

Inequality: A Piketty problem? - r0h1n
http://www.economist.com/blogs/freeexchange/2014/05/inequality-0

======
Brakenshire
There's obviously a strong intention to find some way of rationalizing your
existing political opinion when a book like this is published, either against
the status quo (in the sense of agreeing with the book) or in favour of the
status quo (finding some way of 'debunking' it). This is made worse because
there is a whole industry in providing the material to reinforce our
preconceptions. And, also, because the news cycle is by nature much faster,
and much less patient, than would be necessary to fully judge the economic
case in a book like this. It doesn't make good copy to say that the
conclusions will be tested over the next years, and to wait for that gradual
outcome.

At the moment it seems to be very difficult for professional economists to
come to a clear conclusion, so in terms of the academic judgement of the work,
the rest of us should hardly be coming down strongly one way or another.

Edit: Ironically, there seems to be an error in the linked article:

> For America, the outcome of the analysis is relatively muddy (based in part
> on the fact that the source data themselves are harder to parse, according
> to Mr Giles). The trend for the top 1% share does not seem to be affected.
> For the top 10% it is harder to say; here is a chart Mr Giles produces:

When you look at the chart, it's the 10% trend (the triangles) which is
unaffected, and the 1% trend (the squares) which is muddied. I therefore say
with utmost confidence that I have debunked the debunking of the debunking of
Piketty. I don't know which of my preconceptions that means I can keep intact.

~~~
selmnoo
Political intentions aside, I'm very impressed by Piketty's elucidative and
insightful reply:

> _For the time being, we have to do with what we have, that is, a very
> diverse and heterogeneous set of data sources on wealth: historical
> inheritance declarations and estate tax statistics, scarce property and
> wealth tax data, and household surveys with self-reported data on wealth
> (with typically a lot of under-reporting at the top). As I make clear in the
> book, in the on-line appendix, and in the many technical papers I have
> published on this topic, one needs to make a number of adjustments to the
> raw data sources so as to make them more homogenous over time and across
> countries. I have tried in the context of this book to make the most
> justified choices and arbitrages about data sources and adjustments. I have
> no doubt that my historical data series can be improved and will be improved
> in the future (this is why I put everything on line)._

For putting the data up online, he's proven himself to be a true scholar. This
is how progress is made.

------
guelo
FT was quick to compare Piketty to Reinhart-Rogoff. Felt like a hit piece.

~~~
enraged_camel
You have to understand that FT is a conservative news organization. If you
think about their primary audience (wealthy businesspeople), it was no
surprise that they tried to take a shit on Piketty's work.

~~~
spindritf
This is the laziest of criticisms. Don't like someone's argument? Don't even
bother reading through, let's check who sponsored the study, or maybe the
author is a hypocrite, or at least cheats on his wife, and anyway, it's
racist.

You could just as easily dismiss Piketty: Oh, he's just some French lefty
(cheese eating...), of course he'll conclude that inequality is the problem
and we need to tax wealth.

~~~
enraged_camel
>>This is the laziest of criticisms. Don't like someone's argument? Don't even
bother reading through, let's check who sponsored the study, or maybe the
author is a hypocrite, or at least cheats on his wife, and anyway, it's
racist.

I read the FT article when it appeared. What seemed remarkable was that, even
though it took Piketty _years_ to compile and work with the data, it took the
FT editor _weeks_ to come up with a rebuttal [1]. That by itself should tell
you something.

[1]Unless he read the original French version from last year, but that's
doubtful because the book became popular (and therefore dangerous to the upper
class) only after being translated to English.

~~~
spindritf
It tells me nothing. Finding mistakes is always easier than writing the book
containing them.

And the list of those supposed mistakes is public[1], behind only a
registration wall. Piketty either made them, or not. They either substantially
change the results, or not. You don't need to make guesses based on timing.

Perhaps Chris Giles is motivated by pleasing his "wealthy businessmen"
audience. Perhaps he spent sleepless nights pouring over the text to find
something, anything. Maybe he even cheats on his wife.

But so what?

[1] [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/)

~~~
unclebucknasty
I get the whole dismissal of the ad hominem-based conclusions thing, and you
have a point.

OTOH, it is equally fallacious to suggest that Giles' cheating on his wife is
as irrelevant as his ideology or that of his employers.

At this point, we don't know who has it right. But, it is not unwise to look
suspiciously upon a person's ideology and/or leanings when approaching their
work. This is especially so in today's world of corporate-owned media.

------
MaysonL
For me, the money quote from this article was:

 _Scott Winship, a scholar at the Manhattan Institute who disputes Mr Piketty
's overarching narrative about inequality wrote on Twitter last night:

"I’ve spent time with Piketty U.S. wealth ineq[uality] spreadsheet and LOTS of
time with his income data. He’s not up to funny business."_

------
malloreon
I'm glad to see the debate and discussion surrounding Piketty's work. I'm very
slowly reading through the book itself and it's almost like relearning my
Economics degree 10 years later.

~~~
Ma8ee
It's a pity if the discussion would be reduced to nitpicking though, rather
than a real discussion about the books real scientific merits and its
consequences for how we want to build our societies.

~~~
naturalethic
Harrison Bergeron comes to mind

------
jokoon
You don't often see scientific work having implications in world economic
policies that much, but when it does, it's really entertaining to watch.

It's still weird that it takes the work of an economist to prove something
that everybody already knows. That's a big elephant in the room.

It puts a little faith in my political opinions that some could start
listening to this discussion. It kinda pains me to watch you need to hear the
word of an economist to prove it to you though.

------
Tycho
This piece takes issue with the 'brushing off' response to the reported
inaccuracies

[http://www.zerohedge.com/news/2014-05-24/piketty-fudged-
his-...](http://www.zerohedge.com/news/2014-05-24/piketty-fudged-his-wealth-
data-progressives-still-support-his-compelling-theoretical)

~~~
jshen
I notice that the author of your link implies his main point but never states
it clearly. This is usually a bad sign.

~~~
Tycho
What point is that?

~~~
jshen
That wealth hasn't been concentrating at the top.

------
Kiro
I'm surprised to see so many left-wing views on HN. I thought most hackers
were libertarians.

~~~
woof
I'm surprised you see them as "left-wing".

Are these "left-wing" too? *
[http://www.economist.com/blogs/freeexchange/2014/05/inequali...](http://www.economist.com/blogs/freeexchange/2014/05/inequality-0)
* [http://krugman.blogs.nytimes.com/2014/05/24/is-piketty-
all-w...](http://krugman.blogs.nytimes.com/2014/05/24/is-piketty-all-wrong/)

~~~
Kiro
I was referring to the comments you often find in political threads on HN.

------
alexeisadeski3
"In some ways the new FT criticisms may not matter much, although I think not
in a way which is reassuring for Piketty." \- haha

[http://marginalrevolution.com/marginalrevolution/2014/05/wha...](http://marginalrevolution.com/marginalrevolution/2014/05/what-
do-the-piketty-data-problems-really-mean.html)

------
Tycho
To be honest, the work never seemed rigorous enough in the first place to go
about finding 'fatal flaws' in it.

~~~
21echoes
my impression is that, regardless of outlook, economists have overwhelmingly
praised the book as extremely thoroughly researched, setting a new bar for
evidence presentation in economics literature.

~~~
vixin
As pointed out here [http://blogs.spectator.co.uk/coffeehouse/2014/05/why-
didnt-p...](http://blogs.spectator.co.uk/coffeehouse/2014/05/why-didnt-
pikettys-harvard-publisher-spot-the-errors-which-the-ft-has-exposed/)

"Perhaps the idea of one’s instincts being proving empirically correct is
rather intoxicating, which partly explains the success of his book. Perhaps
Piketty gave the left intelligentsia a story which (as tabloid hacks say) was
“too good to check”.

