Dan Kervick — The Financial Times’s Lazy Reading of Piketty

The Financial Times has sparked a major debate on Thomas Piketty’s Capital in the Twenty-First Centuryby releasing an investigation that purports to find important data problems and errors in Piketty’s work. A helpful summary of some of the initial contributions to this debate can be found here. My conclusion at this stage is that the only really major data issue appears to lie in the analysis of UK wealth inequality for the past four decades. While I strongly suspect that Piketty’s basic conclusions with regard to the recent UK trends will be sustained after his results are compared with other measures of wealth inequality, including the revised estimates by Saez and Zucman that incorporate wealth held abroad, including wealth held in offshore havens that Zucman has called the “missing wealth of nations,” the data issues themselves are not the topic of this post. 

What I am interested in here is the bearing of the data problems the Financial Times purports to have discovered on Piketty’s central theoretical arguments, and on his assessment of the likely path of inequality in the 21st century absent policy corrections that might redirect that path. Yesterday, the Timesdescribed the impact of its investigative results on Piketty’s argument in very dramatic terms. But some of the statements they make about that impact are so odd that one can only conclude that the people at the Financial Times who are making these charges have not read the book with even minimal care. It is apparent they don’t understand the book’s argument very well. Thus they are in a poor position to evaluate the bearing of the data issues they have raised on the book’s central arguments, and are misleading their readers about the substance of Piketty’s arguments and claims.

Rugged Egalitarianism
The Financial Times’s Lazy Reading of Piketty
Dan Kervick