The case of The United Steel Workers of America v. The United States Steel Corporation (1980) concerned the closing of two steel mills. The steelworkers claimed U.S. Steel had promised to keep the two mills open so long as they were “profitable” and that the mills in fact were. The corporation said they were not. In his decision, Justice Edwards admitted that profit had revealed itself to be a matter of “interpretation.” Profit, the judge realized, is no obvious, neutral, or timeless economic benchmark. Rather, it is a calculative practice open to interpretation. Edwards was still loath to exchange an interpretation of “the parameters of profitability for that of the corporation.” Corporations decide what profit is.
Rather than being a timeless category, profit has a history as contingent and as eventful as any other. Spanning from the dissemination of double-entry accounting bookkeeping in the early nineteenth-century United States to the mark-to-market criteria of contemporary global capitalism, “Accounting for Profit and the History of Capital” (open access) by Jonathan Levy (Princeton University) aims to assemble and narrate a history of profit. Profit, despite its changing accounting definitions, always concerns a rate over time. In addition to serving as a medium of competition and a category of distribution, a chief task of profit under capitalism is to organize capital’s inherent temporal motion. Posing the problem this way leads to the temporal logics of the changing forms of capital—the biological life cycle of the slave, the rusting obsolescence of the steel mill, the debt-financed “special purpose entity“ of today’s financial markets—from which capitalists define and make profit. It also leads to the history of corporations, ultimately the great scenes of action in profit’s history. But the Profit only continued to be a matter of interpretation.
This interdisciplinary essay is an interesting and important contribution to economic sociology.