New insights from cost accounting into British entrepreneurial performance circa 1914

              Robert R. Locke UNIVERSITY OF HAWAII
NEW
INSIGHT
S FROM COST ACCOUNTING INTO BRITISH ENTREPRENEURIAL PERFORMANCE CIRCA 1914
Abstract: This article takes issue with economic historians who have tried to re-habilitate the reputation of the late Victorian and Edwardian entrepreneur. It ar-gues that the revisionist attempt to ground their case on cost, profit, and produc-tivity calculations flounders because of an insufficient analysis of the factors involved in arriving at cost, profit, and productivity. The economic historian, preoccupied with recent European economic development could, therefore, improve his analysis by incorporating the science of management accounting into his methodology. A companion piece to this article will be published in the fall issue of the journal.
Few if any problems in British economic history have drawn more attention than that of British economic performance during the late Victorian and Edwardian eras. Optimists have argued that the British economy functioned well, pessimists that it faltered badly, and the pessimists have usually had the upper hand in the debate. Recently a group of younger historians, led by Donald N. McCloskey, has de-cidedly challenged the pessimists' view. "There is...," McCloskey wrote, " little left of the dismal picture of British failure painted by historians. The alternative is a picture of an economy not stagnating but growing as rapidly as permitted by the growth of its resources and the effective exploitation of available technology."1 Revisionists do not claim that the British economy expanded as rapidly as the American or the German; indeed some, unlike McCloskey, might even concede a relative economic stagnation. But they do not con-cede that the British entrepreneur can be faulted. Economic facts limited his parameter of action but within that parameter he perform-ed well.
This article rejects the optimists' interpretation of British entrepre-neurial performance. It is, however, less concerned with conclusions than with how conclusions have been reached, for much of the revisionism stems directly from the application of a "new" meth-odology, grounded in economic theory and quantification.2 The contention is, therefore, that inadequacies in the optimists' conclu-