The Measure of Progress

ISBN:: 978-0-691-17902-5

(2 reviews)

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 In The Measure of Progress, Diane Coyle argues that the framework underpinning today’s economic statistics is so outdated that it functions as a distorting lens, or even a set of blinkers.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’s 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’s lives in ways large and small. The metrics for economic growth were developed when a lack of physical rather than natural …

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 In The Measure of Progress, Diane Coyle argues that the framework underpinning today’s economic statistics is so outdated that it functions as a distorting lens, or even a set of blinkers.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’s 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’s 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’s 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.

1 edition

Ben Waber reviewed The Measure of Progress by Diane Coyle

A Masterful, Deeply Researched Examination of Economic and Welfare Measurement

5 stars

Coyle absolutely knocks it out of the park in this expanded follow up to her can't miss book on the history of the GDP metric. Here she more fully interrogates how we currently measure GDP, its gaps, recent trends in constituent metrics, and how to improve societal welfare metrics more broadly. Starting with the concerning declining productivity growth trend since ~1980 in pretty much every developed economy, Coyle methodically works through different explanations of that trend from mismeasurement of new innovations, problems with measuring improvements in products, movement of production outside of firms, declining actual innovation, and more, with implications for how we measure GDP and regulate firms. Personally I think the contribution of the basket neoliberal policies is the flashing red light in all of this, and Coyle does somewhat consider this but partially dismisses it with less focus than I'd like. That, however, is a minor quibble in …

Coyle absolutely knocks it out of the park in this expanded follow up to her can't miss book on the history of the GDP metric. Here she more fully interrogates how we currently measure GDP, its gaps, recent trends in constituent metrics, and how to improve societal welfare metrics more broadly. Starting with the concerning declining productivity growth trend since ~1980 in pretty much every developed economy, Coyle methodically works through different explanations of that trend from mismeasurement of new innovations, problems with measuring improvements in products, movement of production outside of firms, declining actual innovation, and more, with implications for how we measure GDP and regulate firms. Personally I think the contribution of the basket neoliberal policies is the flashing red light in all of this, and Coyle does somewhat consider this but partially dismisses it with less focus than I'd like. That, however, is a minor quibble in what is an essential book - there are even multiple sections on the inherent subjective nature of metrics and algorithmic bias, and the entire book contains copious citations! Highly recommend

Ben Waber

rated it

July 11

The Measure of Progress

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