Book Reviews

Book Reviews Finance & Development, September 2015, Vol. 52, No. 3

When Big Is not Beautiful Dirk Philipsen

The Little Big Number

Princeton University Press, Princeton, New Jersey, 2015, 416 pp., $29.95 (cloth).

GDP is out of favor in some quarters. Some environmentalists take issue with the idea of prioritizing economic growth, measured by GDP, at all. Others argue that a wider perspective on progress is urgently needed. The global financial crisis, climate change, and the focus on inequality—all have contributed to a renewed interest in alternative ways of measuring how the economy is doing.

Many readers will therefore like the polemical tone of The Little Big Number. It looks at the history of GDP, its inadequacies as a measure of social welfare, and the environmental consequences of seeking continuing economic growth. It covers some of the same ground as a number of other books, including—from the same critical perspective—Lorenzo Fioramonti’s Gross Domestic Problem, and—from a more nuanced perspective—my own GDP: A Brief but Affectionate History and Zachary Karabell’s The Leading Indicators.

Dirk Philipsen’s book has some additional historical detail but it is a rather emotional book. There are, for example, assertions like: “It is safe to say our ancestors, for some 200,000 years prior to the agricultural revolution, engaged in labour only to the very extent to which it helped them survive.” Really? No cave paintings, ancient jewelry, religion? Or, because of our “fixation with the accumulation of things,” trying to capture the reality of late 18th century life “by saying that people were poor would represent a fundamental misread.” So were they not less well-nourished than we with more illnesses, and shorter lives, and many children dying in infancy? Did women (and even men) not spend hours in domestic drudgery? I do not hesitate to call people in the 18th century poor on this basis; it was nothing to do with a passion for accumulating cars or handbags. I don’t want more than one washing machine but wouldn’t be without the one.

The Little Big Number identifies the turn to growth rather than levels of national income as a policy aim in the 1950s. Philipsen attributes this to American optimism as the victor in World War II. Another possibility is that it was driven by the dawning Cold War, and the need to demonstrate over and over that the American system was superior to the Soviet one. Geoff Tily pinpoints a 1961 Organisation for...