What was it Giles Wilkes said about the New Economics Foundation?

The new head of the NEF - now that Ms. Fanbulleh is in Parliament - takes to The Guardian to tell us all off:

According to the latest count by the Office for National Statistics, 38% of all turnover of non-financial businesses in Britain went through foreign owned companies….(…)….I don’t think even Thatcher would have imagined that a quarter of British GDP would today be made up of sales of US multinationals like Amazon, Coca-Cola, Goldman Sachs and Uber.

Yes, we have elided there. But that looks dangerously close, to us, to claiming that turnover of companies is a measurement in some way comparable to GDP. Their reference is to this ONS page. And in that downloadable little spreadsheet of the results we’d suggest looking not at turnover but clicking the next tab, GVA. For while there are technical details meaning that GDP and GVA are not exactly the same thing they are the best we currently do have as comparators. That is, they’re both measurements of value add, not turnover. Comparing turnover and GDP is simply wrong. Tsk.

But beyond that conceptual problem there’re also these two failures of basic empirics.

The UK has seen income and wealth inequality soar in recent years,

Has it? The usual measure of inequality is the Gini, which for the UK incomes is lower than it was in 2007, in fact it’s also currently lower than it was in 2001. The Gini for wealth inequality: “wealth inequality as measured by the Gini coefficient has remained stable over the last 14 years.”*

When people actually count, rather than claim, we don’t seem to see this increase in outrageousness.

Odd that, eh?

Not grasping the difference between turnover and value add. Being unable to check numerical claims. Well, yes, there was a reason that Giles Wilkes called the NEF not New Economics Foundation but Not Economics Frankly.

Tim Worstall

*Sadly, we cannot use the latest figures up to 2022 as ONS did not calculate it. A change in the counting of private pensions wealth (35% of total wealth) meant that the figures would not be backwards comparable.