Measuring the transformation of the european economies: income, health and welfare

Abstract

The measurement of national income has added greatly to our understanding of economic and social change in Europe over the past hundred years. But national income analysis does not take full account of changes in welfare and particularly of the causes and effects of long-term changes in the health of the European populations. The paper surveys methods which have been used to adjust national income estimates and shows that they can be supplemented, if not replaced, by measures of growth in human physical height as an indicator of changes in the nutritional status of national populations, of the peoples of particular areas and of social classes. National income analysis is central to our present knowledge of the trans formation of the European economies. By their painstaking work, a generation of scholars such as Bairoch, Feinstein and Hoffmann have delineated that transformation as it appears in the national accounts which they have com piled; they have enormously facilitated comparisons between the national economies as well as the description and analysis of changes within those economies (Bairoch 1976; Feinstein 1972; Hoffmann 1965 and survey in Crafts 1983). As a result of their work, economic historians in western Europe turn naturally to such concepts as gross domestic product per capita, factor shares of labour or capital and growth rates of gross national product and use them as basic building blocks in their endeavour to describe and analyse the European economies and the relations between them. It is in the nature of scholarship, however, that the work of one generation should be questioned by the next. Just as the great compilations of his torical national income statistics are completed and used in such works as British Economic Growth 1856-1973, by Matthews, Feinstein and Odling-Smee (1982), so questions are raised about the suitability of the national income framework for the analysis of economic development in the long-run. Doubts are expressed about the assumptions concerning the structure and workings of economies which underlie this mode of analysis, about the irrelevance of national frontiers to many of the processes of economic growth and, most fundamentally, about the significance of national income itself, either as a measure of production or as a measure of welfare.