When will Scotland’s economics correspondents catch up with current thinking on GDP? When they can find something else to attack the SNP with.

GDP figures are useless

According to the latest GDP figures, Scotland’s economy only grew by 0.8% in 2017 while the UK figure was 1.8%. The Scotsman and the Herald responded with:

‘Scots growth lags behind UK with fears of no U-turn’

‘Scotland’s economy continues to lag behind the rest of the UK, as critics take aim at SNP’

Even if Scotland’s GDP figures were accurate, they’d still tell us very little about the health of our economy and I suspect the critics know this, but GDP remains a convenient stick to beat the SNP with so there’s no way they’re putting it down.

I written this several times, but it needs repeating:

First, even the DAVOS elite have turned against GDP. As far back as 2016 they said:

‘Three leading economists and academics at Davos agree: GDP is a poor way of assessing the health of our economies and we urgently need to find a new measure. Speaking in different sessions, IMF head Christine Lagarde, Nobel Prize-winning economist Joseph Stiglitz, and MIT professor Erik Brynjolfsson stressed that as the world changes, so too should the way we measure progress. A country’s GDP is an estimate of the total value of goods and services they produce. But even when the concept was first developed back in the late 1930s, the man behind it, Simon Kuznets, warned it was not a suitable measure of a country’s economic development: “He understood that GDP is not a welfare measure, it is not a measure of how well we are all doing. It counts the things that we’re buying and selling, but it’s quite possible for GDP to go in the opposite direction of welfare.”’

https://www.weforum.org/agenda/2016/01/gdp/

Secondly, from Manchester University:

‘The official statisticians are not the only people who think the quarterly ritual of City economists and commentators making a song and dance about the headline change in GDP – is it 0.2% or 0.3% – is a nonsense. The figure for the change every three months is the outcome of a very complicated process of collecting data from many different sources, adjusting it for seasonal changes, summing it, adjusting for inflation and so on. The inevitable margin of error is sometimes bigger than the headline number. Revisions occur frequently. With hindsight, recessions can be revised away.’

http://blog.policy.manchester.ac.uk/featured/2015/01/time-to-ditch-gdp-as-a-measure-of-economic-well-being/

Thirdly, from real professor Richard Murphy at City University in London:

‘There will, no doubt, be those saying that low GDP growth (and none in terms of GDP per head) is bad news for Scotland. This, though, assumes that, first of all the GDP data is right, and second that GDP matters. There is no way we can be sure that the GDP data for Scotland is right because the calculation of GDP requires accurate data on imports and exports from Scotland and all experts agree that Scotland does not have that information. In that case whether or not the data is accurate depends upon whether or not a fair proportion of estimates to and from Scotland to the rest of the world, as well as to and from the rest of the UK, are correctly estimated. I have my doubts about this and explained why to the Scottish Parliament last year……We now know that GDP is a poor indication of well-being. In particular, the share of wages in GDP has been falling steadily over time whilst that of profits has been rising…..The Scottish Government would be wise to adopt increases in median pay as its economic goal and stop worrying about the nearly meaningless Scottish GDP measure that is beloved only by those who do not seem to have the best interests of Scottish people at heart.’

http://www.taxresearch.org.uk/Blog/about/

The above are only three, from a host of commentaries, debunking the value of GDP. Try Googling for ‘GDP no good professor’ and you’ll have more than any of has the time to read, from many ‘leading’ thinkers. Finally, real evidence that the Scottish economy is robust can be found in a wide range of indicators reported here in previous months. See, for example:

Scottish economy is thriving on innovation as patent filing runs at 4 times the UK rate

And more evidence of a strong economy: starting salaries in Scotland increase at quickest rate for more than 3 years

Scottish Chambers of Commerce survey suggests 2018 will be a good year for the Scottish Economy

17% increase in number of Scots planning to start a new business as Scottish economy strengthens

Reports of a strong Scottish economy just keep coming. Now debt decrees down 93% in the last three months

Clear signs of a robust economy? 15% increase in Edinburgh office take-up in 2017 and Glasgow set for a ‘stellar 12 months.’

Scottish businesses continue to show signs of health with insolvencies down 23% as the Scottish economy holds strong

The Auditor General strongly, with no qualifications, commends the Scottish Government on its ‘sound’ management of the economy. The lowest under-spend since devolution.

With only 8% of the population, Scotland’s maritime sector accounts for 25% of the UK maritime sector’s (GVA) contribution to the economy and is 17.5% more productive than the UK marine oil and gas sector. Once more, too wee, too poor?

12% increase in the formation of social enterprises in Scotland over only 2 years leads to a £2 billion economic contribution to Scottish economy.

England runs massive trade deficit. Only Scotland has a viable sustainable economy, exporting more than she imports thus requiring no national debt

To my knowledge, none of the above made the mainstream media in Scotland. I could give you more.

Despite this, the Scottish media continue to use these unreliable and inappropriate figures to undermine the case for Scottish independence because they’re all they have.

 

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24 thoughts on “When will Scotland’s economics correspondents catch up with current thinking on GDP? When they can find something else to attack the SNP with.

  1. Ann Forbes April 5, 2018 / 9:04 am

    ICYMI see thecommongreen.scot 04/0418

    Like

  2. Ann Forbes April 5, 2018 / 2:39 pm

    My mistake ! Article dated 04/04/18 in – thecommongreen.scot – ‘We Need to talk about the Deficit’

    Like

  3. Robert Graham April 5, 2018 / 4:46 pm

    Oh well a basket case if ever i saw one , we might as well all go home , but there is light on the Horizon just look east across the North sea we have a country with a comparable population with less natural resources than us they have so much money they cant find anything to do with it , The one thing they dont have is a next door neighbour who control by weight of numbers the countries Parliament , all the major industry ,the first bite of the tourist trade ,the main container terminal ,all main ministries that control the country , and we have these clowns controlled by the english state whos main job is to make sure we dont and cant progress under this stifling straight jacket that a lot of our proud scots are happy to endure because they are doing ok thanks very much .
    What’s not to like its f/n heaven , for some .I dont believe a single word that these proud scots and their friends spout every day .

    Like

    • johnrobertson834 April 6, 2018 / 1:51 pm

      Well put. The Norwegians got rid of their absentee landlords, the Swedes, in 1905 well before the oil boom.

      Like

  4. Ludo Thierry April 5, 2018 / 6:16 pm

    Hi John – big apologies for going off topic so quickly. Was just quickly checking around the Auntie beeb site and noticed a piece about someone called Peter Horrocks (CBE) who is Vice Chancellor of the OU and has cleverly managed to unite his academic staff in the struggle to have him removed from post.

    The bit that caught my attention was that this Horrocks chap is a former senior exec with the beeb. Truly, these former beeb exec types seem to be embedded in every significant institution throughout the UK (as we know only too well here in Scotland – Col. ‘Harrison’ anyone? Ashley Highfield, CEO of Johnston Press anyone?).

    It really does reek of pre-revolution Romania. One further thing mentioned in the report is the apparent severe decline in part-time students “..in England..” at O.U. (specifically mentions ‘England’ – so I wonder whether the situation is different elsewhere across UK? – If there is a serious decline in O.U. numbers down south I find that sad – and hope it is a temporary phenomenon. I have great respect for the O.U. as a concept – It was one of Harold Wilson’s best actions to get it pushed through at Westminster – I understand he expended a fair bit of political capital to see the scheme through to fruition).

    The austerity cuts at the O.U. (£100M from an annual £420M budget apparently) are another good reason for us to choose Indy here in Scotland. All these various popular and useful institutions which were pushed through against the Westminster inertia during the ‘energised’ period of post-war consensus politics (and which did deliver some palpable benefits to the general population across the UK – and helped, a bit, to open up a very ‘closed’ society) are being strained to breaking point and beyond by the current Westminster/britnat elites’ ‘austerity’ mantra (everyone get back in their boxes – the elites are ‘taking back control’). Time for Indy, folks – High time.

    Liked by 1 person

    • Contrary April 6, 2018 / 9:05 am

      Well, the OU – I did a degree with them, finished it in 2014 (and of course have forgotten most of it, having been blessed with a terrible memory) when they were just bringing in the higher prices & working with the English no subsidised fees rules. Suddenly the website wouldn’t give you information on the course costs until you’d selected ‘Scotland’ or ‘England’ – no idea what those folks in the navy did at that point, for the OU catered to many with offshore jobs. The people that were already signed up to a degree in 2014 could finish it at then current costs, but after that,,,,

      We are talking about the difference of say a £500 course costing more than £2500 (this equivalent to, say, a third of a full time year of a brick university) – I don’t know about you, but that makes a ‘fitting in the time and tightening the belt to try out a subject to improve myself’ turn into a ‘totally unaffordable commitment to something that may not be of benefit’ option. Conclusion: the Westminster establishment wants to keep the population stupid, it makes us more controllable, buy into their unreasoning rhetoric and fall for every form of ridiculously obvious nonsense propaganda they care to throw a us – not throw, force feed us with.

      However it has been run recently, I’m the same as you Ludo, I believe in the principle behind the OU concept. At one point it was a good way to keep the brain getting fat and lazy, but even the Scottish prices went up too much (what with cost of living increasing, and salary definitely NOT) to take it beyond hobby status. And they changed the structure, so the courses were more structured and formed a degree course, so less emphasis on trying out various subjects – say a smaller level 1 course might have cost £200 – AND they stopped residential courses, a week away to interact with other students and do practical real live things in the real world – in science there is no substitute for this (I know this, having done a biology degree in a brick university many years ago). There you find out that some people had been doing OU courses for 20 to 30 years, and why not? So at three grand a pop, those people keeping doing study year after year with no aim are one section that that won’t be paying into the OU coffers any more.

      The loss of funding, the structure changes and austerity for us the common person, means it is likely the OU is doomed. Just the way the uk government wants it. A shame. If they had perhaps moved their operation to Scotland and made a deal with the Scottish government, things may have been different?

      Liked by 1 person

    • johnrobertson834 April 6, 2018 / 1:52 pm

      Yes, big fan of the OU, tutored part-time with them back in the 90s. Some the best students I’d seen.

      Like

    • Contrary April 6, 2018 / 7:03 pm

      I have to say that nearly all the tutors I had over about twenty courses were excellent – one was a bit grumpy, and one was truly rubbish (though, in saying that, he still gave me high scores so can be forgiven 🙂 ) but usually feedback was excellent, and it really was a good experience – and when they started the online course forums there was a lot more good (mostly! ,,, you always get some eh) engagement with other students. Met a variety of fabulous people at the residential schools too – wish I was better at keeping in touch though! Ahh, the good ol’ days.

      Like

  5. Ludo Thierry April 5, 2018 / 7:14 pm

    A bit of good news from the beeb Europe page:

    Carles Puigdemont freed on bail by German court
    A German court has rejected “rebellion” as grounds to extradite Catalonia’s ex-leader Carles Puigdemont and ordered his release on bail.

    Spain has accused the former Catalan president of rebellion, but the court concluded that the closest equivalent to this in German law was high treason.
    But it ruled that in Mr Puigdemont’s case there was no element of violence, so the charge was inadmissible.

    Hopefully Mr. Rajoy’s attempts to manipulate the EAW system will backfire on him mightily.

    Liked by 2 people

    • bigjon999 April 6, 2018 / 6:11 am

      With a bit of luck and some legal common sense the Scottish justice system will reject the extradition bid here.

      Liked by 1 person

  6. bigjon999 April 6, 2018 / 6:19 am

    Off -topic but the Guardian page for Commonwealth medal results shows a crap version of the Scottish flag.

    Liked by 1 person

  7. seanair April 6, 2018 / 6:33 am

    Mr. Robertson, could you please write a letter to the Herald and the Scotsman and show them how wrong they are. If they refuse to print it, we will know that they are not worth their former weight. Perhaps an MSP could raise it at FMQ and let Nicola show what is happening in the Scottish newspaper market.

    Like

    • johnrobertson834 April 6, 2018 / 1:54 pm

      I’ve complained and reported them several times in the past with no success.

      Like

  8. Bill Dale April 6, 2018 / 12:18 pm

    Another great post John. Not just GDP, but the whole of so-called macro economics is deeply flawed (see Prof. Steve Keen’s Debunking Economics for details.) This means that neo-liberal economics is more like a religious cult than a rigorous or even semi-rigorous discipline. It does, however, serve the needs of the establishment in providing a cover for their assault on freedoms, rights and wealth of the general populace.

    Like

  9. Ludo Thierry April 6, 2018 / 5:13 pm

    Seems as if Boris and Treeza and Co. have made a potentially fatal error in their ratchetting up of the ‘Russian nerve-agent attack’. We learn today that Mr. Skripal had various family pets within his home. Inexplicably – given the alleged intense searching of the property for ‘clues’ – these animals were apparently left (abandoned? – undiscovered?) in the closed house since the events occurred. We discover that 2 pet guinea-pigs died of thirst in their cage. A beautiful Persian cat (named Nash van Drake) was found to be so malnourished that a vet decided that he required to be put-down on welfare grounds. The whereabouts and condition of a further pet cat that is apparently part of the household is not yet in the public domain. Just what on earth is going on here???

    The various peoples of these islands have huge patience with their ruling elites. They are slow to rouse to anger. However, one thing that is guaranteed to cause anger – if not fury – among all the varied peoples of the UK is unnecessary – or even wanton – cruelty towards animals in general – and household pets in particular.

    Boris and Mrs. May and her tory govt. have sown the wind – they may yet reap the whirlwind.

    Like

    • Contrary April 6, 2018 / 7:26 pm

      Eh? Their cute furry pets all died because of neglect?! That IS outrageous, and I suspect you are correct that all the populations of the British Isles will be in fury over it. Surely if there was a danger of poison the animals should have been taken away and quarantined, not locked in and starved?! Are the polis down there total weirdos?

      Have you checked out Craig Murray’s assessment of the Skripal farce? I usually take a quick look to see what he’s saying on any international matters.

      There is no sense to the stories we are being fed – will they be blaming the death of household pets on the Russians next I wonder, and I wonder what their ‘evidence’ will be? Perhaps that a Russian gentleman once said he didn’t like furry mammals, so the Kremlin must be to blame. The BBC, on the radio, appear to report whatever the latest development is pointing to uk incompetence and farce (though that changes hour by hour too), but always finish with a repeated report, usually by interviewee, that the government was still quite right to immediately accuse the Russians despite no evidence and the investigation having barely started. Utterly bizarre.

      Like

  10. Ludo Thierry April 6, 2018 / 5:46 pm

    Saw on the beeb Wales site that the Welsh Govt are playing hardball with the Westminster tory govt. regarding the plans for a large new prison facility proposed for the Port Talbot area. I’m suspecting that the stramash over the brexit power grab which has promulgated the close ++working relationship that has evolved between the Welsh and Scottish Govts (within and beyond the framework of the JMC and Council of the Isles) might be a major factor in this latest, and interesting, development.

    The Welsh Govt. are deploying their ability to delay, and potentially fully frustrate, the Westminster govt’s prison plan as a lever to persuade Westminster/Whitehall to discuss the particular Welsh requirements of prison policy (as identified by tthe elected Welsh Govt) although prisons policy isn’t (yet) part of the Wales devolution settlement.

    To me this looks like, potentially, a matter of huge import. The Welsh Govt have – by good chance and clever procedure – found a way to (publicly) demonstrate how joint discussions and frameworks can benefit the combined England/Wales application of policy in this ‘reserved’ area of Westminster responsibility. The Welsh Govt will, I’m sure, not be slow in alerting the voters of Wales that it is, precisely, this sort of joint decision formulating framework that the Welsh and Scottish Govts are promoting in the brexit arrangement discussions within the JMC (on the odd occasions that the Westminster govt permit the meetings to take place).

    Doubtless Dick Leonard and his ‘Scottish’ labour accounting unit will be denouncing Carwyn Jones’ Welsh Govt (Labour led) as being divisive and inculcating a ‘grievance’ culture with Westminster – or maybe not! – see details below:

    Welsh Government ‘will not back new prisons’

    Plans for new prisons in Wales will not get the backing of Welsh ministers unless “meaningful” talks take place with the UK government, public services secretary Alun Davies has said.

    His announcement follows calls for the Welsh Government to refuse to sell land for a planned Port Talbot super-prison.
    The comments mean it is unlikely the plan can proceed until ministers’ concerns are addressed.

    The Ministry of Justice said it remains committed to a prison in the town.

    Mr Davies has written to Secretary of State for Justice David Gauke calling for talks.
    Alun Davies does not refer to the Baglan prison plan directly in his statement to AMs, but his comments have big implications for the plan.

    In effect, it means the site will not be sold to the UK government to allow the scheme to continue until his concerns are dealt with.
    The stance does not derail the prison entirely but it puts a big and potentially difficult hurdle in its way.

    On the face of it the Welsh Government says it is concerned about the impact on prisons – which are not devolved – on public services.

    Like

  11. Ludo Thierry April 6, 2018 / 6:29 pm

    Hi John – I often use posts to criticise the beeb site – can I beg some space to congratulate the beeb Reality Check article on UK drug use patterns? They have managed to be very clear in the piece when identifying figures as relating to the UK, to England and Wales or Scotland. They have actually done some work and located some broadly comparative figures for Scotland (one year out of synch only). The Scottish figures are fairly significantly lower than those for England and Wales – which will, I’m sure, be abhorrent to those ‘scottish’ britnat commentators who routinely spout off about how ‘everything’ is sooooo verrry much worse in Scotland. The beeb no less – SO IT MUST BE TRUE – are reporting a lesser percentage of adults using ‘illegal’ drugs in Scotland as compared to England /Wales – by a pretty considerable margin of 6% versus 8.5%. Can’t help but wonder if the constant scrutiny by John’s blog and others is shifting beeb fact checking standards ever so slightly?:

    Reality Check: Is UK the ‘drugs market of Europe’?

    Like any illegal activity, finding reliable data can be tricky, but piecing together the evidence certainly suggests the UK does have a significant drugs market.
    In 2014, the Office for National Statistics said illegal drugs added £4.4bn to the UK economy.

    In England and Wales, a confidential household survey asks people whether they have used an illegal drug in the last year.
    Respondents fill in the survey themselves – the idea is to reassure people the survey is confidential in order to make the responses more reliable.
    A fictional drug is included in the survey to try to weed out people being untruthful in their responses. (I even appreciate the beeb humour in applying the phrase ‘..weed out..’ in these circs).

    The latest figures show around 8.5% adults aged 16 to 59 in England and Wales took an illegal drug in the year 2016-17. This is much lower than ten years ago.

    In Scotland, the latest figures for 2014-15 found 6% of adults said they had used one or more illegal drug in the last year.

    Like

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