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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.
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 circumst-
ances, 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.
396 R . S. Olusegun Wallace
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 socio-
psychological) of production. However, he fails to question the consequences
of the reliance on kinship on social networks. He does not consider circumst-
ances 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
398 R . S. Olusegun Wallace
skeletons; impaling on stakes; forcing a long steel ramrod through the body
until it appeared through the top of the skull’’ (Kingsley 1899, p. 535).
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
African labour systems 399
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
400 R . S. Olusegun Wallace
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 ques-
tions to refer to the present set of native labour practices, they would not be
describing the medieval native labour practice. What they would be describ-
ing 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 pre-
colonial 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
African labour systems 401
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),
African labour systems 403
(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 be-
haviour (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 out-
comes. 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.
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
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 meaning-
ful 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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