The important issue, the bottom line, is always whether these changes lead to a different empirical conclusion. This does not seem to be the case for the transcription problems and data tweaking. Presenting numbers based on worse data refute Piketty also does not change the story.
In sum, Giles has offered up a weak critique of Piketty. At best, he shows that wealth inequality is increasing less than Piketty says it is. At his worst, he ignores the argument made in Capital. To repeat, the problem is that Giles does not mention and does not question of the 5% returns on wealth. Piketty’s point is that because wealth is distributed so unequally (a point that virtually no one objects to), high returns to wealth (relative to economic growth) will push up inequality. This is not an empirical matter that may contain lots of mistakes. It is a fundamental property regarding how capitalist economies work. This is the brilliant insight of Capital. Giles has not refuted it. Even worse, he does not even attempt to do so. In many respects, and in retrospect, it is hard to see what all the fuss has been about.Dollars & Sense Blog
Live-Blogging Piketty: An Interlude (Response to Chris Giles)
Steven Pressman | Professor of Economics and Finance at Monmouth University
No comments:
Post a Comment