Mondays with Murray: Statistics, the State's Achilles' Heel
I have a confession to make: I am obsessed with the statistics of this website. Despite the advice I often give to the contrary, I just can't help but to track the page views, unique visitors, geographic reach, podcast hits, and every random statistic Google Analytics allows me to dig up. These statistics are just a distraction, really. I could have one million people click on an article that don't care about what I wrote, or I could have one person read an article that passionately believes in what he has read and has 10,000 Facebook friends and 50,000 Twitter followers he shares it with. I'd obviously prefer the latter scenario, but the raw statistics can only tell me so much. Statistics can't tell me whether an article or podcast strikes a chord in someone, whether it moves their soul. Murray Rothbard was even more dubious of statistics. In a 1961 essay "Statistics: Achilles' Heel of Government", Rothbard begins by critiquing the overall problem with a reliance on statistics, in particular how government uses statistics to justify its policies:
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.
So why should the average libertarian-on-the-street give a hoot about statistics?
The burgeoning of government statistics offers several obvious evils to the libertarian. In the first place, it is clear that too many resources are being channeled into statistics-gathering and statistics-production. Given a wholly free market, the amount of labor, land, and capital resources devoted to statistics would dwindle to a small fraction of the present total. It has been estimated that the federal government alone spends over $48,000,000 on statistics, and that statistical work employs the services of over 10,000 full-time civilian employees of the government.
This was written over fifty years ago; I would imagine the current numbers dwarf the shocking figures from 1961. It's important to consider the fate of the potentially productive resources that are diverted by government central planners into statistics. Who knows what great new technologies, innovations, or new businesses might have sprung up if so much wealth wasn't flushed down the proverbial statistical toilet.
Secondly, the great bulk of statistics is gathered by government coercion. This not only means that they are products of unwelcome activities; it also means that the true cost of these statistics to the American public is much greater than the mere amount of tax money spent by the government agencies. Private industry, and the private consumer, must bear the burdensome costs of record keeping, filing, and the like, that these statistics demand. Not only that; these fixed costs impose a relatively great burden on small business firms, which are ill equipped to handle the mountains of red tape. Hence, these seemingly innocent statistics cripple small business enterprise and help to rigidify the American business system
Worse yet, government statistics serve to "crowd out" pure market data - that provided by the pricing system, a response to the juxtaposition of the individual wants and needs of consumers in the marketplace with the supply of resources. This data provided by the market is what individuals and business need to make their decisions. As Rothbard points out, bureaucrats have no need for market data, and rely on statistics to justify their interventions into the economy.
The individual consumer, in his daily rounds, has little need of statistics; through advertising, through the information of friends, and through his own experience, he finds out what is going on in the markets around him. The same is true of the business firm. The businessman must also size up his particular market, determine the prices he has to pay for what he buys and charge for what he sells, engage in cost accounting to estimate his costs, and so on. But none of this activity is really dependent upon the omnium gatherum of statistical facts about the economy ingested by the federal government. The businessman, like the consumer, knows and learns about his particular market through his daily experience.Bureaucrats as well as statist reformers, however, are in a completely different state of affairs. They are decidedly outside the market. Therefore, in order to get "into" the situation that they are trying to plan and reform, they must obtain knowledge that is not personal, day-to-day experience; the only form that such knowledge can take is statistics.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.
The individual has no use for most of these statistics. It is the State, in all it's central-planning glory, that rests on statistics to justify it's constant interventions in the economy.
Certainly, only by statistics, can the federal government make even a fitful attempt to plan, regulate, control, or reform various industries — or impose central planning and socialization on the entire economic system. If the government received no railroad statistics, for example, how in the world could it even start to regulate railroad rates, finances, and other affairs? How could the government impose price controls if it didn't even know what goods have been sold on the market, and what prices were prevailing? Statistics, to repeat, are the eyes and ears of the interventionists: of the intellectual reformer, the politician, and the government bureaucrat. Cut off those eyes and ears, destroy those crucial guidelines to knowledge, and the whole threat of government intervention is almost completely eliminated.
Rothbard finishes by bringing up a unique solution to unwinding the State's ill effects on the economy - though it should be noted he doesn't offer up much of a plan of how to do it - but nonetheless it's a fantastical idea: deprive the State of it's fancy statistics. Remove the cover for their economic interventions, and they will quickly unwind.Rothbard concludes:
Surely, the absence of statistics would absolutely and immediately wreck any attempt at socialistic planning. It is difficult to see what, for example, the central planners at the Kremlin could do to plan the lives of Soviet citizens if the planners were deprived of all information, of all statistical data, about these citizens. The government would not even know to whom to give orders, much less how to try to plan an intricate 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.
Check out our past editions of Mondays with Murray!12/9/13 - Where Would All the Scientists Go? 12/2/13 - Sell Out and Die11/25/13 - How did Murray Rothbard Become a Libertarian? 11/18/13 - Rothbard on JFK, LBJ and Crony Capitalism11/11/13 - Don't Underestimate the Shell Game of the Central Planners11/4/13 - Rothbard on the "Black Market Strategy"9/23/13 - The Influence of Rothbard10/28/13 - What Crimes Does the State Hate the Most?10/21/13 - Who Would Fund the Science?10/14/13 - A Strategy for Liberty10/7/13 - Rothbard on "Obamacare"9/30/13 - Rothbard on Ayn Rand9/16/13 - Around the World with Rothbard9/9/13 - Rothbard on Syria War Propaganda9/2/13 - Did Rothbard Approve of Torture?7/29/13 - Rothbard on Revolution7/29/13 - Rothbard on Revolution8/24/13 - Rothbard on "Libertarian Populism"8/17/13 - Rothbard on Libertarian Qualifiers8/12/13 - Rothbard on War Revisionism8/5/13 - Rothbard on George Will's Comments Regarding Libertarianism7/22/13 - Rothbard on the George Zimmerman Verdict7/15/13 - Rothbard on Orwell's "1984"7/8/13 - Rothbard on U.S. Aggression Foreign Aggression & Imperialism7/1/13 - Why Be Libertarian?6/24/13 - Rothbard's Conflicting Views on Thomas Jefferson6/17/13 - Who was the "best" U.S. President?6/10/13 - Rothbard on State Surveillance6/3/13 - Rothbard on Chomsky and "Anarcho-Syndicalism"5/27/13 - Rothbard on America's "Two Just Wars"5/20/13 - Do Animals Have "Rights"5/13/13 - A Further Insight on IP5/6/13 - The Boston Lockdown4/29/13 - The Problem with Empirical Studies4/22/13 - The Real Story of the Whiskey Rebellion4/15/13 - What is an Entrepreneur?4/8/13 - Rothbard on Intellectual Property4/1/13 - The Five Key Questions for the Libertarian Movement3/25/13 - The Six Stages of the Libertarian Movement3/18/13 - Rothbard on the Future Prospects for Liberty3/11/13 - Rothbard on Lysander Spooner3/4/13 – Rothbard on Statism2/25/13 – Rothbard on John Bolton and Ann Coulter2/18/13 – Rothbard vs. Krugman on $9 Minimum Wage2/11/13 – Time To Hoard Nickels2/4/13 - The Death of Keynesian Economics1/28/13 – Competition and Monopoly1/21/13 – Rothbard Down The Memory Hole?1/14/13 – We Are Not The Government1//7/13 – Why Does Someone Become A Statist?12/10/12 – Rothbard on Conspiracy Theory12/3/12 – Rothbard on Secession11/26/12 – Rothbard on the Drug War11/19/12 – Rothbard on the Euro Crisis11/12/12 – Rothbard on the Lions of Liberty11/5/12 – Rothbard on Voting and Gas Lines10/29/12 – Mythbusting the “Free Market Cartel”10/22/12 – Rothbard on the Two Party Charade10/15/12 – Rothbard on Private Roads10/8/12 – Rothbard on Private Law10/1/12 – Rothbard on Ron Paul9/24/12 – Rothbard on Quantitative EasingReceive access to ALL of our EXCLUSIVE bonus audio content – including “Conspiracy Corner”, “Degenerate Gamblers” and the “League of Liberty Podcast” by joining the Lions of Liberty Pride and supporting us on Patreon!
