Led by the auto industry, the United States economy grew rapidly in the 1920s, generating more jobs, more income, and more free time that the American consumer had in order to spend. As long as people were employed, paying for goods and services, there was really no need to measure how the economy was doing. However, in the 1930s, the American economy went bust and a frustrated Congress asked if there was any way to measure the depth of the Great Depression.

On January 4, 1934, economist Simon Kuznets, professor at the University of Pennsylvania, sent to the Senate a report entitled "National Income: 1929-1932," the first accounting of U.S. productivity, essentially the gross national product (GNP). More than 4500 copies of this report were sold in just eight months. The basic concept that Kuznet had was to limit this accounting measurement to the...