In 1494, two years after the discovery of America and 229 years before Adam Smith was born, Luca Pacioli published his manuscript entitled the Summa de arithmetica, geometria, proportioni et proportionalita. This was the beginning of an immense research programme that could be compared to the ones of Copernicus, Newton and Darwin. The history of science (contrary to the economic practices) has not recognised the significance of Pacioli’s research programme so far. Why is it so? It stems from the originality of economics as a field of science, its origins, methodology and unique paths of development.

One of the leading representatives of the analytical philosophy (the Lwów-Warsaw School of Logic), Kazimierz Ajdukiewicz held, in his works on science methodology, that the construction of every science is permeated by a collection of axioms that accumulate subject knowledge[1]. It is demonstrated below that Ajdukiewicz’s key theorem also applies to a specifically understood theory of economics. From the perspective of the history of science, it is quite an interesting fact that Pacioli’s system of axioms is over 500 years old thus being older than the heliocentric theory presented by Copernicus in De revolutionibus orbium coelestium.

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[1] K. Ajdukiewicz, Metodologia i metanauka, p.121; see also K. Ajdukiewicz, Język i znaczenie, in: K. Ajdukiewicz, Język i poznanie, volume II…, p.155; K. Ajdukiewicz, Systemy aksjomatyczne z metodologicznego punktu widzenia, in: K. Ajdukiewicz, Język i poznanie, volume II…, p.339

In the twentieth century history of philosophy of empirical sciences five consequent periods can be distinguished[1]:

(1) dogmatism

(2) inductionism

(3) falsificationism

(4) relativism

(5) research programmes period.

These periods differ in their general stand on the certainty of scientific inquiry results as well as applied research methods and criteria for an assessment of the products of science. The first period held that induction, the first tool for learning empirical sciences, gave the absolute certainty of the achieved results. The second period, dominated by Rudolph Carnap, took a more moderate stand by claiming that induction can only guarantee a certain level of probability. The third period, proclaimed by Karl Popper, was characterised by the notion that unfalsified and not yet invalidated hypotheses were the positive outcome of science, thus these hypotheses remained probable.

The fourth period belongs to four thinkers, Thomas Samuel Kuhn, Paul Karl Feyerabend, Stephen Edelston Toulmin and Norward Russell Hanson. In this period the most significant ideals of science were apparently ruined. In accordance with this period’s principles “taste” (Feyerabend) or “agreement among the community of scientists” (Kuhn) provided a reason for accepting scientific theorems, as a consequence the logical value of conclusions is none. To some extent this situation may have seemed difficult since the axiom of the rationality of science was seriously disturbed.

The fifth period was a direct reaction to the views of the four philosophers, in this period, mainly because of Imre Lakatos, Popper’s falsificationism and two rational criteria for assessing scientific theorems the logical cohesion and the ability to support the scientific development (the heuristic power) were rehabilitated. Propositions formulated by science could anew be ascribed with some level of probability.

Lakatos’ methodology is of a normative character since it constitutes a criterion for assessing theoretical creations and serves as a demarcation criterion. However, it is not normative in a sense of giving advice on where and how to search for a problem and its solution. Lakatos emphasised strongly the division between methodology and heuristics. Methodology is not a ‘heuristic machinery’, yet “… good methodology – ‘distilled’ from the mature sciences – may play an important role in the case of immature or even problematic disciplines.”[2] Thus ‘normative’ means a proposition on how to approach theoretical issues being a hint only in a methodological context, excluding a heuristic one. Works of reason and imagination cannot be determined by methodological norms. Imagination paints a picture, reason codifies it into words and symbols, and methodology frames it as a whole.

Lakatos’ methodology is the methodology of the so-called research programmes. Statistically, a research programme is a structure of propositions formulated within a certain field of knowledge and classified in a specific way. Propositions constituting a research programme fall into two classes. The first, relatively small, class is composed of axioms - hard core theses that are deemed as binding and accepted without proof. The second, more numerous, class is further divided into at least two subclasses and includes, on the one hand, propositions inferred from axioms, and on the other hand, propositions that protect axioms against invalidation, the so-called auxiliary hypotheses.

In a dynamic perspective, a key presentation of the issue of a research programme is the fact that this is a developmental process of a characteristic structure of propositions, a series of proposition structures. Lakatos chose the term ‘research programme’ over ‘proposition structure’, for instance, with the intention to emphasise a dynamic approach to the subject matter.

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[1] J.M. Bocheński, Współczesna filozofia nauk empirycznych, in: J.M. Bocheński, Współczesne metody myślenia, W drodze, Poznań 1993

[2] I. Lakatos, Historia nauki a jej racjonalne rekonstrukcje, in: I. Lakatos, Pisma…, p.232, footnote 134

The period between the 5th and the 10th century was the so-called ‘dark ages’ in Europe. The disappearance of almost the entire culture resulted from the civilisation vacuum that emerged after the fall of the powerful Roman Empire. This vacuum was not easy or fast to fill in, especially that this period must have been followed by social chaos. The dawn of the Middle Ages came with the 11th century and it was the first clear consequence of creating a universal culture that combined elements of Greek, Roman, Christian as well as Arabic and barbaric traditions. The illumination in the early Middle Ages came with the Book of Revelation and Aristotle’s works. The characteristic form of the Medieval Europe culture would never have come into existence without those works. The third crucial contributing factor in the making of civilisation was the adoption of the ancient Roman law further broken into the private law (the dominating trend) and the public law.

The Church, who had long been opposed by the Roman emperors, had to learn the role of a moderator. It became an institutional base for the entire culture. The unity of culture was influenced by the common language, Latin, that was predominant in religion, philosophy, science and big politics. Also education contributed to strengthening the intellectual unity of the western world as it had a unified structure, programmes and teaching methods.

The most important premises of the medieval philosophy defining the deepest foundations for thought and deeds came down to determine the concept of man and his place in the universe. The concept of the world, society and man in this period is very static. It was assumed that both progress and man’s possibilities were hugely limited[1]. Despite that, the rational inquiry dominated philosophy, and reason was to be the most supreme natural spiritual power of man, not only in science, but also in life.

The Middle Ages were the period of publishing big Summas. The period’s great work written between 1266 and 1273 was the Summa Theologica (in Latin: Summa theologiae) by Thomas Aquinas, in which he presented a synthesis of Aristotle’s teaching and the Book of Revelation and showed the division between reason and faith. One has to remember that the Middle Ages were a colourful and complex period with various opinions clashing in the fields of philosophy and religion. The Summa perfectionis written in Italy in the 11th or 12th century may serve as an example. It was an anonymous alchemy treatise on a legendary Arab alchemic Jabir ibn Hajar, which combined the elements of chemistry, physics, art, psychology, metallurgy, medicine as well as astrology, mysticism and religion.

Feudalism prevailed as a social and economic system in the Middle Ages. It was characterised by a hierarchical and static social structure with two main classes initially, higher (aristocracy) and lower (peasantry). In this agrarian system, the land was the basic economic resource. The land meant both safety and wealth.

The history of the emergence of class division is covered by the ‘dark ages’. Class division was not determined by ‘blue blood’ or ‘noble ancient ancestors’ criteria, as the aristocracy wanted it, but the sword. Aristocrats were descendants of the early medieval knighthood who before getting some refinement of the higher class had been warlike hordes. This genesis of the economic system was a big hindrance for a wider perception of Aristotle’s and Thomas Aquinas’ idea, especially for the lower class (e.g. peasants were not able to educate their children).

Feudal farms were mostly self-sufficient. However, they generated an external supply and demand (e.g. sale of produce surplus, purchase of tools). This gave way to an impulse for the development of urban centres. Tradesmen and craftsmen took on accommodating this supply and demand. It was not done out of free choice but under a constraint resulting from not possessing the land.

In small towns this new style of life and the new perspective of a management process set in with time. For town people trade knowledge, their own labour, a good place in the market, silver and gold earned as well as a good reputation based on the merchant’s reliability became economic resources. In the first period this was far from the wealth of big feudal farmers, yet it gave a chance to survive. One could claim that a difficult start of the bourgeois was the lack of their own place in the feudal system structure.

Since the 11th century in the northern part of the Apennine Peninsula a few bigger urban centres, especially Genoa, Venice and Florence, started to develop trade relations with countries in the Mediterranean, the Middle and Far East. On the other hand, trade among towns also flourished. The bourgeois standard of living increased as well as their level of education and culture. Literacy and numeracy became more and more common. The result of merchant travels to the Middle East was the adoption of the Arabic numerals and calculation methods. Paper and ink were used widespread. Merchants and some time later bankers started to conduct elaborate trade and financial transactions and record them in books. Gradually, a wealthier class of elite town society emerged (the Patricianship) among the bourgeois. Craft and trade guilds were organised to serve as closed corporations for trade education (master, apprentice, pupil).

Traditional elites of the feudal society holding huge power had to observe such changes with anxiety. Why was that so? First of all, these elites did not understand fully the genesis of the affluence which the bourgeois (who have been deprived of land) were accumulating. Secondly, merchants, dealers in currency exchange and bankers who clearly understood the nature of monetary phenomena, the influence of time and risk on the value of money, used the interest calculations, a practice morally scandalous in those times. Last but not least, the phenomenon of the bourgeois getting rich shook the medieval vision of the world and man. Not by reading verses of the philosophical treatises were they getting rich but by their actions. It could not have been justified by the fact that merchants’ travels often cost them lives as a few centuries before knights had laid their lives during the crusades. The ethos of knights, clergymen, scholars, court officials or even artists was recognised in the society, whereas that of merchants was not.

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[1] J. Bocheński, Duchowa sytuacja czasu, in: J. Bocheński, Sens życia, Philed, Kraków 1993

Around 1458 Benedetto Cotrugli (also Benedikt ‘Beno’ Kotruljević) from Dubrovnik wrote a manuscript entitled Della Mercatura et del Mercante Perfetto. It included a short chapter on a few crucial issues of double entry bookkeeping. Unfortunately, this work was published in Venice only later in 1573. It seems that the main reason for this over a 100-year delay was the title that directly referred to the ethos of merchants. The fact that Pacioli knew and appreciated the manuscript is of big importance.

Where was the first recorded manuscript on commerce and accounting written? In today’s Dubrovnik (then Ragusa), which was a port town in the south of Dalmatia (Croatia) on the Adriatic Sea. This settlement was founded in the 7th century as Ragusium (Italian Ragusa) by Roman exiles. In the 7th and 8th centuries Slavic peoples arrived there as well. Until 1204 this area was ruled by the Byzantine Empire, whereas between 1204 and 1806 it was a free merchant republic under the power of Venice, Hungary and Turkey consecutively.

Benedetto Cotrugli was a merchant, economist, scientist, diplomat and humanist in this republic. Such an array of professions and social statuses exceeded class divisions in the feudal society and could not have been formed by itself in the areas indigenous to Latin civilisation in those times. The earliest surviving copy of Cotrugli’s manuscript under a changed title Libro de l’Arte de la Mercatura is dated for the year 1475.

Luca Pacioli (Luca Bartolomeo de Pacioli, Luca di Borgo) was born in 1445 in Sansepolcro, a town in the centre of Italy, about 60 km from Perugia. As a child he was not brought up in his parents’ house, but with the Befolci family. In Sansepolcro Piero della Francesca, a mathematician, scholar and painter had a studio and workshop. Pacioli was apprenticed to him and the knowledge he achieved there was the basis for another important stage in his life. Namely, he moved to Venice, where he entered the service to a wealthy merchant Antonio Rompiasi whose house was located in a rich district of Venice – Giudecca. Pacioli had known mathematics by then and had vast general knowledge, for which reasons he could tutor Rompiasi’s three sons. It is probable that in his house he came across Cotrugli’s manuscript and undoubtedly the practice of bookkeeping records of merchants’ transactions.

Many years later, in 1496 Luca Pacioli was invited by the duke of Milan to teach mathematics there. By that time Pacioli was a famous university lecturer, author of scholarly books, excellent logician, mathematician, tutor of the duke’s sons, friend of church hierarchs and Franciscan friar. It is likely that the invitation came due to Leonardo da Vinci’s presence at the duke’s court as da Vinci himself was enthusiastically interested in mathematics. In Milan Pacioli discussed mathematics with Leonardo da Vinci, who, with the intention of repaying the teachings, drew figures for Pacioli’s next work under the title Divina proportione. Despite Leonardo da Vinci’s figures, Divina proportione did not become a legendary work.

Earlier, in 1494 Luca Pacioli published the Summa de arithmetica, geometria, proportioni et proportionalita in Venice. The Summa was a comprehensive summary of Pacioli’s mathematical knowledge. The work comprises ideas developed by Piero della Francesca, Benedetto Cotrugli’s ideas and everything that Pacioli had found out over many years of studies and through life experiences.

Contemporary books on accounting describe the Summa with its own characteristic language (code): “In this work the author discussed the recording of economic operations from chronological perspective, in the order of the date when they occurred (records in the book called ‘journal’) and the systematic entering of economic operations, i.e. recording them in the correct synthetic account grouped in the so-called ‘ledger’.”[1]

The ledger presented in the Summa has accounts for assets (inclusive of inventory and accounts receivable), liabilities, equity, income and costs. The work presents the outline for a balance sheet, a profit and loss account and a technique for closing the accounting year. Pacioli codified the principles for keeping records Venetian merchants initiated and used that had previously been mentioned in Della Mercatura et del Mercante Perfetto.

Does it not seem a bit strange that the work entitled the Summa de arithmetica, geometria, proportioni et proportionalita has for hundreds of years been a guidance for merchants, bankers and accountants? Why do encyclopaedias call it ‘a manual for merchants’? Is it not puzzling that after 500 years since its publication good accounting manuals still mention the Summa? Could such an outstanding philosopher, logician and mathematician have been unaware of the fact that he had described a new field of knowledge that would exert a significant influence on the economic future of the world?

It seems that this puzzle contains a historic moment of the emergence of a new science. Since Pacioli knew it was a coherent theoretical system which was formally equal to other sciences, why did he not present it in the language that was worth it? What motives could have driven Pacioli to presenting the new science from the perspective of a mundane method? And why did he avoid giving it a name and appropriate status? After all he was respected in the world of science and could have done that. The beam of light shed to solve this puzzle lies in reconstructing the crucial period in Pacioli’s life and examining the structure of sciences at that time.

Pacioli had adversaries who were willing to do harm to him, which is very evident in his biography. “In 1489, after two years spent in Rome, Pacioli returned to his hometown of Sansepolcro. Not all went smoothly for Pacioli in his home town, however. He had been granted some privileges by the Pope and there was a degree of jealousy among the men from the religious orders in Sansepolcro. In fact Pacioli was banned from teaching there in 1491 but the jealousy seemed to be mixed with respect for his learning and scholarship, for in 1493 he was invited to preach Lent sermons. During this time in Sansepolcro, Pacioli worked on one of his most famous books the Summa de arithmetica, geometria, proportioni et proportionalita which he dedicated to Guidobaldo, the duke of Urbino.”[2]

He had reasons to act carefully, but what exactly did these fears relate to? Could they have been so serious? In the Middle Ages the base for the structure of science comprised the so-called seven liberal arts (in Latin septem artes liberales). This idea had already originated in the antiquity and was adopted in the Middle Ages by the means of Cassiodorus’ works. The medieval system of education was based on this notion. From the point of view of the progress of civilisation, Cassiodorus’ works were not as important as the Bible, Aristotle’s works or the Roman law, yet they can be mentioned just after the Latin language usage. That is the reason why Cassiodorus had a huge influence on the creation of the medieval culture.

Being awarded a title of a Master of seven liberal arts served as a passport for further university studies in theology, law or medicine. In those times the equation ‘3 + 7 = 10′ was still deemed as a symbol of hierarchical and finite perfection (the Decalogue has the same structure). This equation cannot be added to or subtracted from. Pacioli was aware that economics was the eighth liberal art but there was no place for it in the system of sciences at that time.

This speculation confirms what follows. Seven basic arts were divided into trivium and quadrivium. Trivium are the sciences of language: grammar, logic, and rhetoric. Whereas quadrivium is the collection of sciences of numbers:

QUADRIVIUM STRUCTURE
I	II	III	IV
Arithmetic	Geometry	Music	Astronomy
Science of pure numbers	Science of numbers used to describe (statics)	Science of numbers used to describe time	Science of numbers used to describe motion and space (dynamics)

New Pacioli’s science was based on numbers and that is why it would have to be added to this collection and then automatically become its fifth element.

Was the notion of ‘the fifth element’ (in Latin quinta essentia) also a symbol? This term is literally overloaded with symbols. In those times it was associated with alchemy, which was based on the ancient Hellenic theory discussed in Aristotle’s metaphysical deliberations, according to which the world consists of four elements, namely Water, Fire, Air and Earth. The main subject of alchemists’ inquiries was a process of transmuting lead into gold. ‘The magic circle’ believed that finding the fifth element would allow them to discover the alchemic opus magnum. Their aim was not to acquire objective knowledge or artistic beauty of noble metal but they took part in an insane chase after unlimited wealth, immortality and absolute power.

What was this ethereal fifth element meant to be? It was rather the philosophical stone that enabled the creation of gold (wealth) and the elixir of life, the substance that makes astral bodies and a quintessence of other four earthly elements. It was meant to be both a contradiction and unity (in Latin coincidentia oppositorum). This is the reason for the philosophical stone to be associated with hermaphroditic Mercury which, according to the old Roman beliefs, was the god of trade, profit and commerce.

It is not difficult to notice that in the area of blurred and mythological knowledge it was easy to come up with a statement that the philosophical stone is just the fifth science on numbers by Pacioli and merchants and banker (bourgeois) were just members of ‘the magic circle’ who were the followers of the ‘anti-science’. Alchemy was a blend of dangerous astrological superstitions that were completely exposed by science later in the modern era. In medieval times such empirical (scientific) questioning was not so easy. The main line of defence could be the Bible verses and the authority of the Church Fathers who by definition condemned all fortune-telling and astrology. Alchemy did not disappear from the culture at all because ‘dirty’ alchemy gave way to the scientific research programme of the contemporary chemistry. The ancient theory of four elements was transformed into the periodic table of over a hundred of elements.

Pacioli’s economics could not have become the ‘quintessence’ of the science of numbers. It could not have provided a starting point for a scientific legitimisation of alchemy, and being aware of the atmosphere of his time Pacioli could not have dared to do so as with the use of his pen he would have given his adversaries the weightiest arguments, or even could have brought down repressions on the bourgeois.

Pacioli’s responsibility for the fate of his new research programme was manifested by the fact that although the Summa, being concerned with quadrivium, comprised economics, it presented it implicitly as a dry method for keeping commerce accounts. The part of the Summa on economics was enigmatically entitled De computis et scripturis, whereas, it could have been entitled ‘on a new liberal art’. The complexity of the commercial language, laboriousness of keeping records on paper as well as an intricate and methodological perspective was as Pacioli wished them to be. It allowed the open-minded to examine the commerce methods but likely adversaries were not able to see anything that would have shaken the static order of the medieval world.

This trick, an example of an unconventional research policy (Lakatos), allowed for saving the presence of economics in the Summa and its quick publication in print. That is why one can claim validly that in a way the credit for such groundbreaking events in the economic history as the Industrial Revolution and the Information Revolution goes to Pacioli who precisely diagnosed the mechanisms of the Trade Revolution and outlined its main code in the Summa.

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[1] Z. Messner, J. Pfaff, Rachunkowość finansowa, Część I (Podstawy rachunkowości), published by SK in Poland, Warsaw 200X, p.16

[2] source: (http://www-groups.dcs.st-and.ac.uk/~history/Biographies/Pacioli.html) J.J. O’Connor, E.F. Robertson Luca Pacioli .

Every research programme is based on a hard core. It is nothing more than a small collection of axioms, i.e. binding theses adopted as a methodological decision without proof by programme representatives.

The emergence of a research programme cannot be associated with the moment of a hard core construction. Often the research work focuses on the hard core that is expressed implicitly. Almost all research programmes are developed without a clearly defined hard core and even after it is constructed, amendments are allowed to a limited extent. “The hard core does not emerge fully equipped as Athena from Zeus’ head. It develops slowly during a long preparatory process of trials and errors.”[1]

A question has to be posed how Pacioli would have behaved if he had not lived in such complicated social and political conditions. When working in the conditions of the open information society characteristic of the contemporary world, he would have started the presentation of ‘new liberal art’ with main theses as the foundation for the entire theoretical system. Had he known Lakatos’ terminology, he would have called those theses ‘hard core of a research programme’. A reconstruction of this hard core is the following:

Hard core of Luca Pacioli’s economic research programme (mathematical model of an enterprise)

1.                  money is a number and measure for economic processes 2.                  assets = liabilities 3.                  profit = income – costs

The first thesis refers to the principle of account recording. Money as a number is immanently connected with a simple construction of a booking account. The second thesis refers to a few familiar accounting principles: the subjectivity, double-entry bookkeeping and balance sheet construction. The third thesis corresponds to the principle of economic periodisation and rationalisation.

At the same time these theses present the simplest model of an enterprise that is implicitly described in manuals on accounting. Accounting always concerns a certain subject because in actual fact controlling private (public or cooperative) property is at stake. It is worth emphasising that this model is both analytical and flexible. On the basis of this model and antique accounting books, the model of ‘Donado Soranzo e Frati’, a company operating in Venice in years 1410-1434[2] can be reconstructed. Experienced accountants all over the world have this kind of a model of a company in their minds.

Adam Smith’s research programme was not able to combine the theory of economics and the theory of accounting. Alas, it separated these two theories by referring to the science structure. A formal trick with the use of metalanguage was applied to support the notion that the theory of economics differs from the theory of finance and accounting when it comes to the level of details in monetary phenomena. Economics was to deal with a general presentation of a problem, whereas finance and accounting with a detailed analysis of these processes. The methodology of scientific research programmes allows one to view this issue from a different perspective.

What is so exceptional in the theory of accounting that it has fascinated the biggest minds (e.g. Wolfgang Goethe)? It seems that it is both its simplicity and abstractness. One is easily attracted to the theory of accounting when one observes its connection to the theory of economics, since accounting and its theory of recording economic transactions reduces the number of previously demonstrated axioms (see the table above) from three to one.

Hard core of Luca Pacioli’s economic research programme (theory of accounting)

monetary value recorded under Debit = monetary value recorded under Credit

The striking simplicity of this single axiom results from a dual construction of a booking account and applying the universal monetary measure. ‘Luminous certainty’ of accounting and its ‘fascinating obviousness’ means Debit must balance Credit.

The combination and comparison of theses of the theory of an enterprise and the theory of accounting has a very illuminating value. It allows one to demonstrate the difference between economics and accounting. The theory of economics deals with such realities as money, assets (possessions), liabilities (equity and debts), income, costs and financial results. These are tangible categories which every economic entity recognises when being driven by the subjectively understood ‘interest’ in mind, i.e. what is of benefit or not.

The theory of accounting rises over this axiological division, which makes it completely abstract in essence. Paradoxically, this abstraction instead of losing its usability gains on applicability when recording each single economic operation. At the same time, it serves an ontological assumption that ‘nothing becomes lost in the world’, a record entered under Debit always has to be accompanied by a record under Credit.

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[1] I. Lakatos, Falsyfikacja…, p.74

[2] J. Aleszczyk, Rachunkowość finansowa od podstaw, published by WSB, Poznań 1999, p.10

The heuristic strength of a programme is the ability to explain the nature of phenomena studied. Pacioli’s programme does not only demonstrate an enterprise or accounting. The hard core theses of a research programme constitute an axiomatic base for the contemporary theory of banking and present a description of a bank. For a bank is a special kind of an enterprise.

First, let us assume that the hard core of the theory of money is the following:

Theory of finance (money and credit) as a special case of Luca Pacioli’s economic research programme

1.                  money is a number and its price is determined by an interest rate

Next follows a slight transposition of the hard core theses of Luca Pacioli’s programme, so that they serve as a base for the demonstration of an axiomatic foundation for the theory of banking. After a small amendment the theses are as follows:

Theory of banking as a special case of Luca Pacioli’s economic research programme

1.                  money is a number and its price is determined by an interest rate 2.                  assets = liabilities 3.                  profit (interest margin) = interest income - interest costs

It seems that the theory of banking is a combination of the theory of an enterprise and the theory of money. A question may be posed whether this model of banking derives from antique accounting books kept in the years 1408-1428 aimed at controlling transactions of ‘Casa di San Giorgio’ bank in Genoa[1]. Is this model of banking referred to when talking about the genesis of contemporary banking? This is just the way credit and deposit banks operate.

On the other hand, when attempting to describe the insurance business Pacioli may have made this transposition:

Theory of insurance business as a special case of Luca Pacioli’s economic research programme

1.                  money is a number and a premium is the price for protection against the consequences of risk of a random incident 2.                  assets = liabilities 3.                  profit (technical result) = income from premiums - costs of damages paid

As it is evident, there is nothing to prevent one from presenting the theory of banking and insurance business as a direct derivative of Luca Pacioli’s economic research programme. A lot of detailed information like the unique character of assets and liabilities in banking or insurance industry, different combinations of profit and loss accounts, contemporary income taxes or the notion of risk have been left out in the table above as from a theoretical point of view and at this stage of research they are of minor importance.

When following this reasoning a question may arise why in the practice of managing big industrial enterprises, bankers, financial controllers or economics professors are employed so readily as financial directors. In the case of big economic enterprises, monetary phenomena acquire the characteristics specific to a bank. Luca Pacioli would reply to this question by presenting the following version of the hard core:

Theory of financial management of an enterprise (management accounting) as a special case of Luca Pacioli’s economic research programme

1.                  money is a number and its price is determined by an interest rate 2.                  assets = liabilities 3.                  EVA = (income – variable costs – overhead costs) – assets * interest rate

EVA – economic value added (economic profit)

The first thesis of this version of the programme comes from the theory of finance and banking. The second thesis is unchanged, whereas the third takes into consideration the theses on financial management and management accounting – the concepts of operational leverage, financial leverage, capital structure management, capital costs, alternative costs (with no taxes or the phenomenon of a tax shield).

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[1] J. Aleszczyk, Rachunkowość finansowa od podstaw, p.10

Kazimierz Ajdukiewicz, Metodologia i metanauka, in: K. Ajdukiewicz, Język i poznanie, volume II, Wybór pism z lat 1945-1963, PWN, Warsaw 1965

Kazimierz Ajdukiewicz, Systemy aksjomatyczne z metodologicznego punktu widzenia, in: Kazimierz Ajdukiewicz, Język i poznanie, volume II, Wybór pism z lat 1945-1963, PWN, Warsaw 1965

Kazimierz Ajdukiewicz, Naukowa perspektywa świata, in: K. Ajdukiewicz, Język i poznanie, volume I, Wybór pism z lat 1920-1939, PWN, Warsaw 1960

Kazimierz Ajdukiewicz, Wartość nauki, in: K. Ajdukiewicz, Język i poznanie, volume I, Wybór pism z lat 1920-1939, PWN, Warsaw 1960

Kazimierz Ajdukiewicz, Postępowanie człowieka, in: K. Ajdukiewicz, Język i poznanie, volume I, Wybór pism z lat 1920-1939, PWN, Warsaw 1960

Kazimierz Ajdukiewicz, Język i znaczenie, in: K. Ajdukiewicz, Język i poznanie, volume II, Wybór pism z lat 1945-1963, PWN, Warsaw 1965

Józef Aleszczyk, Rachunkowość finansowa od podstaw, published by WSB, Poznań 1999

Stefan Amsterdamski, Między historią a metodą, PIW, Warsaw 1983

Mark Blaug, Metodologia ekonomii, PWN, Warsaw 1995

Józef M. Bocheński, Duchowa sytuacja czasu, in: J.M. Bocheński, Sens życia, Philed, Kraków 1993

Józef M. Bocheński, Współczesna filozofia nauk przyrodniczych, in: J.M. Bocheński, Współczesne metody myślenia, W drodze, Poznań 1993

Józef M. Bocheński, Współczesne metody myślenia, W drodze, Poznań 1993

Józef M. Bocheński, Filozofia przedsiębiorstwa, in: J.M. Bocheński, Sens życia, Philed, Kraków 1993

Józef M. Bocheński, Filozofia analityczna, in: J.M. Bocheński, Sens życia, Philed, Kraków 1993

Józef M. Bocheński, O nawrocie w filozofii, in: J.M. Bocheński, Sens życia, Philed, Kraków 1993

Józef M. Bocheński, Ku filozoficznemu myśleniu, Pax, Warsaw 1986

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