Accounting for Duality and Circularity

Abstract

Double-entry bookkeeping has been one of the most ingenious inventions in economic history. It enabled merchants of the Middle Ages to account for negative balance at a time when negative numbers where not yet known and, more importantly, it grasped the inherent duality in economic processes. Most economists despise double-entry bookkeeping and some of them can not even tell the credit-side from the debit-side of a T-account.