Simon Kuznets

Simon Smith Kuznets (April 30, 1901 – July 8, 1985) was a Belarusian-American economist, statistician, demographer, and economic historian who won the 1971 Sveriges Riksbank Prize in Economic Sciences in memory of Alfred Nobel "for his empirically founded interpretation of economic growth which has led to new and deepened insight into the economic and social structure and process of development."

Simon Smith Kuznets (1971)

Quotes

• The welfare of a nation can scarcely be inferred from a measurement of national income.
  • Simon Kuznets in report to the Congress, 1934; "National Income, 1929–1932". 73rd US Congress, 2d session, Senate document no. 124, page 7. Cited in: Gernot Kohler, ‎Emilio José Chaves (2003) Globalization: Critical Perspectives. p. 336

• Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term. Goals for more growth should specify more growth of what and for what.
  • Simon Kuznets in: Herbert David Croly eds. (1962) The New Republic Vol. 147. p. 29: About rethinking the system of national accounting

• we need far more empirical study than we have had so far of the universe of inventors; any finding concerning inventors... would be of great value... for public policy in regard to inventive activity.
  • Simon Kuznets (1962, p. 32), as cited in: David W. Galenson, "Understanding the Creativity of Scientists and Entrepreneurs." (2012).

"Economic growth and income inequality," 1955

Simon Kuznets, "Economic growth and income inequality." The American economic review (1955): 1-28.

• The central theme of this paper is the character and causes of long-term changes in the personal distribution of income. Does inequality in the distribution of income increase or decrease in the course of a country's economic growth? What factors determine the secular level and trends of income inequalities?
  • p. 1

• An invariable accompaniment of growth in developed countries is the shift away from agriculture, a process usually referred to as industrialization and urbanization. The income distribution of the total population, in the simplest model, may therefore be viewed as a combination of the income distributions of the rural and of the urban populations. What little we know of the structures of these two component income distributions reveals that: (a) the average per capita income of the rural population is usually lower than that of the urban;' (b) inequality in the percentage shares within the distribution for the rural population is somewhat narrower than in that for the urban population... Operating with this simple model, what conclusions do we reach? First, all other conditions being equal, the increasing weight of urban population means an increasing share for the more unequal of the two component distributions. Second, the relative difference in per capita income between the rural and urban populations does not necessarily drift downward in the process of economic growth: indeed, there is some evidence to suggest that it is stable at best, and tends to widen because per capita productivity in urban pursuits increases more rapidly than in agriculture. If this is so, inequality in the total income distribution should increase
  • p. 7 as cited in: Anthony Barnes Atkinson, François Bourguignon, Handbook of Income Distribution, Vol. 1. Elsevier, 2000 p. 799

• The rural and urban populations does not necessarily drift downward in the process of economic growth: indeed, there is some evidence to suggest that it is stable at best, and tends to widen because per capita productivity in urban pursuits increases more rapidly than in agriculture.
  • p. 8

• The very fact that after a while, an increasing proportion of the urban population was "native," i.e., born in cities rather than in the rural areas, and hence more able to take advantage of the possibilities of city life in preparation for the economic struggle, meant a better chance for organization and adaptation, a better basis for securing greater income shares than was possible for the newly "immigrant" population coming from the countryside or from abroad
  • p. 17

• The paper is perhaps 5 per cent empirical information and 95 per cent speculation, some of it possibly tainted by wishful thinking. The excuse for building an elaborate structure on such a shaky foundation is a deep interest in the subject and a wish to share it with members of the Association. The formal and no less genuine excuse is that the subject is central to much of economic analysis and thinking; that our knowledge of it is inadequate; that a more cogent view of the whole field may help channel our interests and work in intellectually profitable directions; that speculation is an effective way of presenting a broad view of the field; and that so long as it is recognized as a collection of hunches calling for further investigation rather than a set of fully tested conclusions, little harm and much good may result
  • p. 26

Modern economic growth,'(1966)

Simon Kuznets and John Thomas Murphy. Modern economic growth: Rate, structure, and spread. New Haven: Yale University Press, 1966.

• [The principal characteristic of this economic epoch is] a sustained increase in per capita or per worker product, most often accompanied by an increase in population and usually sweeping structural changes.
  • p. 1, as cited in: Amitava Krishna Dutt, ‎Jaime Ros (2008) International Handbook of Development Economics. p. 48; Definition of "modern economic growth"

• The inescapable conclusion is that the direct contribution of man-hours and capital accumulation would hardly account for more than a tenth of the rate of growth in per capita product — and probably less. The large remainder must be assigned to an increase in efficiency in the productive resources, or the effects of changing arrangements, or to the impact of technological change, or to all three
  • p. 81

• [An] epochal innovation [consisting of the] spreading application of science to processes of production and social organization.
  • p. 487, as cited in: Peter Temin, ‎Gianni Toniolo (2008) The World Economy between the Wars. p. 7

Quotes about Kuznets

• If the history of economics in the twentieth century were properly written, the two great figures associated with what has come to be called the Keynesian revolution would be John Maynard Keynes and Simon Kuznets. And this is a judgment in which Keynes would concur. Keynes showed in analytical terms the possibility of a shortage in aggregate demand and argued the means for its correction. But it remained for Simon Kuznets and his talented associates to put this in the quantitative terms that made it persuasive, indeed irresistible. The Keynesian argument could be resisted; the Kuznets figures could not.
  • John Kenneth Galbraith, letter to Robert W. Fogel (March 23, 1981), published in Richard P. F. Holt (ed.), The Selected Letters of John Kenneth Galbraith (2017)

• GDP! The right concept of economy-wide output, accurately measured. The U.S. and the world rely on it to tell where we are in the business cycle and to estimate long-run growth. It is the centerpiece of an elaborate and indispensable system of social accounting, the national income and product accounts. This is surely the signal innovative achievement of the Commerce Department in the 20th century. I was fortunate to become an economist in the 1930's when Kuznets, Nathan, Gilbert, and Jaszi were creating this most important set of economic time series. In economic theory, macroeconomics was just beginning at the same time. Complementary, these two innovations deserve much credit for the improved performance of the economy in the second half of the century.
  • James Tobin, quoted in: Sarkis J. Khoury (2003) Wealth Forever: The Analytics of Stock Markets', p. 197

• Simon Kuznets is best known for his studies of national income and its components. Prior to World War I, measures of GNP were rough guesses, at best. No government agency collected data to compute GNP, and no private economic researcher did so systematically, either. Kuznets changed all that. With work that began in the 1930s and stretched over decades, Kuznets computed national income back to 1869. He broke it down by industry, by final product, and by use. He also measured the distribution of income between rich and poor.
  • "Simon Kuznets" The Concise Encyclopedia of Economics. 2008. Library of Economics and Liberty. 10 June 2014.