Public event report: Global Politics & the Power of Numbers

On 4th September 2014, Prof. Lorenzo Fioramonti (University of Pretoria, South Africa)
delivered a guest lecture, entitled ‘Global Politics & the Power of Numbers’, held by the
Berlin Forum on Global Politics (BFoGP) in collaboration with the Center for Global Politics
(CGP) at the Osteuropa-Institut of the Freie Universität (FU) Berlin.

For Prof. Fioramonti, numbers are far from neutral: behind the glut of indices and
measurements lie political factors. The paradigm that is established by means of numbers is that
of winners and losers, where everything needs to be measured. Despite such an overwhelming
infuence, it is clear that neither does everything need to be measured nor are prices and money
the only way by which we can determine value.

In his lecture, Prof. Fioramonti explained and clarifed to an audience of around forty
people this relationship between politics, power, ethics and numbers. He provided an innovative
and timely exposé of the topic addressing issues ranging from the world’s obsession with gross
domestic product (GDP) to the dubious infuence of credit rating agencies, and from the
marketization of nature to the assessment of development aid. The lecture was based on research
published by Prof. Fioramonti in his most recent book, How Numbers Rule the World – The
Use and Abuse of Statistics in Global Politics.

After the lecture, the questions and comments posed by the audience led to a lively
discussion in which Prof. Fioramonti took the chance to add more examples and to further
explain the relationship he considers to exist between numbers and global politics.
 Report details

Prof. Lorenzo Fioramonti started his lecture by recognizing that people usually shy away
from numbers and their discussion, no matter the fact that these have a direct impact on a
number of policies that govern everyday life. Consider, for example, the consumer price index (CPI),
a statistical estimate that attempts to measure changes in the price level of the market basket of
consumer goods and services of a household. Errors in its calculation can lead to incorrect
alterations in infation and access to credit.

A well-known number or index is gross domestic product (GDP) – which Prof. Fioramonti
refers to, half-jokingly, half in earnest, as gross domestic problem. GDP was invented in 1934 by
Simon Kuznets, Nobel Prize winner in economics (1971), for the United States (US) Congress as
an aggregate measure of production, which is used to calculate the annual growth of an
economy. Kuznets already warned in this frst report, ‘National Income, 1929-32', that GDP
should not be used to measure welfare. Since then, GDP has greatly infuenced government
mechanisms, spreading out from the US to the rest of the world after the Second World War. To
understand to what extent, consider that a Google search for GDP six months ago led to fnd
over 36 million results. Compare that to only 5 million results for human development, 29 million
results for climate change, or 27 million results for well-being. Mainstream media also reinforces the
popularity of GDP as an end-all. However, the facts remain that GDP: is only an average; can
lead to the destruction of economies that are less-formalized (non-market); includes military
expenses; is based on arbitrary prices; encourages defensive consumption; and, in the end,
establishes a moral judgment on what is in and what is out (for example, the value of efforts to
better the community or of work done within the household).

GDP has come to be considered so crucial, argues Fioramonti, that it is even

constitutionalized within the European Union (EU) through the Stability and Growth Pact (SGP),
a fscal monitoring agreement between the EU’s member states, which determines the acceptable
limits of governments’ defcit and debt in terms of GDP. The austerity measures that EU
member states have hotly debated these past years are due, in great measure, to the SGP. And
yet, the academic paper, ‘Growth in a time of debt’, by Carmen M. Reinhart and Kenneth S.
Rogoff (2010), which was so widely cited by those that forwarded austerity measures, was
revealed to be critically fawed by a graduate student, Thomas Herndon. However, not even the
display of the grave consequences that the incorrect usage of some indices and numbers may
have seems to slow down dependence on GDP, since there are discussions in some EU countries
to expand their GDP calculations in order to include prostitution and sales of illegal drugs.

The dependence on GDP is not exclusively European, as the case of the current World
Bank (WB) president, Jim Yong Kim, shows. Kim went on a global listening tour to solicit the
priorities of decision-makers and leaders throughout the world briefy after a text he had written
in 2002, where he critiqued GDP, was offered as a rebuttal of his nomination. It goes without
saying that after Kim returned from his tour, his opinions on the importance of GDP were more
agreeable. However, there is also an increasing rejection of GDP as an end-all to economic
measurement. Prof. Fioramonti also explained that China, which continues to delay receiving the
mantle of the world’s largest economy and reluctantly accepts that of it’s second largest, is
attempting to reduce its dependence on GDP. The Organisation for Economic Co-operation and
Development (OECD) has also critiqued GDP openly.

There are other numbers and indices that have power in our societies. Three credit rating
agencies (CRA) infuence the economies of the world by controlling roughly 95% of the global
ratings industry. Numbers are dominant in cost-beneft analyses (CBA), which have in-built biases
(e.g., that future costs are worth less than present costs) that dramatically misconstrue the
importance of some options when compared to others. Natural capital accounting calculates the
natural resources of a given ecosystem in terms of stock and fows, which leads to the
marketization of nature in the name of sustainability. Carbon emissions trading is a widely
known example, but the US Clean Air Act of 1990 was only the beginning of the particular mix
of green and brown policies and practices. Since then, the marketization of nature has come to
include biodiversity fnance and forest bonds, among others, which attempt to save our natural
resources by collateralizing them.

An over-reliance on numbers, explains Fioramonti, establishes a paradigm in which

everything needs to be measured. Despite such an overwhelming infuence, it is clear that neither
does everything need to be measured nor are prices and money the only way by which we can
determine value. Why attempt to understand the world, he questions, with a “one size fts all”
approach? Furthermore, the contestation of numbers is vital to constructively determine the
direction in which we want our politics to move forward. Were we to concede that which is to be
measured, we would also concede that which our politics ought to value. The question is not,
hence, how to leave numbers behind, but rather, how to open the discussion on which numbers
we want to grant power to.

The guest lecture was followed by a feedback session where the warm and lively audience
posed their own questions and shared comments, to which Prof. Fioramonti replied with more in-
depth answers and comments of his own.

We like to thank Prof. Lorenzo Fioramonti and other interested parties who helped make
our event such a success. Please do not hesitate to write to our email address,
contact@bfogp.org, with any inquiries about our organization, projects and activities or if you
are interested in engaging with us in a collaborative effort. To remain informed about our
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