The Nation — How Gender Changes Piketty’s ‘Capital in the Twenty-First Century’

Where economics and feminism intersect.

The Nation
How Gender Changes Piketty’s ‘Capital in the Twenty-First Century’
Kathleen Geier, Kate Bahn, Joelle Gamble, Zillah Eisenstein and Heather Boushey

Tyler Cowen — More Matt Rognlie on Piketty — the most important point Tyler Cowen

To be perfectly frank on this one, Matt [Rognlie] here is completely correct and Piketty has not produced any effective response to this point, either within the book or without. The internal response “I still think we need to worry about inequality therefore I side with Piketty” simply represents a misunderstanding of Matt’s argument. Piketty’s mechanism of accumulation, as laid out in his book, is simply the wrong mechanism for understanding growing inequality, both theoretically and empirically. And it is a shame that the Giles critique from the FT has attracted so much attention because it has distracted everyone from the more serious problems with the argument of the book.

Marginal Revolution
More Matt Rognlie on Piketty — the most important point
Tyler Cowen

John Weeks — "Why Is Capital In The 21st Century (C21C) Such A Success?"

About a month ago — this is a true story — after a meeting of Economists Against Austerity, I hailed a taxi in Westminster (the workers of the underground system were on strike). During the ensuring discussion with the driver I mentioned that I taught economics at the University of London before retiring. The driver then asked me, have you read this book by a Frenchman named Piketty?

A London taxi driver discussing an economics book, much less one 578 pages long (text only) qualifies the book as a “phenomenon” by the dictionary definition, “a fact or situation that is observed to exist or happen, especially one whose cause or explanation is in question”. And very much in question the cause is. I am in the process of writing a review of these 578 pages (plus the occasional excursion into a footnote), and at this point limit myself to speculating over why it has swept all before it.... 

I suspect — let me stress than I have never met Piketty, only heard him speak (see his Real News interview with Lynn Fries) — that a tactical decision was made to avoid discussion of macroeconomic policy in C21C, as well as to avoid directly confronting political debates. Most of the previous exposés of inequality had overtly linked to neoliberal policies of deregulation, especially in the financial sector. Several years of constant and duplicitous attack on this obviously correct causality by the mainstream of the economics profession, right-wing to the core, drove it from public discussion. So successful has been this counterattack that in both Britain and the United States a majority of people believe that excessive public sector spending explains the lack of a recovery if not the crisis itself.

When listing the many shortcomings of C21C we should not include “naivety”. Unless I am wrong, the decision was made to keep C21C narrowly focused on inequality, while padding that discussion with countless diversions into cultural and historical commentary. The goal was to stimulate debate over inequality rather than seriously deal with causality or policy. That is not the way I would have written C21C, but – hey – it worked. He put the inequality ball in play and now it is for progressives to score a goal with it.

Social Europe Journal
"Why Is Capital In The 21st Century (C21C) Such A Success?"
John Weeks | Professor Emeritus of the School of Oriental and African Studies of the University of London

Dan Kervick — Cowan on Piketty and Science

Tyler Cowan complains that much of the debate about Thomas Piketty’s Capital in the 21st Century is ignoring the existing science on wealth inequality, which Cowan believes “has already offered a wide range of insights on these topics, as well as having rendered some of the more extreme claims unlikely.” And Cowan offers this paper by Ana Castañeda, Javier Díaz-Giménez and José-Víctor Ríos-Rull as an instance of the kind of science that is being ignored. Cowan says the paper he cites contains “a reasonably good and accurately calibrated model” and as a result “we already have a theory which does quite well in explaining U.S. wealth inequality, and it isn’t based on the total centrality of a comparison of r and g, as you find in Piketty.” And he complains that “no one in the current debates is citing this piece, Piketty included.”

But it doesn’t surprise me that serious researchers on wealth and income inequality would not cite the paper by Castañeda et al. Note this passage from footnote 10 in the paper:

Note that throughout this article our definition of earnings both for the U.S. and for the model economies includes only before-tax labor income. Consequently, it does not include either capital income or government transfers.

In other words, the authors’ model assumes there is no capital income or government transfer income, only labor income. That is a strange restriction to say the least....

Rugged Egalitarianism
Cowan on Piketty and Science
Dan Kervick

Matthew Yglesias — The Chart the Debt Alarmists Don't Want You to See

From Thomas Piketty's book. There is no net public debt (public investment less public debt).

Slate
The Chart the Debt Alarmists Don't Want You to See
Matthew Yglesias

(h/t Charles Hayden)