Tim Blair taking a very global view for an Oz journo mentions the new Kerry ” Misery Index.”
A full discussion of this highly misleading indicator is here
Does this remind anyone of the report in the UK a couple of weeks ago about the ” Measure of Domestic Progress ” or MDP ? That report that tried to convince us that 1976 was the best year ever in the UK ?
It’s a truism that you get what you measure, and in Kerry’s case he’s trying to win an election : painting your opponent’s performance as bad is just par for that course.
The New Economics Foundation is at least presenting itself as a dispassionate academic organisation, which to my mind makes their dissembling worse.
For what they measure is how close the country is to an egalitarian, highly statist nirvana of their own devising. And since 1976 was the high point of statism in the UK, ergo their best year will be 1976.
Just a little reminder : it wasn’t Maggie who started the retreat from the corporatism of Wilson and Heath. It was Callaghan, after the UK went cap in hand to the IMF in 1976.
Just to run through a few of the things that they measure :
1) Consumer expenditure, positive. OK, in accordance with mainstream thinking here.
2) Value of services from domestic labour. Positive. OK, an adjustment for the unpaid work that both men and women do in the home. Although a move to a society in which less work is done at home, you know, things like take out meals, washing machines, non iron clothes, would seem to be, by their measure, a decrease in human welfare. Arguable I suppose, home cooked meals and decent linen shirts being valued by me at least.
3) Public, ( non defensive ) expenditures on health and education. Positive. Ah, really ? A little later they state that Private such expenditures are negative in their effect on the index. This does seem to be showing just a tadge of political bias, eh ? The higher the state portion of education and health expenditure, the higher their index will be. That would mean Soviet Russia, where no private expenditure was allowed, would rate higher than the US, where almost all health and much education is privately funded. Hhhmm. How seriously are we to take a measure of ” Domestic Progess” which would value 1930’s Russia over 2004 USA ?
In the UK expenditure on secondary school pupils is about the same in the public and private sectors. £ 5,500 per pupil per year ( day schools only, natch ). In the private sector, that £ 5,500 is spent in the school. In the public sector, 30 % of it is devoured by the bureaucracy of the Local Education Authority.
We’re actually being asked to support an index which states that expenditure on the race/ lesbian awareness officer to playgroup is an addition to our welfare, while £ 10 on an ABC primer from Granny is a reduction in our welfare. Hmmm.
4) Difference between expenditures on and service flow from consumer durables, positive. OK, perhaps just a different way to deal with improving technology, something the US deals with via hedonic pricing. Yes, there are issues with something like this, but nothing wrong with the principle.
5) Net capital growth, mainly positive. Only mainly ?
7) Effects of inequality in the distribution of incomes. Negative. Huh ? WTF ( no swearing here please ). Something of a political statement don’t you think ? That there are some negative effects of inequality I don’t really doubt. That there are some positive aspects I know. The effects on incentives for example. It is usually assumed in a capitalist economy that those positive effects outweigh the negative : the proof being that those countries which have a capitalist system with all its inequalities, are those countries rolling in the economic wealth while those without are those stuck in the economic mire.
We could also look at tax rates : let’s assume that they are using post tax income as their measure, just to credit them with some economic lucidity.
1976 income tax rates were 83 % at the top end. With 15 % surcharge for ” unearned ” income like interest or dividends. Plus high inflation. So when 98 % of the income from your savings disappears in tax, we might well have had a flattening of income inequality in 1976. But to state that the corollary, an abandonment of investment in UK companies and the fleeing of anyone with two shillings to rub together, is worth it, and that tax rates of that sort are a good thing….well, don’t you think this index is being a little, what shall we say, political ?
There’s a series of other factors in their calculations, go read and fisk them yourselves. Some seem quite reasonable, like the negative effects of family breakdowns. So let’s tighten up those divorce laws eh ?
Others seem a little odd. To have both the loss of natural habitat and the loss of farmland as negatives seems so. As most abandoned farmland reverts to natural habitat, they seem to get us coming and going. An increase in habitat from more efficient farming still sticks us with the negative of loss of farmland.

As I said above, you get what you measure. If you believe that a state controlled egalitarian society is the best, then you can construct an index to look at the factors that reflect such and economy : and amazingly, you’ll end up stating that the best year in the UK is the one that was most egalitarian and statist.

Just as an exercise : A majority of the House of Commons thinks that removing the feudal aristocracy from political power is a worthy goal. Thus getting rid of the hereditaries in the Lords.Going somewhat further left one can find the opinion that the over-riding action which would improve the UK is the abolition of the reactionary ruling classes. So let us ask which year in English history would be the best by this measure ? Just this one measure.

Yup.

You’re right.

1066.