Policy debates should be accompanied by a numeracy test
Bandying around of taxation figures shows woeful lack of basic arithmetic
Numeracy is a skill that employers say is in short supply. Our behaviour often reveals a woeful lack of understanding of basic arithmetic. Photograph: Getty Images.
Numeracy is a skill that employers say is in short supply. Our behaviour often reveals a woeful lack of understanding of basic arithmetic. I pride myself on a solid grounding in probability and statistics yet I enjoy the odd visit to a casino and have even been known to buy a lottery ticket. These are exercises in utter futility. I justify this lunacy by claiming that I am merely paying to have a bit of fun. But, like a lot of other people, my awareness of probability is swamped by a weird belief that this time I am going to beat the odds.
If we can successfully kid ourselves about basic probability, our ability to ignore simple laws of arithmetic is seemingly infinite. The old cliche about lies and statistics is in operation in daily life. We throw around numbers with gay abandon, aiming to intimidate our opponents, exploiting their lack of numerical skill. Our own inability to add up makes no difference: cite a few numbers with strident certainty and we often spoof our way to winning the argument.
Outside of the ESRI, I wager that the number of people who understand the the difference between GDP and GNP could be counted on the fingers of one hand. When we bandy around our opinions about where our economy currently stands, let alone where it might be going, are we aware of the possibility that GDP/GNP is often badly measured, perhaps dangerously so during the bubble years? All those bank profits that proved illusory, all those ghost estates: they are there in the past growth numbers. Were they real?
Policy debates should be accompanied by a numeracy test. If the person proposing a policy change fails in a basic arithmetic step, ignore everything they say. If they display a fundamental misunderstanding of the numbers they are quoting, ignore the proposal. If the suggestion makes no numerical difference, regard it as an act of retribution, rather than well designed policy.
So, let’s just ask them what they mean. For example, we read recently that Social Justice Ireland (SJI) wants, amongst other things, a cap on total taxation of 45 per cent. I think that means if high earners pay 45 per cent of their income over to the State, Dr Seán Healy will be happy. I make the uncontroversial assumption that he also thinks that this would mean a serious tax rise for all high earners. If so, he is wrong and the recommendations fail at least one test of basic numeracy as well as a lack of understanding of the difference between marginal and average taxation.