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The Wiki Man

The uncountable problems with innumerate Brits

30 March 2019

9:00 AM

30 March 2019

9:00 AM

A levels, from the perspective of a ‘choice architect’, are a disaster. While pupils are free to pick and mix freely among the humanities, science is implicitly presented as an all-or-nothing package deal. Any aspiring scientist must study at least three of the big four: mathematics, physics, chemistry and biology. People who want to keep their options open, or who are reluctant to drop, say, history, are forced at around the age of 15 to make a highly asymmetric choice: either bet the farm on science or abandon it entirely. Faced with this skewed option, too many do the latter.

This means many otherwise intelligent people leave university with a rather poor understanding of science — not only of its strengths but its limitations. Having been fed only a diet of artificially neat geometry problems with a single right answer, someone whose mathematical education ended at 15 might easily conclude that anything expressed in numerical form is a hard fact — leaving no room for nuance or interpretation.

The result is not only that too many people are innumerate. It is also that the innumerate are too easily bamboozled by the semi-numerate.

Take a statistical finding now almost universally believed to be true. This is the notion that the poorest 10 per cent in the US have gained very little in wealth over the last 30 years, while the richest 1 per cent are minted. This has become the basis of almost every policy discussion from Davos to the Dog and Duck. It paints a grim picture of failed capitalism.

Except this picture is highly misleading. Here’s the economist Russ Roberts: ‘the biggest problem with the pessimistic studies is that they rarely follow the same people to see how they do over time. Instead, they rely on a snapshot at two points in time. So for example, researchers look at the median income of the middle quintile in 1975 and compare that to the median income of the median quintile in 2014. When they find little or no change, they conclude that the average American is making no progress. But the people in the snapshots are not the same people.’

Life is not lived in aggregate snapshots, it is lived by individuals over time. The problem is that the longitudinal panel data required to understand ‘life as it is experienced’ is both harder to collect and slower to reveal its truths. But it tells a very different story.

One panel survey from the US revealed the richest quintile in 1980 ended up poorer, on average, in 2014. The top 1 per cent in 1980 were also poorer on average 34 years later in 2014. Over the same period the greatest wealth gains went to those who began in the poorest quintile. Surprisingly, many from this group were to be found among the richest 20 per cent later in life. That’s a very different story to the one we usually hear.

So why does this narrative about 50 per cent of people being stuck in a lifetime of static wages gain so much currency in the media? Partly because the population is too easily impressed by shallow statistics. And also, perhaps, because the experience of income stagnation may well be valid for one influential group of people — journalists. (Much of Britain’s economic pessimism might be cured if we simply showered print journalists with cash.)

You may think I’m defending capitalism here. Nothing to see here. Move on. Not necessarily. You could still use this information to tackle poverty, and to form redistributive policies to promote mobility (taxing income less heavily for people who are not yet wealthy, perhaps). But the policies you’d adopt would be very different — and, I suspect, much more effective.

Rory Sutherland is vice-chairman of Ogilvy UK.

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