Monday, February 19, 2007

Star pushing for malleable “Index of Well-Being” to replace GDP

But who are the unidentified “Bay Street moguls” who endorse it?

The Toronto Star’s front page today carries a story about an effort to complement (their word) the GDP with something called the Canadian Index of Well-being. The article claims that “the CIW has gained a legion of fans, from former Saskatchewan premier Roy Romanow to Bay Street moguls to top government statisticians.” Yet the article does not quote any of these purportedly enthusiastic “Bay Street moguls” (to use the Star’s groovy 1970s terminology).

And it is not quite accurate to say that the CIW has “gained” a fan in Romanow – Romanow is actually one of the CIW’s prime movers, as a member of the national steering committee pushing for its adoption.

The index would be comprised of soft and subjective data (e.g. "affordable" housing, time management, community cohesion and diversity, civic engagement) that is ripe for manipulation by the usual suspects, i.e., the NDP, public sector unions, sociology departments and phoney pink tanks such as the Star-funded Atkinson Foundation (and, lo and behold, the Atkinson Foundation is behind the drive to establish the CIW!):

In health care alone, the CIW’s measure could include ER wait times, rates of cancer and other diseases, body mass index, smoking rates, life expectancy, infant mortality and low birth rates, even rates of depression and suicide.

Adding all these up, factoring in at least six other “domains” to produce an “integrated index,” would be a monumental achievement. There is still considerable disagreement over methodology (see sidebar) even though the first phase of the project is set for this fall.

Given the apparent reluctance of Bay Street moguls to go on the record for the Star, its reporter was forced to resort to quotes from current and retired Statistics Canada employees, and the less-than-disinterested Roy Romanow.

“We really need a different kind of statistical indicator – not to replace the GDP, but to complement it,” says Michael Wolfson, assistant chief statistician at Statistics Canada.

You would think that Statistics Canada would know better than to initiate a new statistical product that is begging to be abused, after years of seeing their Low Income Cut-off figure brandished by politicians and activists as a de facto “poverty line.”

Wolfson also says “GDP tells us how big the pie is, but not how the pie is divided.” Actually, Wolfson’s employer, Statistics Canada, already does a lot of work on “how the pie is divided,” such as this table: “Incidence of low income among the population living in private households, by province (1996 and 2001 Censuses).” Or how about “Average income and income shares by after-tax income quintiles, showing different income concepts” (Tables 8-1 through 8-5 in this 2004 report)?

Sigh. Here’s Roy Romanow’s take:

For the long-time NDP politician, the GDP’s limitations as a measure of well-being are revealed in the negative inputs it includes.

Expenditures on cancer treatment, divorce, prisons and funerals are counted alongside factory production and restaurant meals as good for the economy, but few would say such things have improved their lives.

“If you don’t measure what counts, what counts is never measured,” says Romanow.

Actually, GDP doesn’t “count” any of the above activities, or anything else, as “good for the economy” (but I might mention that, having spent some of the past year working for family lawyers, divorce did help keep a roof over my head). The GDP measures their objective impact in an objective way. It’s up to the public through its elected representatives to debate and decide what is “good for the economy” and what “counts.”

The CIW is a thinly-disguised attempt to short-circuit that debate by limiting it to a select group of policy makers and interest groups, then releasing the “result” in the guise of a “statistic” that would be pre-inoculated from any challenges.

All of this is reminiscent of Joseph Stalin’s observation that “It is enough that the people know there was an election. The people who cast the votes decide nothing. The people who count the votes decide everything.”

1 comment:

Road Hammer said...

I'd love to know how one quantifies "community cohesion". One could be forgiven they'd use violent crime rates as part of such a figure, but that would be too easy.