The Measure of Progress: Counting What Really Matters

The Measure of Progress: Counting What Really Matters
Diane Coyle (Princeton, $41, 306 pages)

Economist Diane Coyle argues that traditional economics metrics like Gross Domestic Product and the System of National Accounts, important as they were in helping policy-makers and economists understand material well-being, are inadequate to measure complex modern economies and thus economists are unable to answer the vital question: “Are things getting better, and for whom?” Written in accessible prose, Coyle argues that current national accounts do not adequately capture intangible assets such as free products or time. What is the impact of time spent on social media on the well-being of individuals? What is the cost of misinformation? Economists have struggled valuing time, even though it matters for both production and consumption. Coyle notes that many new services save consumers time, which increases the “productivity” of those who do not need to line up in a bank queue or visit a travel agent in person before going on vacation. These effects escape measurements of market productivity. Coyle argues convincingly that by failing to take into account for the time of both production and consumption, statistics cannot give the full picture of human well-being at a time of dramatic economic change. This is an enormous shortcoming, for as Coyle explains, “time saving, to create more time for activities that provide more value, is at the heart of progress for both consumers and producers.” Because there are “gaps” in the “landscape of economic statistics and concepts,” it is, Coyle says, “impossible at present to say anything definitive about … the scale and consequences of the broader phenomenon of digital disintermediation of the physical.” It is not possible to say anything definitive, but it might explain why despite traditional economic metrics suggesting that the economy has fully recovered from the disruption resulting from the pandemic, polling indicates that people have not returned to a “normal” level of comfort and contentment.

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