Measuring Economic Progress

Economists have been inquiring into the nature and causes of the wealth of nations for centuries,1 but the regular and systematic construction of official quantitative measures of relative economic progress is a phenomenon of recent decades. A key role in this transformation was played by Colin Clark, who held that ‘[c]omparisons of economic welfare between one community and another, one economic group and another, and between one time and another, are the very framework of economic science’ (Clark 1951, p. 16). Clark’s Joseph Fisher Lecture in Commerce at the University of Adelaide in 1938 was a milestone, because it was in this lecture that the idea of using the national accounts framework to express the average incomes of countries at a common price level was first developed and applied. Drawing upon material from what was his forthcoming book, Conditions of Economic Progress,2 Clark attempted to quantify ‘the absolute levels of economic progress so far achieved in different countries’. He explained that this was a difficult statistical task consisting ‘in essence ... of measuring the real national income of the countries concerned, which amounts to the same thing as the actual equivalent of goods and services produced ... measured at an international price level’ (Clark 1938, p. 9, emphasis added).