THE MEASURE OF PROGRESS

Or, what we talk about when we talk about GDP.

Coyle, a published scholar of economic history and statistics, opens with a provocation: How do we measure the “beneficial effects of the ultrasound therapy” used to clear away brain cells implicated in Parkinson’s disease? By most measures, this is a cost, but how does one account for the possible positive effects on patients who are able to return to work? How do we factor in the cost of carbon in producing a good? How do we measure productivity in terms of time—possibly a more revealing metric than mere dollar value? For that matter, what do we mean when we use the word “value,” anyway? Coyle holds that standard measures such as GDP and the more comprehensive SNA (System of National Accounts) work from invalid assumptions: They presuppose that natural resources are limitless and free, and they do consider externalities—the cost to the environment of a coal-fired plant, say. As for the digital world, with all its abstract characteristics, well, Coyle observes, “This is a new era, and a new statistical framework ­will be needed.” Just what that new statistical framework might encompass is the brief of this book, which will prove as clear as a slurry-filled stream to anyone without grounding in economics and its mathematics. For those who have the background, though, Coyle offers useful notes for future research on matters such as how to more accurately measure the effects of inflation (which tend to be exaggerated), how to incorporate a “hedonic adjustment”—the index of how much pleasure owning or using something might bring—into the raw numbers, and how better to use statistics to give governments better guidance, since “the purpose of statistics is to enable the state to govern well.”

A slog for noneconomists, but revelatory to anyone who’s tracking the numbers.