The Numbers Racket

The Tyranny of Numbers: Mismeasurement and Misrule
by Nicholas Eberstadt
AEI Press. 305 pp. $24.95

In the late 1980’s, visitors to the Soviet Union noticed that milk was no longer reliably available in ordinary grocery stores. Meanwhile, back in Langley, Virginia, the Central Intelligence Agency was busy churning out elaborate quantitative assessments that showed Soviet economic growth to be proceeding at an impressive pace. According to the CIA, milk production was a particularly vibrant sector of the Soviet economy, the country’s per-capita output being some 40-percent higher than that of the United States.

To monitor and forecast Soviet economic trends, the CIA employed a small army of researchers and equipped them with an array of sophisticated computer programs. Altogether these analyses comprised, in Nicholas Eberstadt’s words, “probably the largest research project ever undertaken in the social sciences.” Yet according to Eberstadt, a demographer at the American Enterprise Institute and at Harvard’s Center for Population and Development Studies, the Agency’s study was skewed by a variety of factors, ranging from an overreliance on Soviet-supplied data to the CIA’s own organizational insularity; as a consequence, American policy-makers had a grossly distorted view of the Soviet economy on the very eve of the system’s demise.

For the CIA to have preferred statistical data to the ordinary evidence of the senses was, in fairness, only natural: as Eberstadt writes in The Tyranny of Numbers, “the modern state is an edifice built on numbers.” Modern governments, he observes, “unlike the diverse governments of earlier times, require statistical information simply . . . to perform the tasks now conventionally assigned to and expected of them.”

Intrinsically, perhaps, there is nothing wrong with this, and Eberstadt’s own analysis demonstrates that a quantitative approach can yield insight rather than confusion. When dealing with numbers, however, trouble is almost always close at hand. Statistics can easily convey a false impression of certainty and precision; this, in turn, can encourage governments to undertake ambitious but unwise interventions in the lives of their citizens. In The Tyranny of Numbers, a collection of essays most of which have been published previously, Eberstadt ferrets out the misleading numbers that have fed public misconceptions, distorted intellectual discourse, and degraded the quality of government policy-making.

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One such number, tirelessly rehearsed by liberal groups advocating increased government spending, is the official U.S. poverty rate. This indicator—which rose sharply during the late 70’s and early 80’s—has been criticized for ignoring regional cost-of-living variations and for setting arbitrary poverty thresholds for different types and sizes of households. For his part, Eberstadt adduces a still more fundamental shortcoming: by focusing on income rather than consumption, the poverty rate measures the wrong thing.

Official poverty-rate calculations, Eberstadt shows, neglect to factor in such non-cash government benefits as food stamps and Medicaid, and therefore understate the purchasing power of low-income households. By contrast, a consumption-based index, one which measured household expenditure rather than income, would have revealed not an increase but a steady decline in poverty during the period under study.

Interestingly, the federal government’s use of an income-based measure arose from little more than bureaucratic expediency. When the rate was devised in the early 1960’s, consumption figures had been collected only through occasional surveys, while income statistics had been compiled annually, and a staff specializing in such data was already in place. The consequence of this chance circumstance has been an official poverty rate which has greatly exaggerated the degree of material deprivation in America, and which has also diverted attention away from the growing problem of dependency on government largesse.

Another figure given close attention in The Tyranny of Numbers is our infant-mortality rate. High by international standards, it is often invoked as evidence of the need for expanding the government’s role in health care. Eberstadt’s analysis, however, suggests that the crucial variable is not the accessibility of medical services but rather personal behavior. In fact, the American medical system outperforms its foreign counterparts in treating low-birthweight babies, but is unable to keep pregnant women from high-risk activities. There is, Eberstadt contends, a correlation between illegitimacy and infant mortality, and it has been deliberately neglected by public-health officials reluctant to compile the relevant data; such studies, after all, would invite accusations of “blaming the victim.”

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Training his sights farther afield, Eberstadt adroitly dissects the myth, propagated by the United Nations Children’s Fund (UNICEF), that the third-world debt crisis imperils the well-being and even the lives of millions of children around the globe. According to UNICEF, interest payments on debt constitute a massive transfer of resources from poor to rich nations, severely retarding efforts by the former to improve health and education.

This pious accusation is starkly contradicted, Eberstadt demonstrates, by the fact that the flow of funds to the “underdeveloped” world has remained strongly positive, with much new lending taking place on highly concessional terms. Indeed, the general situation of the third world, painted in such dark colors by the international bureaucracies, turns out, on close inspection, to be better than commonly supposed. Fears of a global food shortage, for example, are often based on sloppy measurements which fail to take into account the increasing substitution of high-quality crops for low. School enrollment throughout the third world has been rising for decades and shows no sign of reversal. Finally, Eberstadt can find no link between malnutrition estimates and actual mortality rates.

The Tyranny of Numbers closes with a warning that, if one projects forward from present population trends, an ever-larger share of humanity will be living under non-democratic governments in the early 21st century. This argument, dependent as it is on the premise that current political regimes will remain intact, is one of the most speculative and least compelling of Eberstadt’s own forays into statistical theorizing. But his prediction of an international order in which democracy retreats before demography provides a thought-provoking ending to an eclectic, iconoclastic, and welcome book.