[...]... large body of producers.18 Looking at the social consequences of economic growth in the Victorian era, the English writer Thomas Carlyle famously labelled economics ‘the dismal science’ ‘Supply-and-demand, Leave-it-alone, Voluntary Principle, Time will mend it’, he wrote in 1850 ‘Till British industrial existence seems fast becoming one huge poisonswamp of reeking pestilence physical and moral.’19 In... records about domestic consumption, production, trade, and population growth as part of a centralization process that would eventually strengthen the government at the expense of peripheral pockets of autonomy He also made the case that keeping track of domestic production would have improved the collection of taxes and the design of economic policies to support the expansion of Britain vis-à-vis competitors... expenditure patterns, quality-adjusted prices for high-tech goods and measures of banking output that recognize cash withdrawals, electronic funds transfers, as well as the wide range of services that most banks provide In 1991, the GNP was superseded by GDP, which is still the most popular acronym by which national income is commonly known From ‘national’ the gross product became domestic Although this... Federal Reserve recently suggested a minor – but politically relevant – revision: to replace it with its income-based alter ego, namely gross domestic income (GDI).71 Politically, this idea appeared rather palatable to the US administration, given that GDI painted a more positive picture of the long-awaited economic recovery In the first quarter of 2011, the real GDP growth estimates showed an annualized... ‘subjective well-being’ to be incorporated into official statistics.77 President Obama officially welcomed the effort, which was also sponsored by his chief economic adviser, the Princeton economist Alan Krueger, who co-authored a 2009 paper proposing ‘a new approach for measuring features of society’s subjective well-being’ 78 Finally, in April 2012, the UN secretary general Ban Ki-Moon participated... most critical advantages of the US vis-à-vis other countries, especially Nazi Germany For all intents and purposes, the invention of GDP helped America win the war at least as much as the development of the nuclear bomb carried out by the Manhattan Project No surprise, then, that such a close connection between GDP and the war economy continued unabated in the post-war period and especially with the... calculations and are only taken up by policymakers if they comply with the GDP-led development model The socalled Bush tax cuts, the largest in the recent history of America, were amply justified by the need to foster GDP growth, while efforts to secure increases in the federal living wage have been thwarted by persistent gloom-and-doom forecasts with respect to overall GDP performance 11 Our geography... sector and a huge saving pool, which, coupled with pent-up consumer demand for durable consumer items, were the key factors propelling America’s post-war economic expansion In 1946, Milton Gilbert, one of Kuznets’s closest collaborators, who by then was in charge of the GNP computation at the Department of Commerce, recognized that ‘war conditions and problems stimulated interest in analyzing the national... was based on two main indicators: the gross social product, which measured the total gross output of industries, and the net material product, which deducted from the former the material consumption generated by the industries in the production process.38 According to the Great Soviet Encyclopaedia, the socialist society ‘is able to produce and distribute the gross social product in accordance with... measured as the sum of these charges This is known as the ‘income approach’ (or gross domestic income) and is often used to assess the purchasing power of households and the financial health of business In addition, GDP can also be measured as the sum of the value added at each stage of the production process The ‘value-added approach’ to measuring GDP, which is carried out through specific surveys . viewed at his blog, www.globalreboot.org. GROSS DOMESTIC PROBLEM The politics behind the world’s most powerful number ______________________ LORENZO FIORAMONTI Zed Books LONDON | NEW YORK To. science’. ‘Supply-and-demand, Leave-it-alone, Voluntary Principle, Time will mend it’, he wrote in 1850. ‘Till British industrial existence seems fast becoming one huge poison- swamp of reeking. ebook edition was first published in 2013. www.zedbooks.co.uk Copyright © Lorenzo Fioramonti 2013 The right of Lorenzo Fioramonti to be identified as the author of this work has been asserted