An addendum to the earlier post on Thomas Piketty’s “Capital in the 21st Century”:
As was originally pointed out yesterday by Alisa, the Financial Times attempted to verify the data presented by Piketty in his book, and failed to be able to reproduce it.
They found that the data, as presented, contained (to say the least) substantial inaccuracies. More bluntly, if the correct figures from the sources he cites are used, and the calculations are performed correctly, the effects he claims to describe vanish entirely.
The Financial Times has now published two articles on the subject, but I would prefer to draw people’s attention to the blog post by Chris Giles that discusses the matter in full detail. It is absolutely worth reading, especially as Piketty’s reply to the FT on the matter is breezy and entirely non-substantive, addressing none of the points brought up by Giles.
There were hints of data problems even before my own earlier blog post on this matter. I will continue to assert that even were the data correct, it would make no real difference, as Piketty’s conclusions are absurd. However, it is of significant interest to know that his objective claims about the data are untrue as well.
One wonders why Professor Piketty chose to first publish his ideas in a popular account rather than in academic journals, where peer review might have caught these problems earlier. Perhaps then, however, we would not have experienced the treat of Paul Krugman explaining to us that no real counterargument exists to Piketty’s claims. Quoting Professor Krugman only a month ago:
The really striking thing about the debate so far is that the right seems unable to mount any kind of substantive counterattack to Mr. Piketty’s thesis
Note that Professor Krugman wrote this mere days after the book even became available to most readers, long before it could be expected that anyone could have double-checked the data or formulated a coherent response, and long before any but the swiftest of readers could have been expected to digest the contents.
I recommend that connoisseurs of schadenfreude read all of Professor Krugman’s writings in The New York Times on the subject of Piketty. They are, especially in the light of the emerging news, a rare treat.