1Here are two books from Princeton University Press, each providing elements of a history of the iconic number, GDP or Gross Domestic Product. (Both books treat GDP and GNP as interchangeable for their purposes). Both authors presume that the question of its adequacy as a measure is hard to separate from its role as a political and economic force. Neither, however, enters deeply into the characteristics of numbers, rankings, or indicators that give them their power, or the social and political systems that can make them irresistible. The books focus less on the history of economics or of economic statistics as scientific fields than on the relations between economic measurement and the historical development of economies. Each author puts the number itself on center stage only during its formative period, that of the Great Depression and the Second World War. Thereafter, it lurks and looms, pulling invisible strings, in Philipsen's book, and adjusts imperfectly to changing economic conditions in Coyle's.
2The questions the books raise are of great interest and importance.
3Coyle's study is on the order of a very brief history, just 140 small pages of text. Within that frame she achieves a great deal. Although “affectionate”, as she says, in attitude, her purpose is not to praise GDP, but to bury it. “It is a measure designed for the twentieth-century economy, not for the modern economy of rapid innovation and intangible, increasingly digital services.” (6) Indeed, she recognizes serious issues with its definition from very early in its history. GDP was invented for purposes of economic management, to bring the depressed economies of Britain and the United States nearer to their potential in the 1930s, and subsequently to assess their capacity for war production. It was not designed to measure economic goods, meaning what is valuable for (human) life, but has been coolly applied to assess instruments of war and the rebuilding occasioned by their destructive force on the same terms as foodstuffs, education, and art. The American pioneer of economic measurement, Simon Kuznets, argued strenuously for redefining GDP to measure economic welfare. Coyle does not quite endorse the decision to treat all forms of output equally, but she accepts the need of governments for an inclusive measure that can guide fiscal policy.
4Philipsen's history of GDP takes a darker view of this crucial choice. It was the right one for the desperate circumstances of depression and war that gave birth to it, he writes, but it then became inappropriate, indeed massively harmful. There are many well-known examples of the incoherence of GDP, such as its meaningless reduction when a man marries his housekeeper, thereby ceasing to purchase her services. (Classic GDP takes the family, not the individual, as the atomic unit of macroeconomic measurement.) Philipsen, like Coyle, mentions such examples, but he is more concerned with its inclusion of what is positively harmful, such as costs of cleaning up oil spills that reflect unwise energy policy, or of security systems made necessary by unchecked crime and by social policies that stimulate it. His story emphasizes the deliberate concealment or distortion of measures of economic welfare by powerful interests that organize in opposition to health regulation and to the reduction of inequality. Economic mismeasurement, he argues, favors harmful policy choices, especially environmental ones. GDP is the holy icon for a religion of relentless economic growth, which cannot be sustained for long, and which comes down to a massive discounting of the future. Characteristically, it assigns no value to a tree until it is cut down and consumed.
5We do not expect language like this in scholarly books. Philipsen is strident in his criticism of policies framed to serve the false god of GDP. He even dares to offer a utopian vision of what might be possible if we gave up endless expansion for true human welfare. His goals seem so modest, reducing in the main to sociability and the satisfaction of basic wants, and yet at present appear impossibly utopian. While the flaunting of wealth has been with us always, numbers like GDP participate in constructing that reality. The ubiquity of GDP as a measure of policy success (Bill Clinton famously pronounced: “It's the economy, stupid”) surely has consequences. It has of late been subject to a wave of criticisms, perhaps most notably in a book commissioned by Nicolas Sarkozy while he was president of France, and coauthored by Joseph Stiglitz, Amartya Sen, and Jean-Paul Fitoussi (2010). No doubt Philipsen exaggerates the real-world impact of measures like GDP, which gained its prominence in part by blessing programs already favored by powerful interests. Yet the soft power of indicators is not to be sneered at, and this one quietly incorporates a host of policy choices that in other contexts would be strenuously debated. Certainly it is appropriate to bring its assumptions out into the open and to ask if other statistical measures might direct attention more effectively to real human needs.
6Coyle writes in a different idiom, more along the lines of managing the economy than of saving the world. She interprets the service economy, especially the explosion of computing power, as an immensely promising but disruptive force. She does not praise it unequivocally, and even, in her modest way, condemns the economic manipulations that brought the financial crash of 2008. With remarkable concision, she sketches out the relations between economic measurement and an evolving economy over nearly a century. “Sustainability” is for her one of three large problem areas for GDP or its replacement, and takes up about four pages at the end of her book. She writes as an economist, while Philipsen, though trained as an economic historian, writes mainly as an ethicist.
- 1 Ian Hacking's argument about experimentation in Representing and Intervening (Hacking, 1983) applie (...)
7Numbers, including measures and indicators entail choices. In the human sciences, at least, they function as interventions, never merely as representations (Porter, 1995, chap. 4; also Bruno, Didier and Previeux, 2014; Rothenburg, Merry, Park and Mugler, 2015).1