Political Arithmetic: Simon Kuznets and the Empirical Tradition in Economics (National Bureau of Economic Research Series on Long-Term Factors in Economic Development)

Today, economists' assessments, measurements, and forecasts are considered essential to government and business decision-making. However, less than a century ago, economists lacked the necessary information and statistical tools to understand the increasingly complex modern economy. Political Arithmetic tells the story of economist Simon Kuznets, the founding of the National Bureau of Economic Research, and the creation of GNP—a concept that enabled measurement of entire economies' performance for the first time. The book examines the political and economic forces that created demand for more detailed economic analysis: Progressive-era hopes for activist government, World War I production demands, Herbert Hoover's interest in business cycles during his tenure as commerce secretary under President Harding, and the Great Depression's economic failures. It shows how economists like Kuznets, through measurement and analysis, developed practical tools that transformed economics into a discipline applicable to everyday decision-making. Drawing on a lifetime of economic study, this work serves as both a history of a pivotal period in economic thought and a demonstration of how applied ideas can shape practical outcomes.