There was some shock in Britain this week at the discovery that the UK had been knocked off its position as sixth largest economy in the world to be overtaken – oh, indignity – by modest little Brazil. Modest and little because it has a population of only 190 million compared to our mighty 62 million, making Brazil barely three times bigger.
Well, OK, just over three times bigger.
I’m not quite sure what losing sixth slot means. We don’t make the cut? We don’t get to play in the final? That can’t be right. If you listen to the doom and gloom merchants, the final is already under way, and not the final match but the final act, and we’re all in it.
What I don’t understand is why it was such a big deal that most of the papers carried the story, as did the BBC. Surely if it's interesting at all, it’s a matter for congratulation, isn’t it? For far too long Brazil was struggling with poverty, crime and vile military regimes. They’ve apparently successfully put the military back into its box. Crime seems pretty much as endemic as ever. If they’ve started to make some inroads on poverty, well that has to be good news on two fronts out of three, and not something we should be getting upset about.
If anything, a bit more of the same would be good. Leaving to one side the issue of how much growth a resource-constrained world can stand, a bit more GDP per head would be good: in Brazil, it’s still about a third of Britain’s. So great that they’re doing better than they were, but a bit more of the same might be no bad thing.
As it happens, the people who brought us the news about Brazil’s move into sixth place do reckon they will keep doing better. Here’s the league table they produced:
Now that table is just brilliant, in so many ways. Look at Germany dropping like a stone, leaving it hovering only just ahead of the UK; France even falls behind us.
And look at Russia and India just powering up the rankings. Heady stuff.
But that’s not what I mean about the table being brilliant. The brilliant bit is the stuff around it. Let’s start with the word ‘forecast’, on the column for 2020. Did they imagine that without it we would believe that they’d built a time machine, travelled to some time after 2020 to take a look at the state of the world, and then had the goodness to travel back and tell us what they had found out, not as a forecast but as a matter of historical record?
Even more important is the source of the information. The ‘CEBR’ is the Centre for Economic and Business Research. That casts the notion of ‘forecast’ in a completely new light.
A Centre for Research of any kind just demands your respect, doesn’t it?
If I pop down to the pub with four or five mates and we talk about the dire state of the world, that’s just whinging over a drink. But if we raise some money and take an office in a prestigious location and stick a brass plaque on the door with ‘Centre for Research’ on it, we become a reputable authority deserving to be taken seriously. Even if round the meeting table it’s the same five guys, with the same beer and the same brand of crisps.
Things are pretty much the same in those great centres of contemporary power, such as rating agencies. As I’ve said before, they’re seen as forces of nature expressing the will of God, or perhaps the will of the Market, insofar as they make any distinction between God and the Market, but in fact they’re just twelve guys sat around a table condemning Greece or Italy or anyone else that attracts their ire, to several more years misery.
Of course, you can't really compare these people with my five mates. These are experts in economics or business. Which makes them special. And I really mean special: economics and business experts are the only people who prevent weather forecasters being at the bottom of the mockery pile. Which presumably making them fundamental to the forecasting profession. If only in the sense that the fundament is the bit we all sit on.
Here’s a little illustration.This is the Guardian on 27 December talking about the Italian plan to sell more bonds in an auction over the following two days: ‘In an indication that traders fear the auction could prove expensive for Italy, the indebted country saw its 10-year cost of borrowing rise by about 11 basis points to 7.13%, before settling back below the psychologically important 7%.’
Well, OK, just over three times bigger.
I’m not quite sure what losing sixth slot means. We don’t make the cut? We don’t get to play in the final? That can’t be right. If you listen to the doom and gloom merchants, the final is already under way, and not the final match but the final act, and we’re all in it.
What I don’t understand is why it was such a big deal that most of the papers carried the story, as did the BBC. Surely if it's interesting at all, it’s a matter for congratulation, isn’t it? For far too long Brazil was struggling with poverty, crime and vile military regimes. They’ve apparently successfully put the military back into its box. Crime seems pretty much as endemic as ever. If they’ve started to make some inroads on poverty, well that has to be good news on two fronts out of three, and not something we should be getting upset about.
If anything, a bit more of the same would be good. Leaving to one side the issue of how much growth a resource-constrained world can stand, a bit more GDP per head would be good: in Brazil, it’s still about a third of Britain’s. So great that they’re doing better than they were, but a bit more of the same might be no bad thing.
As it happens, the people who brought us the news about Brazil’s move into sixth place do reckon they will keep doing better. Here’s the league table they produced:
 |
| Source: ECBR |
Now that table is just brilliant, in so many ways. Look at Germany dropping like a stone, leaving it hovering only just ahead of the UK; France even falls behind us.
And look at Russia and India just powering up the rankings. Heady stuff.
But that’s not what I mean about the table being brilliant. The brilliant bit is the stuff around it. Let’s start with the word ‘forecast’, on the column for 2020. Did they imagine that without it we would believe that they’d built a time machine, travelled to some time after 2020 to take a look at the state of the world, and then had the goodness to travel back and tell us what they had found out, not as a forecast but as a matter of historical record?
Even more important is the source of the information. The ‘CEBR’ is the Centre for Economic and Business Research. That casts the notion of ‘forecast’ in a completely new light.
A Centre for Research of any kind just demands your respect, doesn’t it?
If I pop down to the pub with four or five mates and we talk about the dire state of the world, that’s just whinging over a drink. But if we raise some money and take an office in a prestigious location and stick a brass plaque on the door with ‘Centre for Research’ on it, we become a reputable authority deserving to be taken seriously. Even if round the meeting table it’s the same five guys, with the same beer and the same brand of crisps.
Things are pretty much the same in those great centres of contemporary power, such as rating agencies. As I’ve said before, they’re seen as forces of nature expressing the will of God, or perhaps the will of the Market, insofar as they make any distinction between God and the Market, but in fact they’re just twelve guys sat around a table condemning Greece or Italy or anyone else that attracts their ire, to several more years misery.
Of course, you can't really compare these people with my five mates. These are experts in economics or business. Which makes them special. And I really mean special: economics and business experts are the only people who prevent weather forecasters being at the bottom of the mockery pile. Which presumably making them fundamental to the forecasting profession. If only in the sense that the fundament is the bit we all sit on.
Here’s a little illustration.This is the Guardian on 27 December talking about the Italian plan to sell more bonds in an auction over the following two days: ‘In an indication that traders fear the auction could prove expensive for Italy, the indebted country saw its 10-year cost of borrowing rise by about 11 basis points to 7.13%, before settling back below the psychologically important 7%.’
The following day, when things turned out rather better than expected in the first phase of the bond sale, the Guardian blog ran with the headline ‘Successful Italian bond sale cuts its borrowing costs’.
Then on the 29th, after the second auction didn’t raise quite as much as the maximum hoped for, the paper gave us ‘full details of today's Italian debt sale’ and commented ‘analysts aren't impressed.’
Yeah, right. Would these be the same analysts who were so concerned about Italian debt on Tuesday, reassured on Wednesday, now reverting to pessimistic type on Thursday?
Personally, I’ll reserve my admiration for economists until they get that time machine built.
In the meantime, all I can say is – ‘good on you, Brazilians. Doing well. Keep it up.’
Then on the 29th, after the second auction didn’t raise quite as much as the maximum hoped for, the paper gave us ‘full details of today's Italian debt sale’ and commented ‘analysts aren't impressed.’
Yeah, right. Would these be the same analysts who were so concerned about Italian debt on Tuesday, reassured on Wednesday, now reverting to pessimistic type on Thursday?
Personally, I’ll reserve my admiration for economists until they get that time machine built.
In the meantime, all I can say is – ‘good on you, Brazilians. Doing well. Keep it up.’
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