The utility of economic theory in analyzing the economic potential of ocean-based activity has been limited by two complementary difficulties: (1) the need to bring economic analysis of ocean affairs into the mainstream of economic theory and policy; and (2) the need for an analytical framework which contributes to the ordering of research and facilitates creation of research priorities in policy studies. 2 A partial solution to the first problem is to move from a micro to a macro level and to go beyond investigation of limited aspects of the subject toward a more general, theoretical framework. I do not advocate elimination of micro studies of specific areas; however, the place of these studies can best be defined by the larger analytical framework of economic theory and methodology currently used in policy analysis. Such a macro-economic framework would encompass partial equilibrium studies, and would also contribute to improving the methodology employed. This chapter contains a report on the historical background that lies behind the development of a project that contributes to the creation of the desired macro framework and additionally creates an order of research and policy priorities. In undertaking the project, our objective was simple: to measure the value of the oceans to the United States economy and to measure the output of the various components of ocean-based activities. It is necessary that such 188a set of numbers be consistent with the way we measure the rest of the economy. Thus, we set about creating an “ocean sector” within the existing analytical framework of National Income Accounts. It is the first spatial sector within that framework.