Historians and their Index Numbers

John Steele Gordon argues—over on Bloomberg’s recently revamped “echoes” blog—that historians of the US stock market in the mid-twentieth century has been misled by that market’s most prominent index. The handiwork of a publisher (Dow) and a statistician (Jones), the Dow-Jones Industrials evolved from a series of focused indexes into a single number meant to represent the entire NY exchange, and by proxy the American economy.

But for all the power and influence this number has had, Gordon shows how dependent it is on basic assumptions. Swap out AT&T for IBM in the Depression years and the market recovery comes years before we have generally thought.

For our purposes, the Dow, its development, and public understandings of stock indexes strike me as topics awaiting a historian of science’s analysis. I would read that book.


If you haven’t seen the new “echoes” blog—edited by Stephen Mihm, the UGA historian of capitalism in the US, it’s worth a peek.

Also, as long as we’re talking about American science and index numbers, here’s a shout-out to Tom Stapleford’s recent history of the Consumer Price Index, which also happens to be a fascinating history of American statistics generally.

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