April 20, 2007

The Begining of Governance - the Egyptian Accountants

Governance is about protecting the assets of the owner. Here's an anecdote on an early development in Governance, that reflects the arisal of robust accounting and predicts redundant computing:


It’s said that accountants’ predecessors were the scribes of ancient Egypt, who kept the pharaohs’ books. They inventoried grain, gold and other assets. Unfortunately, some fell victim to temptation and stole from their leader, as did other employees of the king. The solution was to have two scribes independently record each transaction (the first internal control). As long as the scribes’ totals agreed exactly, there was no problem. But if the totals were materially different, both scribes would be put to death. That proved to be a great incentive for them to carefully check all the numbers and make sure the help wasn’t stealing. In fact, fraud prevention and detection became the royal accountants’ main duty.

Accounting is both a mundane tool for telling you how much you have, and a critical tool for stopping that "how much" from shrinking through theft. Hence, it is a Governance tool as well; double-entry accounting is also a tool to achieve a governance feature, by the magical trick of clearly identifying errors and separating them from intent.

In the absence of double entry, the Egyptians solved the errors problem using redundant computers. Just like today's designs for redundant computers, errors caused the shutdown of the system, although it seems that Egyptian designs for redundant computers did not advance to voting and quorum systems.

Posted by iang at April 20, 2007 06:33 AM | TrackBack

The Kings of old where gods and in that capacity they exercised powers beyond those of mere accountants. Entrance into an after life was measured in part by contributions made in this life. The same principle of placating the unknown exist today,we call it the government. The arbitrary whims of government officials require some sacrifice however inaccurate the accounting maybe they must be satisfied or gamed in order to conduct a normal life. The unknown god and the unknown long arm of the law serve the same purpose fear. We cannot bank on love, or friendship, but we can created fear if we sit in the drivers seat and other do not. So by driving the poor mass of users into some kind of fear mode power is exploited. In a good governance system the value need not be enforced it is apparent to all. Once the values become questionable the surest means of correcting the misaligned user group is to stampede the herd into a frenzy. The now polarized herd will respond to fear, uncertainty, and doubt. Once the FUD recipe has been completed going in and selling an abatement to fear is easy. If you worship the gods properly the world will not come apart at the seams. So if the gods require two loaves of bread, them two it is, that is until someone decides to short change the loaf and keep the difference for themselves. As this short changing of the loaf happens and the world remains whole confidence wains and a situation ripe for a new crop of fear emerges. Lots of excess bread around and poorly fed gods, tends to spur the economic free market as it slides from outside controls to seek its own level. A brave new world of gods and usurpers emerges one replacing the other. The names change from loaf of bread to best search engine, to be replaced by advertising dollars and one day to brain frequencies. An ever changing array of values seeks to be converted to another and create an arbitrage, whereby the new innovative value looks to exploit the older value. Dollars for land, which is the real value, land for guns or weapons, food for drugs, and on and on goes the story. As long as it can be counted it has a value which is purely notional. All the notions are derived from the need to have and to hold, influence and sustain the power we seek from others by artifice hopefully one with little or no green house gases.

Posted by: Jim at April 25, 2007 08:49 PM
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