It’s all about GDP – or the Great Data Problem
I believe one of the reasons people lack trust in government is because we don’t understand the numbers that get bandied around.
We’re told ‘growth’ is up or down, whatever that means. Or inflation is below expectations.
‘Growth’ of what? Whose expectations? Not mine I can tell you that.
Everyone I talk to about the cost of everyday life is feeling the squeeze – especially on the less well paid.
Let’s look at how it works … a number is reported, for example inflation is up 0.2% this month, or GDP is down 0.4% over the quarter. And the commentators and news media leap into action.
It’s deemed good or bad according to what forecasters may or may not have predicted. The editorial slant of the reporting organisation likely plays a part in the interpretation too.
Overall, a story emerges that ‘the data’ shows things are going well or these days badly.
Is this an accurate picture of what’s happening?
In a word, no.
The trouble is the numbers aren’t the whole story. They’re not even that accurate a lot of the time. They’re usually revised and often end up contradicting the initial position.
By any count food and energy prices are higher by a huge amount over the last year or so. And it’s been a sudden rise.
Furthermore, a recent Ipsos survey found that housing costs for rent, and mortgages have shot up for at least 25% of the population, and even more expect them to keep on climbing throughout the year. In total almost 1.5 million mortgages face a rise in rates for example.
And yet those key numbers are not included in the CPI (Consumer Price Index) data.
These changes affect the younger and less well-off in society far more than anyone. And they’re the ones that can least afford it.
So how do we start to rebuild trust?
For me it begins with values. Our money shouldn’t be something whose value erodes so fast that everything costs much more over such short periods of time.
We work hard in our jobs, and our abilities don’t change, if anything they improve. The things we make and the services we deliver tend to only get better over time as well. So why should they all be worth less money?
We need to rethink the way we measure value.
What Really Matters
In the end, we don’t care about how much is in our bank accounts when we die.
What’s important is the number and the quality of the relationships we have had in our lives.
Studies show that past a certain point it’s not the amount we earn that makes a difference to people’s satisfaction in life, it’s having meaningful work.
My solution to the crisis looming in our economy is to focus on strengthening the parts of society that deliver those outcomes. And that means families, it means local organisations that support communities and funding where it counts.
We need to give people the authority and funding to run their own communities. They can become accountable to each other to deliver. By distributing decision-making and decentralising the power that controls our public services we can make a huge difference.
The models are there: using civic trusts, regional lenders, local assemblies we can create networks across the country that can manage public services in the interests of communities, all run by those communities themselves.