By James Grant, includes “Represented as a stack of $100 bills, America's $17.1 trillion gross domestic product would weigh in at 188,000 tons. Only then would it be tangible. GDP, the most ubiquitous macroeconomic datum, is otherwise as abstract as the thing it purports to measure. You can't see "the economy." Neither can you touch or taste it. Reading this little charmer of a book, you begin to apprehend that you can't really measure it either. "GDP: A Brief but Affectionate History" is just what the title promises. Diane Coyle tells us where GDP came from, how and why it is compiled, what it counts, and what it fails to count. "Of course it is a flawed measure," she admits. She's stuck on it anyway. It helps to know that, according to Ms. Coyle, the word "statistics" is an etymological first cousin of "state" and that the earliest statistics had to do with tax collections. So informed, one is not surprised to learn that war provided the impetus for the formative attempts to compute national output (in Britain in the 17th century and in America, in a more systematic fashion, at the start of World War II). It tells you something about the mindset of the early American bean-counters that they chose to treat government expenditures as if they, too, contributed to the nation's production rather than thwarting, wasting or redistributing it. As Ms. Coyle both observes and implies, GDP is a political statistic. … "The databases of GDP in many countries over decades, used so often by economists to develop theories and policies, lead us to think that GDP is a natural object that we can measure with increasing accuracy," Ms. Coyle writes. "But the accuracy is spurious, and the 'object' being measured is only an idea, not something with an independent existence waiting to be discovered and counted." … ”

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