Posts Tagged ‘numbers’


This post is for all those dedicated activists and teachers, such as mfa, who are committed to teaching about and creating the conditions to eliminate global poverty and economic injustice.

I have been writing of late about utopia—for example, with respect to classes and the right to be lazy.

But the world economy today represents exactly the opposite, a dystopia of extreme poverty for hundreds of millions of people (768.5 million in 2013 according to the World Bank, or 10.7 percent of the global population).


And as Angus Deaton reminds us, those struggling to survive in conditions of extreme poverty aren’t just “over there,” in the Third World. Notwithstanding the focus of the World Bank-sponsored campaign to eradicate extreme poverty and the ubiquitous appeals on behalf of the needy in poor countries, a large portion—approximately 14 million people—live in wealthy countries—some 5.3 million in the United States alone.

Is there any more damning condemnation of contemporary economic institutions, in both the North and the South?

But wait, there’s more.

We’re talking about hundreds of millions of people living—barely—on less than $1.90 a day!

That’s the official World Bank number, updated in recent years from the original $1 a day and then $1.25 a day. But let’s put that number in perspective, in order to understand how low a threshold it actually is.

First, according to recent research by Robert C. Allen (pdf), $1.90 a day for people in Third World countries covers a consumption basket of food, a variety of nonfood items, and housing. But the devil, as always, is in the details. For food, we’re talking only 2100 calories a day (enough to allow people, beyond a bare minimum, “a more ample supply of energy to do the work that sustains society as well as raising children”), plus additional food (basically animal fat and vegetables) to meet recommended daily allowances of various vitamins and minerals (iron, B12, Folate, B1, Niacin, and C). That’s it in terms of food.* It all includes various nonfood items, such as fuel, lighting, clothing, and soap—but not education, medical, and other such nonfood expenditures. Finally, a housing allowance is calculated, which amounts to just 32 square feet per person.**

Calculate the total of those expenditures (using linear programming) and you end up with an extreme poverty line for people in Third World countries of only $1.90 a day. And the way the world economy is currently organized, it can’t guarantee even that miserly sum to hundreds of millions of people across the globe.

The second way of putting that number into perspective is to recalculate it for people in wealthy countries. Allen has done that, too. For the United States, it comes out to about $4 a day (mostly because housing costs are so much higher, and make up a much larger percentage of poor people’s budgets, than in the Third World).***

That means we’re talking about just $1460 a year for an individual or $5840 for a family of four.**** The way the economy is organized in the United States forces over 5 million people to get by on less than $4 a day.

Consider what those numbers represent—whether $1.90 a day in the Third World or $4 a day in rich countries like the United States—and there’s no doubt, for hundreds of millions of people, we’re living in an economic dystopia.


*Thus, in Sri Lanka, the so-called Basic diet would consist, per person per year, of the following: 309 pounds of rice, 108 pounds of beans and lentils, 77 pounds of eggs, 9 pounds of oil, and 99 pounds of spinach, cauliflower, or peanuts).

**As even Allen admits, “By the standards of rich countries, this represents extreme, and often illegal, overcrowding. Even illegally subdivided apartments in New York offer 5–10 square meters per person.”

***In Third World countries, about two-thirds of spending is on food, one quarter on nonfoods, and 5–10 percent on housing. The food share drops to one quarter in the United States, the nonfood share remains at one quarter, and the housing share explodes to half or more of income.

****The official poverty line in the United States is $34.40 a day for an individual, which comes out to $12,752 a year. According to that standard, 43.1 million Americans (12.7 percent of the population) are forced to have the freedom to live in conditions of poverty.

Liberal mainstream economists all seem to be lip-synching Bobby McFerrin these days.

Worried about automation? Be happy, write Laura Tyson and Susan Lund, since “these marvelous new technologies promise higher productivity, greater efficiency, and more safety, flexibility, and convenience.”

Worried about the different positions in current debates about economic policy? Be happy, writes Justin Wolfers, and rely on the statistics produced by government agencies and financial firms and the opinions of mainstream economists.

Me, I remain worried and I have no reason to accept mainstream economists’ advice for being happy.

Sure, new forms of automation might lead to higher productivity and much else that Tyson and Lund find so alluring. But who’s going to benefit? If we go by the last few decades, large corporations and wealthy individuals are the ones who are going to capture most of the gains from the new technologies. Everyone else, as I have written, is going to be forced to have the freedom to either search for new jobs or deal with the fundamental transformation of the jobs they manage to keep.

When it comes to separating fact from fiction, aside from the embarrassing epistemological positions liberals rely on, where are the statistics that might help us make sense of what is going on out there—numbers like the Reserve Army of Unemployed, Underemployed, and Low-wage Workers or the rate of exploitation.

You want me not to worry? Analyze what’s going to happen to workers and the distribution of income as automation increases and calculate the kinds of economic numbers other theoretical traditions have produced.

Even better, let workers have a say in what and how new technologies are introduced and change economic institutions in order to eliminate the Reserve Army and class exploitation.

Then and only then will I be happy.

Turkey’s numbers

Posted: 19 July 2016 in Uncategorized
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As regular readers know, I spend a lot of time on this blog producing numbers and trying to represent, make sense of, and explain other people’s numbers.

But I simply can’t keep track of the numbers currently coming out of Turkey after last week’s attempted coup.

The latest: more than 15,000 education staff in Turkey [ht: ja] have been suspended. The High Education board has also ordered the resignation of over 1,500 deans at state and private universities nationwide.

That’s on top of the following groups that have been detained or dismissed:

  • 6,000 members of the military
  • almost 9,000 police officers
  • as many as 3,000 judges
  • 30 governors
  • one-third of all generals and admirals

According to Bloomberg,

That brings the total of those suspended, fired, removed from jobs or stripped of professional accreditation to 59,628.


Now that voters in 33 states have cast their ballots in Democratic primaries, let me update my numbers that matter:

According to my calculations, of Clinton’s 17 primary wins thus far, only 6 have come in states Barack Obama carried in 2012. Sanders, in contrast, has come out ahead in 16 states, 10 of which are states where Obama was victorious.*

If we consider 4 states as toss-ups (Iowa, Nevada, Massachusetts, and Missouri), and award a half point to each candidate, the difference is even more dramatic: 5 out of 16 for Clinton, 11 out of 17 for Sanders.

It’s still virtually impossible for Bernie Sanders to win enough delegates in the remaining primary contests to beat Hillary Clinton to the Democratic nomination. But, based on the numbers that matter, you have to ask, who’s the real Democrat in this campaign?


*As I explained in my previous post, these numbes matter because it’s unlikely the Democratic nominee in 2016 will carry any state Obama did not win in 2012. While it won’t change the final delegate count, one can argue that some wins (in states Obama carried in 2012) are more important than wins elsewhere (e.g., in the Deep South, which the Democratic nominee, regardless of who they are, has little chance of carrying in 2016).


It’s virtually impossible, at this point, for Bernie Sanders to win enough delegates in the remaining primary contests to beat Hillary Clinton to the Democratic nomination.

However. . .


In the midst of all the number-crunching, there is one calculation I haven’t seen mentioned: primary wins that matter. Let’s define “matter” in relation to the states Barack Obama won during the 2012 presidential election.

According to my calculations, of Clinton’s 12 primary wins thus far, only 4 (Iowa, Nevada, Massachusetts, and Virginia) have come in states Obama carried in 2012. Sanders, in contrast, has come out ahead in 9 states, 6 of which are states where Obama was victorious.*

Why are these numbers significant? It’s unlikely the Democratic nominee in 2016 will carry any state Obama did not win in 2012. While it won’t change the final delegate count, one can argue that some wins (in states Obama carried in 2012) are more important than wins elsewhere (e.g., in the Deep South, which the Democratic nominee, regardless of who they are, has little chance of carrying in 2016).


*If we consider 2 states toss-ups (Iowa and Massachusetts), and award a half point to each candidate, the difference is even more dramatic: 3 out of 12 for Clinton, 7 of 11 for Sanders.


The other day I made the argument that the IMF and all the other mainstream economists who were using a low multiplier severely underestimated the negative effects—on investment, consumption, and unemployment—of the austerity measures that have been imposed in the wake of the economic crisis of 2007-08.

Now, Gavyn Davies has done some useful calculations with the original and revised multiplier numbers:

If the multiplier is 0.5, then an initial public expenditure reduction of 1 per cent of GDP reduces real output by 0.5 per cent. Using normal rules of thumb, this drop in output would in turn reduce taxation or increase public transfers by about 0.2 per cent of GDP, leaving the budget deficit improving by 0.8 per cent of GDP. This ratio of budget improvement to reduced growth might be just about acceptable to democratic governments.

If, however, the multiplier is 1.7, then the same initial public spending cut of 1 per cent of GDP would reduce real output by 1.7 per cent. The second round effects of this reduction in output would reduce tax or raise transfers by 0.68 per cent. The net overall improvement in the budget deficit would therefore be only 0.32 per cent. The economy would be in recession, and the budget deficit would hardly improve at all. Even if this were acceptable to governments, it would not be acceptable for very long to their electorates.

And that’s exactly what happened in the countries where austerity has been imposed. And it has not been acceptable for the majority of citizens in those countries.

I don’t want to argue that a number—in this case, the fiscal multiplier—created the Second Great Depression. However, the wrong number did give a tiny minority at the top the cover for imposing policies with the argument that austerity would both induce economic growth and bring down government deficits.

Well, it didn’t—and the lives of millions of people have been ruined as a result.

Chart of the day

Posted: 26 January 2012 in Uncategorized
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Measurement problems

Posted: 19 August 2011 in Uncategorized
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It’s a warning I often give to my students: beware of the numbers!

Economic numbers—GDP growth, productivity, inflation, etc.—are often reported with seeming exactness. GDP grew at 1.3 percent in the last quarter, productivity rose by 2.9 percent, prices went down by .6 percent. They appear to be exact, and therefore an accurate representation, but they’re really only guesses, based on a whole slew of assumptions, partial data, and so on. And all of them will be revised, up or down, later on.

Binyamin Appelbaum explains how this works with the GDP numbers.

When the government announced in April that the economy had grown at a moderate annual pace of 1.8 percent in the first quarter, politicians and investors saw evidence that the nation was continuing its recovery from the depths of the financial crisis. The White House called the news “encouraging” and the stock market extended its bull run.

Three months later, the government announced a small change. The economy, it said, actually had expanded at a pace of only 0.4 percent in the first quarter. . .

How can such an important number change so drastically? The answer in this case is surprisingly simple: the Bureau of Economic Analysis, charged with crunching the numbers, concluded that it had underestimated the value of vehicles sitting at dealerships and the nation’s spending on imported oil.

More broadly, politicians and investors are placing a great deal of weight on a crude and rough estimate that has never been particularly reliable.

In the midst of the current debt hysteria in the United States, it might be helpful just to look at the numbers.

MSNBC [ht: ja] has compiled some useful information. For example, instead of just going by the scary number on the National Debt Clock, it’s useful to consider the ratio of debt to national income. As it turns out, the United States is seventh (at a ratio of 101 percent), after Japan, Greece, Italy, Iceland, Ireland, and Portugal, just above Belgium, France, and the United Kingdom.

What about the holders of U.S. debt? The bugaboo is, of course, China—which, as it turns out, owns just 8 percent of total U.S. debt.

The rest of the data is interesting: Roughly 28 percent of the $14.3 trillion national debt is sitting in a Treasury Department account called “Social Security.” Another 12 percent is held in hundreds of other government trust funds. Foreign governments (apart from China) together hold about 25 percent of the total. Private investors–from insurance companies to mutual funds–hold the final 28 percent.

Once you do the numbers, the U.S. national debt is just not an issue that should cause hysteria—not in terms of its size (especially in the midst of the Second Great Depression, with millions of unemployed people and plenty of excess capacity) nor in terms of its ownership (apart from the fact that wealthy individuals and large corporations would prefer to lend money and receive interest payments instead of paying their fair share of taxes).

It’s another set of numbers that really should be worrying us—like the unemployment rate, the number of children living in poverty, the income and wealth gaps, the rate of exploitation, and so on. That’s what the pundits and politicians should be concerned about.

Oil spill numbers

Posted: 3 August 2010 in Uncategorized
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The numbers just keep climbing, now making the BP oil spill in the Gulf of Mexico by far the largest in U.S. history and perhaps the largest in world history.

According to the Washington Post, the blown-out Macondo well released oil and natural gas at a rate 12 times faster than the government and BP estimated in the early weeks of the crisis and has spilled a whopping 4.9 million barrels, or 205.8 million gallons, to date.

Macondo’s flow rate has been a major source of controversy since the April 20 explosion on the Deepwater Horizon. Early in the crisis, the Coast Guard and BP pegged the flow at 5,000 barrels a day, sticking with that figure even as outside scientists declared that it low-balled the actual rate. The flow rate team, assembled in May, tried to come up with a more solid figure. Scientists examining the surface slick as well as video taken by submersibles soon upped the estimate; by early June, the government declared the flow to be 35,000 to 60,000 barrels a day. . .

The new figures indicate that the roughly 800,000 barrels of oil that BP managed to capture with its various containment strategies — a riser insertion tool, a “top hat,” and flaring from a surface rig — represented only about one-sixth of the crude that surged into the gulf over the course of nearly three months. In all, about 1.2 million barrels of oil have been accounted for, either burned, captured or skimmed off the ocean’s surface. That’s about a quarter of the new estimate for the total spill.

No one knows where the other three-quarters of the oil has gone but it’s likely it remains underwater, contaminating vast swathes of the Gulf below the surface.

Here, according to Foreign Policy, are the five other top oil spills in history:

GULF WAR (Persian Gulf, 21 January 1991)
Amount: Between 160 million and 420 million gallons
How it happened: As Iraqi forces withdrew from their position in Kuwait, they sabotaged hundreds of wells, oil terminals, and tankers. All told, a minimum of 4 million barrels were poured into the Persian Gulf.

THE IXTOC 1 OIL WELL (Gulf of Mexico, 3 June 1979 – 23 March 1980)
Amount: 138 million gallons
How it happened: This exploratory oil well suffered a catastrophic blowout (whereby pressure causes the well to explode), caught fire, and caused the drilling platform to collapse. For months, 10,000 to 30,000 barrels of oil gushed into the ocean every day.

Amount: 90 million gallons
How it happened: Two fully loaded oil carriers, the Atlantic Empress and the Aegean Captain, collided 10 miles off the coast of Trinidad and Tobago during a tropical rainstorm. Both ships caught fire and began leaking their contents in what would become the largest tanker-based spill ever recorded.

NOWRUZ PLATFORM (Persian Gulf, 4 February 1983 – 18 September 1983)
Amount: 80 million gallons
How it happened: During the height of the Iran-Iraq War, an oil tanker hit the Nowruz Field Platform in the gulf and knocked it onto a 45 degree angle, damaging the well underneath. The resulting leak of 1,500 barrels a day could not be capped for months because the platform was under constant attack by Iraqi planes.

ABT SUMMER (off the coast of Angola, 28 May 1991)
Amount: 80 million gallons
How it happened: The ABT Summer, a tanker holding 260,000 tons of crude, suffered an explosion 900 miles off the coast of Angola. It burned for three days before sinking and was never recovered.

The numbers matter—because, first, they give us a sense of the magnitude of the spill and the associated consequences on nature and society, and, second, they provide dramatic evidence of the lengths BP and other energy companies will go to obtain their profits.