"As an example, he said, researchers making revisions to price indexes may have been pushed to understate inflation, as such a change would result in smaller liabilities in the Social Security system when the baby-boom generation retires. "In reality, those kinds of things do play some role."
I agree with Professor Mitchell. The spontaneous tendency of capitalism is to dehistoricize its own existence, including making good statistical time series of social and economic activity difficult to construct. It is interesting to note, that the practice of collecting statistics through social surveys itself originated from a branch of inquiry called "political arithmetick". One of the main reasons why censuses were done originally, was to provide a rational basis for government taxation policy, a very politically sensitive area; and at least in Europe, the very formation of the bourgeois state was intimately connected to the revolt of the bourgeoisie against taxation by the absolutist feudal state - the bourgeoisie wanted to take over and modify the form of the feudal state, in good part to get more control over taxation and the government treasury, on the ground that it was responsible for the creation of a lot of social wealth, and therefore should be able to control how that portion of wealth creamed off through taxes, tolls and levies, was spent. This was particularly important because of the common interest of the bourgeoisie in creating a larger unified market, and the removal of impediments to that process. The material basis of nationalist ideology was precisely this concern to eradicate the impediments created by small principalities, fiefdoms, city-states and so forth (each having their own rules and regulations) to a national market with one standard set of rules governing trade. Of course, what the epoch of specifically "industrial capitalist" imperialism is about, is the transcending of national markets, the competition for the world market, in which a conflict develops between the interests of the largest corporations (which seek maximum free trade) and the national state apparatus (which has a territorial economic responsibility, and seeks to ensure a balanced development of the national economy reflecting citizens interests on the basis of the democratic principle). To smash protectionism, ultimately you have to smash democracy, because it is governments which implement protectionism, and these governments are elected on the basis of a majority vote, and if the voters consider free trade is not in their interests, they will support protectionist measures. The corporations are organisationally not democratically based, but the government apparatus is. The corporation provides limited accountability to shareholders, the government provides accountability through democratic elections, and the public service also contains some democratic principles in its organisation. But insofar as the corporations grow in power, the state apparatus begins to reflect this, and corporate organisational principles begin to be introduced within the state apparatus itself. This is not illogical, since the CEO's of government departments are often recruited out of the corporations. But this has the effect, that the total amount of democratic input gradually shrinks - more and more, the lower levels are subordinated to the higher levels on the basis of corporate, rather than democratic principles. Plus, the very difference between corporate organisational principles and democratic organisational principles starts to be fudged. You might ask me, why tell this story ? Is this not an irrelevant digression...? Well the reason is, that this whole process I describe, is directly reflected back into the very survey methods, the collection process and the presentation of social and economic statistics. Statistics are supposed to be objective, neutral, unbiased and impartial, but in fact they are not, because the corporate influence seeks indeed to alter the very way in which statistical observations are categorised - and if Statistics Departments themselves become corporate entities, this whole process is facilitated and speeded up. The Corporations have no strong interest in historical time series, they are mainly interested in the latest, most up-to-date information, and possibly some figures dating back a few years for comparative purposes, just as with company balance-sheets. The Corporate view is that there is no strong interest in the independent interpretation of data by Statistics Departments themselves, rather the Statistics Departments should "just provide the data" on a cost-efficient, market basis, with the minimum amount of interpretation. Indeed, there are disputes about the very need for an independent Statistics Department anyhow, since many of its operations can be contracted out to private survey agencies as a profit-making activity. The debate then centres on the issue of, in which cases the quality of survey data would be impaired, if respondents no longer saw the surveyers as "neutral", but as commercial operators, seeking to get information from citizens for free, in order to sell it as a commodity to make money out of. Here, there is a conflict of interests between the state bureaucracy and the corporations. The public service knows very well that its income is ultimately derived from taxation, the appropriation of private sector incomes to fund the social infrastructure of corporate exploitation (transfer of surplus-value). That is to say, the public service has its own interest or "stake" in statistical information, because that information plays an important role in justifying and evaluating what it does. The actual output of statistics thus generally reflects a compromise between corporate and public service interests. To give you an indication of the "logic" I am talking about, consider this: in Putin's Russia, they decided in many cases no longer to report terrorist incidents in the media. They justified this on the basis that publishing stories about terrorist incidents would only give terrorists more publicity, and of course if you kill people, but it doesn't generate any publicity, then at least some of the motive for terrrorist acts disappears - the population as a whole is not terrorised, because it doesn't know. That is the argument anyway. Some opinion polls were done, to check if Russian voters would go along with this policy, and they could sometimes find a majority (I do not know how great offhand) that would. The public's "right to know" is not infrequently interpreted rather loosely in Russia, just as with the corporate media. But how about, for example, statistics on strikes and work stoppages, or trade union membership ? The Corporates do not have much interest in those; the trade union officials may do perhaps, some politicians may do, social researchers and investors have some interest in it, but apart from that, there is not really a big "market" for this "statistical product". So then the question arises, why should the Government collect that data, isn't that a bit of an imposition on business ? Particularly in an age of computerisation of data collection and automated surveying, surveying activities can be much more flexibly altered to suit the needs of those who commission the surveys, and those who produce the survey data are interested in a commodity which they can sell. And what sells, is information which shows "how the commodity-producing society likes to see itself ideally reflected in quantitative information, which is itself a commodity". This reflection is ultimately a "mirror" which inverts the real face of capitalism with categories which turn the social reality upside down, or distort it. An example: the Consumer Price Index does not truly measure the change in the prices which consumers choose to pay, or the cost of living, it measures rather the change in the prices of of a range of consumer goods (and services) for which final consumers DO pay. It is true, the regimen is based on a basket of commodities reflecting current consumption patterns of households. But what is being measured, is the prices of goods and services destined for final consumption, and not destined for use in production (for production, you have a Producer Price Index or PPI measuring input and output prices). This may be a subtle nuance of emphasis, but how wrong the neo-classical ideology of "consumer sovereignity" is, is palpably evident when you rush into a supermarket to get all the goodies you want in ten minutes, and do not have the time to decide rationally between alternate preferences and decide what you are prepared to pay for the goods you want. In fact, the CPI leaves out various "costs" to final consumers, various prices they have to pay, which are of a type which are not classified as consumer products or services, but which they nevertheless have to pay for. You can prove this by examining and comparing questionnaires and classifications used in aggregating household income & expenditure data, household expenditures in the real world, and the CPI regimen actually applied. Then why talk about a "consumer price index", when we are not talking about a change in a weighted average of prices which final consumers choose to pay, but rather a change in a weighted average of prices of final consumption goods and services ? When you actually rigorously examine this question, then you will come to the sociological conclusion that the labels being used here, confuse a "person" with a "commodity". In which case we are back again to that familiar Marxist story about the reification of human characteristics by the market economy. People are depicted as if they were things, and things are depicted as if they were people. If you think all this discussion is silly nonsense, just consider that there is a direct link between the epistemic logic I describe and the future social impact of the Internet on the supply and access of information. It is perfectly possible to structure the internet on the basis of commodity-economic logic, because information can be reduced to a packet of bits and bytes for which you can charge, a commodity, just as you can charge for a piece of statistical data. Quite simply, an act of communication becomes a transaction, and a communicator becomes a transactor. It isn't just that "time is money", communication is money, giving attention is money, love is money, everything is money. Which reinforces the methodological individualist ideology that what is really wrong with people, is that they do not know what they are worth, they may undervalue or overvalue themselves in the marketplace. The idea that this undervaluation or overvaluation of people might be generated by the operation of markets themselves, is not a possibility which is considered. Cheers J. ----- Original Message ----- From: "Eubulides" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Friday, July 11, 2003 5:08 AM Subject: [PEN-L] if you line up all the economists from end to end........ > [ for more; http://www.quine-duhem.com ] > > [NYTimes] > July 11, 2003 > Data in Conflict: Why Economists Tend to Weep > By DANIEL ALTMAN > > > Is the economy pulling itself out of a slump, or is it sinking deeper? > > The answer could be either, based on the data from government agencies > these days. Because they measure the same things - employment, incomes and > prices - in different ways, it can be hard to tell what is really > happening. > > Yet among all the alternative gauges, some of the most widely cited data > is collected in a patchwork fashion, or checked against benchmarks only > once a decade. What is more, frequent changes in the agencies' methods can > make comparisons with earlier trends impossible. And a few economists > complain that those revisions may be motivated by politics rather than > science. > > "This is not a customer-driven enterprise," said Daniel J. B. Mitchell, a > professor of management and public policy at the University of California > at Los Angeles. "It's not always clear to me that we're getting the > services that we'd hope for." > > Many Americans have been watching data from the job market, but those > figures can sometimes be misleading. The Bureau of Labor Statistics > reported last week that payrolls outside farming had dropped by 30,000 in > June, on a seasonally adjusted basis. In the same report, it said that the > total number of employed people had grown by 251,000. > > Was the labor market stagnating, or booming? > > Neither number represented an absolute truth. The figure for payrolls > comes from reports by businesses and government that are checked once a > year against unemployment insurance records, which are fairly > comprehensive. But the figure for employed people comes from a sampling of > households that is thoroughly benchmarked only once a decade, with the > census. > > "Particularly if you are interested in employment as a measure of economic > trends, you probably want to use the payroll survey more than the > household survey," Professor Mitchell said. "Things that are proportions, > percentages, ratios - that's what I would say you want to use the > household survey for." > > Thomas J. Nardone, who supervises the survey of households as chief of the > bureau's division of labor force statistics, said Professor Mitchell's > approach was basically correct for short periods. "You have to be careful > about interpreting things, especially if you're dealing with just one > additional bit of information." > > Even a single data point can change, sometimes more than once, over time. > The Bureau of Economic Analysis, a Commerce Department agency, releases > three figures for economic growth for a quarter: an advance number, a > preliminary number and a final number. > > For the first quarter of this year, the bureau announced annualized growth > rates of 1.6 percent in April, 1.9 percent in May and 1.4 percent in June. > Given that the economy averages growth around 3 percent, a swing of half a > percentage point is not negligible. Yet it is not uncommon, either. > > "That's not an unusual or atypical swing," said Brent R. Moulton, the > bureau's associate director for national economic accounts. "When you're > working with a small base, it seems more noticeable." > > Much of the quarterly data is collected in dribs and drabs, Mr. Moulton > said. For service industries, which represent two-thirds of economic > activity, comprehensive data is only collected annually. For more frequent > figures, some statistical guesswork is involved. > > "We have data on volume of stock market activity, which we can use to > infer something about the amounts paid in commissions for financial > transactions," Mr. Moulton said. "We have data on temperature - heating > and cooling degree-days - that we can use to infer something about > electricity and natural gas consumption." > > In some sectors, the economy has grown beyond the scope of statistics, > leaving the government scrambling to fill the holes. "We've got an economy > that has changed rapidly over the past 15 or 20 years that our statistical > infrastructure hasn't really kept up with," said Richard B. Berner, chief > United States economist at Morgan Stanley and a member of the Bureau of > Economic Analysis's advisory committee. Because reporting is often > voluntary, he added, it can be hard to persuade new companies to > contribute. > > They may also drop in and out. The semiconductor industry, for instance, > recently agreed to share information on its shipments and inventories for > the first time in about a year. But how should officials measure, say, the > output of an Internet search engine? > > "In a knowledge-based, information-based economy, one could argue that we > don't have good metrics for measuring output," Mr. Berner said. > > Measures of income, which the Bureau of Economic Analysis releases > alongside measures of production, can also be incomplete. Mr. Moulton said > the agency received fairly reliable data on wages and profit, but "for > most of the other pieces of income, we don't have very timely information > coming in." > > Among the most controversial of government gauges are the indexes of > prices. These determine the growth of Social Security checks, the interest > paid on inflation-adjusted bonds and the positioning of tax brackets. They > also feed into data on worker productivity and real interest rates. > > A true change in price, said Neal Soss, chief economist of Credit Suisse > First Boston, should not reflect changes in the quality of a product - > essentially, the evolution of a new product. And in the services sector, > discerning those distinctions can be difficult. > > "I don't know how you'd measure the quality of haircuts, or whether > today's rock music is better than the golden oldies of the past," Mr. Soss > said. "But in some parts of the service sector, there are objective > measures of quality that could be applied, and I don't think that the > Bureau of Labor Statistics has applied nearly enough effort to this." > > Adjusting prices of services for changes in quality can be especially > challenging, said John S. Greenlees, acting associate commissioner for > prices and living conditions at the Bureau of Labor Statistics, because > services are less likely than goods to have observable characteristics. > Comparing the features on television sets with different prices is easy, > he said, but not so for movie tickets. > > "You don't have different movies with different admissions prices based on > their acting," he said. > > The scope of a statistical agency's work can also be limited by its > budget. For instance, the federal government has been gradually replacing > its classification of industries in the last few years - a move that has > affected thousands of figures collected by many agencies. Yet while the > Federal Reserve painstakingly reconstructed decades of old data to match > the new framework, Mr. Berner said, the Census Bureau has been unwilling > or unable to follow because of a lack of money. > > The experts all said that almost constant revisions in methods and data > sources made continuity a recurring problem in government statistics. > Drawing comparisons of trends in inflation, employment and growth could be > tricky, even, Mr. Berner said, for periods as short as five years. > > "The statistical agencies are a little too cavalier about saying, `Well, > we want to have a very accurate snapshot right now, and to hell with > continuity,' " Professor Mitchell said. "If they break the series, the > users of that information - the clientele - don't have any alternative. > We're at their mercy." > > Putting aside budget shortages, Mr. Berner said that the government's > statisticians and economists were able to work in an independent, > scientifically minded way. But Professor Mitchell, who has consulted for > several federal economic agencies, said they also faced political > pressures. > > As an example, he said, researchers making revisions to price indexes may > have been pushed to understate inflation, as such a change would result in > smaller liabilities in the Social Security system when the baby-boom > generation retires. "In reality, those kinds of things do play some role." > > Mr. Soss agreed. "It's sort of in the air," he said. "For 35 years, > countries have wanted their inflation rates to be lower, and I think > there's a natural tendency of anyone living in the society to breathe the > air. The air surrounding these processes was something that led to looking > for ways that inflation might be lower." > >
