The Measure Of Progress Counting What Really Matters Review

The Measure of Progress

Why do we use eighty-year-old metrics to understand today’s economy? 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 In The Measure of Progress, Diane Coyle argues that the framework underpinning today’s economic statistics is so outdated that it functions as a distorting lens, or even a set of blinkers.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.

The Measure of Progress

"A book which explores how the digital transformation of the economy affects how we measure and interpret the true scale of innovation, productivity, and growth. Statistics are an essential guide for better economic policies. They also involve questions of freedom, justice, life and death, as governments - and increasingly machines - use statistics to make decisions affecting people's lives. This book argues that the conceptual framework underpinning today's economic statistics is out of date, and makes it impossible to measure, understand, and respond to what is really happening in the economy. According to Diane Coyle, we have been interpreting the economy through the lens of a statistical framework developed in the mid-twentieth century, when a lack of goods and services rather than natural resources was the binding constraint on growth, when the intangible value of intellectual property and digital assets were largely unaccounted for, and when the most pressing economic policy challenge was managing demand rather than supply. Today's challenges are vastly different. Growth in living standards in the rich economies has slowed significantly in recent decades, despite dramatic innovation in digital technologies. The geopolitical as well as the environmental landscape is fraught, and our belief in democracy increasingly strained. In The Measure of Progress, Diane Coyle comprehensively explores how the digital transformation affects how we measure the economy and our capacity to interpret the true scale of innovation, productivity, and growth. Her book also sets out some key principles for improving measurement. A true understanding of the economy, she argues, will require different data collected in a different framework of categories and definitions. Only then will policymakers, businesses, and individuals be able to shape a better, sustainable future"--

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