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Accounting For Shakespeare

by J. Wilson Mixon, Jr.; Gary S. Robson; and W. D. Sockwell

"If you can read this," the bumper sticker says, "thank a teacher." This one might not catch on, but it's worth considering: "If you enjoyed 'Shakespeare in Love,' thank your accountant." We don't immediately associate the moving poetry of William Shakespeare with the accountant's bean counting, but we should.

Genius that he was, Shakespeare did not invent the stories that his plays bring alive; he borrowed them. He particularly borrowed them from the Italians. Accounting techniques were also borrowed from the Italians. While accounting, of some sort, has been with us for at least seven millennia, the double-entry bookkeeping (dubbed "The Method of Venice," though invented in Genoa) did not appear until about 1340. Accounting textbooks proudly tell us that the voyages of exploration could not have happened without accountants. The same is true of the large-scale printing that made Italian literature available to Londoners.

In her widely acclaimed Worldly Goods, Lisa Jardine connects commercial achievements to advancing humanism, while noting that the printing industry was central to the spread of the Renaissance. It isn't a novel idea that books are central to the spread of knowledge and the arts. The point that Jardine drives home is that printing, much like any other industry, focused directly on the bottom line rather than on social implications. She admirably demonstrates that printing a new book was an involved and expensive endeavor. One of several conditions necessary for such large-scale undertakings is the careful tracking of information. This condition could be satisfied only after the emergence of modern accounting techniques.

Many studies of commerce's history have documented just how important formal information systems are for the organization to grow and innovate. When discussing the progress of disarmament talks with the former Soviet Union, President Reagan was fond of saying: "Trust but verify." This applies to business as well as to diplomacy. A business that cannot verify must remain a small one. Accounting makes possible the kind of verification that allows companies to move beyond arrangements based on kinship. Limited partnerships and corporations become possible.

The contention that the advent of printing fostered the spread of modern accounting procedures is an important point. Equally noteworthy is the idea that causation ran both ways. Mass printing faced the same information tracking hurdles as large-scale shipping endeavors, and improved accounting facilitated the rise of the large publishing houses that undertook this enterprise.

Everyone knows that Gutenberg provided the technology for modern printing. But Gutenberg's technology, used by the small printing houses of the early 16th century, gave us the high-cost limited editions so valued by collectors. It was not the famous inventor, but anonymous accountants who made possible the evolution of an era in which books were cheap enough to be had by the son of an alderman in the small town of Stratford-on-Avon.

One observer at the time recognized the magnitude and implications of this change: "The art of printing has, with incredible speed, crammed not just Italy but the whole of Europe full to bursting with a marvelous wealth of books." Achieving this widespread distribution implied massive changes in the printing industry itself. Printing operations were first and foremost businesses (and big businesses at that). The business of printing was complex, involving (by historical standards) large supplies of paper, the efforts of many of the period's premier scholars, the acquisition of financial backing, and the development of sophisticated and adaptable distribution networks. In every respect, the business of printing rivaled that of trade with regards to its complexity and scale. Thus, it required the type of internal and external communications that could be had only with the use of adequate accounting procedures.

The book followed the same path to the masses as the VCR and the personal computer. First, publishers sold expensive copies, produced in small runs, to the wealthy. In the case of books, these were often educated English diplomats or Italian diplomats dispatched to backwater posts such as London. This was the pattern in the early 1500s. However, by the end of the century publishers were producing low-cost books by the thousands. They scoured monasteries looking for ancient manuscripts. By the 17th century, they were buying manuscripts from contemporary writers like Voltaire, and they printed the works of many translators.

The explosion of material written in English coincided with another historical event. The Tudor dynasty from Wales (Henry VIII and Elizabeth II being most prominent) settled in London, requiring all parliamentary meetings to occur there. As one writer notes, "To London came the adventurers, the men of ambition, the poets, the country gentlemen with money to spend, the innocents hopeful of enlarging the 'small experience' available in their provincial homes. One such innocent was William Shakespeare." Armed with the knowledge that he had gained from inexpensive, mass-produced books made possible by the methods of accounting, William Shakespeare was ready to make his mark on the land.

So, the boisterous atmosphere so well depicted in "Shakespeare in Love" owes much to those we often caricature as gnomes wearing green eyeshades. Who'd have thought?

J. Wilson Mixon, Jr. is Dana Professor of Economics; Gary S. Robson is an associate professor of Accounting; and W. D. Sockwell is an associate professor of Economics. They all teach at Berry College.

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