Is there anything real about real wages? A history of the official British cost of living index, 1914–62

This article explores the history of the cost of living index, tracing its evolution from its introduction in 1914 as a device designed to furnish an adequate evidential base for the tariff reform debate, through to the mid-twentieth century, when it had become one of the most important measures in the British economy, influencing the wages of millions of workers. By embedding the index within the wider economic, political, and social histories of the period, the article presents a consideration of how it came to exert such influence over the economy, and why, despite its widely acknowledged inadequacies, the index remained tied to a rough estimation of a pre-1914 pattern of working-class expenditure until 1947. Through examining the debates surrounding its compilation and the context in which decisions were taken about its modification, it is demonstrated that, far from being a neutral statistical measure, the official cost of living index was essentially political in nature.