Reviews for Measuring the Wealth of Nations: The Political Economy of National Accounts

The average rating for Measuring the Wealth of Nations: The Political Economy of National Accounts based on 2 reviews is 2.5 stars.

Review # 1 was written on 2017-07-24 00:00:00 Eva Karlsson What we define as wealth has implication on how we measure it. One of the major issues the Shaikh and Tonak describe is the implication between the difference in productive and unproductive labor, or as they prefer to state it, production and nonproduction labor. All labor produces an outcome that can be extremely valuable to society, but not all labor has an output. Production labor add to the total wealth of society, while nonproduction labor either transfers wealth of society or is just a form of social consumption. Under this framework, changes in employment have different effects depending on the type of labor. The current Neoclassical framework of measuring production is to include many forms of labor that are actually meant to be social consumption. Making anything that someone is willing to pay for a production activity. The problem with this view, that the authors point out, is the implication on investments change. Increasing social consumption, in the authors framework would reduce the available investment. The authors pose an alternative way of measuring production. They use a variety of models and charts to show the way their alternative measure would look like. Their methodology is based on the Classical perspective, more of from the view of Marx. Their measures differ from Marx, but are based on Marx. The authors use an input-output account framework, rather than the national-income-and=product account, as it enables greater coverage by tracking the whole product. The problem with the book is that the general discussion is relegated to a minority position. The impact of particular measures of wealth and the politics of measuring wealth is not the dominant theme. The book is not an easy read and deeply mathematical. Most of the book is trying to explain the math and outputs of the various alternative measures of wealth. The equations become harder to read as the explanation to them is reduced. Although the authors meticulously explain their equation and charts, there appears to be a huge disconnect between the math's and their meanings.

Review # 2 was written on 2019-06-09 00:00:00 Adan Luciano I was recommended this book by a friend, and the best I can say is that Profs. Shaikh and Tonak make some interesting points about how the national accounts and gross national product had been devised, specifically why it shouldn't treat certain activities as output producing (e.g. financial services, ground rent, certain parts of government expenditure like administration and defense spending) and instead as a form of social consumption, thereby getting perhaps a clearly picture of available national savings and real investment. Others in the mainstream neoclassical tradition have put forth similar arguments (see: Kelvin J. Lancaster), but Shaikh's and Tomak's come at it from a classical political economic perspective a la Ricardo and Marx. Where I get lost, however, is when they delve into the nebulous realm of Marxian economics - labor values, money values, surplus value, the whole transformation problem, etc. To be frank, I think it undermines their whole argument by spending so much time trying to use this novel perspective to try and solve problems most economists had largley moved on from for good reason, including many Marxists from Joan Robinson to John Roemer. Much of the analytical structure the authors make rests on one critical assumption that allows them to solve the Marxian transformation problem through national input-output tables, and they are clear about it: labor values and producer prices are proportional by some assumed constant. This is a rather bold hypothesis, and without it, sadly, the problem devolves back into the same one Marx had in Capital Vol. III of how 'labor values' map into market prices that is one-to-one (in other words, from a given set of prices, there is an inverse mapping from prices to labor values to allow value-based calculations). Overall, this book is a good thought provoker for macroeconomists if one just reads the introduction and conclusion, and skip most of the body. For most of everyone else, you probably will find it to be a long and pointless read.