The ways that statisticians and governments measure the economy were developed in the 1940s, when the urgent economic problems were entirely different from those of today. In The Measure of Progress, Diane Coyle argues that the framework underpinning today鈥檚 economic statistics is so outdated that it functions as a distorting lens, or even a set of blinkers. When policymakers rely on such an antiquated conceptual tool, how can they measure, understand, and respond with any precision to what is happening in today鈥檚 digital economy? Coyle makes the case for a new framework, one that takes into consideration current economic realities.
Coyle explains why economic statistics matter. They are essential for guiding better economic policies; they involve questions of freedom, justice, life, and death. Governments use statistics that affect people鈥檚 lives in ways large and small. The metrics for economic growth were developed when a lack of physical rather than natural capital was the binding constraint on growth, intangible value was less important, and the pressing economic policy challenge was managing demand rather than supply. Today鈥檚 challenges are different. Growth in living standards in rich economies has slowed, despite remarkable innovation, particularly in digital technologies. As a result, politics is contentious and democracy strained.
Coyle argues that to understand the current economy, we need different data collected in a different framework of categories and definitions, and she offers some suggestions about what this would entail. Only with a new approach to measurement will we be able to achieve the right kind of growth for the benefit of all.
Diane Coyle is the Bennett Professor of Public Policy at the University of Cambridge. She is the author of Cogs and Monsters: What Economics Is and What It Should Be, GDP: A Brief but Affectionate History (both Princeton), and many other books.
“Diane Coyle, author of an affectionate (and illuminating) history of GDP, turns to its flaws. In a world of dematerialized production, of digital clouds located who knows where but used from everywhere, of supply chains involving dozens of countries, and of unpriced but critical natural goods, the usefulness of GDP is increasingly wearing thin. Hard-to-measure items have come to dominate things we know how to measure. Coyle’s surefooted guide to this maze will be useful to economists and noneconomists alike.”—Angus Deaton, Nobel Prize–winning economist and coauthor of Deaths of Despair and the Future of Capitalism
“In this engaging and thought-provoking book, Diane Coyle explores whether our long-standing economic measures, like GDP, are sufficient for understanding progress today. Drawing off her deep expertise in economic statistics, she makes a strong case for complementing these metrics to better capture the realities of a changing economy.”—Karen Dynan, Harvard Kennedy School
“Are official productivity statistics ‘a measure of our ignorance’? Diane Coyle counts the many ways that these statistics ignore important factors that affect social well-being and progress, especially as the economy becomes more digital and perhaps less sustainable. Refreshingly, however, she outlines an alternative framework. Based on a comprehensive accounting of public, private, and natural assets and valuation based on the way people spend their time, this new approach might just provide a better guide to policy and future growth.”—Jim Bessen, author of The New Goliaths: How Corporations Use Software to Dominate Industries, Kill Innovation, and Undermine Regulation
“A masterly exposition of a deep and difficult subject, this book will prove to be the definitive account by a leading authority of how we should measure economic progress.”—Partha Dasgupta, University of Cambridge
“A fascinating, rich, and surprising book on one of today’s most important questions, by one of the world’s leading experts on the issue.”—Daniel Susskind, author of Growth: A Reckoning
“This is a fascinating and profoundly important analysis of the way in which changing technologies, processes, environmental and social conditions are upending the way in which we measure, account for and report on the state of our national economies. Diane Coyle makes a powerful and persuasive case for placing much more emphasis on comprehensive wealth and time in revising our systems of national accounting. Her book provides policymakers with a clear and practical blueprint for reform.”—Colin Mayer, University of Oxford
