Diane Coyle and Emily Skarbeck point out that innovation doesn't seem to show up in GDP or productivity data. As Diane has written, "the way GDP is measured makes it impossible to capture fully the effect of innovation."

One reason for this, says Diane, is that GDP data don't capture "the explosion in variety" of goods and services available to us. Eric Beinhocker has given a nice long-run image of this. The biggest difference between New Yorkers and primitive tribes, he says, isn't the "mere 400-fold difference" in their incomes, but rather the 100 million-fold difference in the number of products available to them.

This, though, deepens the puzzle. Not only does innovation not appear in the GDP statistics, it doesn't appear in subjective well-being statistics either. The OECD has reported (pdf) that the UK "experienced no consistent change" in life satisfaction between the mid-70s and late 00s, and the ONS estimates (pdf) no change since then either.

This is weird. For one thing, in The People, Selina Todd points out that there was a time when rising real wages did increase happiness:

In 1949 Mass Observation interviewed 2040 people across England about their income and spending patterns. The investigators discovered widespread satisfaction, especially among manual workers and their families: " a third say that they have no particular wants beyond those that they can afford."

And for another thing, common sense tells us that if our real incomes are flat, the explosion in variety which innovation provides should increase our well-being simply by allowing us to improve the match between our tastes and what we can buy.

So why doesn't it? Here are two theories.

First, there's a big difference between piecemeal innovation which produces more of the same, and innovation which increases variety. "More of the same" gives us increases in real incomes in a steady environment: think of the stereotypical mid-20^th century worker who enjoyed rising real wages whilst working for the same firm his whole life. Increases in variety, however, entail creative destruction: think of smartphones destroying Nokia, Spotify the music business, Uber taxis and so on. Whilst providing benefits for consumers, this generates uncertainty for workers. And many (pdf) people hate uncertainty.

A second reason has been pointed out by Katherine Guthrie and Jan Sokolowsky. Quite simply, as variety increases, so too does opportunity cost: we can't afford both the new phone and the PS4, or if we're holidaying in the Maldives, we can't be in Dubai. Variety brings with it regret. This is consistent with something found by Sheila Iyengar, that increases in choice can be demotivating (pdf).

I don't say this to deprecate increased variety. Quite the opposite. Intuitively, it seems to me that variety must be a great good. What made the Soviet Union so drab and joyless was not so much the material poverty of the people as the lack of variety of goods. And one reason we are mourning* the death of David Bowie is that he, more perhaps than any other pop musician, gave us innovation and variety.

Perhaps instead there's another inference here - that not only is GDP an inadequate measure of a healthy economy, but so too in some respects are measures of subjective well-being.

* Mourning is the right word, arseholes.