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A Comparison of Ledger‘s account between Korean Practices and Italian Pigeonholes Theory

  • The Review of Korean History
  • 2011, (101), pp.171-204
  • Publisher : The Historical Society Of Korea
  • Research Area : Humanities > History

전성호 1

1한국학중앙연구원

Accredited

ABSTRACT

Why we need to consider East Asian's Civilisation for capitalistic rationality? Max Weber regarded the double entry bookkeeping as leading to rationality and the distinguishing peculiarity of Western culture, which means there was no substantive rationality, like capitalism in East Asia, only found in many Western societies. Double-entry used in attempts to account for the Rise of the West and it is closely linked to the concepts of rationality. Some accounting historians in Korea had challenged against Weber's association of Western rationality with the advent of capitalism. They claimed traditionally Korean book-keeping system as a double-entry system, preceding Italy by two centuries, but the evidence does not altogether warrant such a claim until now. Jack Goody in his book "The East in the West" pointed out European developments in book-keeping are clearly linked to the world history of trade,especially between Mediterranean in Europe and Yellow sea in East Asia. In early medieval period, Venice was the main city for the trade between East and West. Venice took the foreign exchange in gold and silver to buy the luxury goods of the East. the Franciscans established a base at Quanzhou(Zaitun),opposite Taiwan, which during the later Tang, for Korea unified Silla Dysnasty became the world largest harbour, where already in 1326 Genoses merchants were not an uncommon sight. Nestorian Christians and Persian merchants plied silk road to Silla Korea and Tang China. The evidence of international merchants activities is enshrined in the Shosho-in treasures of Nara(正倉院). The great achievement of the Italian medieval merchants, roughly between 1250 and 1400, was to fuse all these heterogeneous elements into an integrated system of classification in which the pigeonholes were called accounts and which rested on the principle of dual entries for all transaction, but it is sometimes said that the basic principles of bookkeeping have not changed since the origin of double-entry in the middle ages. However Italian practical evidence for the accounting entry in medieval times did show no heading, and not highly abbreviated tabulation of the value involved. Only early in the seventeenth Century occurred certain modifications in the form of the ledger account which suggest that there was a tendency for account evolution to move in the direction of a more simplified and abbreviated arrangement. Early in the eighteenth century minor changes appeared in the account headings. The Account title was dropped from the heading of the credit folio and the phrase "per contra" took its place. At the same time the words "debit" and "credit" were abbreviated as "Dr". "Cr", these abbreviations standing at the head of the respective folio. By the middle of the nineteenth century both sides of the account were shown upon a single page and a single title. The situation of accounting history for Korea relatively has been underdeveloped. This paper examines a newly re-discovered cache of merchant accounts preserved in North Korea together with other records preserved in South Korea. Korean practical evidences for accounting provided perfectly articulated and highly abbreviated tabulation accounting with pigeonholes symbol set which were also recorded by in the city of Kaesŏng merchants, and they date in eighteenth century. This paper has three concerns. A first concern is the great similarity of the form of the record and the wording of entry between Korea and Italy, for creating DEB which is the same remark of Genoa, Florence and Venice in the Mediterranean Sea applied to Kaesŏng and Zaitun in the Yellow sea. A secondary concern is to compare the practical organization of the Korean accounts to the model presented by Lucas Pacioli, and thereby clarify the Korean accounts for comparative purposes. A third concern is to clarify the significance of the existence of this system. The major conclusion of this paper is that these Korean accounts on the ledger from seventh century to nineteenth century were in a general way much alike. Fortunately, the newly re-discovered merchant documents reveal a perfectly integrated method that accords with Italian pigeonholes theory.

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