Luca Pacioli and Leonardo DaVinci – Domestic Association of Genius

Luca Pacioli and Leonardo Da Vinci, men of the Renaissance, were mathematical geniuses. Leonardo leaned more towards military engineering, while Luca towards abstract and pure mathematics. When Pacioli included “Double Entry Accounting” in his textbook, Summa of Arithmetic, which he published in 1494 (two years after Christopher Columbus landed in Santo Domingo), little did he know that he was going to change the world.

Leonardo Da Vinci and a monk named Luca Pacioli, the inventor of accounting (debits and credits), lived together for many years. Luca’s math textbook contained the basic notions that accountants follow today: Assets equal liabilities plus owner’s equity (A = L + OE).

Both, being university professors, traveled together and stayed together in different universities.

Sigmund Freud, in his study of Leonardo’s homosexuality, ignored this fact. It is a pity because Freud would have provided factual evidence rather than wild speculations based on his physicoanalytic techniques. Leonardo, who is much younger than Luca, has always been described as Luca’s protégé.

Today, with the perspective of time, we can understand that they probably had a kind of domestic partnership. In 1495 they lived together in Milan and Venice. Art historians have well documented that Leonardo was summoned to court to address the homosexuality charges against him. But since the accuser did not appear, the charges were later dropped.

The diagrams and figures seen in Luca’a Summa were drawings by DaVinci’a. They worked together as equal partners rather than the master-apprentice relationships of the time.

Billions of human beings have populated the earth, mostly living in the shadow of survival and mediocrity, it is the odd, the strange and the eccentric who make the most invaluable contributions to the betterment of the human condition. These two eccentrics made tangible contributions to humanity.

While Leonardo’s achievements have been well documented and documented in our times, even Bill Gates couldn’t resist owning Leonardo’s original manuscripts, Luca’s contributions are less well known. Like our American composer Aaron Copland, I will play a fanfare for the common man: Luca with his ingenious explanation of the double-entry accounting system made international trade possible, opening the floodgates to what we now call “The Global Economy.”

Businesses were no longer confined within borders, as banks, financial institutions, entrepreneurs, and corporations traded, traded, and made profits across borders. The standardization of the Financial Statements followed, so that the Balance Sheets, Profit and Loss Accounts and Cash Flows are read and interpreted without major impediments throughout Europe.

With capital formation booming, the capital needed for factories became available, thus furthering the advent of the European Industrial Revolution. In 1750, Europe was already industrialized and in 1860 (after the Civil War) America became an industrial power.

Yes, it was a leap of the imagination to design Debits (left side) and credits (right side) as an information system. Write the assets on the left side of the equation and the claims on those assets on the right side.

In more than ten thousand years of recorded history, no one in the human race had attempted to keep business records by double entry. The Babylonians, Phoenicians, Persians, Egyptians, Greeks, Romans, and other ancient civilizations recorded their transactions in cash and with a single entry; that is, the entrepreneurs made lists of items bought and sold.

As a result, businesses remained small businesses, doomed to remain small as the lack of an orderly system impeded growth. Whether on papyrus, sheepskin scrolls, or bricks, all business records were endless enumerations and catalogs, offering little insight into measurements of profit or loss.

Pacioli changed all that.

To think that a humble discovery like double-entry bookkeeping can change the destiny of the human race challenges credibility. But since double entry allows not only an orderly classification of accounts, journals and ledgers, but also measures of liquidity and profitability, it is not surprising to see that capitalism flourished.

In economic systems where capitalism prevails, companies, which are the main employers, offer health coverage and retirement plans, men and women can now enjoy the latest technologies and therefore live longer and better. Health.

One can imagine Luca and Leonardo discussing symmetries, contrasts, dichotomies, dualities, binary oppositions, polarities, antitheses, and other opposites:

“Physical nature exhibits all these dualities: day and night, narrow and wide, fast and slow,” said Luca, “and also human nature.”

“We carry good and evil, love and hate, in our spirit and in our body, or as Heraclytus loved to say: ‘the way up is the way down, the narrow and the wide,” he replied. Leonardo.

-And Ecclesiastes, Leonardo? Did not say …?

a time to be born and a time to die; time to plant and time to uproot; a time to kill and a time to heal; a time to tear down and a time to build; time to cry and time to laugh; time of mourning and time of dance; …

The observation of these doubles as a knowledge system allowed Luca to expand it to the accounting equation where what is on the left must be equal to what is on the right side (Assets = Liabilities + Owner’s Equity). Later, accountants realized that another duality was needed: income, which is increases in the owner’s equity, and expenses decrease; the difference is none other than profit or loss.

With debits and credits fairly established as a system of order, writers like Descartes, Cervantes, Shakespeare, and Dickens imposed it on literature and philosophy by way of antithesis.

Discards Cogito ergo sum, is the synthesis of a duality: mind and body.

In A Tale of Two Citites, Dickens opens his novel with a detailed set of hymns:

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of folly, it was the age of faith, it was the age of unbelief, it was the season of Light, it was It was the season of darkness, it was the spring of hope, it was the winter of despair, we had everything ahead of us, we had nothing ahead, we were all going directly to heaven, we were all going directly in the opposite direction …

Although philosophers like Hegel and Karl Marx tried to discard the duality system by replacing it with a triad: thesis, antithesis, synthesis. They failed; And we can understand why: Hegel professed state power, while Marx professed communism. By now we know the chaotic results of Nazism and Communism.

The natural tendency is duality, as demonstrated by the Second Law of Thermodynamics: order and chaos (entropy). Although nature tends to chaos, human nature imposes order; the mind invents patterns of understanding.

The double entry bookkeeping system is a triumph of the mind over the chaotic activities of humans involved in commerce. The Double Entry not only produced a new economic system, but also the dawn of a new way of thinking: modernity. And modernity dispelled the mists of superstition, monsters, magic, witches, ogres, dwarves, giants, miracles, chimeras, unicorns, centaurs, mermaids and other impossible figures of the supernatural.

The Middle Ages and feudalism gave way to modern times.

Luca Pacioli’s legacy, the accounting system, for the business world is order. It contains: Balance, plenitude and radiance, because its system fits with Democracy, with Freedom for the entrepreneur; a system that matches the pillars of Adam Smith’s capitalism: laissez-faire (free market economy), competition (Invisible Hand), and the Division of Labor (the innate human propensity that creates wealth for all).

This is my fanfare for the common man, the humble monk – Luca Pacioli