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Accounting, finance, engineering and society

March 1, 2009

Sorry, guys, this has nothing to do with what I normally talk about on Irresistible (Dis)Grace, but this is my site, darn it.

I don’t talk about it that much here, but I’m an accounting major. The problem is, when I tell people this (or even if I don’t), people don’t really respond to this very well.

Oh, whatever, I’ve already written about this one on facebook (lol, if you add me and I have no idea who you are, I will reject you — but you *can* follow me on twitter where I talk about infinitely less interesting things)…so I’ll just copy and paste (this is like…really long 1200 words):

In my travels in a world that appreciates law, medicine, and engineering, I’ve come across multiple variations of a theme that has struck out against me: “Why accounting?”

It’s not a “Why accounting?” that’s genuinely interested in wanted to know “Why Accounting?” (although I guess that might also be a tough question to answer)…it’s a “Why Accounting?” that is mired in condescension and pity. It’s a “Why Accounting?” that closely attends (whether behind or ahead) the remark, “You could’ve done so much more for society!” or “You’re wasting your talent!”

I’ve heard this from teachers, I’ve heard this from parents of friends in high school, I’ve heard this from those friends in high school or friends in college. All of which, I think, should be ashamed to say, much less think this.

And then, people might come out again and say something like, “Why not do something worthwhile like engineering.” (Interestingly enough, the teachers will say, “Why not do something worthwhile like teach snotty-nosed HS kids for peanuts.” NOOO THANKS!)

The knife in my side irritates too much for me not to scream.

In today’s world, we have a complex society. We aren’t just people living in villages bartering with each other. Thanks to society, we have need of certain individuals with unique talents. So we *do* need engineers if we want to experience modern society or progress to postmodern and future societies. But because engineers often produce something that is tangible to you, there’s this idea that they are at this top of the totem pole of worthiness. But because engineers suffer and bleed from every pore through pore-bleeding math, there’s this idea that they are providing salvation to us being mired in sin.

But I will have to say, we live in a complex society. You can’t just build stuff. You can’t just research stuff. Engineers, indeed, are not God. And this is why, interestingly enough, at least *some* people hold law in high esteem. (When people ask “Why Accounting?” if they follow it up with what they consider to be worthy alternatives, they’ll *usually* include law along with medicine and engineering.) Law is necessary for a modern society, even if you think lawyers are crooks or deceivers or smooth-talkers or whatever. Law, in some form, is the foundation of a stable country. You might want fairer laws…you might want simpler (less is more, maybe) laws…you might want implied laws over formalized laws…you might want the law of human conscience to reign over a government-imposed law…but whoever you are, you recognize law is required. So, a contempt for lawyers is not really a contempt for law, but of the practice of what is felt to be bad law over good law. Good law, quite simply, provides some rules of engagement. Law should enable people to build stuff and research stuff (without getting ripped off, I guess our society would suggest).

It is so strange that law can be recognized (at least by some) as something valuable…and yet accounting and finance often become the dregs of society. I mean, when people consider business *worse* than liberal arts, that’s pretty darn sad (no offense to LBARs).

Why so strange? Because for our modern, complex society, we *also* require business. For all the engineering that an engineer painstakingly tends to, he needs capital. And when he needs capital, he needs a financier. He needs to keep records and pay his taxes appropriately (even if our treasury secretary hasn’t quite gotten this down). So he needs an accountant.

I have heard so many people say things like, “Accountants and financiers make money off of nothing but meddling with others’ money…” but the problem is that in a complex society, this is what we agree to. We agreed to the management and control of money way back when when people decided that collecting interest on loans wasn’t usury but a good way to keep the bank in business. We agreed to management and control of money when we decided that perhaps more complex forms of economies were more lucrative than less. We cannot turn back on accounting and finance for gut reactions like, “But they don’t make a physical product” or “they are leeches” unless we also want to turn back on modern comforts of society.

Now, I know it’s particularly fun to hate on financiers and economists. After all, whenever we have a massive failure of something, we want to find blame. And really, I’ll admit that some investment banks screwed up bad.

But is this failure of finance or failure of some financiers? And when Arthur Andersen missed the Enron scandal, was that failure of accounting or failure of some accountants? I think these cases are examples of the failures of some individuals and not failures of entire disciplines. After all, we aren’t dropping the ideas of banks and investment banks and capital markets…we are just trying to adjust them so that unscrupulous people can’t do stupid crap like this again. In the Great Depression, we didn’t get rid of the idea of banks…but we needed controls on them. We needed controls on investments. (or, if you swing the other way, perhaps the idea was that we had too many artificial controls that prevented the smoothness of these institutions and we just need to go back to times of splendor.)

You will always need accountants and financiers if you want to enjoy a good life. Even if you think that engineers and doctors are the only source of good things in that good life because you can touch their work-spawns, it is nearsighted of you not to realize that behind those doctors and engineers are accountants and financiers who transport the blood of capital and money around the body. So that the doctors and engineers can do their job, at the very least.

You cannot just radically change laws and policies to eliminate the need for these careers, in some attempt to show that they are less worthy than engineers. Well actually, you can, but as soon as you do, you will destroy your society and move back in ages. You will become Russia, and the one rule of economics that is reliable throughout history is (beyond all the hypotheses and models and theories that apparently aren’t worth anything): whatever Russia does, do the opposite.

You can change laws and policies in a way that you think might be radical enough to eliminate us, but really, all you’ll find is that you’ll be introducing more financial uncertainties into the market, which will only STRENGTHEN the demand for people who know about the law and about finances. You will only STRENGTHEN the demand for accountants and financiers. Go ahead and get rid of the income tax. You won’t get rid of accountants. Go ahead and get rid of the Federal Reserve. You won’t get rid of accountants and financiers. Go ahead to whatever extreme you think; you won’t get rid of accountants and financiers if you want to enjoy life with comfort. We are necessary for this society, and we will do our best to make sure this society works as smoothly as possibly even if you spit in our faces.

tl;dr summary: Behind every woman/man is a good woman/man helping him. Behind every job that you like is an accountant/financier that you may dislike or think is worthless, but nevertheless backs him up. Redirect your rage toward elementary school teachers who said you’d be writing in cursive for the rest of your life. Who uses cursive, lol?

Just had to get that out there.

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6 Comments
  1. Todd permalink

    I must confess, I may be one of those people that don’t respond well to finding out someone is an accounting major. I wouldn’t ask “why accounting?”–I just assume that they thought it was a good way to make money, and hope that they find it rewarding. I certainly wouldn’t suggest that accounting is a waste of talent. After all, it requires talent, and it’s certainly a necessary function in society.

    So I guess I wouldn’t have a negative response. I just wouldn’t have much response, period. Whereas, when I find out that someone is a comparative lit major, I’m all curiosity, wanting to know what languages they’re specializing in, and who their favorite authors are. When I met a physics grad student last August, my first question was “so remind me . . . is the universe going to keep expanding, or will it eventually contract?” (answer: it will keep expanding). If someone’s a dance major, I want to know what type of dance is their specialty, what ensembles they’re involved in, and who their favorite choreographers are.

    Theology, paleontology, philosophy, geology, history, anthropology, botany, music, and art history are just a few of the topics that fascinate me, all potential areas for interesting conversation. Business and accounting, not so much. It’s not that I look down on them. I just have to look further to find some common interest.

  2. That’s understandable, Todd…but my kind of question would be…how do you keep up with today’s economy and then not have much common interest?

    I mean, it seems like accounting is behind the scenes a lot, but the current downturn/crisis/armageddon/etc., has accounting (in part) as one of its so-called central players (mark to market, fair value accounting, etc.,)

  3. Todd permalink

    Well, that’s a good point. I certainly have been reading a lot more about finance over the last year, trying to understand the issues surrounding the stimulus bill, bank bailout, regulation of financial firms, etc. And Obama’s budget proposal, pointing out the deceptive budgeting tactics of the Bush administration (only some of which I’d been aware of) certainly highlights the importance of honest, transparent accounting.

    Also, I’ve recently (over the last four months or so) become aware of Peter Orszag’s budget forecasts, showing how imperative it is that we reform health care, to avoid economic disaster 30 years down the road. I’m definitely a believer in the need for honest and transparent accounting in the government.

    I guess what pushes me into investigating these areas is my desire to be an informed voter–my feeling of responsibility for the actions of my government.

    But in an ideal world, where the financial markets were healthy, and politicians didn’t practice deceptive accounting, I would never think about this stuff at all. Whereas I find natural history just inherently fascinating and rewarding, whether or not it has any bearing on public policy.

  4. I guess that’s the case. but my deal would be to jut point out that we don’t live in an ideal world, and really, that’s what makes it inherently fascinating to me.

    Unlike something like physics, which is set in stone (a hard science), accounting is something we really come up with as we go. So the excesses or deficiencies of people directly affect accounting — which means you always need people who are one step ahead of people who would try to game the system.

  5. Todd permalink

    I guess looking at it that way does make it seem more intriguing–like an ongoing investigation.

    My dad has a physics degree and an MBA. His second job was working for a computer company based in Salt Lake City, but it didn’t last long. He quit when the President/CEO (who was also a stake president) made it clear that he expected my dad to do some ENRON-style accounting.

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