Published by EH.Net (June 2022).

Stephen J. Macekura. *The Mismeasure of Progress: Economic Growth and Its
Critics*. Chicago: The University of Chicago Press, 2020. 320 pp. $27.50
(cloth), ISBN 978-0226736303.

Reviewed for EH.Net by Daniel Gallardo-Albarrán, Rural and Environmental
History Group, Wageningen University.



One major line of inquiry in economic history concerns the measurement of
economic development in the long run. Over the past two decades, the field
has thrived by furthering our understanding on important questions on the
timing of the ‘Great Divergence’ or the consequences of industrialization
for living standards (among others). However, there are issues at the core
of this research strand that are often swept aside or are insufficiently
tackled, as a result of using price-adjusted Gross Domestic Product (GDP),
wages and similar metrics capturing purchasing power or economic output.
For instance, which changes in an economy should count as economic
*development*? How are narratives of long-term living standards influenced
by the assumptions underpinning our measurement frameworks? These questions
are of paramount importance to anyone interested in measuring or
understanding long-run development, and Macekura’s work provides useful
insights into them.

The *Mismeasure of Progress* presents a sweeping history of dissent,
conflict, and disagreement around the concept of Gross National Product
(GNP) and the growth paradigm, i.e., the idea that societies should
maximize national income. Macekura follows the professional and
intellectual trajectory of a number of experts who were crucial in
developing and measuring GNP and GDP and establishing the system of
national accounts, along with major critics of this endeavor. The book
ultimately shows that the story does not end well for those critics who
aspired to fundamentally change how societies measure national income and
its preeminence in academic and policy circles, since GDP prevailed after
all. However, knowing how their ideas developed is important to put in
historical perspective current arguments against GDP.

The book contains six chapters as well as an introductory and a concluding
chapter. The former sets the stage and draws parallels between current and
past growth measurement critics. The development of the main argumentation
of the book begins in the first chapter, which deals with a critical
question: how did policy circles and the academic community come to
associate living standards with GNP so narrowly? Before Simon Kuznets
submitted his report on national income to the American Senate in 1934,
concerns about the condition of the working classes triggered initiatives
to gather information on different (non-income) aspects of people’s lives.
For instance, the International Labor Organization conducted cross-national
social surveys to measure workers’ access to food and shelter, and national
statistical offices amassed data on suicides, crime rates, etcetera.
However, the Great Depression and the Second World War consolidated
national income statistics as a priority for policy makers, who used them
to manage tight budgets and to mobilize large amount of resources for the
war economy.

The construction of national income statistics and their adoption for
economic policy was far from a smooth process, as the second and third
chapters show. Already in the 1930s and 1940s, experts identified limits of
national income as meaningful metric of economic activity and thus were
skeptical of its usefulness to understand the economy of countries in
different stages of development. Macekura illustrates this by highlighting
the work of Phyllis Deane, a British economist tasked with measuring the
economic capacity of the colonies in the 1940s. Her work in Zambia led her
to criticize the national accounts as a clear comparable framework of
economic activity, since it did not take into account that unwaged female
labor and self-subsistence output were an important part of Zambian
household production. In addition, a number of critics argued that the
pursuit of growth had negative side effects for the natural environment and
society, including greater poverty and inequality. The influential
report *Limits
to Growth* published by MIT in 1972 argued that ecological constraints
would lead to a decline in population and living standards. An overemphasis
on maximizing GDP was therefore misleading since economic growth had
environmental costs that were not properly accounted for. Similarly, others
argued that the pursuit of rationality and efficiency resulted in a
spiritually aimless society too focused on mass consumerism.

Chapters four and five describe the crisis suffered by the growth paradigm
in the 1970s and the search for alternatives that followed. The dependency
of industrialized countries on fossil fuels (e.g., coal, oil) and other
minerals (e.g., copper, zinc, lead) became increasingly clear to experts
and the general public, as energy consumption surged after 1950 and
economies suffered from the energy crisis of the 1970s prices when oil
prices skyrocketed. For many, capitalist growth would ultimately lead to
social disruption and conflict, although not everyone agreed. Intellectuals
in the Global South saw maximizing GDP as a way to achieve prosperity and
therefore opposed a zero-growth policy agenda in developing countries,
which some even considered a new form of imperialist oppression. These
discussions provided fertile ground for the development of social
indicators that could replace GDP. Two influential metrics in this respect,
which did not succeed in the end, were the Physical Quality of Life Index
by Morris David Morris and the Measure of Economic Welfare by William D.
Nordhaus and James Tobin.

Chapter six closes the main argumentation of the book by covering the
revival and later debate of the growth paradigm during the last decades of
the 20th century. The reliance on market mechanisms to reactivate the
stagnating economies of the 1970s gave further impetus to the idea that
maximizing national income will lead to long-term economic and social
stability. However, and unlike the predominance of the growth paradigm in
the 1940s and 1950s, the arguments and initiatives of critics reached a
much broader audience than before. One example is the well-known Human
Development Index that was embraced by the United Nations to enrich public
discussion about international development in 1990. Even though this and
other measures quantifying the environment and female work did not end up
replacing GDP, they have significantly broadened the ideas around what
constitutes development and how to advance it.

My main quibble with *The Mismeasure of Progress* is that it remains mostly
descriptive. It excels at presenting the origins of dissent around GDP and
the growth paradigm, and how some concepts and metrics emerged, changed,
and at last were discarded. However, it would have been useful and
interesting if Macekura had explained in detail why such ideas were
ultimately ignored. To be sure, some parts give hints at why that was the
case, but I missed a chapter (or various sections) providing a systematic
review of various explanations and how they compare against each other. In
addition, although this is a minor criticism, there is some argument
repetition in a few parts that could have been avoided by referring the
reader to other chapters.

Overall, this is an interesting book that complements earlier work on the
origins and evolution of GDP (by Diane Coyle) as well as more technical
work on how GDP mismeasures important aspects of citizens’ lives (by Marc
Fleurbaey and Didier Blanchet). I think the first three chapters are
particularly valuable for teaching purposes to chart the complicated
origins of national income and how economists, far from a homogeneous group
interested in advancing a specific agenda, fought against some of the very
things the international community value most these days, such as gender
equality, sustainability, or inequality. And perhaps this is one of the key
lessons to extract from it: there is a long tradition of experts arguing
that growth is non-neutral and we can learn from their history to craft
more compelling alternatives to measure living standards in both history
and the present. Agreeing on a definition or metric of progress is elusive
and maybe impossible, but having public discussions about the shortcomings
of our measurement frameworks will bring us closer to something that
resembles a consensus worth pursuing.



Daniel Gallardo Albarrán is assistant professor in Economic History at
Wageningen University, where he researches the roots of global health
inequality and their implications for global welfare disparities. He is
currently conducting a project funded by the Dutch Research Council on the
determinants of clean water and sanitation since 1850 from a global
perspective, and he manages the research portal Long-Run Health Matters (
www.lrhmatters.com).

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