Since Plato never felt the need to learn accounting for himself, he would not  have noticed any of the “loose ends” that made no rational sense at certain irrational financial moments in my “Socratic” reading of financial history.  Here are a few examples that would get Socrates’ attention.  (Not all directly involve Accounting.)

1. Several weeks after I, and countless others, watched a significant percentage of my modest investments dematerialize on “Black Monday” in October 1987, I read explanations of How and Why it had happened in a weekly publication about business and finance (Barron’s – sister to the Wall Street Journal).  This was the first of several “blow-ups” in the financial world that I still find rationally inexcusable.  Part of the explanation involves something the Experts and Authorities had created to theoretically pretend to circumvent the natural world risks of “uncertainty.”  Some prestigious combination of the Best and the Brightest among Economists and Accountants had established a new Social Protocol of investment perfection – or so everyone in Authority accepted.  After the latest innovation of geniuses to theoretically outsmart nature and its Free Will risks was tested and failed (as they always do), “Portfolio Insurance” was quietly abolished.  No one was prosecuted for fraud.  And the shareholders in mutual funds and elsewhere took the actual losses.  (Investment Bankers never even refund their cash commissions when their recommendations achieve catastrophic losses.  Life goes on.)  If any Economists or Accountants suffered a punishment, I never read about them then or over the last 30 years of my 40+ years of pretty regular weekly Barron’s readings.
2. In the mid-1990’s I wondered each year: how did the Chase Manhattan Bank Annual Report seem to “hide” in a distant footnote multi-trillion dollar “notional amounts” of unspecified potential liabilities – if something went seriously wrong in “foreign exchange” markets and also “interest rate swap” markets?  (There are lots of “Capital Markets” these days.)  Those are called “derivatives” or “derivative contracts.”  I have never found a rational explanation for how to turn them into real numbers of real things in a real Accounting statement.  (Nobel Prizes have been won by macro-economic theoreticians from the most prestigious Universities claiming to accurately value such “derivatives.”  They only get exposed as unreliable speculative estimates when things “blow-up” in the so-called “Capital Markets.”)
3. 1998 – Long Term Capital Management (LTCM) “blew-up” in the “Capital Markets” – all over the world!
4. I still wonder: how did the New York Federal Reserve Bank get the U.S. Government Federal Reserve Bank to “coordinate” the liquidation of a 100 billion dollar accounting balance sheet (that became completely out-of-balance) at LTCM with the temporary loaning of 2 or 3 or 4 billion dollars from the 5 or 6 or 7 institutions providing all the necessary “financial services” to the LTCM “investment” business?  [The lack of anyone going to jail for violating the Social Protocols or for the necessity to change those Social Protocols to correct the regulatory deficiencies, coupled with a mysterious absence of catastrophic losses actually suffered for catastrophic losses experienced in that LTCM business (and all the associated “financial services” businesses) as a financial catastrophe is very difficult to make rational sense out of .  (I lost a lot of real money in 1987.)]
5. How did Enron Corporation spend several years adamantly denying they did anything wrong in their regulated Accounting statements (before their regulated Accounting statements themselves became part of the evidence at trial that convicted several executives and accountants)?  As I have done for over 40 years, I usually got the basic narrative of business and finance stories explained to me originally by Barron’s Weekly.  The Enron story revealed even more irrational Accounting pseudo-standards in the Social Protocols of finance and law than those goofy unquantifiably risky “derivatives” Chase Manhattan’s annual reports surprised me with earlier in the 1990s.  (For hundreds of years of progress in the scientifically modernizing world, modern world accounting has provided a rational basis for business and finance.  This post-modern world is irrationally different.)  Enron introduced me to the “off-balance” item, a post-modern irrational innovation (or irrational extension) of formally rational accounting.  The name I remember was “special purpose entity,” but I believe there were several other obfuscatory terms used to hide the simple truths the Balance Sheet was originally designed to “transparently” reveal.  The irrationality grows regardless of which political party controls the White House or the Congress or even the ideologically voting majority of the Supreme Court itself.  [I think all this irrationality would make Socrates want to puke as he says so often in The Memoirs of Socrates.]
6. It really troubled me when, in the late winter or spring of 2007, I first read in Barron’s of common “Liar Loans” in the so-called “sub-prime” mortgage industry (“securitized” in “bonds” that made no sense to me either.)  I wondered how many previous years the term was used during which the “financial” industry and the “financial news media” did not inform the general public about “liar loans,” for this innovative type of mortgage loans that perfectly fulfilled the utopian ideal of “everyone being able to own their own home” (without being required to afford it under rational Social Protocols.  I can well recall bus station or phone booth public advertisements for ACORN, the Social Justice Idealistic group I most closely associate with that “innovation.”)  Furthermore, I have long since been befuddled by the decades old practice of “securitization” of loans by financial institutions into a host of differently defined “bonds” (also conveniently removed from the Balance Sheet) where in the old-fashioned modern world way there would be an accurately quantified liability transparently noticeable.  (For years, a certain person I knew could not have a conversation without reiterating the story of someone’s pet dog who easily secured a “Liar Loan,” for a human house that honest renters were incapable of taking advantage of.  For decades we have lived in a world where few, if any, liars are punished.  It is the compulsively honest who end up being punished – probably because they are socially naive enough to be honest.)
7. I do not remember which year it was between Enron and the “Liar Loan” revelation when the Fanny Mae Balance Sheet started having trouble staying in balance.  For years they had the “due diligence” investment bankers pretend to quantify and contain their risks of hundreds of billions of dollars of mortgages with a mere tens of billions of dollars of “derivative” contracts that ultimately failed to fulfill the goal of quantifying and containing the financial risks.  (I don’t recall the multiple-year mega-million dollar politically connected executive salaries and bonuses being returned at Fannie Mae or anywhere else.)
8. The next mystery in the world of Finance occurred at the end of the summer or the beginning of the autumn in 2007.  The story was that two “hedge funds” at Bear Stearns “blew-up”  to the tune or 10 or 11 billion dollars.  When I looked up Bear Stearns’ total market capitalization, it was not much bigger than that.  They were then constructing a new building a few blocks from their old corporate headquarters on Park Avenue and 46th Street.  Things went on as if nothing were seriously wrong, until early 2008 when somehow the Federal Reserve subsidized J. P. Morgan Chase (formerly Chase Manhattan) in taking over the suddenly bankrupt Bear Stearns.
9. The Lehman Brothers’ “blow-up” in 2008 was the opening act of what is usually called the “Credit Crisis.”  When the Federal Reserve intervened to guarantee the value of a host of “securities” so that “capital markets” would not seize up but continue to function, as the Federal Reserve did in the fall of 2008, no rational person could rationally dispute the initial action.  After a few days, or maybe even a handful of weeks, to sort things out and rationally assign the losses, the “capital markets” could resume rational financial activity.  (Not as “robust” as before perhaps.  Tough luck on those expecting ever greater annual bonuses.)

That was seven and a half years ago.

And still, macro-economists are trusted.  Accounting is trusted.  And the world-wide Social Oligarchy thrives.

And I did not even get around to the craziest part of all – the “derivatives” known as “Credit Default Swaps.”  The most perfect financial innovation ever invented.  They are sold for high cash fees.  And if they become necessary to be paid off, the Central Bankers will find a creative way to first pay them off for the sellers who would otherwise be bankrupted.  Then they “recapitalize” the banks and other sellers with such innovative macro-economic ideas as permanently distorting interest rates so that the frugal with cash savings will subsidize the profligate, the greedy and the dishonest for ever and ever.  If all of this makes sense to you, you must be in the Social Oligarchy, with political “friends” in high places.  How any regulated financial institution can be paid to accept a financial risk that is bigger than their capital is not rational.

Way back in 2004, Goldman Sachs, the biggest and most prestigious major Investment Bank, somehow managed to sell an enormous package of “derivatives” to the habitually profligate Socialist Greek Government so that their Accounting statements would comply with the requirements to join the European Union.  During several of the last 11 or 12 years, it has become painfully obvious the “due diligence” was, to put it politely, flawed.

Nobody cares.

It is for such societal disregard of elementary modern world standards of rational judgment that Socrates (as Plato reveals in one of his dialogues) responds in frustration to the inquiries of many of his friends as to how he was preparing his defense before the 500-man jury of his impending impiety trial.  He said:

“It is as if I were a physician arraigned by a confectioner before a jury of children, and my only refuge, my only defense, is the innocence with which I have lived my entire life.”