Accounting, vehicle of a certain vision of the world
Accounting does not simply consist of a neutral recording of the activities of a structure. The way in which these figures are taken into account is the result of an ongoing process from the premises of accounting, which is based on strong philosophical assumptions. Double-entry accounting, for example, has not always existed and reflects the distinction between objects that can be exploited, controlled and used (assets) and subjects, worthy of respect and rights (liabilities). One can easily imagine what this could have to do with the relationship that organizations have with different forms of living beings and how this could lead to various social and environmental crises.
In addition, we can only record some activities that have a market value. However, many activities in the commons sector cannot however be classified as marketable, although they fully contribute to the value of joint projects.
The second collaboration layer, REA accounting (Resources, Events, Agents), aims to go beyond traditional double entry accounting which only looks at one entity (what comes in, what comes out, what can be remembered after ). There is no ecosystem vision and no view on everything that is happening outside.
The aim is to highlight the distinction between the extractive and the generative mode. A farmer who depletes his soils is in an extractive, rather destructive logic while in a generative logic, the farmer will enrich his soils and take care of them, for example. On standard accounting documents, this cannot appear anywhere. For the authors, this blindness of accounting to externalities is the main weakness of the current political-economic system, which allows companies to take full advantage of this gap between reality and accounting, without paying for the damage caused along the way. This distinction can also be made for currency. Some speak of cold money (extractive, dominant, without concern for equity) and hot money (local, which wants to take into account more than the market value).
In this sense, the MACAO cultural center in Milan has been experimenting since 2015 with a local cryptocurrency: the CommonCoin, in order to create a circular micro-economy within the community (comprising a hundred members). Employees are paid in this currency, supplemented by a basic monthly income in euros. In collaboration with other actors like Faircoop and Dyne.org, they are launching a major project in Europe; Banque des Communs, a cooperative bank whose mission is to provide cooperative financial tools to support alternative economic projects and various social movements.
Finally, the third “family” of alternative accounting would be thermodynamic accounting, which aims to internalize externalities.
As an example, we can cite the work of the Austrian association Economy for the Common Good, which has developed in recent years a “Common Good Balance Sheet”. This assessment is characterized by the existence of a matrix with a system of positive and negative points. There are 17 clusters of positive or negative impacts. 2000 companies and cooperatives use it. This means that we are changing the incentives. The activity will be rewarded with a positive impact on society. This kind of accounting is not necessarily internal. It is not operational for everyday work (it can be done every 6 months, years). Some municipalities have already implemented it.
Another model currently in the testing phase is that of CARE (Creative Accounting Adapted to Environmental Renewal). This is a multi-capitalist accounting, which therefore takes into account not only economic capital but also social capital and environmental capital in the calculation of profit. The idea is to say that one can be punished for financial mismanagement but not if one causes negative ecological or social externalities. This method therefore seeks to internalize the externalities.
Contributory accounting, REA Accounting, thermodynamic accounting… the dream would be to take the best of all three. Many prototypes exist today, but still remain fragmented.
How can administrations deal with these questions?
During our exchange, Michel Bauwens first suggests creating protocol cooperatives whose objective would be to create a software fund that allows all participating cities to create shared housing, shared mobility, energy cooperatives etc … in order to centralize and use the same technological bases (which is the strength of platforms like Airbnb and Uber). Collective infrastructure would facilitate the development of these projects and thus support generative entities.
- From the concept of general interest
IBEST. Starting from the observation of the inability of these indicators to account for common well-being for the sole obsession with performance, the metropolitan area of Grenoble has launched a research program on the creation of new wealth indicators: the indicators of sustainable territorialized well-being (IBEST). This sustainable well-being can then be understood along eight axes:
– Work and employment
– Affirmation and commitment
– Democracy and “living together”
– Time and rhythm of life
– Access to basic needs
– Access and use of public services
– The natural environment
These axes should make it possible to consider the action in a more transversal way and to be freed from the logic of competition at all costs, in order to better serve the general interest.
You can find the video of this conversation below!