Simon Kuznets

A recurring figure in the national-accounting arc of Double Entry by Jane Gleeson-White. The book credits Kuznets and his colleagues with devising the first official measure of the overall US economy in the 1930s — national savings, consumption, and investment — when no comprehensive measures of national income and output had existed before. The Depression created the need: as economist William Nordhaus put it, before then “we had no idea what was happening to our economy.” Kuznets’ work (with Richard Stone and others) became the foundation of international accounting and turned national income statistics into the key indicator of national success.

Notably, Double Entry presents Kuznets as one of the earliest critics of the very measure he helped create. He believed national accounts should include the value of unpaid housework, and broke his association with the US Commerce Department in the late 1940s when it refused to calculate such estimates. He warned (in 1971) that many costs of economic development — migration, the retraining required by technological advance, the declining value of acquired skills — are not captured and “may never be susceptible to measurement.” The book uses Kuznets to argue that GDP was never designed to be the primary gauge of a nation’s economic health, echoing his concerns later voiced by Robert Kennedy in 1968.

Context: Simon Kuznets (1901–1985) was a Russian-American economist who won the 1971 Nobel Memorial Prize in Economic Sciences. He pioneered the empirical measurement of national income and economic growth, and is also known for the “Kuznets curve” hypothesis relating inequality to development.

Where this appears

• Double Entry — credited with building the first US national accounts in the 1930s, and cited as an early critic of GDP’s exclusion of household production and the human costs of growth