From the earliest times, man has felt a compulsion to measure things. For instance, the Egyptians used the sun's shadow to record the passage of time. But they didn't get it 100% right. Their system resulted in hours of uneven length, depending on the seasons of the year.

Some five hundred years later, the inventors of the water clock were dismayed to find that this new measuring device did not agree with the tried-and-true sundial, and spent many hours trying to make the water clocks agree with the hours on the face of the sundial.

We are now in the midst of a huge technological revolution. Yet, like those water clock inventors, we are accustomed to using the only standards we know, standards invented for the Industrial Age. We seldom stop to consider that, like the sundial user, we may be getting a false reading.

Much of the hand wringing over what the latest statistics purport to show about America's position in the world is traceable to increased inaccuracy or irrelevance of our standards of economic and accounting measurements. The old instruments may indicate failure when we have achieved success, or vice versa.

Figures on our balance of trade are a case in point. They conceal more than they reveal. Half of all imports and exports are transactions between companies and their foreign affiliates or parents. The flip side of this is that half of all the products manufactured in the United States have foreign components. But our current accounting is unable to measure this. In the global market, value is added--often in many different countries. The smart coat purchased in a New York store may have had a long journey: cloth woven in Korea, finished in Taiwan, cut and sewn in India, then a brief stop in Rome for a "Made in Italy" label to complement the original American designer. None of our current accounting captures this reality.

In the business world, everyone knows that all the lights would go out, all the planes would be grounded, and every factory would be shut down if the software that drives the computers disappeared. And yet, in a sense, it has disappeared, in that software does not appear in any significant way on the balance sheets of American companies.

In a world in which intellectual capital is relatively more important than money capital, it may be time to rethink our whole measuring system. Any effort to create new yardsticks to measure our new world will be met by cries of "cooking the books," but the old books are no longer reliable guides in the information age any more than the old sundials could replace our atomic clocks.

This is Walter Wriston, for Marketplace.