- Measuring America: How Economic Growth Came to Define American Greatness in the Late Twentieth Century
Andrew Yarrow has written a narrative of how economic growth, as conceptualized and measured by academic economists, became a cultural measure of success for American society after World War II. He traces the growth of the economics profession and how the invention of the macroeconomic statistical system, the National Income and Product Accounts (NIPA), and Keynesian economic theory provided the federal government with the capacity to monitor, forecast, and guide the trajectory of American capitalism. As is well known, Keynesian economics and NIPA underpinned the federal government's planning for budgeting and financing World War II. Their success led Congress to create the Council of Economic Advisors (CEA) in the Employment Act of 1946. That law mandated an annual Economic Report of the President and ongoing monitoring of the health of the American economy. It also signaled the federal government's new role in maintaining a full-employment economy and preventing another Great Depression. Both Republican and Democratic administrations in the postwar period embraced the new mandate to manage growth and overall economic health. From the late 1940s through the early 1970s, the new tools by and large performed well.
That story of that success and the economic profession's proud explication and promotion of "people's capitalism" (72) is the core of Yarrow's study. He has [End Page 251] plumbed the archival records of presidents and their advisors, congressional committees, and the key economists who guided the CEA and the think tanks such as the Twentieth Century Fund and the Brookings Institution. He has also interviewed key economists involved in federal economic monitoring at the time and the promotion of the popular understanding of economics. His research reveals the processes through which the new tools were deployed, defended and explicated and is a major contribution to both the history of public policy and the history of economics profession.
His story turns darker after the 1970s, when the American economy stumbled and the macroeconomic tools proved less effective. Yarrow explores the limitations of the growth models and the emerging critiques of the mainstream Keynesian consensus from both the right and left. His final chapters provide critiques of the NIPA system as a "flawed measure" (164) in light of checkered success of twenty-first century capitalism.
The study fits into a larger literature of "measuring" and monitoring the "progress" of modern national states in general and American society in particular, and the history of the government institutions that did the measuring and monitoring. That literature is substantially larger than Yarrow acknowledges. From Patricia Cline Cohen's study of A Calculating People: The Spread of Numeracy in Early America to William Alonso and Paul Starr (eds.), The Politics of Numbers, to Thomas Stapleford's The Cost of Living in America: The Political History of Economic Statistics, 1880-2000, to Theodore Caplow, Louis Hicks, and Ben Wattenberg's The First Measured Century, to name just a few, scholars have emphasized how the technical development of numeracy, economic theory, and statistical measurement and analysis, have both emerged from the political issues of their time and changed the larger political culture they described.1 The systems of measurement and analysis develop to address the policy issues of their day, be they colonial conquest of the New World, westward expansion and population management, or economic growth and change. Yarrow would agree with the researchers in Hamilton Cravens's edited collection, The Social Sciences Go to Washington, who also explore how social science public intellectuals sought to influence and were drawn into post-World War II policy making.2 But precursors were there in the 1910s managing America's wartime economy, or the 1880s managing immigration policy and Indian Affairs, or the 1850s proposing methods to end or prolong the institution of race-based slavery. Those precursors often did not have disciplinary training or advanced university degrees, because they themselves were also building the institutions of higher education...