Critics Want Other Stats: Why Not Rents?
There are successful groups using stats, churning out stats, and demanding better official stats. May their voices join ours.
July 18, 2016
Jeffery J. Smith
Activist

This article is part of a series by Jeffery J. Smith on the surplus—also known as “economic rent”—that exists in the economy. Currently, this surplus is hoarded; yet once shared, this surplus could generate undreamed of possibilities for the entire human population. To see the entire series, visit Progress.org/Counting-Surplus

“There are three types of lies -- lies, damn lies, and statistics.”  Benjamin Disraeli

While our public agencies do not tell us how much we’re all spending for the land and nature we use in total, let’s not feel singled out. They slight other curious groups, too, who’d like to know statistics like a qualitative GDP, the true inflation rate, real unemployment rate, total assets of governments, actual debts of governments, etc. To meet the need for accuracy in the state’s stats, various groups have arisen to correct official figures and make the data available to inquiring minds. Do such organizations post the total for the worth of Earth? Here are the Top Twelve Potential Alternative Sources for the Figure on the Size of All Rents.

European Resources

One expects criticism of official statistics from critics of either left or right, but check this out: 

“Looking at the focus on the two headline indicators on government finance, while it may provide a single and clear message on the status of public finances within the EU to the politicians and the public at large, it has also created great incentives to governments to compile figures on deficit and debt that look good, instead of them being good from an economic substance point of view. There is a clear tendency to continuously look for “grey areas” to manipulate the relevant national accounts data, in order to stay within the stipulated deficit and debt limits. These practices have substantially increased in “popularity” since the start of the financial crisis during which significant pressures on government finance emerged, amongst others by the direct and indirect effects of the economic downturn and the bailouts of banks.”

It’s in “Government Finance Indicators: Truth and Myth”, by, of all people, the (1) OECD! (by the Organisation for Economic Co-operation and Development’s Working Party on Financial Statistics.) If only US public agencies had the chutzpah to cry out when the emperor wears no clothes. The OECD has produced useful reports before on the link between land value and economic growth, so maybe they could become a standard bearer for determining the size of all locational value.

(2) The Geodemographics Knowledge Base (GKB) is a comprehensive directory of hand-selected websites for people interested in the application of geodemographics and geo-spatial analysis. That’s me!

(3) New Economics Foundation (NEF) is the UK's leading think tank with the mission is to kick-start the move to a new economy through big ideas and fresh thinking. They do this through:

  • High quality, ground-breaking research that shows what is wrong with the current economy and how it can be better;
  • Demonstrating the power of fresh ideas by putting them into action;
  • Working with other organizations in the UK and across the world, to build a movement for economic change

North American Resources

(4) Shadow Government Statistics (“Shadow Stats”) by John Williams offers analysis behind and beyond government economic reporting. Despite Williams coming from the mainstream, there are an awful lot of mainstream articles criticizing him. That actually could be a good sign, that he is telling the harsh truth that the powers-that-be don’t want to hear or be heard by the public. I’m holding out hope for him to go as broad and deep as possible. I always root for the underdog.

(5) Statista’s team of trained specialists analyze, audit, and update each of their statistics frequently. They attend to detail and adhere to academic archetypes and so guarantee they maintain high standards. They ensure that they are fully equipped to meet the needs and expectations of our users—perhaps even me, given deep enough pockets.

(6) G. William Domhoff, who goes by "Bill," is a Research Professor at the University of California, Santa Cruz. Four of his books are among the top 50 best sellers in sociology for the years 1950 to 1995. Who Rules America? (1967, #12) was loaded with statistics and described the local growth machines of real estate development, so he might have some good leads if not even the answer.

(7) The Washington Post has its Wonks blog which focuses on the economy among other subjects. Writers there break down issues and argue with statistics. They explore issues in depth, one even writes about land topics; maybe she will come around to the challenge of digging up land rents.

(8) Washington’s first progressive multi-issue think tank, the Institute for Policy Studies (IPS), has served as a policy and research resource for visionary social justice movements for over four decades. Barbara Ehrenreich, author of Nickel and Dimed (2001), who describes herself as "a myth buster by trade”, once worked there.

(9) The Centre for Research on Globalization (CRG) is an independent research and media organization. The Centre acts as a think tank on crucial economic and geopolitical issues. Its articles, commentary, background research and analysis focus on social, economic, strategic, and environmental issues.

(10) Zero Hedge takes its name from the quip by Keynes who said in the long term, survival drops to zero, so don’t hedge your bets against that. Their mission:

  • widen the scope of financial, economic and political information available to the professional investing public.
  • liberate oppressed knowledge.
  • provide analysis uninhibited by political constraint.
  • facilitate information's unending quest for freedom.

Best Known, Least Bold

(11) Freakonomics began as an article then a book then morphed into a documentary film, a Jon Stewart appearance, and an NPR radio show, by Stephen J. Dubber and Steven D. Levitt. In 2014, Levitt and Dubner published their third book, Think Like a Freak—a blueprint for an entirely new way to solve problems. They use official statistics with blind faith to shed light on funny things people do—like When to Rob a Bank—and call that economics. Their legion of followers think that’s economics, too.

Let them have it. It’s not big picture analysis of an economy’s actual workings and its resultant wealth. Their analyses trivialize what should matter, and what the public should know: how economies work, why they fail, and what citizens can do about it. I suppose that analysis awaits a more fully developed geonomics. So Freakonomics.com, which has been called “the most readable economics blog in the universe” (which, they admit, isn’t saying much), despite all that steady stream of numbers they call “data” (nothing like the accurate and relevant measurements in hard science), steers clear of rents—so far.

Those apparent nice guys who play it safe—safety is where the money and honors are—suffer from statisticism, coined by  Otis Dudley Duncan (1921-2004) in Notes on Social Measurement: Historical and Critical (1984).

“Coupled with downright incompetence in statistics, we often find the syndrome that I have come to call statisticism: the notion that computing is synonymous with doing research, the naïve faith that statistics is a complete or sufficient basis for scientific methodology, the superstition that statistical formulas exist for evaluating such things as the relative merits of different substantive theories or the ‘importance’ of the causes of a ‘dependent variable’; and the delusion that decomposing the co-variations of some arbitrary and haphazardly assembled collection of variables can somehow justify not only a ‘causal model’ but also, praise a mark, a ‘measurement model’. There would be no point in deploring such caricatures of the scientific enterprise if there were a clearly identifiable sector of social science research wherein such fallacies were clearly recognized and [kept] emphatically out of bounds.”

Check an Absent Fact

Even if none of the above come through, not all is lost. There are some official numbers out there for “rents”, and now days some people pride themselves on testing official numbers for veracity. With the rise of the internet and googling, fact checking has become big business. Many organizations focus squarely on it. So do many newspapers.

(12) FactCheck.org is a project of the Annenberg Public Policy Center of the University of Pennsylvania. The APPC was established to create a community of scholars within the University of Pennsylvania that would address public policy issues at the local, state, and federal levels. How could the value of locations—a socially generated value—not be of interest to a group like that?

I’ve explored all 12 sites above and posted questions to their researchers. So far, nothing concrete to report. But it’s early yet. Let them hear from you, too, asking for a reliable figure for the rental value of all land and resources in the US. Then, hearing from a newly rising chorus, they might add their voices to the call and together light a fire under our official statisticians.

Groups Respond to Demand

The fact is, however, “rents” may be too esoteric for even these cutting-edge researchers. Most people don’t see rent, even experts. And those who do don’t see it as critical, even though it is.

Yet hope springs eternal, since all these outfits (except the Freaks) are open-minded enough to go beyond the official numbers. Over time, spin off more publicity for the role of land in the business cycle, spur more people wanting to know natural value. Then you may feel sanguine expecting these educational nonprofits to start delivering the data we want.

All we got to do is publish more news articles that explain current events by the role of rents in economies. Not just the business cycle but other hot topics, too, like the loss of affordable housing in popular cities. Step by step, the movement to measure our spending for the non-man-made will grow. Once an official estimate of the social surplus that land value represents comes out, then let doubters criticize that.

“Facts are stubborn things, but statistics are pliable.”  Mark Twain

This article is part of a series by Jeffery J. Smith on the surplus—also known as “economic rent”—that exists in the economy. Currently, this surplus is hoarded; yet once shared, this surplus could generate undreamed of possibilities for the entire human population. To see the entire series, visit Progress.org/Counting-Surplus

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Inside information on economics, society, nature, and technology.
Jeffery J. Smith
Activist

JEFFERY J. SMITH published The Geonomist, which won a California GreenLight Award, has appeared in both the popular press (e.g.,TruthOut) and academic journals (e.g., USC's “Planning and Markets”), been interviewed on radio and TV, lobbied officials, testified before the Russian Duma, conducted research (e.g., for Portland's mass transit agency), and recruited activists and academics to Progress.org. A member of the International Society for Ecological Economics and of Mensa, he lives in Mexico. Jeffery formerly was Chief Editor at Progress.org.