Thursday, April 17, 2014

The Evils of Government Data Collection (And Its Origins)

I found it fascinating to learn from Zachary Karbell's new book, The Leading Indicators: A Short History of the Numbers That Rule Our World, how intertwined government and statistics have been right from the start:
The word statistics wasn’t much used before the eighteenth century, and its origins are often ascribed to a German named Gottfried Achenwall, who combined Latin and Italian words to coin the term statistic to refer to data about the state.
Murray Rothbard always understood the evil in government data collection. From The Logic of Action II: Applications and Criticism from the Austrian School:
Ours is truly an Age of Statistics. In a country and an era that worships statistical data as super "scientific," as offering us the keys to all knowledge, a vast supply of data of all shapes and sizes pours forth upon us. Mostly, it pours forth from government.

While private agencies and trade associations do gather and issue some statistics, they are limited to specific wants of specific industries. The vast bulk of statistics is gathered and disseminated by government. The overall statistics of the economy, the popular "gross national product" data that permits every economist to be a soothsayer of business conditions, come from government.

Furthermore, many statistics are by-products of other governmental activities: from the Internal Revenue bureau come tax data, from unemployment insurance departments come estimates of the unemployed, from customs offices come data on foreign trade, from the Federal Reserve flow statistics on banking, and so on. And as new statistical techniques are developed, new divisions of government departments are created to refine and use them.

The burgeoning of government statistics offers several obvious evils to the libertarian...

Not only do statistics gathering and producing go beyond the governmental function of defense of persons and property; not only are economic resources wasted and misallocated, and the taxpayers, industry, small business, and the consumer burdened. But, furthermore, statistics are, in a crucial sense, critical to all interventionist and socialist activities of government...

Statistics are the eyes and ears of the bureaucrat, the politician, the socialistic reformer. Only by statistics can they know, or at least have any idea about, what is going on in the economy...

Thus, in all the host of measures that have been proposed over the years to check and limit government or to repeal its interventions, the simple and unspectacular abolition of government statistics would probably be the most thorough and most effective. Statistics, so vital to statism, its namesake, is also the State's Achilles' heel.
Then, of course, there is the perspective of the great apologist for the state, Paul Krugman :
Just a quick note in support of government statisticians. They do an incredibly important job, and by and large do it very well. 


  1. Govt data is only accurate when it supports the Austrian school. Economic data can not refute economic theory. If the economic data contradicts economic theory, the data is wrong. Rothbard 101.

    1. You do seem to delight in being an imbecile Jerry. Mommy chase you out of the basement to go buy her some cigs and pizza?

  2. If that's your takeaway, Jerry, you fail Rothbard 101. Retake the class and perhaps you will understand how grossly you mischaracterize Rothbard's argument.

    Try this for a start: "In human action there are no quantitative constants. As a necessary corollary, all praxeological-economic laws are qualitative, not quantitative."

  3. What makes the Mt. Everest of statistical blather even more dangerous is the completely nonsensical Keynesian models that it populates. It's worse than garbage in-garbage out because the macro theories are a crock. Even if the data were rock solid and the Gods honest truth (and not just a bunch of self serving statist propaganda) the macro models are as reliable as an IPCC prediction.

  4. JW: Troll. Who has not a slightest clue that Austrian economics is QUALIITATIVE. It cannot be falsified or confirmed by any statistics, no more than Pythagoras theorem could be.

    Indeed, Austrian economics holds that any aggregate macro-economic metrics are essentially meaningless because they always amount to addition of apples to oranges.

  5. It would be interesting if people started throwing their American Community Surveys in the trash like I do. I also throw the Survey of Business Owners out whenever I get it. Of course they threaten all sorts of legal action, but what are they going to do? I also only fill in the "# of people in the household" on the census form.

    Anything else is totally unconstitutional. Starve the beast, I say. I've actually had hilarious conversations with the roving census workers dispatched to complete the forms. They are dumbfounded that I would not want to fill the form out. Along the lines of, "...but don't you want your community to get all the money?..." Finally, they say (and I am not joking), "...but I'll get in trouble if I don't get this filled out..."

    We need to withdraw our consent, and this is an easy one.