The Boulton & Watt Case: The Crux of Alternative Approaches to Accounting History?

In accounting history, authors who have adopted a ‘Foucauldian’ approach have recently debated with those representing the ‘Neoclassical’ school of thought the relative sophistication and significance of cost accounting developments in the UK and US respectively during the late 18th and early 19th centuries. This paper argues that the differences between the two schools' understandings are important for comprehending the genesis and scope of modern cost and management accounting systems. It re-examines the historical case of Boulton & Watt, an engineering firm believed to have been in the vanguard of British Industrial Revolution accounting practice (Roll, 1930; Pollard, 1965 and 1990; Fleischman and Parker, 1991), in an attempt to clarify some of the key points of difference in the debate. It proposes that the historical crux for deciding where a modern managerial approach to accounting began lies in distinguishing between the development of engineering standards for materials and machine efficiency and the transfer of such performance measurements to human behaviour. A pressing task for historians is to establish when, where, how and why ‘labour standards’ were first articulated on the grounds that such forms of human accounting, by constructing norms of managerial performance, form the basis for modern management control. The paper reviews the primary sources on the history of cost accounting at Boulton & Watt, including the previously-acclaimed development of labour and engine standards. Its findings are that, while the latter were highly sophisticated as measures of engineering performance, they were less so on the economic dimension of cost measurement. Meanwhile, the evidence for labour standards is unconvincing; there was, around 1800, an intense period of investigating labour time and cost, but no subsequent long-term systematic control exercised over them analogous to the modern managerial approach found slightly later in US contexts. The paper suggests that one priority for further research is the detailed examination of early industrial enterprises on both sides of the Atlantic, in order to establish more definitively when, where, how and why this crucial development occurred.