Here's one about the value of data (for policy making):

 

Cowperthwaite had no need for fancy statistics

Economics is not a science

lawliberty.org

Politicians are always promising higher standards of living, but are there reliable, objective measures to determine whether their policies are achieving their goals? asks Reuven Brenner. You would think so. Aggregate statistics are computed regularly in all countries to this end. Yet rarely are those numbers interrogated to see whether they are really measuring what is claimed. This is important because governments use the numbers to “rationalise bad policy” and they “raise false hopes” for improvements in prosperity.

Institutions around the world made vague calculations of national outputs and incomes for centuries, but it was only in 1932 that the US Senate first required their preparation with a view to informing wartime policy decisions, appointing the eventual Nobel prize-winning economist Simon Kuznets to be in charge of the operation. Yet by the end of the war and in later writings Kuznet became one of the “severest critics” of using his system in peacetime, when decision-making was once again decentralised. 

In 1950, Oskar Morgenstern wrote a critique of publishing aggregate data without also noting that they are subject to massive errors. Alterations in taxes and regulations can dramatically change the meaning of aggregates and price indices, and too much aggregation “mixes the unmixable” to give us models that are “easy to handle” but tell us little. Yet such criticisms have had little effect and to this day aggregate statistics are used in much the same way as astrology to guide decisions. 

History shows that it needn’t be this way. In 1961, John Cowperthwaite became Hong Kong’s financial secretary but refused to compute any but the most rudimentary statistics. His argument was that the statistics only create political pressure to tax more, redistribute more and to (mis)manage the economy. His policies were nevertheless a spectacular success. In 1961, Hong Kong residents earned on average 25% of what their British counterparts earned.  By 1990, they had “leapfrogged the Brits”. They achieved this without recourse to statistics or macroeconomics, but with a simple flat tax and a stable monetary policy pegged to the US dollar. The result was an “economic miracle”. 

Defenders of aggregate statistics and the economic models and policymaking based on them will admit that what they are doing is not an exact science. But the reality is that it is not any kind of science at all. All “economic opinions rooted in aggregates are opinions”, not science, “even when they wear the mask of science”.