We’ve not the numbers to manage the economy - so, don’t
Something of a lament here:
This is a ridiculous position for a country that relies on the accuracy of the data to set policies that affect us all – from increases in our pensions or travel costs, to the setting of interest rates or the growth rate of the UK, which influences how much it costs the Government to borrow.
The Office for National Statistics is not providing the numbers that the planners require in order to be able to do that planning stuff. The swots are unable to do the sticky-out tongues thing as they manipulate their slide rules - tragedy, eh?
But we’ve been here before. There’s actually a Nobel Prize speech that runs through this. The Pretence of Knowledge. We do not know, we cannot know at the centre, sufficient detail to be able to plan. Therefore, don’t plan. Which is what gives us the Cowperthwaite Solution (derived from Sir John, who would not allow anyone to collect Hong Kong’s GDP figures on the grounds that some damn fool would only want to do something with them) which is to concentrate on the things that can be done, the rule of law, a very basic welfare system and enough tax but only that much to pay for them.
Leave the rest of the economy to that coordination method that does in fact work - prices, the information contained within them and the incentives they provide.
It’s possible to approach the same point from the other direction - Kantorovich (another Nobel Laureate) and the Soviet attempts to plan the economy, linear programming and all that. The essential base problem being that we do not - and cannot - know the utility function (the aggregate of what everyone wants when faced with actual conditions of scarcity and trade offs) that the planners are trying to optimise.
Which then gives us what to do about ONS. It cannot provide the numbers required to plan the economy. Good, then close it down and don’t provide the numbers to plan the economy. For the inevitable result of producing numbers will be that the damn fools only try and do something with them.
Swots can play with their slide rules elsewhere.
Tim Worstall