

Thomas Piketty accuses Financial Times of dishonest criticism - xmpir
http://www.theguardian.com/business/2014/may/26/thomas-piketty-financial-times-dishonest-criticism-economics-book-inequality

======
anon1385
Ignoring the merits or not of the criticisms, I did find it interesting to
compare how much effort the FT and Economist put into finding errors in this
work and how much exposure they gave their findings, compared with the way
they have largely ignored problems in other far more influential studies that
were much more flawed.

For example Tol 2009, a flawed paper about the economic impacts of climate
change which concluded that moderate warming would be economically
beneficial[1]. That was cited (although not generally named) in numerous FT
and Economist editorials and opinion pieces over the years yet as far as I'm
aware they have not published anything about the recent correction. It was
used as the basis for serious national and international policy and has
contaminated many subsequent studies in the field. For years the author made
regular appearances pushing the importance of the finding in western media.
Yet even a fairly basic review of the paper would have spotted some of the
errors (it was a meta-analysis and some of the values from other paper were
copied incorrectly or had the sign reversed) i.e. even an FT intern could have
spotted the mistakes. Updates to the paper indicate that the entire result was
based on fitting a curve to a single outlier (a study by the same author) and
additional studies since 2009 give a very different picture when included.

As far as I'm aware Piketty's work has had little to no real world impact as
yet to government policy or widespread public opinion (I might be wrong of
course). Any errors it contained, while worth correcting, don't seem like they
would have an earth shattering impact worthy of front page exposure and double
page spreads while retractions in more influential studies go unreported.

[1] More about that here: [http://www.washingtonpost.com/blogs/monkey-
cage/wp/2015/05/2...](http://www.washingtonpost.com/blogs/monkey-
cage/wp/2015/05/23/the-gremlins-did-it-iffy-curve-fit-drives-strong-policy-
conclusions/) and [http://andthentheresphysics.wordpress.com/2014/05/05/tols-
co...](http://andthentheresphysics.wordpress.com/2014/05/05/tols-corrections/)

~~~
scarmig
Piketty's work is, frankly, much more important than one paper about climate
change that has been alluded to a couple times.

I had to look up that paper to know which one you were referring to, and I
follow climate change very closely. Piketty has lead to a firestorm of
criticisms and rebuttals and counter-rebuttals: virtually every major
political and economic blog has addressed it. Yesterday I saw a pile of copies
of it in a mainstream bookstore. They're in totally different leagues.

Reinhart–Rogoff falls somewhere in between those extremes, and IIRC FT and the
Economist have both mentioned its flaws.

------
selmnoo
I'd always thought Financial Times was a very decent news journal outlet, sure
a little right-inclined but generally trustable much like the Economist. I
thought they wouldn't be up to dirty tricks, then I saw the image they used
for the Piketty article:
[http://www.ft.com/intl/cms/s/2/e1f343ca-e281-11e3-89fd-00144...](http://www.ft.com/intl/cms/s/2/e1f343ca-e281-11e3-89fd-00144feabdc0.html#axzz32phbsY00)

They deliberately used that image (scratching his head, looking confused,
etc.) to paint a certain narrative. That's just a really low way to go.

~~~
panarky
I used to read the FT and the Economist thoroughly, and felt I was well
informed. Maybe I thought they were high-quality publications because their
ideology aligned with mine.

But I matured and my blind belief in the power of free, unregulated markets
was challenged by many examples of abject market failure in the real world.

I still read FT and the Economist, but with a much more jaundiced eye. Much of
what they say is reflexive, ideological, based on either blind belief or self-
interest.

~~~
dobbsbob
There's a reason the Economist doesn't credit articles to authors, so it
appears as received wisdom from seasoned economists/political insiders instead
of actually being written by a 20something hipster intern. If you save a few
issues they will contradict themselves every couple of months especially on
articles about Russia. where Putin is the hero of capitalism in one issue then
an evil protectionist Bolshevik in another. Europe's future will be declared
as under the whims of Russia then a few issues later they claim Russia has
little influence. It's a borderline tabloid rag, so is the FT.

------
QuantumChaos
The article quotes from a critic of Piketty, Scott Winship, but the strange
nature of of the quotes (highly selective and including quotes on irrelevant
matters) made me suspicious. Here are the latest tweets on the matter by him:

1/Quoted in Bloomberg today re #Piketty but sounds like I side w him on rising
wealth ineq & US wealth ineq>Europe.

2/To be clear, I don't. Think his original results failed to make that case,
which is why I'm less worked up than some abt alleged probs.

3/But UK--&, I now believe, US--methods need to be explained by #Piketty, else
looks pretty bad. Just not CONSEQUENTIAL 4 overall thesis

This is the part of the article that quotes Winship:

> Scott Winship, an economist at the right-leaning Manhattan Institute for
> Policy Research, and notable critic of Piketty's analysis, said the FT's
> allegations weren't "significant for the fundamental question of whether
> Piketty's thesis is right or not". In an email to Bloomberg news agency, he
> wrote: "It's hard to think Piketty did something unethical when he put it up
> there for people like me to delve into his figures and find something that
> looks sketchy … Piketty has been as good or better than anyone at both
> making all his data available and documenting what he does generally."

~~~
mpweiher
Not sure what your beef is, your quotes etc. exactly match what the Guardian
wrote about S.W.:

1\. He disagrees with Piketty's conclusion

2\. He finds the FT's criticisms insignificant wrt. Piketty's conclusion.

So: he also thinks Piketty is wrong, but not for the reasons the FT claims,
and he thinks that what the FT claims is inconsequential to whether Piketty is
wrong or right.

~~~
QuantumChaos
Reposting my reply to your other comment in this thread (feel free to continue
discussion on either thread).

According to Winship, Piketty's results are wrong/irrelevant for other,
independent reasons. But not everyone shares this view, so Winship is
clarifying that, for people who were initially convinced by Piketty's
analysis, the FT criticism is important. But it is not important for Winship
because even without the FT criticism, he has independent reasons to
discounting Piketty's analysis.

I hope this explains my "beef" with the use of Winship's quotes.

------
QuantumChaos
On the one hand, Krugman, Summers, and other economists praise Piketty
primarily for his unique, groundbreaking empirical work on income inequality.

On the other hand, when FT critique his empirical work, Piketty says that his
work has already been superceded by other work that proves income inequality
is growing. So nothing the FT can say about Piketty's work will overturn this
now well established fact.

So which is it? I'm inclined to go with the former, because those economists
focused on Piketty's empirical work and downplayed his theoretical work and
policy suggestions. And my own knowledge of economics informs me that detailed
empirical work of this sort is not done enough. So I think that while Piketty
might consider the empirical part of his book to be a detail, in fact it is a
very important matter. All that remains is how valid FT's criticism is, and
how much it changes the results.

~~~
youngtaff
The FT is pretty open in it's questioning of the data -
[http://blogs.ft.com/money-supply/2014/05/23/data-problems-
wi...](http://blogs.ft.com/money-supply/2014/05/23/data-problems-with-capital-
in-the-21st-century/)

Rather than accuse them of dishonesty surely all Piketty has to do is explain
where their analysis is wrong?

~~~
vanderZwan
He and others (including _critics of his work_ ) have, as far as I can tell?

> While the available data was "imperfect", it did not undermine his central
> argument about widening inequality, he said. "Where the Financial Times is
> being dishonest is to suggest that this changes things in the conclusions I
> make, when in fact it changes nothing. More recent studies only support my
> conclusions, by using different sources."

> Scott Winship, an economist at the right-leaning Manhattan Institute for
> Policy Research, and notable critic of Piketty's analysis, said the FT's
> allegations weren't "significant for the fundamental question of whether
> Piketty's thesis is right or not". In an email to Bloomberg news agency, he
> wrote: "It's hard to think Piketty did something unethical when he put it up
> there for people like me to delve into his figures and find something that
> looks sketchy … Piketty has been as good or better than anyone at both
> making all his data available and documenting what he does generally."

~~~
QuantumChaos
The first quote is exactly the kind of vagueness that could be avoided by
specifically addressing what the FT said, which other studies support his
conclusions, etc.

The second quote is similarly vague, and the part on ethics is irrelevant.

~~~
foobarqux
He did cite the study (Saez/Zucman). The article probably omitted the specific
reference.

------
weddpros
The rich get richer faster than others because they're better at it... That's
why they're rich in the first place. Does it take 700 pages to understand it?

Think about it: most people don't even try to get richer !

------
yummyfajitas
I love the classical "he said, she said".

The fact is, Piketty's numbers appear to be incorrect. It is no longer
remotely close to clear that _wealth_ inequality is going up, particularly at
the top, at least from what we see in Piketty's book. The FT corrections show
that inequality has not increased in the UK, and different weighting schemes
(e.g. population weighting across countries) can completely make his effects
vanish.

Krugman showed that income inequality, particularly below the 99'th
percentile, is going up. Income (including capital income) != wealth.

Now maybe other sources prove him correct. If so, this response is far from
convincing - why not just cite those other sources? And if that's the case,
why did anyone care about his book to begin with?

In any case, Piketty is to be commended for releasing his data/methodology.
Just think - if he didn't do this, it would have taken years for his errors to
be discovered.

~~~
mpweiher
_Piketty 's numbers appear incorrect_

Er... _some_ of his numbers appear incorrect. From this you incorrectly assume
that this invalidates the conclusion. It _may_ invalidate the conclusion if
the errors are significant. However, what little I've seen so far does not
seem to be all that significant.

From the fine article:

'Scott Winship, an economist at the right-leaning Manhattan Institute for
Policy Research, and notable critic of Piketty's analysis, said the FT's
allegations weren't "significant for the fundamental question of whether
Piketty's thesis is right or not".'

So there seem to be highly qualified sources that say that the differences are
not significant. That's not the same as "he said/she said".

Do you have any evidence that the errors are significant?

You also blatantly mischaracterize Krugman's point: he showed that inequality
in _capital income_ is going up, not (just) general income. Capital income has
this property that it usually derives from capital (as the name says). So
unless there is evidence that the top 1% or so systematically get
significantly better returns on the same capital, an increase in capital
income let's us include that there is an increase in base capital from which
to derive that income.

On the other side of the coin, income leads to wealth, and unless you have
evidence that high-income people save less of their income than lower-income
people, then wealth will diverge. All the evidence I have seen so far (and
common sense) say that it is the other way around: consumption saturates, so
people with higher incomes actually save more and spend less, at least in
relative terms.

So both sides of this equation quite trivially show the link between income
inequality (especially for, but not limited to capital income) that you deny.

So both the FT criticism (= nit-picking in non-substantive details) and your
criticism are unfounded, as far as we can tell.

Again, if you have some actual substantive evidence that the errors are
significant, I'd love to see it.

~~~
QuantumChaos
On Scott Winship, see one of my top level comments (I made two top level
comments as I only started investigating this after I posted once). Whatever
was printed in the article, he has said on Twitter that he does doubt
Piketty's conclusions, and also that the FT allegations are significant.

~~~
mpweiher
"...and also that the FT allegations _are_ significant" (my emphasis).

Original Tweet:

"3/But UK--&, I now believe, US--methods need to be explained by #Piketty,
else looks pretty bad. Just _not_ CONSEQUENTIAL 4 overall thesis" (again, my
emphasis)

[https://twitter.com/swinshi/status/470880036233699328](https://twitter.com/swinshi/status/470880036233699328)

"are significant" vs "not CONSEQUENTIAL" seem like exact opposites to me.

EDIT: missing parenthesis

~~~
QuantumChaos
you are misreading the context.

According to Winship, Piketty's results are wrong/irrelevant for other,
independent reasons. But not everyone shares this view, so Winship is
clarifying that, for people who were initially convinced by Piketty's
analysis, the FT criticism is important. But it is not important for Winship
because even without the FT criticism, he has independent reasons to
discounting Piketty's analysis.

