The Subjective Theory of Value and Accounting "Cost"

Abstract

IN a recent article2 in The Economic Yburnal, Mr. Harry Norris (an accountant) puts out certain feelers into the overlap of the provinces of economists and accountants, hoping thereby to stimulate economists into thinking about accounting procedures in the light of economic science . Mr. Norris tells us that a comparison of ideas is something of which accountants, and perhaps economists, stand in need, though economists may find difficulty in discovering exactly what accountants mean by certain terms which they use. Speaking of the subject in which he is particularly interested-income-he acknowledges the substantial truth of Professor Canning's view that accountants have not developed, and probably have never put their minds to the task of developing, any complete philosophical system of thought about it. It is only fair to add that Mr. Norris is not able to find any great clarity of thought among economists as to what constitutes income . Some time ago, having suggested that economic science has not yet become integrated into the philosophy of accounting teachers and writers, I ventured to recommend that the results of such a study as Mr. Norris desires should form part of the curriculum of university students of commerce, saying that the ubiquity of accounting and the need for its reconciliation with economics rather suggests that part of a second course in accounting in the commerce curriculum should be called 'Accounting in the Light of Economic Analysis ' .3 It is natural, therefore, that I should welcome, and even try to respond to, Mr. Norris's invitation. My subject, however, is not income, but a term which Mr. Norris uses incidentally, namely, cost. And I must confess that the main stimulus prompting me to discuss it was, not Mr. Norris's article, but one written by Professor C. S. Richards.4 In his article, in which he