Accounting and rural rehabilitation in New Deal America: A Critical Review

picturesque of American great depression in 1930: people were queuing for free food

picturesque of American great depression in 1930: people were queuing for free food

Walker’s (2014) paper about Accounting and Rural Rehabilitation in New Deal USA draws on ‘new historical accounting’ approach elucidating of how accounting could change social behaviour and facilitate social betterment. He points out that through the supervisory accounting program and the disciplined of the farmer, USA economic condition was gradually increased after the terrible great depression in 1930. Walker’s research is not the first one in historical research stream. As Napier (2006) suggests new historical accounting research comprises the explanation of how accounting could mobilized social change and how it interacts with various stream of knowledge and also various social actors, some research might be included in the vein of historical accounting research including Neu (2000) who demonstrates of how British government used accounting as a technology to change the behaviour of indigenous people as the government had a conflict with them regarding the acquisition of indigenous land and also Graham (2010) who explained the role played by accounting in the social safety net for the prosperity of elderly people in Canada. Walker’s (2014) research, is however, different from the previous research as his research considered the active participation of the subject (farmer) in the technical process of accounting. Even though it is clear that Walker’s research suggests the role of accounting in improving the farmer quality of life, this research still have some limitations that leave the room for improvement for future research. I will start discussing the paper from the literature review and finding, then from the methodological aspect, and finally from the conclusion and research implication part.

Literature Review and Findings

Walker (2014) derives his research based on the supervision theory, which he states in his abstract, is from Foucault’s and Giddens’ theory . He suggests two types of supervision are needed in order to enhance farmers’ quality of life, administrative-managerial and educative supportive type of supervision. Supervision theory according to Foucault is related to the administrative-managerial type of supervision whereby ‘the supervisor watches over the supervisee to ensure the adherence to prescription’. Giddens supervison theory is also closely related with the administrative-managerial type, as it is cited in Walker (2014) “surveillance represents an authoritative resource of time-space distanciation which generates administrative power”. Nevertheless, the literature review about supportive-educative type of supervision was derived from other researcher other than Foucault or Giddens. Walker (2014) cited the explanation of Johns (2001) about supportive-educative type of research “…when the intention is to create a liberated practitioner supervisory processes are facilitative, empowering, and enabling”. Furthermore, Walker (2014) argued that through the monitoring the supervisee performance (administrative-managerial type) the information of people who need supervision could be obtained that later on it promotes the supportive-educative type of supervision. It could be inferred that administrative-managerial supervision comes first before the educative-supportive supervision.

After expalining about the theory of supervision, Walker (2014) explained the rural rehabilitation program conducted by the government. The program commenced in 1934 and was initially be the responsibility of Federal Emergency Relief Administration (FERA), however as FERA program was insufficient to solve the rural poverty, the rural rehabiliation responsibility was moved to Resettlement Administration (RA) in 1935. RA rehabilitation program was aiming at improving the condition of the farmer and, from 1937 until its abolition in 1946, the work of RA was transferred to Farm Security Administration (FSA). FSA has a very broad concept about rehabilitiation which is to permanently increased the quality of life of the farmers.

Walker (2014) continues to describes the programme conducted by FSA which was supervised credit and accounting prescription programme. In supervised credit programme the government gave the loan with low interest rate for farmers to purchase farming tools and household needs while they also supervised the consumption of the loan. Meanwhile, the accounting prescription programme was created in order to assure the proper use of the loan that therefore farmers’ quality of life increased and they were able to pay the loan. The accounting prescription programme comprised of ‘farm and home planning’, which contained the assessment of financial position of the farm and home, the budget and the amount of the loan required to achieve self-sufficiency, and also the ‘farm family record books’ in which were inscribed individual transactions, production data, assets and liabilities, and cash flows relating to business and domestic operation.

Supervision process played a substantial role in achieving the succeed of the rehabilitation program. In the first instance, Walker (2014) explains the supportive-educative type of supervision whereby the supervisor act like an educator for the farm families. They taught how to plan a budget and how to record their daily transaction. Afterward, he explained the implementation of administrative-managerial type of supervision in which the supervisor made a periodic visit to the farmer families home to assure if the plan had been carried out through assessing families’ accounting record books. The supervisor also assessed whether the key data had been recorded in a complete, timely, and accurate manner hence it could be inferred whether the government security has been used properly and also suggested the level of improvement of the families. During the home visit the supervisors also collect the data from accounting record book for the purpose of evaluation of the programme.

Afterward, Walker (2014) explains the impact of the rural rehabilitation programme. Based on Giddens theory the intrution of the state through the collection of information could exercised the state’s capacity to regulate human behaviour. In Walker’s essay context, this theory appears as the government used the information obtained from the farmers to assess their improvement. If there is any deviances from the prescribed rule, the government will take further action, including tighten the supervision mode or reassessing the budget. Moreover, it is interesting that in the implication part of the essay, Walker also explains the theory from Foucault as he uses the notions of ‘new pastoral’ power by modern state to disciplined the farmers in maintaining the accounting records. The evidence he gives suggest that the accounting record kept by clients revealed a positive impact. Many of the farmers have change their method and practices that they turn to have the most profitable farm in the state. He also gives evidence thay by the end of February 1943, 86% of the principal due on rehabilitation loans had been repaid. From the educative-supportive type of supervision he gives evident of Negro families who made ‘a great educational stride’ that it improves their standard of living. All in all he suggests that rural rehabilitation programmes brought a permanent impact as it was not only giving the loan to the clients but also giving them the necessary skill to survive through disciplined record keeping.

From the literature review and finding parts, I observed some limitations in his study. Napier (2006) suggests that accounting historical research could not just simply explaining that A cause B but it should explains of why A cause B. Walker (2014) explains the derivation of Foucault and Giddens theory in his analysis of how the state exercised its power to change the behaviour of society through the implementation of supervision and accounting prescription programmes, however he does not considered other factors that could affect the succeed of the supervision and accounting prescription programme. First of all, even though he explains Foucault and Giddens theory that the improvement of societies become the responsibility of the governments that therefore the government implemented tight monitoring towards the populations, he does not explain why American farmer, with their individualistic way of life could accept such state intervention. Fortunately, in 2015 Walker issues his subsequent paper, still using the same New Deal case, explaining that farmers’ way of life is subject to change as the structure that underpin them alter. In this case, farmers’ way of life was changing due to the economic crisis then the government had to preserve the family farm by its intrusive supervision and accounting prescription programmes. Second, Napier (2006) suggests, the accounting history research should also consider other knowledge that could support the impact of one action towards another. Walker (2014) paper missed the explanation of the supervisory style that could affect the successful implementation of the programmes. Hopwood as discussed in Briers and Hirst (1990) explains that supervisory style towards the budget could affected the behaviour of supervisee. In Walker’s (2014) paper it is unclear whether the supervisor style was the budget-constrain, whereby the supervisor is totally intolerate about the budget deviances, or profit conscious in which the supervisor is reasonably flexible toward supervisee budget performance, or may be the combination between them. This factor is important to explain why the supervision program could succeed amidst the laissez-faire culture of American farmers. Third, Walker (2014) does not explain the difficulty experienced by farmers in supervising the farmers, even though later on 2015 he explains that it is difficult for the supervisor to taught accounting for the farmers due to farmers’ illiteracy problems, he fails to explain how the supervisor could combat with their difficulties as in Walker (2015) there are photograhpic evidences suggest the farmers made accounting recording as their daily habit that they could conduct with a sense of tranquility. Finally, it is uncertain whether the rural rehabilitation programme could bring the permanent improvement to the farmers as the evidence of improvement he gives is skirt around the year 1939 until 1941.


Walker (2014) does not explicitly stated the method he applies in his paper, but it appears that he employs the Foucauldian genealogy approach, which describes by Graham (2010) as the historical tracing by putting up together the discontinuities between knowledge, power, and human subject to shape some arrangements of things. Walker (2014) obtain his data from official archive (e.g, Hearings Before the Select Committee of the House, Supervisors’ Guidebook); newsletter; and historical academic article. The absence of oral evidence in this research could diminished the robustness of the research as the researcher merely use his subjectivity to interprete the historical archive. Moreover, this research also exposed to the threat of internal validity, as I mentioned before, there might be some variables influenced the state’s power toward farmers’ behaviour that Walker fails to explained. Hence, the relationship between the rural rehabilitation programmes to society life improvement could be confounded. Finally, Napier (2006) points out historical research also face the problem of generalizability from a single case study. Consequently, it could not be assured that the study’s result could be implemented in another time or place dimension.


Walker (2014) paper contributes to the new historical research vein as he exposes the relationship between state, farmers’ families and economic. However, the conclusion he derives is a bit normative as everyone might understand that supervised accounting and loan could change behaviour thus further improve the economic conditions. It will be better if further research also consider other factors that might influence the succeed of the programme such as supervision style and cultural implication. Moreover, it will also be useful if the research could obtain the data not only from the historical archive but also from the direct witnesses.


Briers, M., and Hirst, M. (1990). The role of budgetary information in performance evaluation. Accounting, Organizations, and Society, 15, p.373-398.

Graham, C. (2010). Accounting and the construction of the retired person. Accounting, Organizations, and Society, 35, p.23-46.

Napier, C.J. (2006). Accounts of change: 30 years of historical accounting research. Accounting, Organizations, and Society, 31, p.445-507.

Neu, D. (2000). “Presents” for the “Indians”: land, colonialism, and accounting in Canada. Accounting, Organizations, and Society, 25, p.163-184.

Walker, S.P. (2104). Accounting and rural rehabilitation in New Deal America. Accounting, Organizations, and Society, 39, p.208-235.

Walker, S.P. (2015). Accounting and preserving the American way of life. Contemporary Accounting Research, 20, p.1-38.

Challenges in Accounting for Human Right

It has been clear that business is the part of society, in doing business companies might work with regimes whose values they might consider offensive. It is quite often that companies have to deal with the local society who need to mine land that is ancestral home of indigenous people. (Gray, Adams, and Owen, 2013)

the illustration above is just a small example which portray that companies are actually deal with human right issue. Human Right is could be defined as the fundamentals principles allowing individuals the freedom to lead a dignified life, free from fear, and free to express independent beliefs (Gray and Gray, 2012). Companies have an obligation to ensure that they do not violate the human rights.

International initiative on human right has been emerged in 1948. As the World War II ceased, the United Nation declared the Universal Declaration on Human Rights (UDHR) for the purpose of protecting individual rights and freedom throughout the world. UN General principle emphasized in the importance role of State in protect against human right abuse within their territory  and jurisdiction by third parties, including business enterprises. Consequentially, this principle also obliged the businesses to respect human rights whereby they should address adverse human rights impact with which they are involved. Moreover, businesses are not only obliged to respect human rights but they also have to avoid infringing on the human rights.

Despite all these initiatives, Gray and Gray (2012) highlight that there are some challenges in articulating the notion of human right that it drives to the very basic question about what is to be human? and what each individuals owes to themselves and to each other?. Albeit this confusion, the notion of human right tend to use UDHR as its touchstone. Arguably, as UDHR is not legally binding and only form the basis of what nations are expected to follow, it has lead to the widespread acceptance of human rights as a basic tool of moral evaluations. 

Another problem arises as UDHR per se  having some disputes and the most substantial dispute is, UDHR is considerably  emerged on western idelogy. It leads to the essential conundrum over the extent to which the UDHR leans towards a privileging of western notions of individualism over the eastern sense of collectivism. 

Moreover, the non-legally binding nature of UDHR, is however, constitutes  no well-defined responsibilities
expected from the government and businesses. As the UDHR has asserted, initially and predominantly human right is a matter of state. Nevertheless, government is incapable in controlling the MNCs as MNCs have many subsidiaries outside its reign. Fortunately, the international initiatives, including UNGC and OECD guideline for MNEs, are developed in order to define how business might begin to understand human right. However, there is a growing resistance from business as human rights are considered to be outside the scope of business that therefore business will have little benefit from engaging corporations with human rights. 

The unclear responsibility of who should assert the human right, leads the NGOs to arbitrate this issue. There are several NGOs initiate in addressing the human right issue. For instance, The business and Human Right Resource Centre (Responses from companies to allegations of misconduct); Right and Accountability in Development (promotes corporate accountability, fair investment, and good governance). However, the complex nature of MNEs with the growing range of stakeholders in different places and the unabated capital mobility, creates a difficulty to small-funded NGOs in monitoring MNEs’ human right-related activities. Therefore, the social accounting and the mechanism of accountability is expected to tackle this issue. the social accounting might help companies to monitor and manage human right risk only and if only the social  accounting have a reporting framework and a clear mechanism of monitoring. Unfortunately, the beyond dispute notion of human right makes there is no clear reporting framework and measurement of human right. Even though, GRI has provide  a guideline in reporting human right, according to GRI (2008) survey there was only 7% of companies surveyed report using G3 guideline comply with the guideline

Closing Remarks

although it is not yet clear how the measurement and calculations to reflect the rights of humanity, some initiative arises in the area of finance through the development of Socially Responsible Investment index such as FTSE4Good, DJSI, KLD Domini and so forth to facilitate conscientious investor place their fund in companies with highest respect in human right. In term of human right practice monitoring, inevitably we still heavily rely on NGO or media. It is expected that this practice could prevent the human right abuses by business enterprises