Of Wars, Computors and National Statistics
Although the origins of national income accounting date back centuries, these concepts were taken up by the British government as a vital part of the war effort when the Central Statistical Office was founded in January 1941 directly from Winston Churchill’s command. The crisis of war drove innovation in the field of economic statistics, creating the need for accurate and useful economic statistics. As Paul Studenski has noted: “Before the war, finance ministers dismissed, national income estimates as the idle speculations of academic minds and as having no practical utility whatsoever…Now, these same ministers used these estimates as the basis for their fiscal and economic programmes. Moreover, the authorities were at last persuaded that estimates contained information of crucial importance to the nation and should be prepared by the government itself because it alone possessed the resources needed to ensure their maximum reliability”.
As future Nobel Laureates James Meade and Richard Stone wrote in 1944: “As is clear from wartime Budget speeches, these estimates of national income and expenditure formed one of the chief bases of in the formulation of the general lines of the community’s economic and financial policy during the war”.
NIESR, itself founded in 1938, played a pivotal role in this development, most importantly acting as a hub for research in this new field of research. In 1940 it had funded the completion of the pre-war study of Professor Arthur Bowley with researchers at the LSE and Manchester (“The National Income Enquiry”). However, it was in 1941 that “Mr J.R.N. Stone” and NIESR research assistant Miss Renée Hurstfield embarked upon “National Consumption and Expenditure 1920-38”. This programme of research continued until after the war and resulted in the publication of the multi-volume study, “The Measurement of Consumer’s Expenditure and Behaviour in the United Kingdom 1920-38” by Cambridge University press in 1953. In 1942 the project expanded to the applying the principles of national income accounting to “The Measurement of National Income in selected Colonial Territories”, with Phyllis Deane the young NIESR “research worker” allocated to the project. Phyllis Deane had arrived at NIESR in 1941, fresh from completing her degree in Economic Science at Glasgow. In a recent NIESR Blog from 2018 (Phyllis Deane and the limits of national accounting), Stephen Macekura outlined Deane’s contribution of making clear the limitations of the standard accounting framework being developed at NIESR when considering economies such as Nyasaland and Jamaica.
The role of NIESR in this was considerable: not only was Richard Stone relying on the work of NIESR Researchers such as Renée Hurstfield and Phyllis Deane (these were two of only four full time Research Assistants at NIESR in 1941), but also NIESR computing power. In 1943 Miss Muriel Potter was appointed as a trained computor (her training was from the Scientific Computing Service), followed by “junior computor” Miss L.H Holbrook. NIESR’s 1943 report also tells us that “The increasing volume of statistical work required by the various research programmes was met by additions to the stock of the Institutes calculating machines. The Institute now possesses two electrically operated machines, a Machant and a Friden, and an electrically operated adding machine, an Addo”.
Moving forward from 1941 to 2021, we can see that the Covid Pandemic also caused a rapid development of national statistics. The ONS has been called upon to summon up economic, social and even epidemiological data in real time at short notice. Nowadays there are many “computors” and the use “big data” by electronic calculating machines has progressed at lightening speed. It is some of these developments that Sir Ian Diamond will be telling us about in his forthcoming Deane-Stone lecture. Many commentators made the analogy between the Pandemic and a war: this analogy also holds when it comes to Economic Statistics and the modern makers of national statistics at the ONS can look back for inspiration at the pioneering work done at Dean Trench Street in the dark days of World War Two.
I would like to thank the NIESR librarian, Sarah Stevens for accessing the NIESR archives.