TAILIEUCHUNG - ACCOUNTING AS THE MASTER METAPHOR OF ECONOMICS

Audits – In those cases where the pricing exposure is not known at contract inception, audits may be used to determine the actual final exposure. These audits can occur during the policy term or at the end of the policy term, depending on the pricing exposure base characteristics. For example, a policy whose final premium is based on the insured’s sales (., a commercial liability policy for a retail store) or payroll (., a workers’ compensation policy) during the policy period will require an audit after the policy has expired to determine the final premium. Endorsements/cancellations – Policies. | Accounting as the master metaphor of economics Arjo Klamer and Donald McCloskey George Washington University and University of Iowa It is now sixteen or seventeen years since I saw the Queen of France then the Dauphiness at Versailles. . . . Little did I dream that I should have lived to see disasters fallen upon her in a nation of gallant men. . . . I thought ten thousand swords must have leaped from their scabbards to avenge even a look that threatened her with insult. But the age of chivalry is gone. That of sophisters economists and calculators has succeeded and the glory of Europe is extinguished for ever. Edmund Burke Reflections on the Revolution in France Everyman ed. p. 73 To outsiders the economist and the accountant look similar both the calculators in whom the glory of Europe is extinguished for ever. Economists see themselves however as distinct and distinctly more gallant. They see themselves variously as worldly philosophers or social physicists or empirical scientists - the ideal varies but is anyway distinct from mere keepers of account books grey men on tall stools. Yet most economists do not know what they scorn. Few have experience in business. Few have taken a course in accounting. A business degree in which such a course might be required is viewed as poor preparation for economics. Mathematics or even history are thought to be better the less about the world of business the better ancient history perhaps or algebraic topology. Most economists have not read an article on accounting. In fact most are startled to learn of the existence of academic articles on accounting. Academic accounting One might as well have academic plumbing. Economics however is dominated by accounting ideas. Most economists would be surprised by the proposition but in fact their field is ruled Address for correspondence Arjo Klamer George Washington University Washington DC 20052 USA Donald McCloskey Department of Economics University of Iowa Iowa City Iowa 52242 USA. .

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