Saturday, 7 February 2015

Addling Up The Figures

A major feature of our times is politicians and other leaders talking figures and what they mean.  With rising inflected voices and other rhetorical devices like poking fingers they want to convince us that they know what they are doing and have the figures to prove it.  Alas, were it so simple.

Three items on the web this week caught my eye as to how far we can rely on them because of how far they can rely on the figures they are chattering about and the organisational basis for them.  All three are hefty think pieces that need some reading.

At the Mises Institute Gary Galles has a think piece about how the aggregation of figures can disguise or distort the realities of what is actually going on and why.  He finishes,


The main point, however, is that to rely on aggregates as the focus moves attention away from individuals, who are the only ones who choose, act, and bear consequences.

Even without further complexities and problems, that approach can hide everything from income redistribution between different groups (net taxes) to income redistribution within groups (minimum and living wage laws) to supply-side effects on production (taxes and means tested government benefit programs) to the impossibility of central planners directing an economy efficiently (with statistics that throw away details that are crucial to the creation of wealth) to the ambiguity of measures of the value of output (government production assumed to be what it cost).

That is a lot to disguise or misrepresent, and such issues provide more than ample reason for suspicion whenever someone puts forth an argument from a major premise that “government aggregate X did Y, therefore we know that Z follows.”


Moving on to the shifting and difficult ground of climate change, a matter on which many a national and supranational policy is being determined there is another issue of some complexity.

Energy Matters has a post by Roger Andrews on The Horrors of Homogenization about the treatment of raw temperature figures in the debate on climate warming.  This needs close reading but near the end says:


So homogeneity adjustment adds warming in Central Australia, Southern Africa and South America, and similar adjustments by the Australian Bureau of Meteorology and NIWA add warming over the rest of Australia and over New Zealand too.

Pretty much the entire Southern Hemisphere is adjusted. How does one justify adding warming to raw records over the entire Southern Hemisphere? One doesn’t. The warming is clearly manufactured, spurious, non-existent.

Curiously, however, the raw surface air temperature records in the Northern Hemisphere are rarely subjected to warming-biased homogeneity adjustments. I will not speculate as to why. I will just observe that they show approximately twice as much warming as the raw records in the Southern Hemisphere and leave it at that.


My own view is that as climate has changed often so it will again, but whichever which way we will find out when it happens and it will not be happy.  The next item is another matter and is about Europe.

The question asked is what on earth is the ECB up to by Frances Coppola in a long analytical piece where clearly she, an able and informed observer, wonders what in blazes is going on.  She ends:


If Germany was seen to force Greece out of the Euro by refusing to negotiate, it would become an international pariah. There are already voices reminding Germany of its own debt forgiveness in 1953, and anti-austerity movements in many other Eurozone countries would only be encouraged by Germany and/or the ECB looking like bullies. Forcing Greece out of the Euro could result in the disorderly unravelling of the whole thing. I may be completely wrong, but this looks far more plausible to me than a simple explanation that fails to take account of the signals given by both Varoufakis and Draghi.

In which case, Schäuble should beware. His position is nowhere near as strong as he thinks. He is dangerously close to the cliff edge himself. If Germany pushes Greece over the edge, Greece may well take Germany down with it.


So our leaders pretend to know what they are doing, present us with figures to suggest it, although the figures are far from reliable and work in organisations supposedly serving democratic states but which are far from democratic in any real way.

And we wonder why the voters have lost confidence.


  1. Given the diagram, I think your headline really ought to be "Sorting Out the Numbers of Politicians" ;))

    Best regards

  2. "My own view is that as climate has changed often so it will again, but whichever which way we will find out when it happens"

    It's the only sane view. Whatever people might claim and however big their computer, nobody knows.

  3. "Whatever people might claim and however big their computer, nobody knows." The trouble is that some people are making lots of money pretending that they do.