Episode 522: The Invention Of 'The Economy' : Planet Money A hundred years ago, nobody talked about "the economy." That's because easy ways to measure and talk about it hadn't been invented. On today's show: how we started boiling nations down to a number.
Episode 522: The Invention Of 'The Economy'
A bread line forms outside of the Rescue Society in New York City in 1929. "Brother, Can You Spare a Dime?" directly confronted the hardship of the Great Depression. Wikimedia Commons hide caption
A bread line forms outside of the Rescue Society in New York City in 1929. "Brother, Can You Spare a Dime?" directly confronted the hardship of the Great Depression.
Wikimedia CommonsThe Great Depression brought unemployment, hunger and anxiety, but it also brought us a great new acronym: The GDP. In the midst of the United States' worst economic downturn — the GDP, Gross Domestic Product — was born. It was a number and an idea that changed the way we talked and thought about the world.
Until the concept of GDP came around, no one really had figured out a way to measure what was happening, economically. There was no way to compare one year to another.
In 1934, Congress asked a group of economists to solve that. Later that year, those economists published a paper called "National Income, 1929-1932." The report, by Simon Kuznets and others, became a best-seller in a matter of weeks.
And soon enough, you couldn't turn on the radio without hearing these numbers and what they were measuring, this new thing called the economy.
On today's show: How we started boiling down entire nations and their economies into a single number. And how that number made people think they could control a country's destiny.
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