n s r e l e v a n t to
members of the coalition. One such control-sys-
t e m is t h e b u d g e t :
The budget in a modern, large-scale corporation plays
two basic roles. On the one hand, it is used as a manage-
ment control device to implement policies on which
executives have decided and to check achievement
against established criteria. On the other hand, a budget
isa device to determine feasible programs. In either case,
it tends to define - - in advance - - a set of fixed commit-
ments and (perhaps more important) fixed expectations.
Although budgets can be flexible, they cannot help but
result in the specification of a framework within which
the firm will operate, evaluate its success, and alter its
program (Cyert & March, 1963, pp. 110-111 ).
T h e b u d g e t m a y set o r g a n i s a t i o n a l o b j e c t i v e s .
B u t it is n o n e t h e l e s s c o n s t r a i n e d b y t h e m o r e
general constraints of the motivational complex-
ity o f individuals. W h a t is i n t e r e s t i n g for o u r p u r -
p o s e s h e r e is t h e p r o p o s e d r e s o l u t i o n t o this dif-
ficulty. O n e n o l o n g e r s e e k s o n l y to f o r c e p e o p l e
into the structures of the budget. Rather one
redefines the accounting side of the equation
through the incorporation of a concept of the
p e r s o n as m o t i v a t i o n a l l y c o m p l e x . T h e b u d g e t
a n d s t a n d a r d c o s t i n g c o m e t o b e d i s p l a c e d in
f a v o u r o f a task o f s e e k i n g t o e n g i n e e r t h e ration-
ality o f t h e p e r s o n . T h e i m p l i c a t i o n a n d n o r m a l i -
sation of the individual within calculative prac-
t i c e s is n o l o n g e r to b e a c h i e v e d t h r o u g h single-
minded pursuit of budget requirements (Hop-
wood, 1973).
Let us try a n d e x p r e s s w h a t w e s e e t o b e at
issue h e r e , for it is n o t s i m p l y a m a t t e r o f defini-
tions. W h a t w e s e e t o b e o c c u r r i n g in t h e t e x t s
w e h a v e c i t e d is a r e c o n c e p t u a l i s a t i o n o f t h e
boundaries of the accounting complex through
an i n c l u s i o n w i t h i n it o f a r e v i s e d n o t i o n o f t h e
p e r s o n a n d t h e firm. W i t h this shift a c c o u n t i n g
c o m e s t o f u n c t i o n as an i n t e r d e p e n d e n t e l e m e n t
in a r a n g e o f o p e r a t i o n s w h o s e c o n c e r n is w i t h
the implication of the individual within organisa-
tional objectives. What we are suggesting, admit-
tedly by merely gesturing towards some relev-
a n t e x a m p l e s , is t h a t an i m p o r t a n t r e f o r m u l a t i o n
of the objectives of accounting occurs through
the introduction of the notion of the behavioural
w i t h i n its t e r m s o f r e f e r e n c e . It is n o t j u s t a
b r o a d e n i n g o f t h e c o n c e r n s o f a c c o u n t i n g . It is a
 ACCOUNTINGAND THE CONSTRUCTION OF THE GOVERNABLEPERSON
significant r e d e f i n i t i o n o f t h e t e r m s a n d o b j e c -
tives o f a c c o u n t i n g as a social p r a c t i c e . A c c o u n t -
ing w o u l d s e e k to w o r k m o r e c l o s e l y w i t h
psychology within a complex of human sciences
w h o s e o b j e c t w a s d e f i n e d as t h e p e r s o n and his
o r h e r life w i t h i n t h e organisation. T h e redefini-
t i o n w h i c h takes place, h o w e v e r , d o e s n o t oblit-
e r a t e t h e c o n c e r n s o f a c c o u n t i n g w e h a v e iden-
tiffed a b o v e as e m e r g i n g in t h e e a r l y d e c a d e s o f
this c e n t u r y . To a d a p t M a r c h ' s ( 1 9 7 8 ) useful
analogy, a c c o u n t i n g c o n t i n u e s to b e c o n c e r n e d
w i t h t h e active e n g i n e e r i n g o f t h e organisation-
ally useful p e r s o n . It c o m e s to possess, h o w e v e r ,
a m u c h m o r e p r o m i s i n g set o f c o n c e p t s ,
t e c h n i q u e s a n d m e c h a n i s m s w i t h w h i c h to
a c h i e v e s u c h an o b j e c t i v e .
IMPLICATIONS AND CONCLUSIONS
W e h a v e p o i n t e d in this p a p e r to a n u m b e r o f
e v e n t s o c c u r r i n g r o u g h l y w i t h i n t h e first t h r e e
d e c a d e s o f this c e n t u r y w h i c h w e s e e to b e sig-
nificant for t h e u n d e r s t a n d i n g o f a c c o u n t i n g as a
social a n d o r g a n i s a t i o n a l p r a c t i c e . T h e s e e v e n t s
have b e e n t h e c o n s p i c u o u s e m e r g e n c e o f diffe-
r e n t b o d i e s o f e x p e r t k n o w l e d g e a n d p r a c t i c e , as
w e l l as political, j o u r n a l i s t i c a n d p h i l o s o p h i c a l
d i s c o u r s e s , all o f w h i c h share as a p o i n t o f con-
v e r g e n c e t h e a c t i v e m a n a g e m e n t o f t h e life o f
t h e p e r s o n in its v a r i e d facets. C l u s t e r i n g a r o u n d
t h e w o r d efficiency, w e have suggested, o n e c a n
w i t n e s s w i t h i n this p e r i o d a d i v e r s e g r o u p ,
including engineers, psychologists, accountants,
m e d i c a l p r a c t i t i o n e r s , p r o p o n e n t s o f eugenics,
journalists a n d politicians, p r o p o s e v a r i o u s p r o -
j e c t s for i m p r o v i n g t h e life o f t h e p e r s o n and,
t h e r e b y , o f t h e nation. At stake, it seems, is an
u r g e n t felt n e e d to identify a n d to e l i m i n a t e
s h o r t c o m i n g s in s u c h m a t t e r s as p e o p l e ' s m e n t a l
a n d p h y s i c a l health, a n d t h e quality o f t h e i r
offspring, as w e l l as t h e i r c o n t r i b u t i o n to t h e
economy, the protection of the empire, and pub-
lic life generally. A t h e m e r u n n i n g t h r o u g h all
t h e d i s c o u r s e s a n d p r a c t i c e s w e h a v e l o o k e d at is
a p o s i t i v e c o n c e r n to take a n d to i m p r o v e t h e life
o f t h e p e r s o n . Q u i t e literally, t h e p e r s o n w a s to
b e w o r k e d u p o n , to b e m a n a g e d t h r o u g h a s e r i e s
261
o f i n t e r v e n t i o n s into an e n h a n c e d state o f life.
W e h a v e s u g g e s t e d that t h e firm c a n b e s e e n as
o n e o f t h e sites in s o c i e t y t o w a r d s w h i c h s u c h
p r o j e c t s w o u l d a d d r e s s t h e m s e l v e s . Specifically,
w e h a v e l o o k e d at scientific m a n a g e m e n t , at t h e
b i r t h o f industrial p s y c h o l o g y a n d o f m o d e r n
cost accounting.
V i e w e d in t e r m s o f a c o n c e r n w i t h n a t i o n a l
efficiency, t h e p r o j e c t o f scientific m a n a g e m e n t
h e l p e d to r e n d e r a p p a r e n t a n d r e m e d i a b l e t h e
w a s t e lying d e e p w i t h i n t h e e v e r y m o v e o f t h e
w o r k e r . N o r m s o r s t a n d a r d s w e r e to b e con-
s t r u c t e d for t h e d o i n g o f w o r k o f e v e r y kind.
T h o s e n o r m s , r e f l e c t i n g as t h e y w o u l d an
i n c r e a s e d level o f efficiency, w e r e e x p e c t e d to
y i e l d that e x t r a o u t p u t a n d p r o s p e r i t y w h i c h
w o u l d r e n d e r class conflict o b s o l e t e . Such a con-
g r u e n c e o f self-interest o f w o r k e r , e m p l o y e r a n d
t h e social b o d y alike, j o i n e d to t h e a s s u r a n c e o f
s c i e n c e , w a s to r e n d e r t h e w o r k e r a c q u i e s c e n t
in this "taking h o l d " o f his o r h e r p h y s i o l o g y , in
o r d e r to e x p e r i m e n t w i t h it a n d to i m p r o v e its
p r o d u c t i v e capabilities.
W e have n o t e d t h e alliance o f scientific man-
a g e m e n t and costing. F r o m its earliest begin-
nings, it seems, t h e scientific m a n a g e m e n t litera-
t u r e h a d r e c o g n i s e d t h e p o w e r o f an efficiency
m e a s u r e m e n t g r o u n d e d in c o s t s a n d profits. A n d
w e have n o t e d t h e i n f l u e n c e o f scientific man-
a g e m e n t o n t h e c o n s t r u c t i o n o f s t a n d a r d cost-
ing, w h i c h itself m e r g e s into b u d g e t i n g . T h e
r e s u l t a n t calculative a p p a r a t u s was to entail t h e
p o s s i b i l i t y for g o i n g b e y o n d a r o u t i n e r e n d e r i n g
visible o f o n l y t h e factory-floor w o r k e r ' s effi-
ciency. W e h a v e v i e w e d t h e s u p e r i m p o s i t i o n o f
a notion of standardized magnitudes upon the
t r a d i t i o n a l a c c o u n t i n g s t a t e m e n t s o f i n c o m e and
financial p o s i t i o n as facilitating t h e normaliza-
tion (in terms of economic accomplishment) of
e v e r y o n e w i t h i n t h e firm. Budgeting, o n e m i g h t
say, w o u l d s e r v e as an e s c a p e - r o u t e b y w h i c h
s t a n d a r d s c o u l d leave t h e f a c t o r y floor a n d
e n m e s h , p o t e n t i a l l y , e v e r y o n e in t h e firm. With-
o u t effacing t h e n o t i o n o f t h e p e r s o n as p o t e n t i a l
thief, that l o n g e r - s t a n d i n g s t e w a r d s h i p c o n c e r n
of accounting, standard costing and budgeting
w o u l d r e n d e r a c c e s s i b l e to v a r i o u s e x p e r t a n d
a u t h o r i t a t i v e i n t e r v e n t i o n s t h e i n d i v i d u a l as "al-
 262 PETER MILLERand TED O'LEARY
m o s t c e r t a i n l y inefficient". Cost a c c o u n t i n g
w o u l d e x p a n d its d o m a i n , to e n m e s h t h e p e r s o n
in a c a l c u l u s o f e x p e c t a t i o n s . In thus c o n s t r u c t -
ing a n o t i o n o f t h e p e r s o n w e have a r g u e d that
standard costing and budgeting provided a
facilitative t e c h n o l o g y w h e r e b y , in time, various
i n t e r v e n t i o n s to i m p r o v e t h e p e r s o n ' s perfor-
m a n c e w o u l d b e c o m e possible. For t h e w h o l e
project of enmeshing the person within norms
o f efficiency, o n c e begun, c a m e q u i c k l y e n o u g h
to b e s e e n as a c o m p l e x , s o p h i s t i c a t e d
endeavour.
I m p o r t a n t in b r i n g i n g a b o u t s u c h a sense o f
c o m p l e x i t y w a s industrial p s y c h o l o g y , to w h o s e
b i r t h w e have briefly attested. M o r e o r less
s i m u l t a n e o u s l y w i t h t h e e m e r g e n c e o f scientific
management and standard costing,
p s y c h o l o g i s t s b e g a n to argue the i n a d e q u a c y o f
such endeavours' concept of the person. Wastes
and inefficiencies, for t h e i r d e t e c t i o n a n d elimi-
nation, w e r e n o w a r g u e d to r e q u i r e t h e e x p e r -
tise o f t h o s e w h o c a n k n o w t h e p e r s o n ' s mind. A
p r o j e c t w o u l d b e initiated w h i c h establishes t h e
individual's p s y c h e as t h e k e y m e d i a t i n g f o r c e in
m a t c h i n g p e r s o n a n d task and in i n t e r p r e t i n g
task p e r f o r m a n c e variables. And w e have
p o i n t e d out, albeit t o o s k e t c h i l y and briefly, h o w
a r e d e f i n e d industrial p s y c h o l o g y c o m e s , later in
t h e c e n t u r y , to significantly i n t e r s e c t w i t h
accounting. By the 1950s, w e have suggested,
t h e p e r s o n as m a c h i n e has b e e n r e p l a c e d b y t h e
m o t i v a t i o n a l l y - c o m p l e x d e c i s i o n - m a k e r . This
a d d s greatly to t h e c o m p l e x i t y o f r e n d e r i n g effi-
c i e n t his o r h e r e c o n o m i c p e r f o r m a n c e , a n d p r o -
d u c e s a r e d e f i n i t i o n o f w h a t w e have c a l l e d t h e
accounting complex.
In l o o k i n g at s u c h p r o c e s s e s in this m a n n e r w e
have w a n t e d to suggest a w a y o f v i e w i n g
a c c o u n t i n g as having c o n t r i b u t e d to a m o r e gen-
eral p r o j e c t o f s o c i o - p o l i t i c a l m a n a g e m e n t . This
is o n e w h i c h o p e r a t e s t h r o u g h a variety o f ex-
p e r t k n o w l e d g e s a n d practices. T h e efficiency
o f individual p e r s o n s a n d t h e i r c o n t r i b u t i o n to
c o l l e c t i v e efficiency is c e n t r a l to s u c h p r o c e s s e s .
But t h e efficiency o f t h e p e r s o n in t h e firm, as w e
have s e e n T a y l o r p o i n t out, is n o t s o m e t h i n g
w h i c h can b e o b s e r v e d w i t h t h e n a k e d eye.
I n d e e d , o n e m i g h t say, it c a n n o t exist until w h a t
is to b e r e g a r d e d as n o r m a l o r s t a n d a r d has first
b e e n c o n s t r u c t e d . But o n c e a n o r m is to hand,
a n d e s p e c i a l l y w h e n it gains e x p r e s s i o n w i t h i n a
r o u t i n e l y a p p l i c a b l e calculative a p p a r a t u s like
s t a n d a r d c o s t i n g o r b u d g e t i n g , t h e p e r s o n can
b e c o m e a s u b j e c t for v a r i o u s h u m a n sciences.
The deviations of the person from a norm, with
all o f t h e i r p o s s i b l e causes and c o n s e q u e n c e s ,
b e c o m e available for i n v e s t i g a t i o n and for r e m e -
dial action. And, w e w o u l d suggest, o n e distinc-
tive c o n t r i b u t i o n o f s t a n d a r d costing, h i t h e r t o
a p p a r e n t l y i g n o r e d , is its c o n t r i b u t i o n to a m u c h
w i d e r p r o c e s s , w h e r e b y t h e life o f t h e p e r s o n
c o m e s to b e v i e w e d in r e l a t i o n to s t a n d a r d s a n d
norms of behaviour.
N o w o f c o u r s e t h e p r o c e s s e s w h i c h w e have
b e e n r e f e r r i n g to h e r e are o f a g r e a t e r c o m p l e x -
ity than w e have b e e n able to indicate. But w h a t
w e w a n t e d to d o was to at least m a k e a start in
untangling some of the strands of the contribu-
t i o n o f a c c o u n t i n g to a m o d e o f o p e r a t i o n o f
p o w e r in o u r s o c i e t i e s w h i c h , w e argue, e m e r g e s
in its d i s t i n c t i v e f o r m at t h e b e g i n n i n g o f this
century. This is o n e w h i c h , w e feel, c a n n o t b e
e x p l a i n e d a d e q u a t e l y b y o v e r - z e a l o u s adher-
e n c e e i t h e r to a n o t i o n o f e c o n o m i c d e t e r m i n a -
tion a n d interests, o r to an e x p l a n a t i o n w h i c h
h i n g e s o n a d e s i r e o n b e h a l f o f t h e p r o f e s s i o n s to
c o n t i n u a l l y e x t e n d t h e i r field o f o p e r a t i o n s . O f
c o u r s e this is n o t to i m p l y that e c o n o m i c pres-
sures a n d p r o f e s s i o n a l influences are u n i m p o r -
tant. It is, rather, to suggest w h a t w e s e e to b e a
different line o f investigation for t h e u n d e r s t a n d -
ing o f a c c o u n t i n g in r e l a t i o n to p o w e r in o u r
societies. This is o n e w h i c h l o c a t e s it as an im-
p o r t a n t p a r t o f that c o m p l e x o f i n t e r v e n t i o n s
w h i c h can b e given the n a m e the h u m a n sciences.
W e h a v e o u t l i n e d briefly h o w o u r t h i n k i n g o n
t h e s e m a t t e r s has b e e n significantly i n f l u e n c e d
b y the w o r k of Michel Foucault and his associates.
W e d o n o t feel that o u r c o n c e r n s in this p a p e r
can b e a d e q u a t e l y c a p t u r e d b y r e f e r r i n g to a gen-
eral p r o c e s s o f r a t i o n a l i s a t i o n o f W e s t e r n indust-
rial s o c i e t i e s ( W e b e r , 1978). In talking o f p r o -
j e c t s for social and o r g a n i s a t i o n a l m a n a g e m e n t
w e have w a n t e d to give w e i g h t to t h e actual con-
s t r u c t i o n o f s u c h p r o j e c t s , a n d to t h e t e r m s in
w h i c h t h e y are c o n s t r u c t e d . W e have s o u g h t
 ACCOUNTING AND THE CONSTRUCTION OF THE GOVERNABLEPERSON 263

tentatively to explain how accounting supplies r a m m a t i c f r a m e w o r k s a n d p o w e r r e l a t i o n s in

an important contribution to a complex of inter-
v e n t i o n s d i r e c t e d at p r o v i d i n g m e c h a n i s m s for
t h e i m p l i c a t i o n o f i n d i v i d u a l s w i t h i n t h e life o f
the organization and of society. The general
p r i n c i p l e o p e r a t i v e h e r e has b e e n w e l l e x p r e s -
sed by Rexford Tugwell, government advisor,
economics professor, and staunch advocate of
t h e a p p l i c a t i o n s o f s c i e n t i f i c m a n a g e m e n t to t h e
wider society:
is it possible that, instead of appealing to sets of emotions
of an immediate and piecemeal sort, the problem of moti-
vation might be resolved by fixing in each individual
mind a rationale of ends to be tried for, and of the means
available? For if this cannot be done, it seems very little
use to hope that group action will ever become coherent
and cooperative in a larger, a genuinely social sense;...
( Tugwell, 1933).
I n d e f i n i n g o u r c o n c e r n as w i t h t h e " c o n s t r u c -
tion of the governable person" we would not
w a n t t o i m p l y an i m a g e o f a t o t a l l y o b e d i e n t indi-
vidual. W e w a n t e d r a t h e r t o e x a m i n e t h e p r o g -
terms of which the lives of individuals are
v i e w e d , m e a s u r e d a n d s u p e r v i s e d . In g e s t u r i n g
towards recent developments within account-
i n g w e w a n t e d to s u g g e s t w a y s o f i n t e r p r e t i n g
the construction of the notion of the complex
p e r s o n as a r a t i o n a l e f o r a s e r i e s o f p r a c t i c a l in-
t e r v e n t i o n s . T o p u t this r a t h e r p r o v o c a t i v e l y ,
o n e c o u l d say t h a t w h a t is at i s s u e in t h e s e m o r e
r e c e n t d e v e l o p m e n t s is a f o r m o f p o w e r w h i c h
operates through freedom: a freedom for the
i n d i v i d u a l to h a v e an i n f o r m a l life w i t h i n t h e
organization, to deviate from criteria of rational-
ity, to b r o o d o n p e r s o n a l p r o b l e m s , a n d t o b e in-
f l u e n c e d b y t h e e n v i r o n m e n t o u t s i d e t h e firm. In
its m o r e r e c e n t d e v e l o p m e n t a c c o u n t i n g has
p r o v i d e d for s u c h a f r e e d o m in its a t t e m p t t o in-
corporate the behavioural and the decisiontaker
w i t h i n its s p h e r e . I n so d o i n g w e w o u l d s u g g e s t
t h a t a c c o u n t i n g t o d a y c a n b e v i e w e d as in c o n -
t i n u i t y w i t h , a l b e i t in a c o n s i d e r a b l y m o d i f i e d
f o r m , a m o d e o f e x e r c i s e o f p o w e r w h i c h w a s in-
s t a l l e d in t h e e a r l y d e c a d e s o f this c e n t u r y .

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