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Satellite Data Strongly Suggests That China, Russia and Other Authoritarian Countries Are Fudging Their GDP Reports (washingtonpost.com)
Christopher Ingraham, writing for The Washington Post: China, Russia and other authoritarian countries inflate their official GDP figures by anywhere from 15 to 30 percent in a given year, according to a new analysis of a quarter-century of satellite data. The working paper, by Luis R. Martinez of the University of Chicago, also found that authoritarian regimes are especially likely to artificially boost their gross domestic product numbers in the years before elections, and that the differences in GDP reporting between authoritarian and non-authoritarian countries can't be explained by structural factors, such as urbanization, composition of the economy or access to electricity. Martinez's findings are derived from a novel data source: satellite imagery that tracks changes in the level of nighttime lighting within and between countries over time.
If I invented a cheap machine that did all your housework and fixed your car for free, GDP would fall. Despite the fact that everybody's lives would be permanently improved.
Say a person saves his money and lends it to people in another country. He's creating wealth for himself. The other country is getting further into debt. Maybe the money is spent frivolously or invested in a soon-to-collapse bubble. Or it's spent on productive investments. Either way, the effect on GDP is the same. And it goes to the borrowing country, not the one accumulating assets (unless the borrower makes successful investments).
As individuals, trying to maximize our own GDP would mean spending every dollar we get and avoiding investments that could reduce how much we need to spend to live our lives. That's the opposite of our best interests.
Real GDP is the net of domestic output minus price changes, ie inflation. Look into how our inflation measurements have been contorted over the years and you'll see how it's "grossly" under-reported, thus GDP is overstated.
If you really believe China's GDP numbers have been that hilarious 7% growth for the past few years, I have a presidency to sell you.
Sincerely, /sar
Russia
You say that like the US ain't one too.
The US has as well ever since it made financial entity transactions part of GDP, something no other nation does.
Any inconvenient data is probably fudged.
pollution data
military spending
number of people in prison
healthcare quality
surveillance of the general population
election integrity
I read the introduction of the working paper. As someone with PhD, I have to call this research to be pure bullshit. If modern economists are as what this researcher, then I will call modern economics to be full of bullshit as well.
From the working paper, here is the main methodology..
" I study whether the mapping of night lights to GDP differs systematically by regime type. That is to say, I examine whether the same amount of growth in nighttime light translates into more GDP growth in autocracies than in democracies"
This methodology does not make sense for obvious reasons and non-obvious reasons. GDP is NOT night time light volume. A city with street lights but no people do not produce GDP. On the other hand, a factory that only works in the daytime, like in industrialized countries such as western europe and east China, do not have light volume at night. I cannot believe this bullshit research gets publicized by Bezos' fake news Washington Post. Maybe these news reporters deserve to starve and their newspapers shut down due to their inability to notice fake research?
Unbelievable, countries with regimes that thrive on freedom of information would resort to such propaganda tactics. Satellite imagery was objectively analyzed for detecting WMD in iRaq after all.
North Korea wishes to point out its superiority in cloaking devices.
They only appear to be in the dark.
nothing was getting better. That's why we turned to a populist (Trump). Sadly so far I don't think it's turned out the way we'd hoped. Our populist put the same Goldman Sach's folks in charge that have run the show since Reagan and now he support's TPP & increases to guest worker programs. His tax cuts expire on us in 10 years but not on the 1%ers. Oh, and the $1 trillion in debt from those tax cuts is already being used as ammo to shoot down Medicare & Social Security, so we're fucked when we got old.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Heinlein was calling them on it (although he probably overstated his case) fifty years ago in "Pravda means Truth" (which you can find in Expanded Universe or the earlier The Worlds of Robert A. Heinlein)
China, Russia and other authoritarian countries inflate their official GDP figures by anywhere from 15 to 30 percent in a given year, according to a new analysis of a quarter-century of satellite data.
This is nothing new. When I was getting my graduate degrees (one of which is in business) 15 years ago it was widely understood that China fudged their official numbers as a matter of routine. No real reason to believe this has changed. Economists who study this stuff are well aware that the numbers out of certain countries are unreliable and they make efforts to correct for the problem to the best of their ability.
data suggest
Nullius in verba
What a major fail. Data centres produce no visible light in sattelite imagery. Neither do banks, mines, crops (agriculture in general), I suspect larg portions of saudi oil-filled dessert would also be unlit and VERY few factories working 3 shifts have glass roofs. Large portions of german autobahn is unlit. Large portions of belgian is.
Some countries chose to fight light pollution. California was amongst the first to start looking into it. Based on this "research" California would also by lying about their GDP.
Someone needs to review this PhD thesis.
Can someone please downgrade this whole article back to the firehose somehow?
In the 1960s, Robert Heinlein went to the Soviet Union as part of an opening salvo of goodwill between the countries. He looked at the shipping and roads in and out of Moscow and realized there was no way it could support whatever X millions of people they were claiming to he on rough parity with New York.
It's been estimated it required about 50% of Soviet GDP to even maintain a facade of parity with the US military.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
Authoritarian regimes lie more than democracies.
This finding explains why the USA has been having 12% annual growth in GDP ever since vivid LED street lamps started to come into widespread use.
GDP is NOT night time light volume.
Of course not. But it is a rough proxy for GDP. Why would it systematically differ between authoritarian and non-authoritarian countries? An obvious answer is data fudging.
A city with street lights but no people do not produce GDP. On the other hand, a factory that only works in the daytime
Why would these differ between authoritarian and non-authoritarian countries?
China is known for "ghost cities", but they were never really that common, many of them are now occupied, and they would lead to under reporting of GDP, not the over reporting actually observed.
If modern economists are as what this researcher, then I will call modern economics to be full of bullshit as well.
You are quite right: modern economics is little more than a huge pile of bullshit. That's mainly because its assertions cannot be tested, so no one knows whether what economists say is true.
That being so,street-smart economists say what the rich and powerful like to hear - and get lucrative professorships, book contracts, government jobs, sponsorship, etc.
If you want to learn something about real economics, read Michael Hudson or Steve Keen. There's still a lot of truth in Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Robert Malthus, John Stuart Mill and the other original "classical" economists. (Although you have to allow for the huge differences between their world and ours. Smith, for example, pointed out how entrepreneurs could make vast profits by ignoring their own country's interests, but concluded that no one could be so vile as to do so. Sigh).
There's also a lot of truth and valuable ideas in Karl Marx, if you have the mental energy and intestinal fortitude to ignore the unjustified abuse that has been heaped on him - precisely because the rich and powerful would much prefer you not to learn about his thoughts.
I am sure that there are many other solipsists out there.
You know that whole "Americans are 14th in reading" thing and all those other allegedly comparable international test score stats? Yeah, because arrogant countries all about self image, especially in Asia, never lie and cheat to inflate those numbers. That tooootally doesn't have any precedent. Other countries lie about everything to make themselves look better. Everyone knows this.
It's obviously not a perfect measure of GDP, but actually people have done the research and shown a strong link between the two. If, as you claim, you have a PhD (and it's in a relevant field: sorry, an English PhD gives you zero qualifications here), you're not only free, but should have the capability to put out your own research disproving this work. Of course, given the quality of logic in your post, I suspect you don't have that capability. For example:
A city with street lights but no people do not produce GDP.
The entire point of both a city and street lights is to have people. It's true that China has been building "ghost cities, but all that does is suggest that in fact the light-based estimate overestimates economic activity, which just makes the point in TFA that much stronger.
On the other hand, a factory that only works in the daytime, like in industrialized countries such as western europe and east China, do not have light volume at night.
Have you seen a factory at night before? Or even seen a factory in a movie at night? Most of them absolutely put out light at night (they're usually glittering beacons of light, in fact). In fact if they have smokestacks or chimneys they're required to or they're a huge safety risk to aircraft. Also lots (most?) factories in most climates run in mornings and evenings before/after sunrise, and it's not uncommon for them to run overnight: downtime is a huge waste of money when you have an expensive factory. In fact, factories not running overnight would be an indicator of economic weakness, such as happened to the US auto industry in the 2000s.
"None can love freedom heartily, but good men; the rest love not freedom, but license." --John Milton
My muscles are bigger than yours, therefore I am superior to you!
I am taller than you, therefore I am superior to you!
I can run faster, therefore I am superior to you!
My penis is larger and harder, therefore I am superior to you!
I am superior to you, therefore more females prefer to mate with me more frequently than with you!
Our GDP is larger, therefore we are superior to you!
Our species is still painfully young, not much more evolved than the rest of the animals. We just have better toys.
Co-operation is more important than competition
We might just survive long enough to reach that point.
Finance 501 taught me that GDP is the money supply times the velocity of money
Your education is incomplete. There are multiple ways to calculate GDP and they use several of them for official numbers to ensure some amount of consistency. In principle each method should give (roughly) equal results though in practice it isn't always so easy. The Economist has a decent article on how it generally is calculated.
You are quite right: modern economics is little more than a huge pile of bullshit.
I'm sure you really believe that too even though that statement makes it clear you haven't actually studied economics and are substituting ideology for evidence.
That's mainly because its assertions cannot be tested, so no one knows whether what economists say is true.
That is not even remotely true for a wide array of economic research. They have testable models which are used all the time. Heck there is money to be made by making testable models - do you really think all the investment banks would spend so much money on quantitative analysis if it didn't provide actual results?
There's also a lot of truth and valuable ideas in Karl Marx,
Yeah you just shot yourself in the foot there if you think Marx is any sort of a refutation of modern economic research.
* Risk of theft and cost of security guards leads factory manager to make different choices about how late the lights are on.
If you have stuff worth stealing, you mean?
* The cost of electricity to the person making the decision to keep the lights on.
So whether they can afford to keep the lights on and make their place safer?
It's not trivial, but it's apparently highly studied, and some of your arguments don't make sense.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
GDP is NOT night time light volume.
Of course not. But it is a rough proxy for GDP. Why would it systematically differ between authoritarian and non-authoritarian countries? An obvious answer is data fudging.
Data fudging, maybe. Cultural differences, developmental differences, and about 100 other factors are probably better proxies. The light pollution methodology IS bullshit. Especially when we are talking about small changes in GDP like 3-7% growth.
Just as one example, in the US a substantial source of light pollution is car sales lots, which are lit up like daytime 365 nights a year. Countries in Europe don't generally have as many lots- they often order their cars from the factory. In Japan, theft is rare and land is expensive so the lots are much smaller and aren't well lit at night. Similarly, the US is heavilly car-dependent and we have huge parking lots of department stores, malls, and grocery stores, many of which are lit up at night. Most other countries have more concentrated population centers and less suburban sprawl.
Additionally, many places are actively trying to reduce light pollution, and in some countries it is normal to shutter most businesses in the evening. Plus, in many developing countries the GDP growth may be concentrated in the top of the economic ladder, which is not very noticable from light pollution.
Unless the study corrected for factors like this (and they didn't) the correlation between GDP and light pollution is completely baloney.
Even those who arrange and design shrubberies are under considerable economic stress at this period in history.
Have you seen a factory at night before? Or even seen a factory in a movie at night? Most of them absolutely put out light at night (they're usually glittering beacons of light, in fact). In fact if they have smokestacks or chimneys they're required to or they're a huge safety risk to aircraft. Also lots (most?) factories in most climates run in mornings and evenings before/after sunrise, and it's not uncommon for them to run overnight: downtime is a huge waste of money when you have an expensive factory. In fact, factories not running overnight would be an indicator of economic weakness, such as happened to the US auto industry in the 2000s.
Not necessarily. Our manufacturing facility has about a dozen CNC machines. We load the machines up in the afternoon and let them run all night until they either complete the part or run into some kind of fault. Everybody leaves by 4:30PM. Not all manufacturing businesses are like this, but there are plenty of them, and likely more in 1st world countries than in 3rd world ones.
Even those who arrange and design shrubberies are under considerable economic stress at this period in history.
All governments lie, just about different things.
"I believe in Karma. That means I can do bad things to people all day long and I assume they deserve it." : Dogbert
Satellite data also 'strongly suggests' that there is a climate change going on, but nobody cares.
But if somebody exaggerates his own wealth, it's a problem?
With THIS Administration?
But do you leave the lights on? Most industrial facilities I have been in are lit up when in operation regardless of the work schedule, so if someone has to show up in the middle of the night they can instantly assess what is going on.
That seems a strange value to focus on. I would think authoritarianism would be measured using domestic metrics rather than foreign policy ones. I mean how many foreign bases does N Korea have?
That being so,street-smart economists say what the rich and powerful like to hear - and get lucrative professorships, book contracts, government jobs, sponsorship, etc.
I'm not sure all of economics is untestable, but it's occasionally hard not to see some aspects of it as a variation on confirmation bias, justifying the outcomes of the economic elite through a quasi-scientific basis.
Surely the economists who create theories and rationales which justify capitalists' economic behaviors wind up with more and better employment opportunities than those who would criticize them. It also doesn't help that economists like to reflexively claim a non-ideological/non-judgemental position on a lot of issues. If something like high-frequency trading, globalism, etc, leads to greater profits it's seen as a good economic outcome even when it causes huge externalities.
Shipping jobs to China has always found legions of economists who support the practice for various reasons and who hand-wave side effects like large-scale regional unemployment as something to be cured with "job training in new industries".
I think there is a lot of economics that can be reasonably modeled and explained through mathematics, but it's not a completely scientific endeavor and seems willing to engage in willing ignorance of some/many outcomes if something like profit/wealth increases.
Privet, drug, kak dela?
His ignorance covered the whole earth like a blanket, and there was hardly a hole in it anywhere. - Mark Twain
I cannot believe this bullshit research gets publicized by Bezos' fake news Washington Post.
Why would that surprise you? WaPo is just shy of publishing Bat Boy stories. Random word generators are more likely to be true.
"Duh" seems the most appropriate response.
Ferret
Sic gorgiamus allos subjectatos nunc
North Korea is a special case.
As I understand it, since the Korean "police action" (a.k.a. "Korean War"), North Korea has had continuous WW II-style, nighttime blackouts (for fear of bombing and/or to keep the population propagandized about external threats.)
So, though they may actually have a low GDP, it may not be a horribly low as the "night lighing => GDP" measure would make it seem.
(I recall, a few years back, the publication of satellite imagery of the Korea-halves, with North Korea almost as dark as an uninhabited wasteland. The caption/story also suggested that this was a sign of how "benighted" the North Korean economy had become. So that was in the back of my mind when, recently, the newsies mentioned that the North was doing blackouts. "AHA!" sez I. "That light thing is probably a bogus overstatement." So here it comes around again.)
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
He's an authoritarian personality type, which is why he loves dictators like Putin and Kim Jong Un.
Why is Snark Required?
I agree their reasoning was flawed, but there is still the concern that in authoritarian countries the government might be scheduling the lighting more of the time, and simply not micro-managing it to the same level that would be happening when each business chooses when to turn lights on and off. It may be that in authoritarian countries, there are lots of people who wished they were allowed to use more lighting, especially when they had lots of work and were working late and would have preferred to install flood lights in the yard instead of having to use portable lights.
That said, I find a lot more value in this than most of the commentors, but it is clearly an early result that is made almost entirely of salt.
Smith assumed that the government and their peers would smack them down, and that nobody would be so vile as to act against their own interests in such a stupid-greedy way.
It was like pointing out that people don't stick their bare hand into the beehive to get a taste of honey.
It turns out, not all governments are capable of self-interest. This was a surprise result. But it changes little of his analysis; it just changes the wording of some things.
Marx starts from quoting Smith's presentation of the basic problem in trade, (self-interest and collusion) but then totally ignores all of Smith's answers and just runs off the rails asserting that the answers have to be as he says, without even considering what if Smith's answer to his setup was legit? People pointing at Marx and claiming it has a bunch of value usually either didn't read it, or didn't bother reading Adam Smith first. You have to read Smith first, because Marx points at Smith's words and mangles the claimed implications.
Have you seen a factory at night before? Or even seen a factory in a movie at night?
You obviously don't know about Chinese factories. In the US, if you look at an office building and a factory side-by-side, they look totally different.
In China, an office building and a factory are not different buildings. The corporate headquarters is not in a fancy building. It is in the same building as the factory. And it looks like a rundown office building in a poor city in the US! 6 floors, all the same height, with exactly the same rows of windows on every floor. You can't really even tell from the outside which floors are offices, and which floors are factory production.
Just go on banggood and start clicking on shit, you can almost always see a picture of the factory that makes a widget. If they work all night, or they're closed for the day, it will produce about the same amount of light when viewed from above. Very little of the light pollution is coming out of windows; most of it is coming from outdoor lights!
In the US, having the exterior of the building lit up at night helps make the superintendent feel important. In China, the factory owner is also the superintendent, and so doesn't gain value from the building looking important; he gains a feeling of value by making money, same as the owner here. Also, in China having exterior lights pointed at the building would look arrogant and wasteful, and their society has local officials who could punish you for looking arrogant and wasteful. In the US there is nobody to do that; if people complained, it would just be some hippies and the business would laugh at them and add more lights. In China they would perceive looking arrogant as a dangerous and anti-social thing to do, with unclear but real consequences.
China is 2nd world, so comparing 1st or 3rd is perhaps mistaken.
The level of democracy for countries is obtained from Freedom House, It has nice maps where Tibet is distinct from China. I know some people advocate for that, but it is the first time I see it on a map.
I wonder what US people would think is some organization featured a map with Indian reserves as distinct countries.
Why would you expect unfree elections to need less lies and manipulation than free elections?! That... seems to be missing important details. Like the "free" part.
Most of the time they don't need a lot of lies, instead they just control what the news is allowed to talk about. They don't need to make up fake shit, they just need to filter out the stuff they don't want talked about. But then when an election comes, they want to make sure that the people vote for the correct people; and they sure as hell don't want to have to stuff the ballot boxes, because somebody might make a video and leak it or something! It is much much better to manipulate the debate around the election so that people know which vote is virtuous! And then you can just track who people voted for, and people are going to suspect you're doing that, so they'll be eager to listen carefully to which candidate the official news considers to have the most virtue!
It isn't enough to have a single political party, because you'll still have different factions within the party. Unfree elections require also control of what people talk about during the election, because if you control people's words you control their thoughts also.
Sincerely, /sar
Russia
In Soviet Russia, sarcasm flags you.
Then we compared the prices of a market basket of goods that we were able to find past prices for. I am just going to say that the results were "discomforting."
For those incapable of reading between the lines, the inflation rate we found was very different from the official inflation rate.
First wrong assumption: that China is calculating inflation using the CPI method.
Second wrong assumption: that inflation rate is similar over various product groups.
Catalin Braescu
Ofaly.com
All those bases are there with permission and contribute to local economy AND protect their asses. I don't think you found a good metric.
I don't think you understand how the "water is wet" thing is used. It's certainly NOT like saying Jews are Nazis. You've got to be the dumbest person on the Internet today.
This doesn't compute.
Laundered funds? How the fuck do communist government workers have tens of millions?