Feeling depressed yet? Tired of the rat-race that your life has become? Working on a dead-end job with no prospects and no future? Constantly chasing meagre amounts of cheese that are barely sufficient for you and your family? Worrying all night and even more during weekends? No rest, no future and no retirement? Don't worry! Be Happy! The statistics so indicate and as you know, statistics never lie! We are better than ever. We are stronger, healthier, and wealthier! What? Not your case? Well… dear reader… you must be a statistical anomaly. Just keep doing what you are doing and eventually statistics will catch-up with you. Who cares if you don't have sufficient food, shelter, clothing and everything else. It will come. Trust us. Statistics don't lie. Just don't you worry and be happy!
OR WOULD YOU PREFER TO KNOW THE TRUTH?
Generalized malaise
If you go out as much as we do (as we live in different countries we don't actually have to travel to "go out") you may have noticed that there is a generalized sense of desperation and "bad-being" throughout the world. Sure, there are a few exceptions such as Norway, Brazil, Chile, China and to a lesser degree India and Russia (depending where) but in general terms, it plainly sucks "out-there". In poetic terms:
The dream is dead and now only nightmares remain.
Being overly optimistic we could say that perhaps 10% of all countries in the world are doing OK in terms of what the population feels. The other 90% is completely depressed and demoralized. So, your chances of being in one of those places where life stinks is about 1:10. If this statistics drops to 1 in 20, it will reach the mystical 5% threshold which in many sciences is considered "negligible" (i.e. to be ignored). In other words, we are very close to a global disease.
The magic numbers
In order to "demonstrate" that this generalized sense of "bad-being" is nonsense, government statisticians typically point to the increasing levels of GDP at the world-wide levels. As such, we obtain glaring graphs like the one below:
Obviously, if the global GDP is increasing this means that the global wealth is increasing and therefore you are wealthier and richer than ever! We really don't get why and what are you complaining about! Sheesh! Some people are really difficult to satisfy.
A more honest assessment
Obviously, the GDP does not really represent what you feel and what is going on with you. Strangely enough, there are some organizations here and there that are more honest and sincere than the PR (Public Relations) machine most governments call Statistics department or divisions. One of such organizations is the Centre for the Study of Living Standards (CSLS). This organization is for all intent and purposes and extension of the Canadian government if we base this assessment of funding alone and so no miracles are to be expected. In 2009 CSLS released a report titled "New Estimates of the Index of Economic Well-Being for Selected OECD Countries, 1980-2007" by Lars Osberg and Andrew Sharp. This report is still available as PDF and can be downloaded from their website. These two researchers gave some though as to what is the meaning of wellbeing in numeric terms. Their process, although still full of subjective ideas, is a definitive step forward from existing interpretations. After a considerable amount of data crunching, they came up with the following charts.
As you can see, in the countries they performed their calculation (selected OECD ones), and in general terms well-being is growing! True, there is some decrease after 2008 due to the world-wide economic debacle created by government, but on longer time scales everything is going up! See, we told you so. Don't you worry and be happy!
So… how is this a more honest assessment if it reaches the same conclusion? Ahhh grasshopper… we are glad you asked.
Peeling away the layers
If we dive into the report and begin to analyze it, the multiple sources of the problem become immediately obvious. The researchers used 4 parameters to measure well-being. They were: Consumption Flow, Wealth Stocks, Equality and Economic Security.
Consumption Flow
This parameter attempts to measure our consumption with the idea that the more we consume the better off we are. The problem is that they included Government Spending in it which is dependent from the unholy trinity: tax, borrow and print. This trinity has a negative overall effect on the economy which decreases (not increases) well-being because it prevents people from increasing their wealth which is produced through savings and capital investment and not through spending.
Wealth Stocks
This parameter attempts to measure how sustainable consumption may be based on the resources people have. They include real estate ownership (which does nothing to sustain economic growth once it is purchased), R&D expenditures (which provide a dubiously potential measure of future sustainability at best), human resources in terms of educational expenditures (which again provide a dubiously potential measure of future sustainability at best) and International Investment which does reflect sustainability.
Equality
This parameter was based on the deeply flawed concept of economic inequality (see Piketty Fences for a lengthy explanation) and its spin-off the "poverty gap".
Economic Security
This parameter, on the other hand, is based on unemployment and related data. This is quite sensible and correct since most people depend of jobs. If jobs are gone so is wealth and with it well-being.
In Summary
So, in summary the three first parameters must be discarded because they are deeply flawed. The fourth, on the other hand, can be relied upon.
And the picture changes
The researchers were very honest because they analyzed every parameter separately and provided separate assessments for each one before blending them. As such, they produced the following graph.
Notice any difference? See how economic security in all countries is either stagnating or dropping like a stone? Furthermore, have you noticed how this trend is continuous since 1980? We suspect that if the researchers would have extended the data further back in time, there would have been a dramatic cut-off point near 1960 which is when most socialistic policies (i.e. uncontrolled government spending) took off.
Now let's stop and think for a second what can we deduce from the available data. Since 1980 the world has gone through several booms and busts yet the trend remains the same: Down! We can conclude two things from this:
- Wealth has been constantly decreasing because if there would have been more wealth, there would have been more jobs and therefore more economic security.
- All the economic manipulations and voodoo performed by governments and Central Banks since 1980's amounted to nothing. Worse. They created all those artificial booms and busts. All those "technical adjustments" and "economic management techniques" created ZERO wealth. As a matter of fact, they destroyed it.
Now do you begin to understand that what you feel, your malaise is real? That your economic problems are indeed very real and that no matter how many twisted statistics governments bombard us with, the economic reality cannot be changed? Yes, you have been lied to. Consistently. Systematically. Now do you understand why 60% of the world population do not trust governments (see In Government We Distrust)? Now do you understand that your life is miserable by design and not by mistake?
Note: please see the Glossary if you are unfamiliar with certain words.
