Sunday, 10 January 2010

The price of everything

These words by me from yesterday's Guardian:

If there is one thing I would like to see more of in 2010, it is those statistics that purport to tell us how much such and such a thing is costing the British economy. 2009 offered pretty slim pickings on this score. We had to make do with the following newspaper stories about how much actual or possible events were costing or might cost the economy: EU regulations (£184bn by 2020), hangovers (£54.7m a year), ID fraud (£1.7bn a year), headaches (£1.5bn a year), arthritis (£2bn a year), illegal downloads (£120bn a year), swine flu (£1.5bn a day), staff pulling sickies in the summer heatwave (£190m a day), the loss of the British Grand Prix ($1bn), people using social networking sites at work (£1.38bn a year), health problems caused by stiletto shoes (unspecified millions in lost working days), Andy Murray getting knocked out of Wimbledon (£150m), and a snowy day last February (£3bn). Admittedly, this is a far from exhaustive list, but I still think we will need to pull our fingers out and do much better this year.

Naturally, there are a few statistical pedants who claim that these figures may not always be 100 per cent accurate. They argue that such statistics are essentially a spurious extrapolation of the cost-benefit analysis, where you try to measure externalities – unseen costs accrued by society as a whole, like time savings or accident rates – as well as direct costs. For all their anomalies, you can see how cost-benefit analyses might be necessary if you are going to commit public money to expensive infrastructure like a new road. But, the pedants argue, things become more problematic when you are trying to compute, for instance, all the billions of pounds lost from people staying off work, the so-called “productivity hole”. For this assumes that when people are at work they are all dutifully contributing to our GDP every minute of the day – rather than, say, attending meetings where the only thing that gets decided is the date of the next meeting.

In any case, these pedants point out, the economy is not a self-contained totality, something you take money out of like a cash register. Money that isn’t spent on one thing can get spent on something else. Even employees who are off sick might be earning money for Beechams and the companies who advertise consolidated loans in the middle of Countdown.

These pedants are right, of course. But they are missing the point. The purpose of these figures is not to convey accurate information. It is to offer reassurance. These statistics are always cited by their originators with enormous authority, as if only an ignoramus could possibly disagree with them. When we have heard so much recently about funny money – toxic debts, sub-prime mortgages, money that turned out not to exist after all - then this sort of confidence is immensely comforting. Thank God, we think, that someone is keeping count and knows how much everything costs, especially now there is no money left and we are all going to have to survive on war rations. In the current climate of austerity, the work of the costings industry offers a consoling mood music.

Statistics, as the social scientist Joel Best writes, are “numeric statements about social life”. We think of them as simply facts that we hone out of reality like coal from a seam, when in fact they are numbers we create to make sense of the world. For example, if you think that something is really annoying, like people using Twitter or going on strikes, then finding out that this is costing the economy lots of money can give you a pleasing sense of righteous indignation. The actual figures don’t really matter. Most of us, as Best points out, are no good at distinguishing between large numbers. £20m or £20bn, it’s all Greek to us. We’re just supposed to think “ooh, that’s a big number, what a waste of money”.

Most importantly, these statistics give us a sense of the ebb and flow of the year. In January, for instance, we always have figures about the money being wasted by staff who are still hung over after new year parties, or who can’t get into work because of the snow. Then, in June, we will be told how much all those malingerers who are calling in sick to go to the beach or to watch the World Cup are costing us. Such statistics remind us of the eternal cycle of the seasons, the kind of work that used to be done by winter solstices and harvest festivals. And that is why it is vital we keep producing these figures telling us how much everything costs. Without them, you see, we simply would not know what day it is.

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