GDP and all that

Benjamin Disraeli was aware of this racket 150 years ago with his observation that “official statistics are just one more variant of government obfuscation”. Indeed, incorrect statistics were the cause of the Forster Act of 1870, by which school education was made compulsory and later nationalised – to the enormous detriment of education ever since. Yet at that time the biggest rackets had barely begun and their proliferation couldn’t possibly have been foreseen.

Or could it? The role of government itself through the tax-and-spendii religion that exists today – to the tune of some 50 per cent of all activity and far more if state legislation is included – immediately removes any possibility of a sensible calculation of “production” as GDP purports to do.

It would be far more useful (and truthful) if all government activities were shown as negative numbers, as indeed they are; tax and spend is always a negative-sum game. Examples are not hard to find, and the Conservative Party seems to be no less prolific. Back in 2007, David Myddelton, now Chairman of the Institute of Economic Affairs, wrote an interesting booklet “they meant well”, covering Government Project disasters – the high speed Channel Tunnel Rail Link, the Millennium Dome, Concorde and several more.

Most of them disguise the true level of state spending on large projects – as per today’s proposed High Speed Rail HS2, the expected cost of which is not being released (no need to guess why). As I write there is news of another Ministry of Defence equipment fiasco, and (separately) a white elephant in the making via the EU’s call for a new European “governance process” – we all know what that means.

Meanwhile, the NHS continues with higher wages for GPs and hospitals with fewer beds and fewer carers. It is a basket case totally out of control, yet even now the Chairman of the Care Quality Commission, David Prior, says he loves the NHS, just like David Cameron. The motto should be the opposite; the bigger the government, the more crucial it is that its nationalised industries should be privatised forthwith. Until then the Health Service Ombudsman will continue to investigate fewer than three per cent of complaints, as recently reported.

Returning to economic activity, David Cameron and George Osborne are still out of control, having taken on the role of Bob the builder – about which they know nothing and (we can only assume) have no idea whether artificial interest rates to go with it will mean more horrendous problems down the track. All in a day’s work. The same goes for the Environment Agency and its reaction or non-reaction to the floods crisis.

I recall an example from the USA in its reaction to hurricane Katrina and its battering of other parts of the Gulf coast in 2005, with almost 2,000 fatalities. Not only did government reach only a tiny few refugees but also it stymied attempts by private individuals and organisations to bring help and provisions to those who had none. Thankfully, this tactic was ignored by several organisations, the largest of which was Walmart. Yes, that’s right, Walmart. Are we now going to see a similar example here while Rome burns and the Environment Agency fiddle faddles as usual?

Terry Arthur is an author of various books including “Crap – A guide to politics”. Financial Regulation Fellow of Institute of Economic Affairs and a Fellow of the Adam Smith Institute. A good sportsman, he played rugby for England in 1966.

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