Pete asked that question, more specifically:
Economics tries to put a price on most everything, even things that are nearly impossible to quantify such as happiness. Where in your opinion does the economic approach currently fail the worst at measurement and quantification?
I believe economics does not measure “culture” very well, including the all-important “corporate culture.” It is hard to think of a good way of encoding companies to reflect how things actually work inside the firm, all the harder for a region or nation. In this context you could define culture as consisting of expectations about the reciprocal behavior of others, across a variety of contexts. We do OK however if it is just a univariate measure of trust, see Knack and Keefer.
It is hard to measure rates of price inflation over longer periods of time. Since 1900, has the American economy had massive inflation or massive deflation? If you are spending fifty cents, it is massive inflation, as today that sum hardly buys you anything, but earlier you could have received a nice white shirt. If you are spending 100k a year, there has been radical deflation.
Those to me are two of the worst failures of quantification in economics. What else?