Funnily enough, where the official data fit Collison’s thesis – such as an increase in self-assessment tax receipts since 2019 – Stripe advances them as evidence of very good official data.
But where it doesn’t, for example, in self-employment figures, the official data are deemed wrong and the officials incompetent or stupid.
So what’s really going on?
The Office for National Statistics (ONS) told me that in the last two years, the number of self-employed people working full-time has remained relatively stable at around 2.9 million, while the number of self-employed people working part-time has grown from 1.39 million to 1.62 million. The number of people with a second job has risen to 1.28 million.
“What we may be seeing is an explosion since 2022 in UK families selling anything and everything to pay bills and ballooning costs,” thinks Marcus Gibson, an analyst who watches the SME sector. “Side hustles are now a national phenomenon to pay for food, petrol and other essentials.”
That is clearly not the same as the booming economy Collison sees in the data.
The ONS questions people about their working habits via the Labour Force Survey (LFS), which it has admitted is wanting.
This is no secret. The problem of getting people to answer truthfully, or even complete the exercise, has bedevilled all econometricians, and unless we want a Big Brother panopticon that spies on every transaction, it’s always going to be difficult. Much work has been invested in improving its delayed successor, the Transformed LFS.
But the LFS is not the only source: ONS blends this with other data, such as HMRC and DWP data on payrolls and self-assessments.
And is Stripe’s single data point any better? The outbound director of the Centre for Policy Studies think tank, Robert Colvile, enlisted to promote the work, thought so: Stripe’s data were a pretty decent proxy for the economy as a whole, he claimed.
But Stripe’s merchant data over-represent digital businesses and neglect others. The approach is more likely to lead observers to read far too much into any small deviation. An increase in merchants using Stripe could also be attributed to other factors, such as taking market share from competitors.
What we’re really seeing, Gibson thinks, may be the long-term societal shift from cash to cashless, which has been under way for several years. More spending is shifting to digital, so of course Stripe is seeing an uptick. A rising tide lifts all boats.
So it appears that Collison and Colville are guilty of torturing the data until it confesses. But confess to what? Here the agenda finally sails into view.
The agenda is to hype AI, which is stubbornly refusing to produce the economic earthquake they predicted and needed.
“Many AI maniacs are using AI tools to start companies of smaller size, and thus of smaller expense, than ever before,” insists Tyler Cowen, a professor at George Mason University.
Cowen is a fanatical enthusiast for AI and a close collaborator with Collison. The pair have a long history of working together: they invented something called “Progress Studies” in 2019 and have each dispersed significant grants to like-minded utilitarians, buying themselves friends and supporters.
So this is an influence campaign. They are selling the idea that AI is good for the economy.
Meanwhile, let’s bank what little good economic news we have to savour. The 832,000 startups that Beaufort reports Britain had in the last year (down slightly) are very real. New ventures find capital, and enterprising people continue to risk it all and have a go. But for how much longer?
Here’s the thing: Stripe is reportedly making an offer for PayPal, a rival roughly the same size, for $53bn. This would remove a powerful competitor from the market. Coming after the merger of Global and Worldpay, it would mean a further reduction in choice for business consumers. A lack of choice often means higher prices.
Perhaps the biggest threat to startups, then, is not questionable data but would-be monopolists such as Collison.
And perhaps instead of trying to tell everyone else how to do their job, he should do his and compete in the marketplace. No wonder he wants to distract us.