Publication Date: January 31, 2014
This paper was prepared for the Markle Economic Future Initiative.
Excerpted from The Second Machine Age: Work, Progress, and Prosperity In A Time of Brilliant Technologies by Erik Brynjolfsson and Andrew McAfee. Copyright © 2014 by Erik Brynjolfsson and Andrew McAfee. With permission of the publisher, W. W. Norton & Company. All rights reserved.
“The Gross National Product does not include the beauty of our poetry or the intelligence of our public debate. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion. It measures everything, in short, except that which makes life worthwhile.” —Robert F. Kennedy
When President Hoover was trying to understand what was happening during the Great Depression and design a program to fight it, a comprehensive system of national accounts did not exist. He had to rely on scattered data like freight car loadings, commodity prices, and stock price indexes that gave only an incomplete and often unreliable view of economic activity. The first set of national accounts was presented to Congress in 1937 based on the pioneering work of Nobel Prize winner Simon Kuznets, who worked with researchers at the National Bureau of Economic Research and a team at the US Department of Commerce. The resulting set of metrics has served as beacons that helped illuminate many of the dramatic changes that transformed the economy throughout the twentieth century.
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