AFRICAN LABOUR SYSTEMS, MAINTENANCE ACCOUNTING AND AGENCY THEORY: SOME FUNDAMENTAL QUESTIONS

Critical Perspectives on Accounting (1997) 8 , 393 – 407

AFRICAN LABOUR SYSTEMS, MAINTENANCE ACCOUNTING AND AGENCY THEORY: SOME FUNDAMENTAL QUESTIONS R. S. OLUSEGUN WALLACE Middlesex University Business School , London Much of the literature on accounting is totally irrelevant to African conditions and problems. Asechemie’s reconstruction of pre-colonial African accounting therefore has special value for African accounting scholarship. This critique examines the central, and very important, question addressed by Asechemie: that is, whether a contemporary accounting theory can be used to explain and reconstruct past practices, particularly in a foreign context. In addition, another perspective on the African labour process and the ‘‘house’’ (or communal) system is offered. The use of oral history methodology in the reconstruction of the past, agency theory’s relevance to pre-colonial Nigeria and the concept of ‘‘African maintenance accounting’’ are examined. The critique also assesses whether (1) the pre-colonial African setting was a capitalist or non-capitalist social one, (2) agency theory applies to settings other than the modern Western capitalist world and (3) there are other pre-colonial accounting systems that can illustrate, in a meaningful manner, the prevailing labour processes in that world. It sceptically examines the main points raised in Asechemie’s article not in a spirit of criticism, but to suggest points which may have been overlooked and future possible lines of enquiry. ÷ 1997 Academic Press Limited

Much of the literature on accounting is not designed to deal with African problems and some of it is totally irrelevant to African conditions and problems. This is one reason, as I see it, why Asechemie’s article (preceding this one, pp. 373 – 392) has special value for African accounting scholarship. It is a kind of reconstruction of medieval or pre-colonial African accounting seen from the African perspective. No doubt it is open to criticism, on points of detail and on broader questions of theory. But the kind of criticism and debate which I hope Asechemie’s article will provoke can itself be of great assistance to all those who are working on the peculiarities of past, present and future African accounting. Asechemie addresses a very important question with potential implications for accounting research: whether a contemporary accounting theory can be used to explain and reconstruct the past, both in the country where the theory was developed and in a foreign context. He argues (pp. 387 – 390) that the principles of agency theory, as applied to management accounting, were irrelevant in pre-colonial Nigeria. There are many aspects of this topic, and I Address for correspondence: Dr R. S. Olusegun Wallace, Middlesex University Business School, The Burroughs, London NW4 4BT Received 21 January 1997; revised 12 February 1997; accepted 10 March 1997. 393 1045 – 2354 / 97 / 040393 1 15 $25.00 / 0 / pa970122

÷ 1997 Academic Press Limited

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will use this paper to discuss four of them: (1) the African labour process (ALP) and the ‘‘house’’ (or communal) system; (2) the use of oral history methodology; (3) the relevance of agency theory to pre-colonial Nigeria and (4) the concept of ‘‘African maintenance accounting’’. Particular aspects of the article are used to illustrate various points about these general ideas. These four issues are important in that they form the basis of answering some of the fundamental questions that we should ask of modern accounting theories. Modern accounting theories are often multidimensional. They have the dimension of historical time, the dimension of geographical space and they are often embedded in political, economic, sociological and technological contexts. All these dimensions are extremely important in understanding modern accounting theories. Because accounting theories are inseparable from the time in which they are developed, we should examine their relevance in terms of time orientation and relationships. For example, one aspect of examining the universality of an accounting theory is to assess whether it is capable of explaining events of the past, the present and the future; a second is to locate it into a geographical space different from the particular place in which it was developed. Asechemie’s examination of the relevance of agency theory to the pre-colonial Nigerian labour process (pp. 15 – 18) attempts to locate that theory within the dimensions of time and geographical space. Finally, each of the four issues discussed below deals with the relevance of agency theory to a different economic and sociological context such as the one which existed in pre-colonial Nigeria.

African Labour Process (ALP) Although dismissed by Asechemie (pp. 375 – 376) as irrelevant to the main thrust of his article, the historical analysis of the labour process of a people requires an understanding of the different modes of production over several periods of their history. Modes of production are models which attempt to link together, and show the mutual reinforcement between labour, technology, trade, belief and value systems. This is in line with Marx’s formulation of the political economy of 19th century Europe as a capitalist mode of production (and I argue below that pre-colonial Nigeria was essentially a capitalist economy). In this respect, it is possible to identify three dominant modes of production with uneven levels of development and varying degrees of overlap and transition in different parts of pre-colonial Nigeria. These three (the communal, the slave, and the feudal modes of production) are described here for illustrative purposes. It does not seem clear which of the three modes of production Asechemie refers to as the ‘‘traditional’’ ALP. In some places, he describes the communal mode of production as the ‘‘traditional’’ Nigerian labour process (NLP) (pp. 377 – 380) and in other places he describes the slave mode of production (see particularly his footnote no. 3) as the traditional NLP. His description of the traditional NLP suggests that it was a unitary construct. Just as Littler (1982, pp. 117 – 145) questions whether there is a single labour process in Britain, I question whether there was a single ‘‘traditional’’ labour

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process in pre-colonial Nigeria. Each of the three modes of production is described below. The Communal Mode of Production The early history of Nigeria (i.e. before communities started to interact with each other) was characterised by social formations made up of separate tribal societies. These societies worked as a single unit in the production of food and other means of survival. In the communal society, the unit of social organisation was the clan, while the unit of social production was the family. During the communal mode of production, the peoples of Nigeria consisted of pastoralists in the north and hunters-agriculturalists in the middle and southern belts of the country. Labour and land, owned jointly by all the social groups, were the major means of production. Land was owned by the community and managed by the ‘‘chief’’ and by individual families. In addition, pastoralists had their herds of animals, while the agriculturalists had their farming implements. These means of production were not private property but communal property governed by complex customs and rules, emphasizing social responsibility (Meek, 1946). The communal mode of production is the only available option for a subsistence economy, and many of the different communities that are now contained within present-day Nigeria had subsistence economies in the pre-colonial era. In such an economy, with a poorly developed exchange and monetary sector, hiring of labour for large-scale agricultural operation was an option that did not arise. With hiring ruled out, reciprocity was the only possibility. And where communication was pedestrian, the most convenient partners in any reciprocal arrangement were neighbours. In those circumstances, the group of neighbouring compound families was apt to develop strong cohesion (Horton, 1985, p. 92). In a mainly subsistence economy, land was an asset that a family would want to hold on to, and as a result there was little or no market for land. As there was a limited supply of land, buying land was ruled out. Inheritance and conquest would seem to be the principal channels for access to this essential resource. This implies a strong tendency for up-and-coming young men to settle down with their close elders. If this settling down took place consistently over several generations, and if the population was increasing, the core of the cohesive neighbourhood group would inevitably come to be a considerable number of close kinsmen related through whatever line determined the inheritance of land. The social surplus arising from the communal production was small and based only on what nature provided. Each family as a production unit controlled the use of its surplus produce, subject to communal contribution for wars. This mode of production was the ancient harbinger of the famous extended family system in which the obligatory system of gift-giving and gift-taking made everybody his / her brother’s / sister’s keeper and ensured social cohesion. In spite of the slave mode of production (discussed below) the communal mode of production and land tenure persists to this day in some parts of Nigeria.

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The Slave Mode of Production The slave and captive mode of production prevailed in the Kanem-Borno Empire and the Hausa state (which now occupy the greater part of northern Nigeria) from about the 10th century and in the Oyo and Benin Kingdoms from about the 13th century. Division of labour was then based on captivity and age categories of free persons. The slaves herded cattle, grew crops, built roads, moats and served as soldiers. Although some able-bodied free men served as soldiers and cultivators, the elderly men acted as political advisers and representatives of chiefs or as lower chiefs in distant lands. Many of the early, domestic slaves were assimilated into the society of their captors and became military leaders, vassals, and court advisers. For example, domestic slaves who proved to be loyal and / or distinguished themselves in war also rose to the ranks of court advisers and territorial representatives. According to Dike (1956, p. 36), in the 19th century, many slave boys rose to the rank of nobility in Nigerian city-states established in antiquity, such as Bonny State. Forceful and energetic Ibo slaves such as JaJa and OkoJumbo took advantage of the peculiar constitution of the Slave and House system and became Heads of the Houses to which they were attached. The elements of the House economy were five: father, mother, children, slaves and food supply. As with every society, the House required cooperative endeavour. As the House economy was predominantly a patriarchal society, it depended primarily upon the head of the House (the father). The father looked to the best interest of the family through maintenance (what Asechemie refers to as African maintenance system) and order. The economy of the House included the totality of all its human relationships: the relationships of man to wife, parents to children, lord (and master) to servants (slaves), and the carrying out of their duties in the House. House economy was neither formed nor oriented toward the market but toward the economy of the household and the farm. Trade was necessary and permissible in so far as it served to supplement the self-sufficiency of the House; but in and of itself, it was not necessarily concerned with making money. Ethics, or practical philosophy, was essentially the moral system for the individual, the head of the House, and the statesman. With the moral system, it is possible for a man, a House, and a state to approach their essence, their true being. This remained the ultimate goal of African morality. In its full development, a House was both a cooperative trading unit and a local government institution. Every trader of importance owned so many slaves bought from various tribes. These, along with the trader’s family, formed the nucleus of a House. Despite the rich reward from the foreign trade in slaves in the heyday of slave traffic, the Delta middlemen retained the best slaves in their personal service, some of whom manned the fleet of canoes indispensable to the trade with the interior, or engaged in agricultural work on the farms. The smaller Houses numbered anything from 300 to 1,000 members; others, such as the royal Houses, numbered many thousands. For example, Waddell (1863, p. 320) reported that in 1847, King Eyo of Creek Town, Old Calabar, had in his House ‘‘many thousand slaves, and four hundred canoes with a captain and crew for every one. Besides his extensive

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trade, which amounted to several puncheons (a large cask of variable capacity, usually between 70 and 120 gallons often used as a measure) annually, he employed his people reclaiming waste lands, founding towns, and planting farms in well-selected positions which gave him command of the rivers and channels of trade’’. The slaves involved in local production were prisoners of war whose conditions of life must be distinguished from those of the slave chattels of the notorious European slave-trade (Uchendu 1977, p. 123). For example, Dike (1956, p. 37) distinguished between the plantation slavery of the New World and the domestic slavery as practised in Nigeria as follows: ‘‘whereas in the former the slaves performed, on the whole, an indirect and impersonal service and were regarded as some form of capital goods, in the latter the wealth produced by a slave eventually set him free, for the master knew his slave intimately and the value of his work and rewarded him accordingly. It was this incentive, ever present in the House [domestic] system, that made it in the [pre-colonial period] an institution full of vitality, flexible, and in a large measure beneficial to all.’’

However, in spite of this distinction, the slave society, it seems to me, was the first exploitative society in pre-colonial Nigeria. The social surplus under the slave mode of production was greater than under the communal mode, and it was usually appropriated by the chiefs, elders and free men. There were two dominant social divisions: slaves and free men or masters who were categorised into both age classes (such as in the Edo pattern—iroghae (youth), ighele (adults), and edion (elders) and wealth classes (such as ijoye in Yoruba, ticizi in Nupe and exaeve , ovie in Edo). Thus, the slave mode of production marked the emergence of social classes and social struggle. Asechemie (pp. 377 – 382) suggests that Nigerians of the pre-colonial period pooled resources to help their kinfolk and that the presence of relatives, neighbours and friends lowered the costs (monetary as well as sociopsychological) of production. However, he fails to question the consequences of the reliance on kinship on social networks. He does not consider circumstances under which the role of kinship was mitigated, overridden, or even reversed by factors in the production context. As a result, he leaves unquestioned the assumption that the ‘communal’ system always provided a haven of support for the labour force. In contrast, as Kingsley (1899, p. 535) suggested, the kinship-based (or House) system failed to provide the expected social welfare and assistance to the labour force in many ways. Much of pre-colonial Nigeria rested on a foundation of slavery; terror and despotism were normal features of the system that had to keep the masses in subjugation. In cases of failure or poor performance, the punishment that could be inflicted on the domestic slaves and apprentices included: ‘‘ear cutting in its various stages, from chipping to total dismemberment; crucifixion round a large cask; extraction of teeth; suspension by the thumbs; chilli peppers pounded and stuffed up the nostrils, and forced into the eyes and ears; fastening the victim to a post driven into the beach at low water and leaving him / her there to be drowned with the rising tide, or to be eaten by the sharks or crocodiles piecemeal; heavily ironed and chained to a post in their master’s compound ... and reduced to living

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During the slave mode of production, individualism (self interest) increasingly influenced social behaviour and eroded the rule of custom within the extended family system. The slave mode of production transformed itself into the feudal mode of production. The Feudal Mode of Production Feudal mode of production is characterised by fief, which is usually landholding, personal bondage, a military class, some form of the state and dispersal of authority. From about the 13th century, the Kanem-Borno Empire, the Hausa state, the Oyo and Benin Kingdoms and the ancient Arochukwu cult hegemony, had developed most of these attributes. The feudal productive factors were the labour of peasants and slaves, and the land. While the slaves were owned by the chiefs, emirs or kings and the nobility, the peasants were, as serfs, in a personal bond of dependence upon members of the ruling class. The peasant producers controlled their own production processes and plans. The associated social relations of production, as they were based on bondage and exploitation, were consequently antagonistic. The relation between peasant producers and landlords was both social and political. In addition, both the tenant and the landlord were in social and political bondage to the nobility. The feudal struggles between nobility and distant vassals in Oyo and Benin Empires arose from demands for independence from the Alafin of Oyo or the Oba of Benin. Social surplus under the feudal mode was paid largely as tribute in kind (later in cash under commutation) to the landowner or lord. The amount attributable to the landlord was limited only by the consumption needs of the lord and his nobility (Waine, 1895). Indigenous Technology The social structure in the pre-colonial agrarian system (described above) extended to the pre-colonial industrial or manufacturing system in Nigeria, except that freemen were mostly the ones that were allowed to train and become craftsmen. Although a few slaves (osu ) turned out to be master craftsmen, they were often released from bondage and made free men before becoming master craftsmen. Industrial production of the pre-colonial era was thus monopolised by free men. Slaves were often found in mining and civil engineering works. Although Asechemie does not distinguish between the three modes of production, he identifies (pp. 377 – 380) three systems—communal labour system; apprenticeship in craft industries (mu oru -aka ), and pupilage under the fishing trade ( ye se nweni konma )—that represent the basic pre-colonial system of fiduciary relationship between the head and other members in a family. The link between the three of them is the reciprocity of services and rewards. The master craftsman, the lord of the land or the master fisherman was expected to offer the apprentice a training in the chosen trade, and the

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young person was expected to provide in return unalloyed service with utmost loyalty to the master. As Mabogunje and Richards (1985), quoting from Sahlins (1974), said ‘‘economic and social laws are specific to given modes of production. Profit maximisation is the guiding principle of the capitalist mode and society is rationalised by the search for profit. The capitalist modes [which were prevalent in pre-colonial Nigeria] are regulated by different economic principles; reciprocity is often more important than accumulation of surplus’’. Conflation of Ideas Asechemie’s exegesis goes off tangent when it takes up the comparison of pre-colonial and post-colonial welfare systems in Nigeria (pp. 10 – 12), as its central theme is not about the difference between pre-colonial Nigeria and colonial and post-colonial Nigeria, but how agency theory cannot be used as a basis for understanding the labour processes in pre-colonial Nigeria. In a similar vein, his linkage of the concept of worker maintenance of pre-colonial and post-colonial Nigeria is tenuous. For example, the post-colonial Nigerian worker is usually a free wage-earning person, while his pre-colonial forbear was not always free and did not earn a wage for specific time-delimited services. It may be argued that the end of service benefits which the master in the pre-colonial period often offered to his servant or pupil constituted an accumulation of underpayments while the servant or pupil was in the service of the master. Whether the sum of the maintenance costs and the end of service benefit were equivalent to the value of the service rendered by the servant or pupil to his master is an empirical question, but one that cannot be resolved because in the pre-colonial age there was no systematic means of measuring value. There was, therefore, no objective measure of value. Oral History According to Collins and Bloom (1991, p. 23), oral history constitutes a verbal recollection of events and circumstances that have occurred in the past from individuals knowledgeable by virtue of their position at the time. The oral history methodology can be used to supplement and verify other forms of history (Collins & Bloom, 1991) and to problematise and contradict the traditional stories of accounting (Hammond & Sikka, 1996, p. 81). However, the main problem with Asechemie’s analysis of the labour process in pre-colonial Nigeria is the use of oral history as a basis for data collection. If the period under study was one that occurred within the life of the subjects of oral interviews or one which they can easily recall from their long memory of, say, events that occurred in the late 19th century or early 20th century, the method might be acceptable. But the setting of the study reported in the manuscript is the pre-colonial era and the mode of production used to discipline the analysis is the communal mode that predates the slave and feudal ones. This puts the period to be remembered by the subjects at about A. D. 1200 to 1500. This should have suggested the possibility of a total distortion of the facts and details provided by the subjects. Although the

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methodology may provide some clues to early labour history in Nigeria, the user of oral tradition in the reconstruction of centuries-old employment practices should be aware of the fragmentary and conjectural nature of his / her evidence. A better method for gathering such data and putting history into perspective would have been to go to the archives or to review the literature that dealt with the period covered. To rely on oral history alone is to suggest that there is no literature on this subject. However, previous historical analyses of the Nigerian environment such as those by Harris (1912), July (1976), and Waine (1895) can be used to reconstruct the NLP of the past. Another problem with the data-gathering procedure was the way the questions were framed and the underlying assumption of the interview process. The underlying assumption was that the pre-colonial labour process still exists in Nigeria in its pristine form. Given the intervening colonial period, the introduction of money into society, the diffusion of Western labour process into the system, what exists today as the remnant of pre-colonial labour process would be a distant relative of the original. The three questions that were asked of the interviewees should be seen in this context. The questions are (1) the types of native work system in the interviewee’s culture; (2) the behaviours of employers and employees in the types of work system and (3) the forces or factors that regulate (or is it regulated?) the behaviours of employers and employees. Answers to these questions depend on the interviewees’ understanding of the questions. If they understood the questions to refer to the present set of native labour practices, they would not be describing the medieval native labour practice. What they would be describing would be a contemporary, perhaps romanticised version of medieval native labour practices. Agency Theory Agency theory is posited as a framework for examining potential conflicts whenever there is separation between owners and managers or between principals and agents. In the context of pre-colonial Nigeria, one can substitute masters for owners or principals and servants for managers or agents. On this basis, it is worthwhile to examine the validity of agency theory in pre-colonial settings. Asechemie’s critique of the agency theory (pp. 387 – 390), though well-intentioned, is probably misconceived and / or based on a misspecification of the economic system prevailing in pre-colonial Nigeria. Much of Asechemie’s discussion of the irrelevance of agency theory to the ALP is based on an inaccurate and romanticised view of the ALP. The underlying premise of Asechemie’s article is that the pre-colonial NLP is dignified! This is contrary to my understanding of that system. The precolonial Nigerian labourer was either a slave or treated as one (especially if the person had no familial relationship with the master). The absence of money wages is cited as an example of the dignity with which the labourer was held. This is not true in many respects: (1) There were pre-colonial currencies in existence in Nigeria. These may be divided into two: pre-coinage currencies and coins. There were two

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types of pre-coinage currencies in Nigeria. The first consisted of local items adopted as a result of internal trade such as iron, tin, cattle, salt, feathers, seeds of wild plants, farm products, textiles and beads. For example, in the pastoral area, a man’s wealth was counted in head of cattle. Horses were the most prized. The Fulanis used horses and saddles as currency, in paying taxes (Eyo, 1979, p. 55). In addition, as Alagoa (1985, p. 400) suggests, both slaves and salt were also in great demand and highly valued; they were used more often as accounting units or standards against which goods were valued. Similarly, Alagoa (1985, p. 400) reported that as early as 1699, iron bars were used, in the main, as an accounting unit, and used only rarely in actual payment. Copper bars were also given out in payment at Bonny and Elem Kalabari, but valued in iron bars (four copper bars to one iron bar). The second consisted of imported items determined by the external trade and influenced by what early traders considered to be of value to a large number of Nigerians. These included cowrie shells, iron and copper bars, manillas, textiles, beads, salt, gin and tobacco. Many of these were used in settlement of labour wages as confirmed by Asechemie’s footnote no. 11 (p. 391). There have been reports of the use of foreign coins in Nigeria in periods dating back to the Middle Ages. For example, a coin of Constantine was found in Jos and a silver groat of Edward III (1327 – 1377) was found in Birnin Kebbi. From 1780, when it was struck, to 1851, the Austrian Maria Theresa dollar was in use in Nigeria and exchanging for between 2,000 and 3,200 cowrie shells (Eyo, 1979, p. 81). Although the importation of manillas, cowrie shells and Austrian dollar coins into Nigeria was stopped in 1903, their circulation continued not only as currencies but as ornaments; cowrie shells formed part of the royal regalia and the dollar was converted into pendants for women (KirkGreen, 1960, p. 142). The pre-colonial currencies of Africa are a subject that has been relegated to the background by scholars of accounting and finance: they have not yet been properly researched and published. What are the ecological products utilised as a medium of exchange and as a measure of value? (2) During the pre-coinage period when there was no money (in the form that we know it today) in use, wages did not depend on money; services were usually contracted in kind and paid for in kind or other services (such as condoning the payment of dowry for the betrothal of one’s daughter). For example (and this is true of present day Nigeria), when a man takes a wife, the family of the wife usually send along with their daughter one or two ‘‘house helps’’ with the unwritten, but understood, condition that the master of the house (their son-in-law) will not only feed, house and clothe the helpers, but must also educate them. The reciprocity for the ‘‘free service’’ provided by the helpers is a surrogate for the monetary wages that are not paid to the helpers. Reciprocal exchange was also an important form of trade by barter. In this form of exchange, the value of the exchange was probably not important and

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the whole matter was devoid of any trait of a business transaction. What was important was the spirit of friendship which the reciprocal exchange created, cemented and sustained between individuals or groups. (3) The quotation from Dike (1956, p. 37) referred to earlier suggests that the reward under the slave mode of production was future based. And it was the anticipation of this reward that kept the labourer in awe and continuous respect of the master. As Asechemie (pp. 380 – 381, 384 – 385) suggests, labour costs may be viewed as the cost of maintaining the servant and of establishing the servant in his or her business after graduation or discharge from apprenticeship; so the absence of monetary wages cannot be the main reason why the agency theory cannot apply in pre-colonial Nigeria. Asechemie’s (p. 381) suggestion that in the case of under-performance by either party to the employment contract there was the remedy of social intervention, is partially true. However, it was only true in respect of observable perfunctory performance in a principal / agent situation where a person engaged another person to build a house or do something in return for an agreed consideration. Either party to the contract was subject to social approbation if s / he failed to fulfil his or her share of the contract. In modern times, this role is being performed by the courts of law, and social and professional groups (see Armstrong, 1991). To argue that agency theory does not apply to pre-colonial Nigeria, one needs to identify the assumptions of the theory that would not apply in that age. Agency theory aims at resolving the problem of risk sharing that arises out of a cooperative endeavour among individuals and parties that have different goals but where there is a division of labour (Jensen & Meckling, 1976). The theory focuses on the relationship between one party (the principal or master) who delegates work to another (the agent or servant) who performs that work. The theory seeks to resolve two problems: (1) conflicts between the desires or goals of the principal and agent and (2) the difficulty or cost of observing what the agent is actually doing. The unit of analysis of agency theory is the contract governing the master-servant relationship given the assumptions about people (e.g. self-interest, bounded rationality, risk aversion), the House system (e.g. goal conflict among members of a House), and information (e.g., information as a commodity which can be purchased). Specifically, the pertinent question should be: is the pre-colonial labour contract (with its maintenance system with end-of-contract benefits, including transfer of property rights) more efficient than the post-colonial labour contract (with its wages, commissions, stock-options, market governance and transfer of property rights)? Just as it is now possible for an increase in the proportion of the firm owned by the managers to decrease managerial opportunism (Jensen & Meckling, 1976), was it possible then for the expectation of an end-of-contract benefit to decrease servants’ opportunism? In pre-colonial Nigeria, there existed between masters and servants or slaves, contracts (unwritten though they might have been) that possessed the characteristics of an agency theory situation. What did not exist then were (1) conflicts between the goals of the master and the goals of the servant (if the servant had any goal at all, it should not be different from that of the master),

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(2) easily measurable outcomes and (3) agents (servants) that were less risk averse than their principals (masters). If servants were not able to diversify their employments or change them, they were usually risk averse and would try their utmost to keep their jobs and stations in life. One major issue not emphasised by Asechemie is the situation in the communal culture that compelled self-interest to give way to selfless behaviour (see Perrow, 1986). If there was no goal conflict, the agent (servant) would behave as the principal (master) would like him to, regardless of whether his or her behaviour was monitored. Another characteristic of the pre-colonial Nigeria labour contract was the immeasurability of task outcomes. Agency theory unrealistically assumes that outcomes are easily measured. However, most tasks in pre-colonial Nigerian subsistence farming and industrial or manufacturing system involved joint or team effort and / or produced ‘‘soft’’ outcomes. In this circumstance, outcomes were either difficult to measure or difficult to measure within a practical amount of time. In such situations, outcome-based contracts were less attractive. Again, in pre-colonial Nigeria, the relationship between a master and his servant was a long-term one. In such situations, the master would learn more about the servant and so would be able to assess his or her behaviour more readily; thus minimising the problems of moral hazard and adverse selection. African Maintenance Accounting If one accepts that Asechemie’s depiction of the ALP is true (which it is not) and that the aspect of it that relates to the maintenance of the servant is also true, it would still be difficult to reconstruct an African maintenance accounting since the maintenance that one is talking about is that the servant partook in the communal or family food. How to determine that part of the family meal that was attributable to the servant would be very difficult indeed, unless there was a means of separating the servant’s ration from that of the family. Asechemie’s construction of a hypothetical value added statement also suggests that accounting in pre-colonial Nigeria was based on a systematic and purposive system of cost accounting. In the communal system where the production unit was the family and the social surplus accrued to the head of the family only, accounting was almost unnecessary. In the slave mode of accounting where the family and production unit produced more than it could consume, the surplus was put on sale and accounting was more of what can be earned in return. In the non-monetised period, barter (through a mixed bag of exchange commodities) was the basis of trade. Asechemie (pp. 384 – 385) also refers to ‘‘African accounting seeing labour costs as fixed both in the short run and long run’’. This is based on the speculation by Asechemie (1996, p. 31) that ‘‘the foundation of African accounting and philosophy is the concept of maintenance. This concept is a derivative of the rhythmic conception of future time. To the African mind, all things should be maintained—life, businesses, environment, the rhythm of the time, and so forth—even at great cost’’. This quotation is an embodiment of mystification about the nature and type of accounting that prevailed in pre-colonial Nigeria. It is debatable if indeed there was any purposive type of

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accounting in those days. If people did not need to pay tax on the basis of a measurable unit, but according to the discretion of the master or the vassals, then accounting had no purpose other than taxation in a subsistence economy. Even in the slave mode of production, the master and owner of the land did not need to account to any one and so accounting might not be demanded. Whatever accounting there was in the medieval period related to trading, not production. In that period, trade by barter was the norm. Pepper, kolanuts, yams and palm oil were exchanged by the forest belt in the south for meat, pottery, leather goods and salt from the Sahel-savannah to the north. And exports of slaves, palm oil, pepper, ivory etc. were also exchanged for imported European linen, gin, cotton, mirrors and similar items. The relative values of these commodities were determined not only by their costs (in labour time) but also by their exchange (or use) value in the market place. For example, Eyo (1979, p. 55) noted that one horse could buy five slaves in 1850 just before Nigeria became a colony of Great Britain. This raises the question of whether it would have helped the pre-colonial Nigerian trader to determine the worthwhileness of an exchange on the basis of a single figure (labour time) when many separate and important issues are at stake. The trader would not have thought of expressing the general result of his / her trade by one scalar indicator (labour time). The trader would probably think about his trade as a vector of labour time, use value, demand and supply and not as a scalar. If many types of commodity were brought by suppliers to the market, less value would be got for that commodity in exchange. In such a barter economy, production accounting was either non-existent or was of no significance. The whole notion of an African maintenance accounting is unfounded and unsupported by archival records. These records constitute one way of bringing to life accounting systems of the past. Some records of the period have survived and are kept both in the National and Benin Museums. An earlier search by me revealed no production accounts in those archives but there are many trading accounts and the sales of products made by different families and clans between the 13th and 16th centuries. It is possible to argue that the absence of records on production accounts of the medieval period in Nigeria validates Asechemie’s decision to adopt oral historiography as a method of data gathering. This methodology would only be appropriate if Asechemie’s subjects or interviewees were accountants of that age (!) with memories of what they did during that period. Otherwise, there is a need for an archaeological search. And the museum is probably the best place to start.

Conclusion Based on the preceding argument, I profoundly disagree with Asechemie’s conclusion that ALP has a framework that differed from the European labour process and that it cannot possibly be explained or theorised on the basis of the agency theory. However, I am not suggesting that I am right and he is wrong. A more valid perspective lies somewhere in the middle. Nevertheless, I have suggested in several places that Asechemie’s historical perspective of

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ALP is so riddled with historical misspecifications that his conclusions must be regarded as unsubstantiated. His analysis caricatures the ALP and dismisses agency theory for failing to account for the phenomena that the theory does not claim to explain. Asechemie’s presentation of the ALP and African maintenance accounting demonstrate a lamentable ignorance of the precolonial Nigerian context and resorts to ad hoc explanations (derived from oral historical methodology) of an idealised environment whose performance contradicted the agency theory. However, this discussion has thrown wide open for debate the question of whether the labour process in pre-colonial Africa is a non-capitalist social construct (that is, one that is fundamentally based on a communal mode of production) or a capitalist social construct. There are two reasons why I disagree with Asechemie’s (pp. 385 – 386) suggestion that because labour was not paid in money wages, it did not come into reckoning when computing cost of production under the African maintenance accounting. First, labour costs were minimised, whether seen from the point of view of recurrent costs (of feeding the servant low quality food relative to the food served to the master and his immediate family) and the perspective of appropriations (payment at the end-of-service in the form of marriage costs—the cost of organising the wedding for a servant was often less expensive than that for son or daughter). Second, if labour cannot be commodified, how could the cost of feeding be allocated between the cost of feeding the master and cost of feeding the servant in the hypothetical performance report? Often, labour wages were paid in kind (crops, etc.) that can be valued. If Asechemie’s (p. 385) suggestion that in negotiation between buyers and sellers in the African markets, sellers have a floor below which they would not like to sell their commodities is correct, that floor must incorporate the cost of production and the recurrent cost of feeding the House, otherwise the floor might be less than the marginal cost. Asechemie’s hypothetical performance report (p. 385) also includes the costs of environmental maintenance, a notion that was foreign to Africans before the 1980s and cannot have been provided for. If one agreed with the notion of environmental maintenance, this task would have been performed by the servants of a House that were fed by the masters and so the inclusion of the cost of environmental maintenance would amount to double-counting. As a result, Asechemie’s hypothetical redistribution of the wealth created is not descriptive of the ALP. Asechemie’s (p. 385) conclusion that both the pre-colonial and post-colonial African viewed the supply of labour as having the same social standing as the supply of capital is not descriptive of both pre-colonial and post-colonial Nigeria. Asechemie (p. 383) cites the requirement by section 279(4) of the Nigerian Companies and Allied Matters Decree (CAMD) 1990 that the Board of Directors of a company should manage that company in the interests of both employees and shareholders, to support his conclusion. This raises the question of whether the above CAMD requirement can be understood to mean that the Nigerian Federal Government believes that shareholders and employees are equal in status from the point of view of the Company Law. The Decree, like the UK Companies Act 1985 from where many of its clauses were copied, is devoted entirely to the protection of shareholders.

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Finally, the proposition that the ‘‘traditional Nigerian (and indeed, African) societies are unlikely to fit either the orthodox marxist modes of production or the progression from one mode to another found in Europe’’ needs to be re-examined. Essentially, the underlying basis of economic structures in traditional African societies is the exploitation of the poor and weak by the strong and rich; the ALP is the vehicle of that exploitation and the precursor of the capitalist system in Nigeria—the master is the capitalist. My purpose in this discussion was neither to suggest that Asechemie’s article is not worthwhile nor to suggest that he should be writing another one. Rather, I wanted to start a debate on whether (1) the pre-colonial African setting was a capitalist or a non-capitalist social one, (2) agency theory applies to settings other than the modern Western capitalist world—that is, can we extend the theory to other contexts and (3) whether indeed there are other pre-colonial or medieval accounting systems that can illustrate, in a meaningful manner, the prevailing labour processes in those other settings. The doubts and scepticism I have raised in the discussion are not meant to criticise Asechemie’s article per se but to flesh out some missing ideas in it. It is to Asechemie’s credit that his work has brought into focus some of the fundamental questions that we should ask of modern accounting theories.

Acknowledgement The author would like to thank David Cooper, Jonathan Lewis, and Rosemary Wallace for their comments on an earlier draft of this paper.

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