delanceyplace.com 10/4/13 - double entry changes the world
In today's selection -- from Double Entry by Jane Gleeson-White. Many of the greatest inventors of the past few centuries are well-known -- Thomas Edison, the Wright brothers and James Watt. However, on a short list of mankind's most pervasive and transformational inventions is one whose inventor goes almost unnoticed -- Luca Pacioli and double-entry bookkeeping:
"The 'father' of double-entry bookkeeping was a Franciscan monk born near Florence in the 1440s. His name was Luca Pacioli. In 1494 he published the first printed treatise on Venetian bookkeeping. Very little has been written on him, but as I researched his life I became more and more fascinated. The monk was also a mathematician, the greatest mathematical encyclopaedist of the Renaissance.
"I learnt that he had been born in the same town and century as one of my favourite Renaissance painters, Piero della Francesca, who possibly taught Luca Pacioli mathematics. I then discovered that Pacioli had taught mathematics to my childhood hero, Leonardo da Vinci. And I began to understand that Pacioli's magnum opus, his mathematical encyclopaedia which contains his 27-page bookkeeping treatise, was published at a watershed in western history: the moment when mathematics was morphing from its medieval form into its incarnation as the lingua franca of science and the modern world. ...
Portrait of Luca Pacioli, traditionally attributed to
Jacopo de' Barbari, 1495 (attribution controversial).
"It turned out that just as the wealth of Renaissance Italy was underpinned by a new method of bookkeeping, so the art of some of the greatest painters of the age was underpinned by mathematics -- and Luca Pacioli was implicated in both revolutionary developments. ...
"I began to investigate the possibility that the system of national accounting first theorised by one of my economist heroes, John Maynard Keynes, might somehow be related to Pacioli's Venetian bookkeeping. I discovered that the very same double-entry bookkeeping principles used by the merchants of Venice had been used to construct the national accounts of the United States and Great Britain during the Great Depression and the Second World War. ...
"The rise and metamorphosis of double-entry bookkeeping is one of history's best-kept secrets and most important untold tales. Why? First, because it arguably made possible the wealth and cultural efflorescence that was the Renaissance. Second, because it enabled capitalism to flourish, so changing the economies of the world forever. Third, because over several centuries it grew into a sophisticated system of numbers which in the twenty-first century governs the global economy. This medieval artefact is still in daily use around the world.
|Double Entry: How the Merchants of Venice Created Modern Finance|
|W. W. Norton & Company|
|Copyright 2011 by Jane Gleeson-White|