What's the point of the coalition's assertion that real take-home pay is rising?

I ask because voters' base their decisions not upon politicians' assertions about statistical aggregates, but upon their own individual perceptions (which of course might well be biased). Put it this way. When Ed Miliband talks of a cost of living crisis, voters might react in one of two ways. They might think he's talking rot, in which case the Tories should keep quiet on the Napoleonic principle that one should never interrupt your enemy when he is making a mistake. Or they might think his talk chimes with their own experience - in which case they'll not believe Tory claims to the contrary, even if these are correct on average, which is doubtful*. In the first case, the Tory claim is redundant, in the second it's implausible.

Macroeconomic data do not, and should not, over-ride individuals' local, dispersed knowledge of their personal situation.

You might think this is an Austrian point. But it is also a Keynesian one. Keynes described macro aggregates such as the price level or aggregate output as "vague and non-quantitative concepts" which are "unsatisfactory for the purposes of a causal analysis." To use a good if over-used metaphor, macro stats are only an imperfect map, not the terrain.

It does not automatically follow, however, that macro stats are useless. They could be a rough guide to policy. Targeting 2% inflation, for example, doesn't mean ensuring that prices rise 2% per year, but merely that they don't rise too much.

In this sense, Alasdair MacIntyre identified the purpose of macro stats - the claim to possess them is a claim to power: "What purport to be objectively-grounded claims function in fact as expressions of arbitrary, but disguised, will and preference" (After Virtue, p107). This sounds like a Foucauldian point, but it has been shared by people who wouldn't know Foucault from off stump. When he was Financial Secretary of Hong Kong John Cowperthwaite stopped his officials from collecting macro data** because "If I let them compute those statistics, they'll want to use them for planning.''

It's in this context that we should interpret the coalition's claim. They aren't talking to voters but rather to fellow members of the political class; journalists, party supporters and suchlike. The claim "incomes are rising" really means "our policies are OK." It's a claim to power.

This, though, is dangerous. If we focus upon macro data to the detriment of individuals' actual experience, we risk mistaking the map for the terrain. Which is one reason (of several) why Kenneth Boulding was right to say (pdf) that "almost all organizational structures tend to produce false images in the decision-maker."

* The claim that incomes are rising for all deciles is consistent with many people suffering a fall in income if they drop down into a lower decile. When Miliband is targeting only 35-40% of voters, this means his talk of a cost of living crisis might be good politics even if it is wrong on average.

** Strictly speaking, "data" is the wrong word. It comes from the latin for "something given", but in fact macro data aren't given at all but rather constructed.