Economic Measurement

Putting science before politics

Economics was founded in the late eighteenth and early nineteenth centuries by people who wanted to create a new scientifically based means for meeting human needs. These people advanced theories, based on observation, that were potentially testable. Regrettably, public discussion about economics seems to be dominated by political speculation about which economist has already come up with the answer to current problems that may bare no relationship to the situation that existed when the particular theory was first advanced. The range of human demands, the environment from which the supply comes and the technologies used for distribution have changed significantly over two centuries and will probably continue to do so. Therefore, economics needs to get back to its scientific roots. Fortunately, this task has been made potentially easier by global communication technology and related developments in the way that we can capture and process large amounts of data.

What we need to analyse economic data are tools of measurement that are appropriate to current challenges, which something that money is not designed to do as it is, essentially, a man-made commodity useful as a means of exchange and a store of value but only of limited use as a unit of account because it measures relative human desire. Adopting internationally recognised standard measurements has improved trade and facilitated economic growth, so it is time to devise an economic unit that will help measure sustainability and efficiency. Because all economic activity involves the conversion of energy, it seems sensible to start with an objectively calculable value of available energy. One suggestion is to base it on the amount of solar energy received over a given area (e.g. a square metre) over a given time scale (e.g. one hour) but it is more important to establish and test any measure and then find out what works best.

Paul Newman
October 2013