How Money Became the Measure of Everything

What led to the pricing of progress in the mid-19th century was capitalism.

Capitalism is not just the existence of markets. It is also capitalised investment, where elements of society and life - including natural resources, technological discoveries, works of art, urban spaces, educational institutions, and people - are changed or "capitalised" into income-generating assets that are valued by their ability to make money and yield future returns.

Capitalization was key to the rise of economic indicators. Upper-class Americans began to put their wealth into new financial assets. They began to see their society as a capitalized investment and the people as capital that could be used to increase wealth.

In the North, such investments took the form of urban real estate and companies that were building railroads. Investors were putting money in communities they had no other interest in. A national business class emerged that cared less about moral statistics than about the town's industrial output, population growth, real-estate prices, labor costs, and per-capita productivity. In the South, enslaved people became pieces of capital that could be mortgaged, rented, insured, and sold.

By the progressive era (1890s to the 1920s), a child was valued as a potential wealth-producer. "If he lived out the normal term of years, he can produce $2900 more wealth than it costs to rear and maintain him," The New York Times stated in 1910. The annual social cost of everything was measured: The common cold ($21 a month per employee), housewife labor ($7.5 billion), the yearly social benefit of Niagara Falls ($122.5 million), government health insurance ($3 billion).

This way of thinking is still used in reports from the government, research organizations, and the media: The annual cost of excessive alcohol consumption ($223.5 billion) and mental disorders ($467 billion).

• The working-class Americans at the beginning of the 20th century were not as eager about the rise of economic indicators because they believed the human experience to be "priceless." They also viewed the figures as tools to be used to justify increased production quotas, more control over workers, or reduced wages.
• Using prices to measure daily life was then highly contested. Some labor unions and Populist farmers succeeded in pushing state bureaus of labor statistics to offer up a series of alternative metrics that instead measured urban poverty, gender discrimination, leisure time, indebtedness, discrimination, rent-seeking behavior, and exploitation of workers.
• But the interests of businessmen reigned, and by the mid-20th century, economic indicators focused on monetary output.

The conditions for economic growth were regularly put before the necessary conditions for individuals' well-being.

In 1911, an efficiency expert bluntly stated: "In the past the man has been first; in the future the system must be first." While capital accumulation is synonymous with progress, human well-being is now a secondary concern.