In the past, we have mentioned business and economic charts and graphs in blog posts such as “Arthur T. Emery and His BIG Book of Charts & Graphs” and “A 1898 Big Data graphic.” However, there is always more that can be said on this topic. Although graphical displays of quantitative and statistical information in business and economics are commonplace now, they were not popularized until the end of the 18th century. Today, increased access to data via web resources, databases such as FRED, the OECD data lab, and platforms such as Wolfram Alpha enable users to access, interact with, and–in some instances–build their own charts, graphs, or diagrams. This post highlights a few noted early developers of graphical methods in the business and economics fields.
The invention and popularization of quantitative graphics is typically attributed to the Scottish political economist William Playfair. According to Wainer and Spence in a 2005 republication which combined of two of Playfair’s classic works, The Commercial and Political Atlas and Statistical Breviary:
The use of tables to present economic data was not new, having been common for more than a century after John Graunt (1620-74), who had used them extensively in his Natural and Political Observations Made upon the Bills of Mortality, and Sir William Petty (1623-87), who had examined the role of the state in the economy in his Treatise on Taxes and Contributions. […] But the pictorial representation of statistical data was revolutionary. The Atlas showed, for the first time, how economic data could be represented by charts. (Introduction, 2)
First published in 1786, Commercial and Political Atlas, includes forty-four charts and graphs on many different topics such as population, revenues, imports and exports, prices, and payment balances. Charts and graphs in this work introduced inventions such as variations in time series line graphs, bar charts, color coding, labeling of axis, and other features that are still commonly used today.
Another of Playfair’s graphical innovations was the use of pie charts, which appears in Statistical Breviary, published in 1801. As Playfair explained in the Preface, charts are effective communication tools for statistical data because “making an appeal to the eye when proportion and magnitude are concerned is the best and readiest method of conveying a distinct idea.” (Playfair, 4)
The early 20th century witnessed another surge in graphical displays of business and economic data as evidenced by the rise of economic forecasting firms and their products. Noted examples of business and economic forecasting charts published during the early 1900s include business barometers such as the Brookmire Economic Charts (1913) by The Brookmire Economic Chart Co., the Babsonchart of U.S. Business Conditions (1932) by Babson’s Business Service, and charts by the Harvard Economic Service. Further, an important contributor to the development of graphical methods at that time was Karl G. Karsten. Karsten, an American economist and businessman who was known for his work on economic forecasting, published Charts and Graphs in 1923, which included over several hundred different charts and graphs. He keenly recognized that the language of business and economics was becoming more visual and foresaw it as a more universal way to communicate. According to Karsten:
The pictorial display of mathematical and numerical statements is an illustrative art, with the high object of facilitating human understanding and vision, an end the achievement of which justifies the means, be they orthodox and accepted or novel and previously untried. (Karsten, 690)
Thus, historical business and economic charts and graphs reveal tremendous imagination and vision among early developers of graphical methods. Playfair, Karsten, and others understood that business and economics data visualized is a powerful tool for both analysis as well as communication.