Capitalizing the "Measure of Our Ignorance": Post-war Macroeconomics and the Accounting Treatment of R&D

• In Event: Organizing Technoscientific Capitalism: Epistemic Values, Practices & Assets - II

Abstract

On the heels of a massive wave of corporate mergers, research and development (R&D) began life as an experimental space in early twentieth-century firms, spreading amongst a handful of the nation’s largest industrials, such as General Electric and Du Pont. Accelerated by the demands of the Second World War, R&D emerged at the end of 1945 a permanent feature of American political and economic life. Through the eyes of Cold War-era policymakers, R&D became a knowable object of intervention that could be measured, managed, and incentivized. In this process, R&D would shift from a means to an end, to an end itself. Crucial in this shift was the role of macroeconomists who, when confronted by an anomaly in national income data, began experimenting with R&D as a distinct form of capital appearing in production functions. Accountants, however, were not so easily convinced. To them, treating R&D as capital implied a guarantee that money spent on R&D predictably generated income for the firm. Mindful of the many failures and dead ends involved in R&D, accountants vacillated between a treatment of R&D as capital on the one hand, and as an expense on the other. An attempt to deploy John Dewey’s logic of inquiry, this paper emphasizes the empirical problems to which R&D was intended to resolve. In so doing, this paper encourages historically-minded STS scholars to approach their own objects of study with an eye to interrogating the relation of their objects to the indeterminate problem(s) against which they are posed.

Author

• Sarvnaz Lotfi, Virginia Tech