Accounting for Property: The Role of Technical Narratives in the Distribution of Wealth

Abstract

In this dissertation I argue that the uniform accounting code created by the federal government of the United States in the early twentieth century for use by railway corporations provided an essential mechanism for the distribution of property rights to the assets and revenues of the U.S. economy. Max Weber identified the use of capital accounting by corporations as the sine qua non of modern capitalism, and the railway corporation as modern capitalism’s most important manifestation. American economists also recognized the railways’ importance, and one – American Economic Association cofounder Henry Carter Adams – attempted, through his dual role as railway regulator and economist, to democratize property ownership by structuring the way railway corporations kept their accounts. Adams argued, as do theorists of performativity today, that the writing of economic theory into the institutions by which economic transactions take place would have a radical effect on economic behavior and distributional outcomes. In the negotiation of a uniform accounting code for the railway industry, Adams and his colleagues recognized an opportunity for establishing processes for dividing up wealth, in which the accounting code functioned as a constitution, providing the definitions, classifications, rules and procedures by which stakeholders in the economy would assert their claims on wealth and income.

Using the records of the negotiation of a uniform accounting code for the U.S. railway industry during the period 1887-1911, I argue that the code provided an institutionalized process for generating technical narratives that justified a particular distribution of property rights to industry assets and revenues. By focusing on the railway industry, long recognized by economic sociologists and historians as the birthplace of modern legal and market institutions, I provide an example of the power of social processes in constituting economic relations of exchange and transfer. Building on existing theories of the relational nature of economic transactions, and of the power of mechanisms of valuation and classification to shape economic outcomes, my research provides further evidence that the distribution of wealth and income is best understood as the outcome of a social process of negotiation and meaning-making under conditions of unequal power.