Lies, damned lies and statistics

From War on Want´s latest jeremiad against free trade.

From the Executive Summary

Moreover, much economic growth has been ‘jobless growth’. Between 1997 and 2007, while world output increased by 4.2% per year, world employment increased by only 1.6% per year, despite high unemployment levels.4 So while the global economy may have grown overall, the gains from that growth have been highly concentrated. The number of people unemployed and the number in unstable, insecure jobs has actually increased – from 141 million to 190 million (1993 to 2007) and from 1,338 million to 1,485 million (1997 to 2007) respectively.

Hmm, check the notes. 

The rate of world unemployment increased from 5.6% in 1993 to 6.0% in 2008, while the rate of vulnerable employment decreased from 53.6% in 1997 to 50.6% in 2007; Global Employment Trends: January 2009, ILO, Geneva, 2009

Oh, you mean that things are actuallygetting better as a proportion? Vulnerable employment is falling by hte only measure that matters, the percentage of the total rising population?

I think we know what we´re in for in this report then, don´t we? Lot´s of handwaving showing that trade, that one thing which we know creates wealth, is really a very bad thing indeed.

This report does not dwell on the successful development experience of the ‘Asian tigers’, given that they deliberately eschewed orthodox neoliberal liberalisation strategies. Japan, the Republic of Korea, Taiwan, China, India and Vietnam all used ‘infant industry’ protection policies, following the historical example of almost all industrialised countries from 18th century Britain onwards. The Japanese and Korean auto and Korean steel industries emerged following import protection; China’s economic take-off occurred behind average tariffs of 30%; while Vietnam used high tariffs, import quotas, import monopolies and state trading. East Asian trade success has been based on infant industry protection and export promotion, including export subsidies, rather than the liberalisation of import regimes.

I think you´ll find that there´s a very large number of economists who would disagree with this position. William Easterly for example.

The blog yesterday provoked a lot of healthy debate about my claim that industrialization is mainly market-driven rather than state-driven, using Korea, China, and India as examples of industrialization out of poverty. I know I am going against the conventional wisdom of the great Asian “developmental state,” authoritarian and heavily involved in planning industrialization. So let me explain why.

But basically, War on Want is saying that we´re going to tell you why parts of the world haven´t got rich by deliberately ignoring those parts that have.

Way to go guys.

Way to go guys.

4 comments on “Lies, damned lies and statistics

  1. “protection policies, following the historical example of almost all industrialised countries from 18th century Britain onwards. ”

    Given the industrial revolution started in Britain, what good would protectionist policies have done the UK. What were they being protected from?

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