“So what I told you was true, from a certain point of view” – Obi-Wan Kenobi
In 2004 the theoretical physicist John Preskill proved that, contra what Stephen Hawking had said, information could escape from a black hole. There was, thus, no ‘information paradox’ and the laws of quantum mechanics were confirmed. Hawking took a look at the evidence and said “I was wrong”.
This sort of humility has always been lacking in the ‘soft’ social sciences. David Blanchflower, Economics Editor of the New Statesman, gave a good example of this last week.
Back in 2009 Blanchflower famously predicted that
“If spending cuts are made too early and the monetary and fiscal stimuli are withdrawn, unemployment could easily reach four million… If large numbers of public sector workers, perhaps as many as a million, are made redundant and there are substantial cuts in public spending in 2010, as proposed by some in the Conservative Party, five million unemployed or more is not inconceivable.”
Of course, since then we have seen a veritable employment boom. As Martin Vander Weyer writes in The Spectator
“Since 2008, we have had ten quarters of growth and ten of shrinkage; last year, when most of us thought recovery was imminent, we had no net growth at all despite a euphoric post-Olympic blip. And yet there were 580,000 more people in employment by December than a year earlier, taking the total UK workforce to a record 29.7 million. That’s roughly 24 million in the private sector, which added 627,000 jobs in the year to September; the public sector shed 128,000 and has now shrunk all the way back to its 2002 numbers, before Gordon Brown went mad.
“So we have an economy that is rebalancing itself favourably between tax generators and tax spenders while creating 2,000 jobs per working day”
That notorious 2009 prediction has hung round Blanchflower’s neck like a necklace made of cat poo, Daniel Hannan bringing it up again recently.
Blanchflower could, like Hawking, have held his hands up and said “I got it wrong”. Instead, with Stirling University economics professor David Bell in tow, he set out to prove that the prediction had actually been correct.
Sure, unemployment might have played out totally differently to Blanchflower’s predictions, but by concocting a measure of underemployment, they might finally locate the dark truth that simply must lay behind Blanchflower’s famous prognostication and vindicate him.
And they found… not very much actually.
Source: New Statesman
As you’d expect Blanchflower and Bell’s underemployment is higher than unemployment. When Blanchflower states that the first conclusion from his data is that “underemployment consistently adds to the measured excess labour capacity in the UK labour market” he is simply stating the obvious.
But it is his second conclusion which is more questionable, where he states that “since the start of the recession, underemployment has been contributing an increasing share of overall excess labour capacity in the UK”.
Well, that’s true, but not by very much. We do not have the data yet so these are rough estimates, but taking the figures from each January of 2001 to 2012 we can see that between 2001 and 2008 underemployment was, on average, 2.73 percent higher than unemployment. And we also see that, from 2009 to 2012, underemployment has been higher than unemployment by 3.32 percent on average. A rise, yes, but not much of one.
Yet on these slim pickings Blanchflower hangs the claim that “It is clear that the coalition is bad for jobs”. And with one bound he is vindicated!
You sympathise with Blanchflower. Faced with the comical failure of his 2009 prediction he set out to fashion a new statistic which would prove that he had, in fact, been correct. And it didn’t. One thing is clear from all this: a desperate desire to exonerate your crackpot predictions is bad for economic inquiry.
This article originally appeared at The Commentator