Accountants are often cast as belonging to a Rodney Dangerfield sort of profession, an occupation that as the late comedian would say, “don’t get no respect.” What do those bean counters do all day long anyway? What’s the point of all that checking and rechecking?

Maybe quite a lot, according to a new theory being developed by two accounting professors at Emory University’s Goizueta Business School. If their theory is correct, we might all be out chasing antelope even now if it weren’t for history’s first accountants.

Historians have long suggested that there is a relationship between accounting advances and economic development. Economic historian Werner Sombart, for example, theorized back in the Thirties that the invention of double-entry bookkeeping wasn’t an innovation that arose during the Renaissance, but the innovation that actually enabled it to take off. However, professors Gregory Waymire and Sudipta Basu argue that accounting may have made an even more profound contribution to human civilization.

The two have developed a theory that accounting, far from being something that is a kind of side effect of a complex society, actually grew up with it. They believe it might even be said to have enabled the evolution of economically complex societies in the first place. Everyone talks about accounting as the language of business, but the professors contend that it really does represent a specialized kind of language – one which humanity would not have gotten very far without. As Basu says, “you couldn’t have firms and markets and governments if you didn’t have accounting.” 

Waymire and Basu have delved into existing archaeological findings for periods before the beginning of recorded history. These findings seem to support their theory: in every known early civilization, transactional records seem to have coincided with the emergence of complex social arrangements. They note that the world’s oldest formal economic records were produced in ancient Sumeria. As far back as 7500 B.C., the Sumerians used stone and clay tokens to signify the transfer of commodities. By 3200 B.C., they began putting the tokens inside hollow clay balls to guard against fraud. Outside, they used unique seals in order to make the contents of the “envelope” difficult to alter.

Even in the surviving remnants of the Inca’s writing system (which involved not letters or pictographs, but long strings of intricate, multicolored knots), records of economic transactions seem to have constituted most of what they considered important enough to “write” down.

“There’s been only three times in the history of man that written language has been invented,” says Waymire. “Everything else has just sort of borrowed off of that.” And in each case, he says, the first use of this tool seems to have been to do accounting: “It wasn’t to write plays, it was to keep records.”

In their paper, “Recordkeeping and Human Evolution,” Waymire and Basu theorize that this early recordkeeping always began as a memory aid for transactions. Recordkeeping made it possible to keep straight many transactions that might otherwise have become too difficult to remember. It also helped make it more difficult for individuals to create a short-term advantage for themselves by cheating, and rewarded people who behaved honestly--a function somewhat analogous to the customer satisfaction rankings on eBay.  

But the theory goes back even further. Waymire and Basu consider the mental equipment that enabled those early recordkeepers to come up with the bright idea of marking a deal with the knot of a string or trading a clay token in the first place. Here, the professors suggest that some of the insights of an emerging field known as “neuroeconomics” might ultimately prove useful. Scholars in this area are trying to examine the inner workings of the brain to see how it is that human beings have over time developed ways to interact with each other for mutual economic advantage.

The two theorize that some kind of mental predisposition for accounting behaviors may have developed over time, and then spread as the accounting-savvy population prospered more than the groups who couldn’t keep their accounts straight. It’s at least conceivable, they write, that over time “natural selection has bequeathed humans brain structures adapted to the observation and measurement skills inherent to accounting reasoning.”

Although their first paper is complete, Waymire and Basu are continuing to develop their theory further. They have been learning more about recordkeeping in primitive cultures by taking a graduate bio-cultural seminar in Emory’s anthropology department this fall.  Soon, Waymire says, they will begin testing their evolutionary hypothesis with data previously collected by anthropologists.

Another way they plan to test the validity of the theory is through a variation on a trust game that experimental economists use. In the game, one subject has ten dollars. He can send any part of the endowment to an anonymous second subject, but whatever he sends gets tripled. So for example, if the first subject sends half the money, or $5, to the second subject, it turns into $15. The second subject can now send any part of what he just received to the first subject.  The first subject will ‘invest’ the $5 if he trusts that the second subject will return the $5 and some of the gain from the tripling rather than just keep everything he received.

“The standard economic prediction is that the guy who receives the 15 bucks is just going to pocket it all and walk away,” Waymire says. In turn, “the person who could initially send the $15 will understand that that’s what’s going to happen, and he won’t send anything,” Waymire explains.

But prior experiments suggest that people don’t actually behave that way, Waymire says.  “If you run those experiments one-shot among anonymous people, in an experiment, they don’t play that way…they have some innate sense of fairness and so they will send something over and then usually on the other side, people will send something back,” he explains.

Basu and Waymire, along with Gary Hecht, Ivo Tafkov, Jane Thayer, and Kristy Towry from Goizueta and John Dickhaut from the University of Minnesota, intend to vary the game to prove a different point. In this version, there would be five senders and five receivers, interacting over a number of rounds. In one case, participants will be able to keep notes on who has done what in earlier rounds of the experiment. In another, they have to keep that information stored in their head.

“The hypothesis is that when you have complex settings, like five people instead of one, and you allow some technology to keep records, what will happen is that people will start keeping the records.  And when they start doing that, it makes it easier for them to trust other people and it’s going to make it more likely that they will actually extract the gains from trade,” Waymire says. The preliminary evidence emerging from these experiments has been encouraging.

So far, Waymire says, the reception he’s received on the first paper has been very positive. He believes the response has less to do with whether the academic accountants he has presented the paper to are persuaded by the hypothesis than by the idea that accounting is very important. “There are a lot of people who think that accounting is irrelevant, and this paper basically tells the story that accounting is by no means irrelevant,” Waymire says. “…In some regard, these very simple recordkeeping practices that humans worked at developing over the course of several thousand years are a fundamental, yet often overlooked, part of the core of modern human societies.”