The McNamara Fallacy

The first step is to measure whatever can be easily measured. This is OK as far as it goes.
The second step is to disregard that which can?t be easily measured or to give it an arbitrary quantitative value. This is artificial and misleading.
The third step is to presume that what can?t be measured easily really isn?t important. This is blindness.
The fourth step is to say that what can?t be easily measured really doesn?t exist. This is suicide.

Charles Handy, ‘The Empty Raincoat’, page 219.

3 replies on “The McNamara Fallacy”

Agreed. But I would also add.

For that which is important, it is better to take an innacurate measure than no measure at all, so long as one realises that the measure is innacurate.

For example, happiness and environmental damage, can only be measured innacuratly, but they can be measured to a degree, and they are both important to measure. People will often say ‘this measure is inaccurate’, and then argue their their political point from rhetoric, ignoring the measure. But an crude measure is better than rhetoric. Thats why I think ‘lies, damn lies, and statistics’ is a misleading statment. One should not dismiss statistics, just realise that they have limitations.

Agreed. The old ‘just because some things are relative doesn’t mean nothing has any value’ / ‘lack of complete accuracy doesn’t mean complete lack of accuracy’ fallacy

There’s a really interesting comparison to some of the issues around LM3 and social capital me n Tom have been discussing.

Here’s something from Richard Leakey’s ‘Sixth Extinction’, on biodiversity. It says something I agree with about the importance of quantifying, especially in realms like ‘community’ or ‘ecology’ where the fluffy tendency needs kicking in the head a bit.

“These days, whenever ecologists talk about biological diversity, they usually feel obliged to justify its value. A quarter of a century ago, no such obligation was felt, for few people bothered to talk about diversity at all. The question of its value did not arise.

Now, however, discussion of the value of biodiversity has become a ‘cottage industry’, as biologist David Ehrenfeld says. There are ?dozens of us sitting at home at our word processors churning out economic, philosophical and scientific reasons for or against keeping diversity.?

?Logging and mining companies know how many dollars they will reap when, in the process of destroying natural habitiat, they harvest trees or recoup minerals from the ground. The same applies to ranchers who turn forest into temporary pasture land. Much of the attention of the cottage industry to which David Ehrenfeld referred centres on the dollar value of the habitats that would vanish if they were exploited for commercial gain. If saving species and ecosystems can be shown to promise more value than destroying them, then there is a strong reason for doing so, or so it is argued. ‘People are afraid that if they do not express their fears in this language they will be laughed at,’ comments Ehrenfeld. As a result, ecologists have largely allowed economists to set the terms of the debate over the value of biodiversity. The danger is that, having accepted the invitation to enter the lion’s den, they are likely to end up as the lion’s dinner.?

“The problem of placing a value on biological diversity is extremely complicated and economics *are* important. For instance, the pre-occupation of local people is survival… But economics cannot,and must not, exclusively set the limits of the debate.” (p.125 to 6)

Leakey goes on to defend looking at the economic, the ‘ecological’ value and the aesthetic. There is a comparison to the LM3 measurement of local money circulation, in that it’s measuring something about the local network, rather than its raw value. Of course, that measure may be an indication – perhaps of something that we can’t measure as easily. But we may have a theory, and empirical research, that has made a strong set of links between the indicator number and those things we can’t immediately grasp.

As regards value, Leakey relates a measurement of one hectare of tropical rainforest in Peru. The logging value was about $1000. The full value of sustainable yields of the diversity of foods, fibres, oils etc, plus selective cutting of trees puts it up to more than $7000.

Long-term gain is not measured, though. Again – this relates to local economic and social measurement. We can choose how we measure: what indicators and metrics to use. We choose them based on set goals. A logging company’s metric will not be the same as others’. A supermarket’s metric will not be the same as a local shops; er… actually, it will – but it shouldn’t be!

Aaanyway… nuff for now.

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