Mariana Mazzucato - The Value of Everything - Making and Taking in the Global Economy

8. L. Robbins, An Essay on the Nature and Significance of Economic Science (London: Macmillan, 1932).

9. The classical economists were well aware that supply and demand changed prices – for example, Marx in Part 1 of vol. 3 of Capital – but saw this as fluctuations around the price determined by labour time.

10. P. Mirowski, ‘Learning the meaning of a dollar: Conservation principles and the social theory of value in economic theory’, Social Research 57(3) (1990), pp. 689–718.

11. Behavioural economics, which deploys psychology, sociology, neuroscience and other disciplines to look at how individuals really make choices, casts doubt on the simple assumptions of marginalism. See A. Tversky and D. Kahneman, ‘Advances in prospect theory: Cumulative representation of uncertainty’, Journal of Risk and Uncertainty , 5 (4) (1992), pp. 297–323; doi:10.1007/BF00122574

12. Robbins, Essay on the Nature and Significance of Economic Science , pp.73–4.

13. A term that Lerner actually picked up from Vilfredo Pareto, who first set the proposition in 1894. V. Pareto, ‘Il massimo di utilità data dalla libera concorrenza’, Giornale degli Economisti 9(2) (1894), pp. 48–66. This proposition was further refined by other economists, among whom we find Lerner, whilst nowadays the accepted proof is the one elaborated by Kenneth Arrow in 1951: ‘An extension of the basic theorem of classical welfare economics’, in Proceedings of the Second Berkeley Symposium on Mathematical Statistics and Probability (Berkeley and Los Angeles: University of California Press, 1951), pp. 507–32.

14. E. N. Wolff, Growth, Accumulation, and Unproductive Activity: An Analysis of the Postwar U.S. Economy (Cambridge: University Press, 1987).

15. T. Veblen, ‘The Limitations of marginal utility’, Journal of Political Economy , 17(9) (1909), pp. 620–36.

16. See Foley, ‘Rethinking financial capitalism and the “information” economy’ for further examples.

17. ‘entrepreneur ne faisant ni bénéfice ni perte’; Walras quoted in J. A. Schumpeter, History of Economic Analysis , p. 860.

3. MEASURING THE WEALTH OF NATIONS

1. C. Busco, M. L. Frigo, P. Quattrone and A. Riccaboni, ‘Redefining corporate accountability through integrated reporting: What happens when values and value creation meet?’, Strategic Finance , 95(2) (2013), pp. 33–42.

2. P. Quattrone, ‘Governing social orders, unfolding rationality, and Jesuit accounting practices: A procedural approach to institutional logics’, Administrative Science Quarterly , 60(3) (2015), pp. 411–45.

3. Studenski, Income of Nations , p. 127.

4. Ibid., p. 121.

5. Ibid., p. 20; J. Kendrick, ‘The historical development of national-income accounts’, History of Political Economy , 2(2) (1970), p. 289.

6. A. Marshall and M. Marshall, The Economics of Industry , 4th edn (London: Macmillan, 1909), p. 52.

7. Studenski, Income of Nations , chs 7, 8, 9.

8. A. C. Pigou, The Economics of Welfare (London: Macmillan, 1926), Part 1, ch. 1, p. 5.

9. A. Vanoli, A History of National Accounting (Washington, DC: IOS Press, 2005), p. 280.

10. Ibid.; and E. J. Mishan, The Costs of Economic Growth (New York: Praeger, 1967).

11. S. Kuznets, National Income: A Summary of Findings (New York: National Bureau of Economic Research, 1946), p. 122.

12. United Nations, A System of National Accounts and Supporting Tables , Studies in Methods, series F, no. 2, rev. 1 (New York, 1953).

13. http://unstats.un.org/unsd/nationalaccount/docs/SNA2008.pdf

14. SNA 2008, p. 2.

15. Ibid.

16. P. S. Sunga, ‘An alternative to the current treatment of interest as transfer in the United Nations and Canadian systems of national accounts’, Review of Income and Wealth , 30(4) (1984), p. 385: http://doi.org/10.1111/j.1475-4991.1984.tb00487.x

17. B. R. Moulton, The System of National Accounts for the New Economy: What Should Change? (Washington DC: Bureau of Economic Analysis, US Dept. of Commerce, 2003), p. 17: http://www.bea.gov/about/pdf/sna_neweconomy_1003.pdf

18. The development of income and growth estimation is sometimes depicted as a purely empirical affair that is barely influenced by theory (R. Reich, The Work of Nations: Preparing Ourselves for 21st-Century Capitalism (New York: Knopf, 1991)). In fact, some histories of estimating growth tend to break off the link with theory that they acrimoniously depict up to Smith and Marx, and simply observe that a ‘comprehensive measurement concept’ prevailed in the capitalist world at the end of the nineteenth century (Studenski, Income of Nations ; Kendrick, ‘The historical development of national-income accounts’). Some individual estimators – such as Timothy Coughlan, an engineer in Australia who might not have been closely acquainted with economic theory – have seen themselves as neutral statisticians who simply compiled what was ‘obviously’ or ‘common-sensically’ value. However, these individuals – just like the politicians who demanded the statistics – were probably the ‘slaves of some defunct economist’, in this case the marginal economists, as the well-known quote by Keynes reminds us.

19. Source: Bureau of Economic Analysis (2016), NIPA Tables 1.1.5: GDP, 1.3.5: Gross Value Added by Sector, and 3.1: Government Current Receipts and Expenditures.

20. https://www.gov.uk/government/publications/independent-review-of-uk-economic-statistics-final-report

21. Ibid., p. 40.

22. Coyle, GDP , p. 14.

23. U. P. Reich and K. Horz, ‘Dividing government product between intermediate and final uses’, Review of Income and Wealth , 28(3) (1982), pp. 325–44.

24. SNA 2008, p. 583.

25. Ibid., p. 119.

26. B. R. Moulton, ‘The Implementation of System of National Accounts 2008 in the US National Income and Product Accounts’ (Eurostat Conference: The Accounts of Society, Luxembourg, 12–14 June 2014), p. 4.

27. The full quote reads: ‘In studying the changes in the economic activity of an advanced industrial country it is unnecessary to impute an income to family services or to the services of household equipment and may even prove an embarrassment to do so, since, not only are there very little data in this field, but the principles on which such imputations should be made are obscure. On the other hand, if a comparison is to be made with a country in which subsistence and family production are important, problems of imputation will have to be faced squarely; indeed, for this purpose, it may be desirable to set up the system of accounts in a different way.’ R. Stone, ‘Definition of the national income and related totals’, in Sub-committee on National Income Statistics, Measurement of National Income and the Construction of Social Accounts (Geneva: United Nations, 1947), p. 25.

28. SNA 2008, p. 99.

29. Ibid.

30. In the 1980s, a textbook on national income accounting boldly asserted that because roughly half the female adult population is working in the household, ‘anything up to one-quarter of all production does not get recorded in the accounts’. G. Stuvel, National Accounts Analysis (Basingstoke: Macmillan, 1986), p. 29. Stuvel argued that household work is production and that something is missing. This raises a curious point that is redolent of Marx. If a single man employs a houseworker, her salary would, of course, be part of GDP (as long as it was paid legally). However, if he married her and she continued doing exactly the same work as before, but now as a married ‘housewife’, her work would no longer contribute to GDP.