The average hospital

In 1998, the UK government introduced the National Reference Costing Exercise (NRCE) to benchmark hospital costs. Benchmarking is usually associated with “excellence”; the government emphasised the raising of standards in the 1997 White Paper “The New NHS: Modern, Dependable” that heralded the NRCE. This paper argues that the UK “New Labour” government's introduction of, and increasing reliance on, hospital cost benchmarking is promoting “averageness”. Average hospitals will be cheaper to run and easier to control than highly differentiated ones; they may also score more highly on certain measures of service improvement. The paper aims, through empirical investigation, both to demonstrate how the activities and processes of hospital life “become average” as they are transformed to comply with the cost accounting average and to indicate how the “average” is being promoted as the norm for hospitals to aspire to. To benchmark to average costs, comparisons are necessary. To compare hospital costs involves the creation of categories and classification systems for clinical activities. Empirical evidence shows that as doctors, patients and clinical practices are moulded into costed categories, they become more standardized, more commensurate and the average hospital is created.     

The social sciences: who needs ‘em?

It is generally forgotten that the institutionalization of disciplines in the social sciences occurred less than 100 years ago. At that time, academics were able to convince the larger community that they could contribute mightily to the amelioration of problems in society. But times have changed. Faced with processes of “globalization,” new technologies, and new pedagogic demands, institutions of higher education now scramble for scarce funds in what is a zero-sum game of survival. But along with this is an attending loss of confidence in the avowed goals and promises of the social sciences, a condition greatly exacerbated by “the culture wars” on campuses. Like it not, too many share the opinion of the Chair of the Massachusetts Board of Higher Education, James F. Carlin, who asserted that “at least 50% of the non-hard sciences research on American campuses is a lot of foolishness”. Indeed, the future looks bleak unless faculties in the social sciences reassert for themselves an older ideal: the idea that social science has genuine emancipatory potential. But of course that also leaves us with the question, who will pay us to do this work?     

Mediating instruments and making markets: Capital budgeting, science and the economy

We examine in this paper how certain instruments link science and the economy through acting on capital budgeting decisions, and in doing so how they contribute to the process of making markets. We use the term “mediating instruments” to refer to those practices that frame the capital spending decisions of individual firms and agencies, and that help to align them with investments made by other firms and agencies in the same or related industries. Our substantive focus is on the microprocessor industry, and the roles of “Moore’s Law” and “technology roadmaps”. We examine the ways in which these instruments envision a future, and how they link a multitude of actors and domains in such a way that the making of future markets for microprocessors and related devices can continue. The paper begins with a discussion of existing literatures on capital budgeting, science studies, and recent economic sociology, together with the reasoning behind the notion of “mediating instruments”. We then address the substantive issues in three stages. Firstly, we consider the role of “Moore’s Law” in shaping the fundamental expectations of an entire set of industries about rates of increase in the power and complexity of semiconductor devices, and the timing of those increases. Secondly, we examine the roles of “technology roadmaps” in translating the simplified imperatives of Moore’s Law into a framework that can guide and encourage the myriad of highly uncertain and confidential investment decisions of firms and other agencies. Thirdly, we explore one particular and recent example of major capital investment, that of post-optical lithography. The paper seeks to help remedy the empirical deficit in studies of capital budgeting practices, and to demonstrate that investment is much more than a matter of valuation techniques. We argue, through the case of the microprocessor industry, for greater attention to investment as an inter-firm and inter-agency process, thus lessening the fixation in studies of capital budgeting on the traditional hierarchical and bounded organization. In addition, we seek to extend and illustrate empirically the richness of the notion of “mediating instruments” for researchers in accounting, science studies, and economic sociology.     

World on fire: two scenarios of the destruction of human civilization and possible extinction of the human race

This paper examines the foundation for two scenarios of the future depicting how human civilization might destroy itself and possibly bring about the extinction of the human race in the process. The scenarios are based upon the two human-generated “fires” deeply ingrained within industrial civilization: (1) the nuclear “fire” of tens of thousands of nuclear weapons and their automated “launch on warning” alert systems and (2) the slow burning “fire” of global warming and runaway climate change. This paper also examines obstacles that are currently preventing the necessary first steps towards solving these problems.     

How can IMF policy eliminate country moral hazard and account for externalities?

Costly crisis prevention has positive external effects, which leads to free-riding of governments on each other's efforts. “Ordinary” IMF loans aggravate existing externalities, reinforcing the under-investment problem. We consider the reform proposals of the “Meltzer commission” in both loan and insurance models and show how the IMF can eliminate country moral. The efficiency-ensuring loan policy accounts for given externalities and involves effort-contingent discounts on interests or the extension of credit volume. Similar results hold for the insurance framework. Ex ante participation requires that smaller countries be “subsidized” by large ones, or that IMF policy consider distributional aspects in addition to efficiency.     

A Critical Theory perspective on the pressures, contradictions and dilemmas faced by entry-level accounting academics

This paper is a study of the accounting academic labour market and workplace conditions. Its particular focus is on the pressures, contradictions and dilemmas experienced by junior (Levels A and B) accounting academics at Australian universities. It is argued that, due to work, personal and family pressures, many junior staff members may struggle to complete their PhD within a prescribed time frame. The reasons for this are discussed, as well as the likely effects. The Marxist concept of “alienation” is explored in detail to explain how a junior staff member's work “product” may take on a life of its own which stands up in opposition to her/him, to accuse her/him. The writings of the first-generation critical theorist, Herbert Marcuse, are used to suggest a radical path forward for the junior staff member. She/he is encouraged to take charge of her/his own destiny from within, value personal relationships, and pursue scholarship for its own sake. Opportunities for resistance are also explored in the paper.     

Gaia bites back: Accelerated warming

This scenario portrays a human extinction event in approximately 500 years due to entangled human and planetary positive feedback loops that lead to terminal system failures. The underlying dynamic of the catastrophe for humans is the shift of the Planetary Life System (or Gaia) to a higher temperature steady state, somewhere below the boiling point of water, but above a tolerance zone for human life. The scenario explores how human systems failures could parallel a suite of natural processes that bring about humanity's extinction by accelerating global warming and removing its nominal temperature range and ecological niche. The scenario posits that human development and progress could continue to flourish up to the “bitter end.”     

Institutional theory and accounting rule choice: an analysis of four US state governments' decisions to adopt generally accepted accounting principles

In this study, we use institutional theory to explore how institutional pressures exerted on four state governments (New York, Michigan, Ohio, Delaware) influenced the decision of these governments to adopt or resist the use of generally accepted accounting principles (GAAP) for external financial reporting. We identify resource dependence as a potent form of coercive institutional pressure that was associated with early GAAP adoption. We identify three factors that may lead to initial resistance to institutional pressures for change. First, if accounting bureaucrats are not active in professional associations that promote GAAP adoption, they may miss the educational process that we believe is important to early adoption of GAAP. Second, organizational printing may impede GAAP adoption. Third, powerful interests may impede GAAP if the proposed GAAP legislation is expected to alter the existing power relationships. We found that key accounting bureaucrats in New York and Michigan used “compromise” as an initial strategic response to institutional pressures to adopt GAAP, Ohio's key accounting bureaucrat adopted a “defy” strategy, although the political leadership endorsed an “acquiesce” strategy. While Delaware initially employed a “manipulate”strategy with some success. Delaware did not adopt GAAP for external reporting until a political entrepreneur for GAAP emerged in the early 1990s. Our study suggests that all strategic responses to resist institutional pressures for GAAP adoption will ultimately fail because of the potency of the institutional pressures that result from the well organized professional accounting and governmental institutional fields.     

Putting Humpty Dumpty back together again? The structures of knowledge and the future of the social sciences

Fifty years ago it was clear what the social sciences were, what they did and where they were going. This consensus was the product of the long-term construction of the structures of knowledge that resulted in the institutionalization of a set of disciplines that would function to guarantee ordered change in the social sphere in the name of “progress” through scientific control, exercised by “experts” and based on “hard facts”. After 1945, the scholarly legitimacy of the premises underlying the partitions separating the disciplines and the practical usefulness of the distinctions declined and from 1968 were overtly contested. It is contended that the structures of knowledge, including the social sciences, have entered into secular crisis and thus a period characterized by the heightened transformative capacity of agency typical of transitions. Since no outcome may be predetermined for the organization of future knowledge forms, this paper ends by considering modes of scholarly participation in the transformation of the social sciences.

“Don’t you think you’d be safer down on the ground?” Alice went on, not with any idea of making another riddle, but simply in her good-natured anxiety for the queer creature. “That wall is so very narrow!” Lewis Carroll, Through the Looking-Glass and What Alice Found There

Fifty years ago a serious discussion focused on the future of the “social sciences” collectively might have sounded at best like self-reflexive narcissism or simply a waste of time. At worst it might have seemed merely absurd. That is not to say that there were not significant disagreements within and across the social science disciplines. There was, however, a widely held consensus on the intellectual and institutional organization of knowledge that recognized boundaries among the humanities, the social sciences and the sciences, and the singular disciplines of which they were composed.The exposition that follows will begin with a sketch of the historical construction of this relational structure, both constitutive of and constituted by material reality, which left open the possibility for theoretical and methodological innovation and substantive development but at the same time disciplined the trajectory of such developments.This sketch will be followed by an overview of how the upheavals of the 1960’s dramatically foregrounded the premises of disciplinary autonomy (indeed, that had never been totally devoid of controversy). As the foundational principles of theoretical approaches, methodological practices, and proprietary subject-matters underwent radical change and race, gender, and class constraints on the make-up of faculties and student-bodies were opened up through a combination of critical reflection and direct action, questions concerning the future intellectual and institutional centers for the production of legitimate and authoritative knowledge of human reality emerged dramatically.Finally, the crisis in the long-term evolution of the internal contradictions of the “two cultures” structure of knowledge and thus also of the social sciences suggests imminent structural transformation. No outcome is predetermined for the organization of future knowledge forms and their institutional organization, but elective agency will be a vital ingredient in their construction and in imagining the possible alternative social structures of which they will be an inseparable part. The last question to be addressed, then, concerns the modes of scholarly participation in this transition.     

Rethinking the profession-state dynamic: The case of the Victorian charter attempt, 1885–1906

Historical analyses of specific professionalization projects and of the profession-state axis have been suggested as possible remedies for the “unexciting routine” into which the sociology of the professions has recently slipped. Accordingly, this essay analyses an attempt by Victorian accountants to attain a Royal Charter from 1904 to 1906 and its antecedent world dating from 1885 to 1903. It tracks the shifting constraints upon, and opportunities available to key players in state agencies and accounting associations. It thereby accounts for the shifts in the aims and strategies of those, the intended and unintended consequences of their actions, and the ultimate outcome of the charter attempt. In doing so it questions the assumption of a tightly defined concept of occupational “monopoly” or “closure” associated with a stable set of strategic imperatives. It also questions the tight coupling of action, interest, and outcome implied by “crude” Marxian analyses, and supports the contention that “professions” are the dynamic outcome of the mutual interaction of “state” and “profession”.     

Accounting and the examination: A genealogy of disciplinary power

Historical elaboration of Foucault's concept of “power-knowledge” can explain both the late-medieval developments in accounting technology and why the near-universal adoption of a discourse of accountancy is delayed until the nineteenth century. It is the disciplinary techniques of elite medieval educational institutions—the new universities and their examinations—that generate new power-knowledge relations. These techniques embody forms of textual rewriting (including the new “alphanumeric” system) from which the accounting advances are produced and “control” is formalised. “Double-entry” is an aspect of these rewritings, linked also to the new writing and rewritings of money, especially the bill of exchange. By the eighteenth century accounting technologies are feeding back in a general way into educational practice (e.g. in the deployment of “book-keeping” on pupils) and this culminates in the introduction of the written examination and the mathematical mark. A new regime of “objective” evaluation of total populations, made up of individually “calculable” subjects, is thereby engendered and then extended — apparently first in the U.S. railroads — into modern comprehensive management and financial accounting systems (systems of “accountability” embodying Foucault's “reciprocal hierarchical observation” and “normalising judgement”), while written examinations become used to legitimate the newly autonomous profession of accountancy.     

Adopting commercial software in the accounting classroom: A focus on learning

Concerns about the current state of accounting education are well documented. A common anxiety is that students are not prepared to deal with the complex issues and unstructured problems that they will encounter throughout their professional lives. Recent studies conclude that an educational objective for accounting is to teach students how to learn. This paper discusses adopting commercial-use software as an approach to accomplish this objective. The paper also provides an example for an accounting information systems class. Because “learning to learn” involves teaching students learning strategies, accounting educators need to find new ways to help students acquire these strategies. This paper will be useful for instructors seeking ways to assist students in developing strategies for learning that will better prepare them for careers in a complex and dynamic environment.     

Health care reform and reform for health: creating a health system for communities in the 21st century

If we are to improve the health of the population and reduce the inequalities in health that plague our communities and our planet, we will have to give greater attention to the determinants of health. The reform of the health care system, necessary though it is, will never be sufficient; we need to reform our whole society and in particular to focus on human rather than economic development. At the community level we need to create healthy communities that are “health-creating systems” of environmental, social and human development, as well as health care systems that focus first on improving and maintaining health. Such a “bottom-down” health care system would see the hospital become once again the place of last resort (but still a potentially important partner in creating healthier communities) and would focus instead on how to provide health promotion and health care from the household level up.     

Learning and the monetary policy strategy of the European Central Bank

This paper examines the welfare implications of alternative inflation targeting proposals for the monetary policy of the European Central Bank. We assume that policy makers have to “learn” the laws of motion of inflation in an economy characterized by “stickiness” in domestic price setting behavior and subjected to recurring shocks to productivity, exports and foreign price. We find that a switch from an “asymmetric” inflation targeting strategy to an “symmetric” makes little difference in welfare payoffs, but it comes at a cost of much higher interest-rate variability. We also find that there are practically no welfare gains from switching from an inflation-targeting strategy based on the Harmonized Index of Consumer Prices (HICP) to a strategy based on the domestic price component of the HICP.     

Professional judgment and accounting standards

This essay explores relationships between accounting standards and people's inferences and judgments. Acknowledging that Demski's impossibility theorem implies that the standards will be “social-preference incomplete”, the paper shows that they are also “decision-procedure incomplete” on three levels. These levels correspond to three kinds of professional judgment: semantic, pragmatic and institutional. The investigation facilitates understanding of (1) how accountants exercise judgment and deduction in applying incomplete standards; (2) how financial statement readers use the incomplete standards to draw deductive inferences from financial reports which are based on accountants' judgments; (3) the special kinds of judgment required of standard setters; and (4) the meaning and extent of professional liability, given the relationships identified between accounting standards, inferences and judgments.     

Identity, appropriateness and the construction of regulatory space: the formation of the Public Accountant's Council of Ontario

Practice rights legislation in Canada continues to be contested 50 years after its first enactment. In Ontario, one of the earliest provinces to enact restrictive legislation, the challenges have focused on how the legislation has been implemented rather than on whether or not public accounting should be regulated. To better understand the contested issues in this field, we examine the process undertaken by the Public Accountants Council of Ontario to implement the Public Accountancy Act of 1950. Our analysis is based on the first 15 years of the minutes of the meetings of the Public Accountants Council for Ontario, augmented by other archival sources such as court cases, newspaper clippings, correspondence and reports. Our intent is to document the process and “logic of appropriateness” used by the Council to construct its identity and stake out its “regulatory space” in the face of the ambiguity of the law and pressure from interest groups. We also identify the contradictions that were institutionalized in this field resulting in repeated challenges to the Council. We conclude by relating the historical insights from this analysis to the continuing challenges to practice rights legislation in Ontario.     

Bank fragility, “money under the mattress”, and long-run growth: US evidence from the “perfect” Panic of 1893

This paper examines how the US financial crisis of 1893 affected state output growth between 1900 and 1930. The results indicate that a 1% increase in bank instability reduced output growth by 2–5%. A comparison of Nebraska, which had one of the highest bank failure rates, with West Virginia, which did not experience a single bank failure, reveals that disintermediation affected growth through a portfolio change among savers: people simply stopped trusting banks. Time series evidence from newspapers indicates that articles containing the words “money hidden” significantly increase after banking crises, then slowly die out.     

Liquidity protection versus moral hazard: the role of the IMF

A game between the IMF, a country and atomistic private investors is motivated by recent crises including that in Argentina. The one stage game has no Nash equilibrium in pure strategies. Considering an equilibrium in mixed strategies, conditions are derived on whether the IMF should exist. A “cooperative first best” may be supported in a repeated game by a “minimum punishment strategy” but breaks down as the probability of insolvency rises. Countries are likely to deviate in bad times placing the IMF in an “impossible position”. The international financial architecture (IFA) remains incomplete.     

Galton's Error and the under-representation of systematic risk

Science progresses by improving its measurement apparatus. This holds true in finance too. The new methodology of “complete identification”, using simple algebraic geometry, throws new light on Galton's Error in finance and economics and the resulting misinformation of investors. Mutual funds conventionally advertise their relative systematic market risk, or “betas”, to potential investors based on incomplete measurement by unidirectional bivariate projections: they commit Galton's Error by under-representing their systematic risk. Consequently, far too many mutual funds are marketed as “defensive” and too few as “aggressive”. Using the new methodology it is found that, out of a total of 3217 mutual funds, 2047 funds (63.7%) claimed to be defensive based on the current industry standard methodology, but only 608 (18.9%) actually are. This under-representation of systematic risk leads to inefficiencies in the capital allocation process, since biased betas lead to mispricing of mutual funds. Complete bivariate projections produce a correct representation of the epistemic uncertainty inherent in the bivariate measurement of relative market risk and provide a new CAPM taxonomy. Our conclusions have also serious consequences for the proper “bench-marking” and recent regulatory proposals for the mutual funds industry. Extension of the new methodology to multivariate systematic risk measurement by Asset Pricing Theory (APT) is suggested.