The question is was this always the case and no it wasnt. The question was when did people want to figure out what was going on economically with members. I start the book with 1066 because the first major effort in the modern world was about william the conqueror commissions to survey the output of the realm. And the empire basically wants to know how much land is under their control how many troops and how much farming output because the tax revenue as agriculture. Sis agriculture. So it is an effort to count who is farming was with the exception not including the church under the authority. Host this is the big theme of the book that it has its flaws. Guest it goes in the realm to whatever was being grown but what its kind of shows is theres a big difference between accounting and statistics and theres been a good book about statistics. It is the art of sampling a lot of stuff you count without having to count at all individually. They go around and count everything. Host it is very different from counting and you point out there is another leap forward in attempting to count stuff and we get to the age of empire and trade so now you have the global industry. It reaches this point between accounting and statistics, what the statistics do for you. Guest in the age of enlightenment people realize the aspects are too difficult to count. The other thing is if you go around and count the first thing people realize is if you count the average lifespan that is at the time a lot of people didnt make it past five or six or 7yearsold if you want to count infant mortality the average lifespan would be low. You have to make the choices of what to leave out and how to weigh things out and then theres the series in the and te formula of how to do that artfully which developed in the 17th century in the same suit that of the german and the french world of creating statistics. There is a whole number of people if you are a statistician you remember the great minds in the way that we look at new ten in terms of the countless and gravity that there isnt really one person. This is just a rolling series of the mathematical evolutions and it takes until the 19th century before you start getting the kind of economic sticks that we think of now. Host this is focused on the United States and you make the case that again the question of counting was ever present even in the beginning of the United States and very much on the mind of the founders and it makes its way into the constitution. Guest we talk about the slavery and north and south and minority rights. We dont usually talk about the census embedded in the constitution that every ten years there would be a count of the population. It wasnt a representational democracy and you have to be signed how many representatives in the house such as the one part of the government is the key to the population that its going to represent. But it moves from just how many people are there and where to the human curiosity to map and measure. What are these people doing, what is there an employment for how many hours do they spend working and what is the nature of their home life in terms of output so you kind of beginquotes creeping growth. Host that gets us up to the end of the 19th century and 20th century where we begin to see the arrival of these modern indicators have come to define us so much. I think most people would be absolutely astounded. People would be interested to find out that the first of a lot of these Economic Indicators were driven by a huge part of the political controversy cause of the social justice that came along with the Industrial Revolution and labor unions, people worrying about how much of they work and how much were y keeping and you have the great story of the stewart. Tell us a little bit about him. Guest . Something called unemployment it would have been a meaningless question because when you have the world that everybody needed to work literally the idea that you could be unemployed or without work was inconceivable. There is almost more things than the bodies are capable of doing so if youre not working because you were drunk or you have a no moral character or your inherited you had wor work tt needework thatsneeded to doing. So it took the Industrial Revolution and the sort of transfer of the workforce is painting with Broad Strokes to find exceptions to the rules. One of the things that drives the question of what is the nature of the work do people have a job, are they getting paid for that job adequately rather than their needs in the use of the reforms in the 19th century is to solve the Industrial Revolution as really chaotic dislocating ones and one that is drawn to the social justice in the late 19th century who was trained in the illinois and ends up being appointed to the Illinois Commission and then makes his way to washington as it was then that very sleepy and not very wellfunded bureau of labor statistics. I think of him a little bit as a statistician named mark twain suffered fools and im going to call the spade a spade and find the numbers to measure and he was one of the driving forces of the made a snapshot of employment. He is a man in the right time because you have a confluence of other factors in particular 1920 and 1921 we have a recession as sort of locking people for a loop and politicians saying how can we measure how bad it is when we dont know where we started from and then of course you have the Great Depression and this seems to push you on that desire to understand just what we are losing or how bad it is. Guest he was eight jailed professor sort of thinking about the prices and what we now call inflation. So there have been some work done before the Great Depression on whats going on in this thing we call the economy. Until the early 20th century i can say with any confidence if you use google that is anything printed on the database and you can find the frequency where things were used if you type in the words economy until the 1930s plot lines and then about 1930s it keeps accelerating because until we create numbers i could be Unemployment Rate and gdp inflation there is no economy. Theres the political economy because there is no means to measure and capture it and it took the Great Depression in this massive dislocation and we didnt know that it is the Great Depression. All the people knew it was some bad things happening that seemed worse than earlier things that had been happening because there had always been bad cycles. And hoover had been an apostle of the Scientific Management. He was a competent administrator during the war, he was an executive, and he be leaved in Scientific Management of everything and the science demands everything. 1929, there were none that he believes in the movements that were placed in the bureau of labour statistics to actually create and unemployment number and that is the first time in any other countrys history when the notion of the unemployment number because central to the body politics. Host coming up within unemployment number involves making lots of judgments and as of the first characters that you have in your book he had to sit down and say we are going to count this and this is our definition. Talk about the array of complexities in that employment. Guest what does it mean to have a job, what a number of hours doesnt mean that you are working in the time in the late 19th and early 20th century 20ty people would work 70 hours a week. How many hours do you have to work, do you trust peoples self identification, do you have a job, are you going to tell the truth, are they going to send around and asking if people to ask every Single Person do you have a job, do you have a job do you do it geographically and if you do but only in urban areas are you going to overstate how much unemployment there is and if you do it only in the rural areas is at population or demographics, so these have to be worked out and in no way are they worked out initially immediately. The definition of what does it mean to be unemployed has changed over time and its not not having a job to use a double negative. It doesnt mean youre not working. It means that you wish to have a fulltime job and you have told the people asking you that you are actively looking for a fulltime job before you got asked that question. And you are therefore unemployed because you are looking and you cant get work. Its not that you just dont have work. We use the term much more loosely today because we use it as a thumbs down. Getting to the point of defining it was immensely complicated. Host who made the final decision . Guest this is by lots of different voices and people are doing. Its not like there was one person that says this is the rate also the reason you should focus on the United States is a lot of the creation of these numbers comes from the United States and then goes global and its a kind of demand note to understand whats going on economically at least in our history from the American Initiative and British Initiative it goes global. We have the creation of the product as a precursor of that. This is happening at the same time. You pointed out part of this was needing to assess the depth of the recession and the output of the country now versus what it had been and how things are going to look going forward, but you also point out and this is when you get a new aspect. What is happening at this time is that you are also getting the concept of the government as an economic actor. Guest co. The government had always been economic actors because they force everything to focus on the war production and supply in the army and one thing you had in the 1930s as we know is a huge effort of Government Spending in the new deadeal in the United States ann great britain. One of the things that happens in the u. S. Is the understandable desire in the state of its critics for the unprecedented stuff. Unless you could measure this thing called an economy and its output independent show its output spent a lot of money its an ideologicain ideological argh it had been untold and. So they were back to measure the output of the country economically and as it happens before they become its in the 17th century there is a low where they do experiments and crushes it would be fun to measure the output of the country and then it kind of lays low until the early 20th century some efforts and the u. S. There is an economy is who later when the nobel prize and John Maynard Keynes in britain and Richard Stone they start saying how do we measure output. What does it mean to measure output do you include Domestic Work because one of the things women did it largely was cook and clean and make sure the home was taken care of. They said look we absolutely should include this. This is an essential aspect of Economic Opportunity thats productive in the absence it is productive. Unless it has a market price, we are not going to include it. What is the market output, things that are bought and sold so we decided to leave out the Domestic Work because it was hard to figure out what the cost of that was. Host this is about the Roosevelt Administration saying look we put this much money in and now this is all the benefits that came from. They had a Predictive Value that you have to stimulate demand in order to know how much you have to stimulate demand you have to know where things stand. Guest and vanessa gets to things that are a little bit familiar in the discussion after 2008 and 2009 like how much output do you need to stimulate him how much demand, what is the gap between what we are doing and what we think the optimal and the right level is if we think about that in terms of employment. If there is a 6. 5 Unemployment Rate if i told you that and you arwere dropped down here from ms there would be no reason to know if that was a bad number or bad number. Its only perceived as bad and this isnt whether or not people are finding jobs because we have this sense of what we thin thine system off to be giving numerically based on what it did do the numerically and none of that pertain to. This is all being made up as it goes along. It allows the administration to talk about the income in the late 1930s and they look the National Income is coming up. The next is world war ii. The challenge in world war ii as we are going to be the armory of the world. How much domestic industry, cars and tractors and whatever we were making could be shifted to producing diamonds and planes and ammunition without the domestic life. How much can we produce, how much more can we produce without generating scarcity and inflation which had been in the society during the war creating the gdp which is one of the tools to do this. That was a potent tool at least people believed to be one of the most essential components and allowing the United States to calibrate the war effort with the domestic economy so that in 1945 having won the war without having to revive your Economic Life and that is what allowed the United States to be so powerful in 1945 because fighting a war like that it takes years to rebuild internally. Host you go back to this point on the economy, the statistics about the creation of the economy and what youre also describing and what you do well in the book is the shift to the government having the ability much in the way that mirrors the Industrial Revolution to manage the economy. And you could actually look at these numbers in its aok now we are going to move this much here and there. This is a new concept. Host guest they figured out how much revenue can i create. That was the sole challenge because the dynasties and the kingdoms. But the idea that you have this thing called Economic Policy where you calibrate and to try to end the cycle cycles in the d down that is part and parcel for one reason or another that is all a part o of this scientific revolution and the emergence of the centralized government, and it is in fact one reason why even today there is and im sure it will continue to be a deepseated suspicion in the society that all of these numbers, gdp, inflation, employment are not numbers that reflect the experience of people they are the way is to exert control. I dont go into that in the book and i think that is a holdover question and subject but it is definitely one that underlies all of the discussion. People look at these numbers and they say come on. Inflation isnt telling me how much it costs for me to live it is just a way for the government to prevent my cost of living allowance from going up. Host i do want to talk about the Conspiracy Theory because it is a fascinating aspect. You touch on something basically postworld war ii when you describe how we enter into this sort of explosion of fascination with Economic Indicators. They start to get involved and we can talk about a few of those. One of the innovation is an indicator that you have this guy that starts to measure and this gets to your point about the Consumer Sentiments and uses that as an economic. Guest you had some before like there had been Housing Associations and some are choosing managers, the people of the companies that buy stuff to figure out what was going on nationally and get the associations creating statistics so we are going to create statistics and then in the epic debate academics there was this guy who came in the 1930s and trained both as an economist. So if anybody remembers the 1970s as a big deal and without going into that discussion, his belief was how people think and feel and shape their behavior economically and therefore if you can engage how people feel you will get the gauge of how they are about to act. That was interesting for the government during world war ii because theres always been an aspect of inflatio inflation ins that is based on the on what people perceive. If you think things are going to get cheaper come if you think theres going to be inflation you will spend a lot now. There is behavior that goes with the expectations that they want to make sure that Inflation Expectations were being kept maintained. And they developed the basic survey do you feel good or bad about the personal finances, do you think it is good to be better in six months or worse. Then you take all of those questions in surveys and you add and create the numbers and the index called Consumer Sentiment which we now live with every month for multiple sources. There are three organizations to disseminate the consumer of the conference board, abc news had a survey. Its really interesting that its predictive powers are absolutely zero. And legitimately. The pushback was a kid test whether or not this works by asking the family six months later to whether or not they did what they said six months before so its not like its individual behavior being predicted. They say they arent feeling good that might be the leading indicator. Nonetheless this remained. We want to be in the culture that we like the numbers to sort of describe reality. Host this is the point of the chapter that you talk about in the 40s and the 50s. You dont just have this spiraling of numbers that give the media really focusing on peace and Business Community is really focusing on these and they come to be interwoven in americas ideas of how we are, how we perform with everybody else. Correct . Guest yes. Theres the bus