'The most important single statistic': The Consumer Price Index and American political economy, 1880--1955

In 1952, a U.S. Congressional committee called the Consumer Price Index (CPI) “the most important single statistic issued by the Government.” Incorporated into a wide variety of labor contracts as a hedge against inflation and used by the Wage Stabilization Board to regulate wages during the Korean War, the CPI wielded substantial economic power: the committee estimated that one billion dollars changed hands annually with every one-half percent shift in the index. Yet this prominent role for the CPI did not result from widespread confidence in its accuracy. On the contrary, throughout the twentieth-century, economists, politicians, and labor officials repeatedly questioned the index's authority.;The ascent of the CPI into a critical place in American political economy depended on two developments: the growth of national, corporatist industrial relations and transformations in the role of technical expertise in public policy. Like the American economy itself, these features evolved in irregular spurts, with transitions clustered around moments of national crisis and federal mobilization: World War I, the New Deal, and World War II.;Prior to 1917, national economic statistics played a marginal role in labor relations, stymied by a decentralized political structure where power was dispersed among the states and the federal legislature. During World War I, federal bureaucracy expanded rapidly in an attempt to manage wartime production, including an effort to stabilize industrial relations by using the Bureau of Labor Statistics' “Cost-of-Living Index” (the future CPI) to set wages. The Bureau's influence shrank once the war ended, but the New Deal brought greater funding and an influx of academically-trained personnel, who positioned themselves as politically-neutral experts, providing guidance for macroeconomic policy. In World War II, the government again used Bureau's index to control wages, but the research staff of national labor organizations (growing in size and power) challenged the Bureau's methodology in a bitter, public controversy. Only during the postwar era would the index reach a stable point, as unions and companies agreed to confine their criticism to private channels in exchange for gaining some influence over the shape of federal statistics.