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TRUTH AND THE EVOLUTION OF THE PROFESSIONS: A COMPARATIVE STUDY OF 'TRUTH IN ADVERTISING' AND 'TRUE AND FAIR' FINANCIAL STATEMENTS IN NORTH AMERICA DURING THE PROGRESSIVE ERA Both advertisers and auditors wrestled with the truth of their text during the Progressive Era (1880 - 1940). Although in North America, advertisers adopted "truth in advertising" as a theme, auditors rejected "true and fair" as a description of financial statements. Auditors instead adopted the weaker statement that financial statements were "consistent with accepted accounting principles. " It is paradoxical that auditors compared with advertisers made the greatest progress toward professionalization during this era. This article documents debates about the concept of "truth" in each profession during the Progressive Era and examines the professional and legal consequences of each profession's engagement with truth.
The Progressive Era, roughly the period from the depression of the late 1880 s through to the late 1930 s, represents a period of institutional, technical, and social innovation. During this period, most developed economies made the transition from rural to urban and from agrarian to manufacturing economies. It is a period when sectional interests, including many of the modern professions, developed. The Progressive Era is particularly marked by the conjunction of scientific knowledge and traditional values.
It is a period when science and technology were thought capable of providing for the material wants of all and that the issue of social justice could be resolved through knowledge. This conjunction provides the setting in which "truth" is seen as an achievable state. The modern professions emerged from this milieu as occupations concerned with the moral and technical mysteries of life. The exemplars of the professional model were medicine, the law, and teaching. The successful professions lay claim to areas of expertise that were used to define what is normal or "right, " mediating the client's individual needs and the values institutionalized in society (Richardson 1997).
The process of professionalization requires an occupation to legitimate its claims to status and authority. An occupation might adopt certain structural features such as codes of ethics or university training as a means of establishing a claim to professional status. In this process, the ability to claim to have found and practice the "truth" could be a powerful rhetorical weapon. Coincident with the rise of the modern professions, large business firms developed during this period (Galambos 1983).
Two characteristics of these firms provided opportunities for the developing professions. First, the modern corporations needed significant amounts of capital to create the infrastructure necessary to carry out their missions. In North America, this capital was typically raised through public offerings in the stock markets. The reliance on outside capital created the need for financial audits, and the accounting profession organized around this opportunity. The key to the success of the audit profession was the ability to add credibility to financial statements (i. e. , to tell the "truth" about the financial state of the company).
Second, large corporations achieved economies of scale through the use of technology, but this required a mass market for their products. Customers without firsthand knowledge of a company or its products had to be convinced to spend their money. The advertising industry developed to meet this need. Financial statements and advertisements represent the major forms of communication between large corporations and two groups of stakeholders: investors and customers. Auditors and advertisers emerged as the occupations that mediated these links, and each wrestled with the problem of the "truth" of these corporate communications. Each of these occupations had professional aspirations.
Consistent with commonsense definitions of what constituted a profession, they organized professional associations, created codes of ethics, and attempted to set educational standards for their members. The literature of this period provides an indication of the success of these professionalization attempts by advertisers and accountants. Palmer (1914) was willing to concede that a broad definition of professions might include some members of the advertising industry. He offered that "nowadays...
we should... probably be inclined to place as a kind of intermediary between the minister and the lawyer the philanthropist and the publicist as those who study the well being of the community" (p. 43). Carr-Saunders and Wilson (1933, 29) undertook "a review of those vocations which by common consent are called professions. " They devoted eighteen pages to accountants but failed to mention any of the occupations in the advertising industry. Schultze (1982) later studied the advertising industry's efforts during this era to establish standardized instruction and licensing or certification requirements (two of the three common characteristics of a profession identified by Schultze, the other being codes of ethics) and concluded that the industry did not succeed; even with university instruction in advertising, they were unable to create a profession. Laird (1998, 242) added that none of the many advertising associations formed during this era ever succeeded at formulating the standards for preparation and admission to a profession such as medicine and law; furthermore, their efforts to pressure members to conform to codes of ethics went unenforced.
As we will see below, the language used by the advertising industry itself during the Progressive Era makes clear the gap between their perceived status and their professional aspirations. By the end of the Progressive Era, only one group, accountants, had successfully established their claim to professional status. The success of the auditors in achieving professional status and the failure of advertisers stand in a paradoxical relationship to these groups' positions on the truth. In Canada and the United States, the advertising industry lobbied successfully for legislation requiring "truth in advertising, " while auditors successfully lobbied against the requirement that they attest to financial statements being "true and fair. " The purpose of this article is to examine the relationship between these groups' engagements with the "truth" and their success or failure as professionalizing occupations. The remainder of the article is organized as follows. The next section examines the meaning of truth in philosophical perspective.
This section provides a vocabulary for understanding the various ways in which truth may be interpreted and used. This is followed by two sections that summarize the history of truth among advertisers and auditors. The discussion then draws out the key factors that explain the observed differences between these occupations' engagements with the truth. For a word with wide currency in everyday use, the meaning of truth remains surprisingly elusive. Many philosophers are willing to concede that no adequate theory of truth has yet been found (Horwich 1990, 1). If theorists of truth have met with limited success, it is perhaps a result of the nature of the task itself.
Truth theories set for themselves the goal of characterizing the essence of truth in all of its various linguistic uses. The truth theorist, in other words, seeks to answer the following question: what do we say of something when we say that something is true? (n 1) Historically, three classes of answers to this question have emerged as dominant: correspondence theories, coherence theories, and pragmatic theories (see Table 1). Like most efforts to specify typologies, this one is stymied by ambiguous cases that seem to fit neatly into none of the categories or that seem to belong to more than one. For our purposes, however, it is sufficient to focus on the paradigmatic example of each of the three classes, leaving the ambiguous cases for the philosophers to entertain.
Of the three classes of truth theories, correspondence theories are both the oldest and the most intuitively appealing. Originally espoused by some of the early Greek philosophers (most notably, Aristotle and the Stoics) and revived again in the modern era by Descartes, Locke, Hume, Russell, Wittgenstein, and others, correspondence views hold that the essence of truth is a relationship of correspondence between what is asserted and some state of the world in which we live. In other words, truth is that which corresponds to the facts. The paradigmatic correspondence theorist is committed to ontological realism. For the realist, objects exist independently of the human mind; the linguistic assertion and the state of affairs to which it refers are therefore distinct and independent of one another. The truth of an assertion is, then, a matter to be adjudicated by reference to the independent object world.
It is true that the book is on the desk because, indeed, the book is on the desk. Despite strong intuitive appeal, correspondence theories suffer from one major weakness that has rendered them less than satisfactory in the eyes of many philosophers. This weakness consists of an inability to specify what constitutes a fact. For the proposition that the book is on the desk to be true, it must be a fact that the book is on the desk. Yet what can the correspondence theorist mean by the fact that the book is on the desk, except that it is somehow true that the book is on the desk? The theory threatens only to say that a proposition is true when what it names is a truth (Johnson 1992, 42).
This, it is argued by some, does not go very far in identifying the essence of truth. This theoretical shortcoming in the correspondence view of truth helps one to appreciate why alternative -- and, for most people, less intuitive -- theories also have been advanced. Coherence theories are the most widely held of these alternatives (Horwich 1990, 9). For coherence theorists (e. g. , Bradley, Blanchard), the truth of a proposition is judged by its coherence with a body of propositions that are held to be true. It is true that the book is on the desk because such a proposition coheres with an entire web of interrelated beliefs that we also hold to be true.
This web of beliefs comprises what Johnson (1992, 25) calls "the world of our awareness, " within which books, desks, their roles, and their meanings are understandable. It is only by recourse to this "world of our awareness" that the truth of the proposition "the book is on the desk" can be assessed. The paradigmatic coherence theory is informed by a metaphysics of absolute idealism. Absolute idealism makes the object world dependent on the mind, such that "brute facts, " in the realist's sense of an independent object world, simply do not exist.
In their place, the idealist posits an absolute reality, in which all things are what they are only by virtue of their relationship to other things. This reality, moreover, is accessible only through the human mind. Given these metaphysical presuppositions, there is no independent object world to which we might appeal in adjudicating truth. Instead, for the idealists, there is only the one large web of interrelationships that comprises the totality of what we currently know of the absolute. The truth of any given proposition, therefore, can only be judged on the basis of how well that proposition coheres with the body of propositions that determines what we presently know of absolute truth. But even if one is willing to accept that coherence is a reasonable way to assess the truth of at least some propositions, this does not imply its adequacy as a description of the essence of truth.
To serve as an adequate theory of truth, there must be no truths that cannot be said to be so on coherence grounds. For many critics, coherence theory fails in this regard. The point of contention generally is that coherence theory does not seem to admit a distinction between what we would, given our existing corpus of beliefs, be warranted in holding to be true and what is, in fact, true. While the coherent ist might well respond that this is merely indicative of an incomplete knowledge of the absolute, critics with less faith in idealist metaphysics remain unconvinced.
Around the turn of the century, the American philosophers Peirce, James, and Dewey elaborated versions of an alternative theory of truth, inspired by the philosophy of pragmatism for which they are known. Although there are important differences in how each of these thinkers conceptualized truth, all pragmatic theories assert that in one way or another, truth is what is useful to believe. For Peirce, "usefulness" was inextricably bound up with scientific methodology and the resulting scientific knowledge. For him, as for Dewey after him, "truth" was that which is or would be agreed to on investigation. For James, by contrast, "usefulness" was operational ized as "long-term expedience, " a criterion that was meant to extend the definition of truth beyond science and into religion and metaphysics as well (Johnson 1992, 64 - 65). Pragmatic theories of truth, unlike the correspondence and coherence theories to which the pragmatists explicitly opposed them, are not concerned with identifying the essence of truth (Allen 1993, 63).
Instead, the pragmatists provide an account of the practical value of truth, where this value is measured by the favorable outcomes that the belief makes possible. Such a conception of truth is consistent with pragmatic philosophy, which holds that all meaning is anchored in practice. Thus, a difference in meaning -- such as the difference between a "true" and a "false" belief -- must involve some difference in practice. "True" beliefs, therefore, are simply those that work out well in practice. Pragmatic theories of truth have been criticized as being too subjective to serve as an arbiter of truth.
What is useful to believe, it is argued, depends on what is useful to the individual holder of the belief. In addition, what is useful in the long run to the holder of the belief may well differ from what is immediately useful to the holder of the belief. In response to numerous criticisms such as these, pragmatists have refined the concept of usefulness, resulting in many different variations of the theory, some of which are only marginally compatible with one another. Nonetheless, objections of this sort have remained major stumbling blocks for pragmatic theories of truth. Each of the theories discussed above seeks to provide an account of the nature of truth in all of its various linguistic uses.
Thus, for any given claim or belief, each theory would provide its own account of what makes the claim or belief true. Consider the proposition that "the sun rises in the morning. " Supposing that theorists of each of the three camps were willing to ascribe truth to this claim, the differences in theory manifest themselves as differences in the reasons each group would give for its willingness to grant that the proposition is true. For the correspondence theorist, it is true that the sun rises in the morning because such an assertion corresponds to a state of the world that is independent of the person who is making the assertion. For the coherence theorist, the proposition that the sun rises in the morning is true because it coheres with numerous interrelated propositions about the relative position of the earth, the sun, and the observer -- propositions that themselves cohere with the one absolute reality. For the pragmatists, in turn, the proposition that the sun rises in the morning is true because such a belief produces beneficial results in practice -- it allows, perhaps, one to gauge the passage of the day by the position of the sun, or it suggests where to look in the sky to observe the appearance of the morning sun. When proponents of the different theories appeal to different reasons for asserting that a proposition is true, they are effectively proposing different criteria by which truth may be assessed.
For correspondence theorists, the relevant criterion is correspondence with an external reality. For coherent ists, it is coherence with accepted belief. For the pragmatists, truth is assessed by its usefulness in practice. Because of the emphasis on truth criteria, it is easy to lose sight of the fact that each theory sees itself not as identifying merely a criterion of truth but as capturing the very essence of truth. Indeed, the distinction between truth criteria and the essence of truth has been invoked by proponents of one theory to grant the criteria while rejecting the essence of a rival theory. With the exception of a handful of philosophers, most people probably do not hold any particular theory of truth.
That is, most of us have probably never considered -- much less resolved -- the issue of what essential attribute identifies "truth. " By contrast, we routinely employ truth criteria in our interactions with others. Truth criteria are evident in the reasons people give for believing what they do or the reasons that speakers offer for why their claims should be accepted as true. Truth criteria, in short, play a prominent role in the linguistic activities of justification and persuasion. Thus, by examining what a speaker says, it is possible to discern the truth criteria employed by that speaker, even if the speaker has never considered the underlying issue of the nature of truth. In the discussion that follows, this article draws on the concept of truth criteria to illuminate the types of truth claims proposed or opposed by auditors and advertising agents. In doing so, we avoid attributing truth theories to either professional group or to either of the two principal stakeholder groups with which they were communicating.
The historical records that inform this analysis do not permit one to make further inferences. In the movie Miracle on 34 th Street, there were actually two miracles. We learn that there really is a Santa Claus. More miraculous, however, was seeing the Macy's managers tell customers the truth, the whole truth, and nothing but the truth.
Truth has been an issue of concern in advertising for centuries and remains so today. However, a significant movement from within the industry for truth in advertising began with magazine publishers' campaigns against patent medicine companies during the 1880 s and culminated in the 1910 s with efforts by the Associated Advertising Clubs of America (AACA) to enshrine truth in state legislation supported by an industry-organized police force of vigilance committees. By 1914, the movement had spread to Canada as the AACA became the Associated Advertising Clubs of the World (AACW), and the American strategy was largely mimicked in Canada. By the late nineteenth century, fraudulent advertising was commonplace in North America (Wood 1958).
Reputable manufacturers of branded products generally were truthful in their advertising. Some disreputable ones were relatively harmless, such as the mail-order company in the 1880 s that offered a "Potato-Bug Eradicator" for ten cents and delivered two pieces of wood with instructions to place the potato bug between them and press together. However, many others were reckless and irresponsible, none worse than the patent medicine companies. Some of those "medicines" contained as much as 40 percent alcohol; others contained poisonous drugs. Brown's Vegetable Cure for Female Weakness promised to cure "a dragging sensation in the groin, sparks before the eyes, hysteria, temple and ear throb, a dread of some impending evil, morbid feelings, and the blues" (Wood 1958, 331). In 1892, the Ladies' Home Journal announced that it would no longer accept advertising from patent medicines and followed with a long and bitter campaign of editorials and articles against the entire patent medicine industry.
It even attacked other magazines that accepted and published patent medicine advertising. Lydia E. Pinkham became rich and famous during the 1870 s for her cure-all Vegetable Compound. It was advertised as a sure cure for Prolapsus Uteri, or Falling of the Womb... Pleasant to taste, efficacious and immediate in effect. It is a great help in pregnancy and relieves pain during labor...
For all weaknesses of the generative organs of either sex. It is second to no remedy that has ever been before the public and for all diseases of the kidney it is the Greatest Remedy in the World. (Wood 1958, 327) But for years after she died in 1883, the Pinkham company kept Mrs. Pinkham's picture in their ads and invited women to write to her for advice. By 1904, the Ladies' Home Journal had had enough and reproduced some of these ads together with a photo of Mrs. Pinkham's gravestone showing that she had been dead for twenty years (Wood 1958, 327). That juxtaposition of the actual circumstances with the statements in the ads clearly relied on the lack of correspondence between them to demonstrate rather dramatically the lack of truth.
What many of the publishers were really after was passage of food and drug legislation to drive the patent medicines from the market. In 1906, they were successful as the U. S. government passed the Food and Drug Act.
Two years later, the Canadian government followed suit with the Proprietary Medicines Act. In both cases, the intent was to protect the public against unsafe food and drug products; false advertisements of such products came under the acts' jurisdictions. Government wanted truth in advertising to protect consumers from harmful products; publishers wanted truth in advertising to create greater public confidence in advertising and generate more advertising business. As early as 1888, there was concern from even deeper within the advertising industry over the issue of truth in advertising.
Printers' Ink (PI) was the first advertising industry trade journal. The first issue of PI featured an editorial that included the following: It is no greater mistake for him that has something good and genuine to sell, to leave the public to find it out for themselves than to attract people by a "taking" advertisement that lacks the element of truth. In the profession of the law, the capable yet conscientious advocate makes use of all the address and skill of which he is possessed, to present his client's case in its most favorable aspect or bearing, yet he never departs from the evidence. So with the advertiser -- he should commend his wares or services to the public in the strongest and most skillfully arranged light they will bear; but the things commended should be the things he has at his disposal and he should never represent them as having properties they do not possess. (Quoted in "It's Still Good" 1938, 31) Advertisers were not expected to understate their claims, just to tell the truth. Here, truth meant using only properties that the product actually possessed. That appeal to correspondence criteria of truth would reappear in 1911, when PI joined forces with the AACA.
The AACA was formed in 1905 when a dozen local advertising clubs in various U. S. cities organized themselves into a national association. By 1911, the AACA had more than 100 member clubs with thousands of members.
In 1914, the name was changed to Associated Advertising Clubs of the World when the Toronto Advertising Club was added and the annual convention was held in Toronto. By 1916, AACW membership numbered more than 15, 000. Although the original purpose of the local clubs may have been social, the AACA was formed "to advance the advertising profession through such activities as teaching professional skills, correcting abuses, exposing fraudulent advertising, and maintaining a bureau for the registration of advertising men" (Schultze 1982, 196). Its aim was thus the professionalization of the advertising industry. Although formal education was a founding ideal for the association, its members were never able to agree on how to implement that ideal.
Some believed that the industry should provide course materials and choose the teachers. Universities at that time were beginning to offer business programs, but many were unwilling to offer advertising; certainly most were unwilling to allow business to design their curricula. When universities did begin to teach advertising between 1900 and 1910, it came in two forms. Business schools taught the subject as part of the study of management and marketing. At some institutions, though, journalism departments taught advertising as part of newspaper publishing. Thus, there emerged two very contrasting approaches to instruction, and the advertising industry was largely powerless over the formal education it had hoped to control.
As Schultze (1982, 206) concluded, "Although advertisers wished to create a profession, that was a dream that would not become a reality even with university instruction. " Like Pinnochio, many advertisers believed they could become a real profession if only they told the truth. In its founding year (1905), the AACA resolved "to expose fraudulent schemes and their perpetrators, " described in the following ways: 1. Misleading statements, insinuations, and illustrations that give impressions of value or service not inherent in the product. 2. Suggestions of cures and palliatives, and lures of beauty and health building that are not founded on scientific fact. 3. Part truths of scientific information that imply a benefit not supported by science. 4. Claims of general underselling not capable of proof and untrue in their insinuations and impressions. (Kenner 1936, xvii-xviii) The theme throughout these examples was a lack of correspondence between an advertised claim and the actual circumstances-and science was held as the ultimate arbiter of truth.
Less clear in these early attempts to define truth were the industry's motivations, beyond the wish for professional status. A speech given at the 1911 AACA convention made the connection between truth and professional status in the following way. "If you are to become a profession, you must here and now formulate a code. That code need spell but the one word, Truth, and all other worthy things shall be added unto you" (quoted in Kenner 1936, 21). And another at the same meeting added, [When] the goods advertised are exactly as described... Such a state of affairs would make the advertising man a sort of auditor or expert accountant, whose one object is to present the truth of the case to his employer, who is not so much the man who pays the salary as the people at large whose buying power makes that salary possible. (Quoted in Kenner 1936, 22) Again, the criterion of correspondence between the actual product and the advertised claim seemed to be the basis for truth. It is also interesting, as an aside, to note the citation of accountants as role models for professionalism in advertising.
The idealized role of the auditor in this quotation, however, is one that the accounting profession debated throughout this period and ultimately rejected. As early as 1907, the AACA endorsed in principle the use of legislation to penalize false advertising. However, its early efforts focused more on self-regulation. This came in the form of codes, statements of principles, and annual conventions that resembled religious crusades for truth in advertising. At the 1913 convention, the symbolism and ceremony that had come to characterize the AACA's crusade became almost comical with the adoption of a truth emblem (see Figure 1) and the official slogan "truth in advertising. " There was even a truth trophy awarded that year and for several afterwards to the member club judged to have done the most work for truth over the preceding year (Kenner 1936, 39). These efforts were imaginative but not very effective because the association had little power to enforce truth in advertising.
In addition, large numbers of small firms and individuals still had no enthusiasm for exercising control over the temptation to stretch the truth. Because of other regulations on antitrust issues that characterized the framework of government regulation in the United States, the groundwork was laid for greater future dependence on government regulation (Miracle and Never 1988). As early as 1911, it was apparent to John Romer, editor of PI, that self-regulation was not working. Romer had covered the AACA convention that year for PI and recognized that while the association had aroused sentiment, it had no plan of action. "The time has arrived, " he said, "when we can do something more than talk about suppression of objectionable advertising" (quoted in "Truth and Consequences" 1938, 256). Soon afterward, Romer hired a New York lawyer, Harry Nims, to investigate existing laws against untruthful advertising (there were two state laws, but neither had ever been used) and to write a model state law directed at sponsors (rather than publishers). The PI model statute read in part as follows: Any person, firm, corporation or association who...
makes, publishes, disseminates, circulates, or places before the public... an advertisement of any sort regarding merchandise, securities, service, or anything so offered to the public, which advertisement contains any assertion, representation or statement of fact which is untrue, deceptive, or misleading, shall be guilty of a misdemeanor. ("Truth and Consequences" 1938, 257, emphasis added) The declaration then elaborated on what constituted "untrue, deceptive, or misleading" by enumerating several practices, including the following: 1. false statements or misleading exaggerations; 2. indirect misrepresentations of a product or service through distortion of details, either editorially or pictorially; 3.
pseudo-scientific advertising, including claims insufficiently supported by accepted authority or that distort the true meaning or application of a statement made by professional or scientific authority. ("Editorial" 1932, 52) Of course, the theme here was the lack of correspondence between actual product characteristics and those claimed in an advertisement. Words such as exaggeration and distortion are particularly illustrative. The model statute was published in PI on November 11, 1911. Romer offered it to the AACA with the suggestion that its member clubs undertake the job of making the statute a working piece of legislation wherever it became enacted into law by watching for infractions, collecting evidence, and seeing that the cases were pressed. The AACA did this by forming a national vigilance committee, and in 1913, when the statute was first passed into law in the state of Ohio, the committee's work began in earnest. Eventually, forty-three states passed the PI model statute into law, although many added the word knowingly to require proof of intent to mislead.
This seriously weakened the legislation's effectiveness. The AACA's vigilance committees evolved into the Better Business Bureaus, and by 1938, there were fifty-six such bureaus guarding the American public against fraudulent advertising. The Canadian counterpart to PI, a trade journal titled Economic Advertising (EA), waited until March 1913 to voice its support for the PI model statute, but like most in the industry, it had supported for years the principle of legislation to control untruthful advertising ("Straight Talks" 1913). Its endorsement of the PI model statute was backed by the opinion that such a law would protect the public and create public confidence in advertising. One year later, the Canadian government created the Fraudulent Advertising Act, which read, in part, as follows: Every person who knowingly publishes or causes to be published any advertisement... containing false statement or false representation which is of a character likely to or is intended to enhance the price or value...
shall be liable upon summary conviction to a fine not exceeding two hundred dollars, or to six months imprisonment or to both fine and imprisonment. ("Retailers Would Put Teeth" 1921, 190) The Canadian government, in passing the Fraudulent Advertising Act, had followed some U. S. states in implementing a watered-down version of legislation requiring proof of intent to deceive. This, of course, made it very difficult to obtain convictions. Fifteen years later, the act had yet to be used and was soundly criticized by a Canadian lawyer writing in the retitled EA, now c...
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