Accounting, Organizations and the Italian Society
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Accounting, Organizations and the Italian Society: The Istituto per la Ricostruzione Industriale (IRI) and the searchfor alternatives to US corporate capitalism(1948-1973) Abstract The accounting literature has long investigated the relationships between accounting, economic policies, and the State. This paper aims to enter this debate by looking at the history of the Istituto per la RicostruzioneIndustriale (IRI), the large State owned Italian corporation privatised in the eighties. The paperaims to show how accounting provides a mediating platform where economic and social policies are not simply implemented, do not only emerge and stabilise, but are also continuously negotiated and re-invented. Drawing on archival evidence, we illustrate the development of planning and management techniques in the immediate postwar period until their institutionalization at IRI in the late sixties. We do so to illustrate how the emergence of value added planning at IRI was not simply a means to provide data to national accounting statistics. The emphasis on value added constituted instead a material practice that made the translation of certain values into an economic value and provided a technical solution to the problem of mediation of the postwar fragmented Italian society. In bringing the case of IRI out to the fore, we also aim to further speculate on the role of accounting in organizations and society beyond a critical stance and towards a more positive speculation on the possibilities that accounting provides to mediate amongst sometimes opposite political and economic interests by providing technical innovations that substantiate the ideal of compromise and assume the character of social innovations. “Essendo noi uomini medi, le vie di mezzo sono, per noi, le più congeniali ”1 (GiulioAndreotti) 1. Introduction In their seminal article on the history of value added in the United Kingdom, Burchell et al . asked: “How is “efficiency” to be brought into relation with “democracy”?” (1985, p. 399). This question has since then inspired many works in the accounting literature that has explored the relationship between accounting and the State (e.g. Miller, 1986; 1990), the role of accounting in the making of macroeconomic policies (e.g. Suzuki, 2003a, b); and reflected on the nature of accounting as a ubiquitous technique of government affecting many aspects of our life (Miller and O’Leary, 1987; 1991). Accounting, far from being a mere technical issue of representing economic transactions, is instead a technology of government (Miller, 1986),2 where economic and social policies are not simply implemented. They rather take form and stabilise through, and in, accounting practices. Viewed from this perspective, accounting, as much as finance, is an “engine and not a camera” (McKenzie, 2006) of the economy, and of economic and social policies. 1“Being ourselves average men, middle ways are for us the most congenial” (GiulioAndreotti, our translation). 2 A technology of government is defined as “the wide range of calculations, procedures and mechanisms that help to operationalise certain abstract objectives” (1991, p. 736) and political rationalities. 1 This paper intends to enter this debate by exploring accounting and planning practices at the Istituto per la RicostruzioneIndustriale (IRI), 3 a large state owned corporation in Italy, in the period that goes from the end of World War IIuntil the explosion of the oil crisis in the seventies which culminated in the privatization of IRI in the eighties and nineties. The choice of this period is not casual. It coincides with the establishment of the Italian Republic, the need for administering the funds arriving to Italy through the Marshall Plan (see (Kipping and Bjarnar, 1998), the search for forms of cohabitation amongst various parts of the Italian fragmented society under this new republican form of government and the necessityto rebuild the Italian economy. IRI was at the centre of these various demands and constituted one of the social, economic and political spaces where attempts to create a new social and economic order in Italy took place (Amatori, 2013). Drawing on archival evidence, we firstly show how attempts to ‘modernise’ management practices at IRI by importing the “American model” (Djelic, 1998) were gradually side-lined and substituted by the emergence of value added as the technical solution to the problem of mediatingamongst various fragmentsof the Italian society.This, it is argued, created the conditions for a balanced and socially sustainable development of the Italian economy. In this context, value added acted as a platform where national economic and social policies could be negotiated and continuously reinvented through a process of planning and mediation that defined the space within which such mediation could happen and be defined. In bringing the case of IRI to the attention of scholars in accounting and organization theory, we pursue a twofold aim. Firstly, we aim to speculate on the nature of accounting as technology of government (Miller and Rose, 1991). We contribute to this literature by theorising the coexistence of stable political rationalities and technologies of government with their continuous change and intrinsic fragility that requires constant compromising work, which is made possible by the malleability of accounting as platform of mediation. We show how accounting produces order by ‘continuous ordering’.In other words, accounting acquires its nature of technology of government and allows stability of economies, political orders, and societies only because of the possibility that it offers of continuously exploringalternative forms of political rationality, beyond any stable and final perfomative attainment. In this respect, the case of IRI is useful as it shows that the only political rationality that allowed a civil cohabitation and a sustainable development of Italy was one of not having any, of always creating and inhabiting a liminal space ‘in between’ various political, social and economic instances. IRI’s way of planning through value added incarnated the political thought of the Democrazia Cristiana (the Christian DemocracyParty, DC), which ruled Italy for forty-five years and is encapsulated in the epigraph opening this paper. It became the platform on which what has elsewhere been defined as a “compromised mindset” (Gutmann and Thompson, 2010; 2013) became operationable. Secondly, by exploring IRI’s history of accounting, we aim to offer material to speculate on alternative forms of accounting beyond those currently framed by market and liberalist economic policies and ideologies, which inspire most of contemporary policy making in Western economies and beyond. This helps us return to the debate on the roles of accounting in organizations and societies (Burchell et al ., 1980) as a material 3 The literature on IRI is vast. As first reference and for a bibliography, see Castronovo, 2011; Amatori, 2103. 2 practice that mediates between the production and distribution of value. We argue that accounting, although provides a framework of visibility, is not aimed at providing truthful representations but is an instrument to reflect on what constitutes a sacrifice of value and for what. We therefore call for positive, but not positivist, forms of accounting that make of this translation the key matter of concern (Latour, 2005) rather than leaving this mechanism in the backstage, covered by a veil of rationality. This call implies a profound reflection not only of the social context in which accounting operates but also the technical aspects of keeping the accounts and communicating information in specific formats which are not neutral in how accounting and the social intertwine (Burchell et al. , 1985). Beyond a critical stance, we aim to show how accounting can provide a technical platform that mediatesamongst sometimes opposite political and economic interests. In this sense, technical accounting innovations assume the character of social innovations, as these accounting technicalities always inform the way in which members of societies are tied together and socialise ‘the economic’. The paper is organised as follows. The following section recalls the accounting literature that has highlighted and theorised the links between accounting, public policies, and the state. This is then followed by a section on research methods where we provide details on the archival material that we have utilised in this study. We then provide a cross section of the IRI case that illustrates the role of value added as planning technology that served the continuous mediation and negotiation of political rationalities in the Italian government, economy and society. We continue with some theoretical speculations in the discussion section and conclude with a summary of the arguments and indications of further possible avenues for theoretical and empirical research. 2. The texture of society: material practices and calculative ties Since the eighties, accounting scholars have paid increasing attention to through “what processes can the social [...] intertwine itself with the calculative” (Hopwood, 1985, p. 365). It is by now clear that economic calculations never inhabit only the space of ‘the economic’, but construct such a space by translating into it wider societal concerns. This is for instance what the literature on governmentality(Miller and Rose, 1990; Miller; 2001; Rose, O’Malley, Valverde, 2006) has shown in the last couple of decades. Miller (1991), for