ABSTRACT
Only fleeting attention has been given to the possibility of persistent error or bias in the calculations on which investment, output, and/or pricing decisions were based in the nineteenth century. This is an indirect tribute to the influence of Max Weber and other "rationalists" who stressed the concept of a rational capitalistic establishment that employs capital accounting, "that is, an establishment which determines its income yielding power by calculation according to methods of modern bookkeeping and the striking of a balance." 1 Schumpeter's views are even more exalting.
... capitalistic practice turns the umt of money into a tool of rational cost-profit calculations, of which the towering monument is double-entry bookkeeping.... primarily a product of the evolution of economic rationality, the cost-profit calculus in turn reacts upon that rationality subjugating-rationalizing-man's tools and philosophies.... 2
