Dark Figures and Number Laundering: Christian Aid's Death and Taxes

"Nine million Witches were martyred in the Burning Times."

I start with a digression, whose importance will become very clear later. It is by way of illustration as to how "dark figures" - estimates of invisible numbers - are created, and how via a process known as "number laundering", they achieve popularity and remain in circulation, even after they have been subjected to critical scrutiny and debunked.

This figure was by a German historian in the late eighteenth century who took the number of people killed in a witch hunt in his own German state and multiplied by the number of years various penal statutes existed, then reconfigured the number to correspond to the population of Europe. Professor Behringer traced the estimate of nine million victims back to wild projections made by an 18th-century anticlerical from 20 files of witch trials. The figure worked its way into 19th-century texts, was taken up by Protestant polemicists during the anti-Catholic Kulturkampf in Germany, then adopted by the early 20th-century German neopagan movement and, eventually, by anti-Christian Nazi propagandists. In the United States, the nine million figure appeared in the 1978 book "Gyn/Ecology" by the influential feminist theoretician Mary Daly, who picked it up from a 19th-century American feminist, Matilda Gage.

The modern estimate is much reduced;

For witchcraft and sorcery between 1400 and 1800, all in all, we estimate something like 50,000 legal death penalties," writes Wolfgang Behringer in "Witches and Witch-Hunts" (Polity, 2004). He estimates that perhaps twice as many received other penalties, "like banishment, fines or church penance

In fact, and almost counter to intuition, the death toll is decreasing as more and more trials are discovered.

As historian Jenny Gibbons points out:

If historians simply reported the number of executions, more deaths would obviously mean a higher death toll. But that isn't what scholars do. They can't -- they know that we're missing many court records and that several areas have never been thoroughly studied. Because of this, scholars compensate for lost records and missing data. That's why if you look at the table of estimated deaths, you'll see that the estimated death toll is about three times as high as the number of recorded executions.

Why do new trials have little impact on the death toll? Because they're replacing estimates. These newly discovered deaths aren't trials we never dreamed existed -- they come from previously unstudied areas and courts. When you "add" those new trials to the total, you also have to "subtract" the estimated deaths that scholars used to add for this same area. And since older estimates tended to be extremely high, new trial data usually ends up decreasing the death toll.

Now all that is ancient history, but it has a significant relevance to today.

Looking at Tax Evasion, the Christian Aid report looks at two methods of tax evasion -

Our figures deal with just two of the most common forms of corporate evasion. The first of these is known as 'transfer mispricing', where different parts of the companies sell goods or services to each other at manipulated prices. Again, the potential scope of this practice can be seen from the staggering fact that some 60 per cent of all world trade is now thought to take place between global corporations and their subsidiaries. The other, 'false invoicing', is where similar transactions take place between unrelated companies. We calculate, from just these two activities, that the loss of corporate taxes to the developing world is currently running at US$160bn a year (£80bn). That is more than one-and-a-half times the combined aid budgets of the whole rich world - US$103.7bn in 2007.

Our figures are derived from the work of Raymond Baker, a senior fellow at the US Center for International Policy. To arrive at his findings on transfer mispricing, he and his researchers conducted 550 interviews with heads of trading companies in 11 countries - all on condition of anonymity.

What are Christian Aid doing here? Clearly the methodology is similar to that of the counting of Witch Trials. They take the result of one study, look at how much tax is evasion is taking place from the 550 interviews in this study, and any other figures they have gleaned from public trials, and then multiplied numbers to get the larger figure. This assumes - as with the early calculations on the witch trials - that the "missing figures", what statisticians call "dark figures" - follow the same pattern on a larger scale.

Frequently we hear in reports that what is revealed - either in corporate corruption and tax evasion that comes to light - is just the tip of the iceberg, and the same kind of extrapolation as went on with the witch trials is made here. The numbers gets repeated from places ("billions in lost taxes") and by being repeated undergoes what the statistician Joel Best calls "number laundering" - it takes on a life of its own, and becomes legitimate because it is continually repeated from place to place.

A statistic's origin--perhaps simply as someone's best guess--is soon forgotten, and through repetition, the figure comes to be treated as a straightforward fact--accurate and authoritative. The trail becomes muddy, and people lose track of the estimate's original source, but they become confident that the number must be correct because it appears everywhere. It barely matters if critics challenge a number, and expose it as erroneous. Once a number is in circulation, it can live on, regardless of how thoroughly it may have been discredited. Today's improved methods of information retrieval--electronic indexes, full-text databases, and the Internet--make it easier than ever to locate statistics. Anyone who locates a number can, and quite possibly will, repeat it... Electronic storage has given us astonishing, unprecedented access to information, but many people have terrible difficulty sorting through what's available and distinguishing good information from bad. Standards for comparing and evaluating claims seem to be wanting. This is particularly true for statistics that are, after all, numbers and therefore factual, requiring no critical evaluation. Why not believe and repeat a number that everyone else uses?

In fact, the Witch trials were scattered, with clusters of intense activity, and other locations with little or no activity. The more detailed count, as Gibbons notes, reduces numbers.

Let me give you an example. Before Poland's Witch trials were counted, Bohdan Baranowski guessed that 15,000 Polish Witches died. Today, Polish historians are studying the Polish court records. They've found several hundred executions, and assume that the final death toll will be approximately 1,000. When their research is done, we will have "discovered" maybe 500 new trials. But the death toll for the Burning Times will *drop* by 14,000 because we didn't find as many trials as we expected to.

The same may well be true of the missing millions lost through corporate evasion. We simply do not know. But there is a very great danger in making use - however well intention - of figures that may well not be representative of the whole. By overstating their case in this way, Christian Aid may well ensure that in the long term, it will be seriously undermined. The corruption that comes to the surface may not be the tip of the iceberg, it may be most of the iceberg. We simply don't know. But let me finish by saying that I am sympathetic to their case, even if I think their numbers simply do not add up. As Joel best says:

When activists have generated a statistic as part of a campaign to arouse concern about some social problem, there is a tendency for them to conflate the number with the cause. Therefore, anyone who questions a statistic can be suspected of being unsympathetic to the larger claims, indifferent to the victims' suffering, and so on.


Links

Counting the Witch Trials
http://www.nytimes.com/2005/10/22/national/22beliefs.html
http://www.summerlands.com/crossroads/remembrance/_remembrance/00000082.htm

Books of the Post:
Best, Joel. Damned Lies and Statistics. Berkeley, CA: University of California Press, 2001.
Loseke, Donileen R. Thinking about Social Problems. Hawthorne, NY: Aldine de Gruyter, 1999.
Paulos, John Allen. Innumeracy. New York: Random House, 1988.