The financialization of GDP: Essays in the political economy of national accounting

This dissertation proposes to add to the existing knowledge on national accounts in several ways. First, in reviewing received histories of the subject we find and critique a technocratic approach to national accounting which presents it as a theory-driven, scientific process which has been perfected over the centuries. Instead, our alternative hypothesis presents the practice of estimating national income, expenditure and, later, production, as an exercise in numerical rhetoric, with each period and place (and author, earlier on) using the accounts to promote particular economic policies. That is, power and policy rather than theory drive changes in measuring the economy.;Secondly, we review various treatments of financial services in the national accounts. After discussing some debates about the presentation of interest-based financial services in value added, we turn to the increasingly important fee-based portion of financial services income. Considering financial `output' as an intermediate input (or economic cost) of the economy as a whole - as it has no final use value - our approach first adjusts GDP downwards on the output side, and then reconciles the revised indicator with the income and expenditure sides of the accounts.;Finally, we explore theoretical, empirical and political implications of treating finance as an overall economic cost. We look at the new measure's applications in relation to aggregate demand, distribution, employment and the standard of living, and examine whether it serves as a leading indicator for recessions and crises. The analysis looks at whether the new measure tracks secular stagnation in recent decades, and more specifically whether demand formation - seen through the new measure's prism - has been hobbled by inequality in the era of financialization and neoliberalism, with the economy being driven by unsustainable credit processes. Similar to finance and real-estate markets, GDP itself is argued to include a statistical bubble that counts income streams built on debt, not production.