On the Controversies Behind the Origins of the Federal Economic Statistics

Abstract

Our federal economic statistics originated in the economic and political divisions in the United States and the bitter debates over economic policy they engendered at the end of the 19th century and during the world wars and Great Depression. Workers were angry because they believed that they were being exploited by robber barons who were capturing all of the benefits of economic growth, while employers were just as sure that the second industrial revolution had brought workers an unparalleled increase in real wages. Other debates centered on the effects of unrestricted immigration on wages and employment opportunities of native-born Americans, on the effects of tariffs on prices paid by consumers, on the effects of frequent financial panics on employment, and, during the world wars, on the effects of wage and price controls on the living standards of workers. Participants on all sides of these debates believed that nonpolitical and accurate statistics constructed by experts would help to win support for the policies they favored. In most cases, the development of these statistics was led by individuals, private organizations, and state governments, although the federal government eventually took over the role of producing these statistics on a regular basis. Here I provide brief histories of the origins of US statistics on prices, national income and product, and unemployment to illustrate this story.