Economic Statistics - The Language of Central Planning
All About Stats
In the USA, we love our government institutions with official-sounding names. We’ve got so many government agencies that somebody’s got to be paid just to keep track of them all. And today we’re focusing on that very subset of government activity – compiling statistics.
We’ve got the Bureau of Labor Statistics, the Bureau of Transportation Statistics, The Bureau of Economic Analysis, The Census Bureau, the Economic Research Service, The National Center for Health Statistics, the National Center for Education Statistics, The Office of Research, Evaluation, and Statistics, the Statistics of Income Division, and over 100 more agencies in the USA that compile statistics about the economy.
For some of these agencies, it is their sole work to collect, collate, and report about statistics. Thousands of government employees spend all of their working time on this project. Billions of dollars are spent every year just on this aim.
The list of statistics collected by the government is endless. We all know famous numbers like GDP, the unemployment %, inflation and CPI, and the “balance of trade” with other nations. Some others include the industrial production rate, consumer spending, workforce makeup, DEI data, energy data, health data, education data, and the wide range of information collected by census.
Why Compile So Many Statistics?
For most people, this isn’t much of a question. It’s self-evident, they’ll say. We should want to compile as much information as we can to increase our knowledge about what’s going on in the world. They’d be more likely to ask why we wouldn’t collect statistics.
However, what practical purpose do they really serve? Almost no one stops to think deeply about this.
We measure the GDP of every state in the US, and of the whole country. What practical purpose does it serve to measure the GDP? How does knowing this actually make any human being’s life better? The answer is that it doesn’t. It makes no difference to the quality of anyone’s life whether we have estimated our GDP or not. If we stopped measuring this tomorrow, no one’s life would get any worse.
When we measure the unemployment rate, this activity does not help a single person get a job or move into the right field for themselves.
When we measure international trade activities, “surpluses,” and “deficits,” we do not get any better goods from overseas than we did before we measured these things. It does not improve our relations with other countries and groups of people.
The Real Reasons
If there’s no practical purpose for spending all this time, energy, and money collecting statistics, why do we do it?
The answer is that economic statistics is the language of central planning.
What other purpose could large, general statistics about the entire economy of states and a nation be used for? The only pseudo-practical reason for it is that those statistics will be used as the justification and the guidance for top-down government policies. Pseudo-practical because there is nothing actually practical about government intervention in an economy.
Think about it. What good is estimating the unemployment rate? It can only be “useful” to a bureaucrat. There are two popular uses:
1. Political dick-measuring
Remember that politicians hold a fundamentally unproductive role in society, providing no actual benefit to other humans. They live parasitically off of the efforts of humans who work and produce and create things. Owing to this quite interesting position, they must constantly manufacture a belief in their relative value – typically by demonstrating that they have not caused as much damage as other politicians in other places or times.
Politicians always need to measure their dicks and compare with other politicians, especially those of other states/countries. GDP, unemployment rate, industrial production, and education statistics are very popular in this arena.
Politicians love to point out how much higher the GDP in their country is than others. If some innovative people make technological leaps and bounds and their society’s productivity increases in a short time, the politicians in power at that time will inevitably attempt to take credit for this with figures like GDP and productivity rates.
US politicians should just take care not to measure dicks with politicians from Ecuador or The Congo. I hear those guys put us American dudes to shame.
2. Central Planning
This is the most prominent purpose for which the government compiles statistics. The statistics are to be used to inform planners and bureaucrats about how to run the economy. As if “running an economy” were possible.
Financial information is used by the Federal Reserve (in a way even their chairman doesn’t understand) to artificially dictate interest rates by force. Education statistics are used by the Department of Education to set a national education policy (maybe not when Trump is done with them). Statistics regarding international GDP’s, productivity, and trade are used to set international trade policies.
Central planning has taken on a sort of scientific aura with many people in the US, especially in the last few decades. It’s seen as the way of the modern society to centrally collect massive amounts of information and then have a few smart people try to use it to run everything. In this light, individual freedom is seen as chaos with no script.
All these big economic statistics are fuel for the political game. The more statistics that are collected, the more there is to argue, debate, and fight about among politicians. More data makes their whole realm feel more important and justified. The more data they collect, the more they feel compelled to act on it, to restrict, to enforce, to govern according to their interpretations of the data.
It Doesn’t Work
Here in the Matrix
The more statistics your government collects, the more you will be treated like a statistic.
Bureaucrats are looking at screens full of numbers telling them estimations of how much capital is being utilized. How many jobs are not filled and the % of people out of work. How much money is being spent. The quantity of money and goods coming and going from overseas. Whether more or less goods were produced by the country than last year.
These bureaucrats go to their meetings with charts showing a trend in this way or that, and they end with a proposal about how to “fix” the trend by positive violent action – minimum wage laws, price controls, tariffs, trade embargos, subsidies, regulations, taxes, new interest rates, debt forgiveness, and a hundred other measures.
Think about the insanity of how this works. We’re allowing the politicians in America to play a game of the Sims with our lives. The virtual people in the Sims game are trapped in a virtual reality and obey our dictates unquestioningly. We’re humans and they’re just virtual people, not possessing consciousness (but they could! Did you see Free Guy?).
Well, we humans are trapped in a Matrix of our own by a subtle, deceiving system, and by laws enforced by the physical might of our governments, confining our creativity and limiting our behavior. And just like the Sims, we are treated by this system as if we possess little to no consciousness. After all, we’re just humans, and the bureaucrats and politicians are…. What are they exactly? Clearly they believe they are something more than human, above human. Perhaps they listened to Plato, who in his writings basically esteemed legislators akin to Gods.
In this scheme, individual human intelligence is not even an afterthought – politicians would have to consider it at some point for that to be the case. Individual humans are treated basically the same way farmers treat cattle or sheep.
Of course, this phenomenon exists as a matter of degree, following a simple formula: The larger and more intrusive the state grows, the less individual consciousness is respected.
The bigger the statistics and the more general the policies (think national), the more individual humans are railroaded. Humans are literally treated as numbers, as fodder for the experiments of central planning politicians who don’t want to see the complexity of reality because it would make their game less fun.
Going Against the Grain
The nature of reality favors decentralized systems, especially in humanity. The world we live in is more complex than any of us understand, and in many ways growing more complicated all the time. The more complex it becomes, the less top-down central planning makes sense.
As individuals, we naturally seek to maximize our thriving (we’re not really cool with starving and dying), and to the degree we are developed and mature, to maximize the thriving of those around us. We are each in contact with the reality of our own lives. No other person can understand the depth of our experience or see every problem we solve on a day-to-day basis.
It is the interplay of each individual person using their creativity to thrive and solve problems that makes our world a better place through time, as illustrated in ideas like the “invisible hand” or Leonard Read’s pencil.
Let’s imagine that government officials were able to collect exact data in all of their studies every month and year, and not just estimates. Exact GDP, unemployment %, consumer spending, etc.. This may not be unrealistic in the near future, with the mind-boggling advances in machine learning and computing occurring now. And let’s imagine they imagine they tripled the amount of statistics they collected each month and year.
Even with all this information, the most intelligent bureaucrats in the US could never hope to replace the ingenuity of 347 million humans collaborating with the rest of the 8.2 billion humans on the planet. Their greater efforts would only be more stifling to innovation and creativity than before. Even worse, when you treat people like cattle, they become like cattle – the creativity and thinking muscles atrophy.
In this way, government violence has played the role of the regressive force through time, pushing back against progress, encouraging waste and corruption, and incentivizing people to fall to low expectations of themselves.
Check out my article on Centralized Authority for a deeper look into this phenomenon.
What Should We Change Going Forward?
So, what should we do about it?
The more you value your own ideas and want to go on your own journey in life, the more you will see the ridiculousness of government statistical gathering, of making charts comparing the GDP’s, unemployment rates, and even happiness levels (that is soooo Sims like!) between countries.
If you understand the failures of central planning enforced by physical might, you will see that the billions of dollars and the millions of working hours spent on collecting statistics by the government are a 100% waste. A total loss.
If some nerds privately want to compile stats for their own secret naughty pleasure, then by all means, have at it. But no people should be taxed so the government can collect statistics which inevitably are interpreted to say those people should be taxed and controlled more.
Here’s my take on what we can do:
1. For the reader. I don’t suspect that this article or anything else I’ve written has magically made changes in your mind. I challenge you to think about this a little more, and to really wonder, even just for a few minutes, what would happen if the government stopped trying to measure everything.
2. For the government and anyone on its payroll. Just remember – no matter how much you measure, it won’t make your dick any bigger. I challenge you to relax, take a deep breath, and try living your own life instead of everyone else’s.
Centralized statistics gathering can only encourage central planning. The less time and energy we spend on this, the more we simply allow individual creativity and innovation to flourish. People don’t need to know what the GDP is to know that they’re living productive lives. They don’t need a happiness index to tell them when they’re happy. They don’t need an unemployment rate to tell them when they’re in the right field.
We aren’t statistics. We aren’t numbers. We’re humans.
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