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Piketty’s Data, Krugman’s Shame

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.

23 comments to Piketty’s Data, Krugman’s Shame

  • Paul Marks

    I would point out that (contrary to what people might think) the Financial Times is actually a newspaper of the LEFT – it is a weird mixture of business news and left wing politics (some years ago it even had one or two card carrying members of the Communist Party on the staff).

    If the “FT” is saying that Piketty’s stuff is nonsense – then it really must be nonsense.

    As for Paul Krugman.

    A wretched hack.

    Sometimes I suspect that I invented Paul Krugman – he is so perfect an illustration of the mixture of arrogance and utter ignorance that I maintain is the defining feature of the modern Progressive academic.

    One of Plato’s bastard children.

  • Mr Ed

    peer review might have caught these problems earlier.

    Perhaps, but what if Isaac Newton’s discourses on alchemy had been peer-reviewed? What might possibly have been gained? Water finds its own level. :-) There is no substitute for the truth.

  • RAB

    What? Yet another French Left wing “intellectual” caught making it up as he went along? Quelle Suprise!

  • PeterT

    I think of the leFT as more managerialists than left wing as such. Nevertheless the unthinking centrism annoyed me enough to cancel my subscription (after they endorsed Obama for a second term). Its a bit of a shame as the business news is second to none. Good to hear that they are calling BS on the Piketty book, which I have no intention to read. The ecommunist magazine did not used to be quite as bad as the FT but got to the same place unfortunately.

  • Jacob

    Economics, like climate science, is a belief system, something like an ideology or a religion.
    Data serves to justify one’s a_priori beliefs. You don’t gather data to research what is the case. You “know” the conclusion already, you use the data to try to give your beliefs a veneer or pretension of objectivity.

  • Paul

    On the contrary. Prof Piketty understands Capitalism very well. He knows that if you make up implausible cr*p confirming their basic prejudices, lefties will fall over themselves the praise it and the book will sell like hot cakes.

  • Why doesn’t anyone remark the obvious arrogance of the book conspicuously being a modern variant of Marx’s “Das Kapital”: same title, updated, same pseudo-scientific mimickry of the science of the day to justify the same communist agenda.

  • CaptDMO

    But Fare, the international award winning economist Mr. Krugman did exactly that, when he ignorantly insisted “…is that the right seems unable to mount any kind of substantive counterattack.”
    Rather than say, referring to other “economic” positions.
    Saaaaay, Didn’t Karl Marx “write” for a “popular” newspaper once?

  • Perry Metzger (New York, USA)

    I think discussing such metaissues as what Piketty’s motivations and politics may be is counterproductive. If one wishes to understand whether his points are true or false, one must concentrate on them, and not his person. If one wants to convince others who find his ideas seductive that they are incorrect, I think it is, again, more principled to discuss his ideas themselves.

    In any case, I have no privileged insight into Professor Piketty’s mind and can only argue on the basis of his statements — and, in the unlikely event that he were to debate against me, I would hope that, rather than calling me names or attempting to link me in people’s minds with various ideological groups, that he would address my substantive points, just as I attempt to address his.

    One should, I think, behave in the manner you wished everyone behaved, rather than behaving in the manner that you see others you dislike behaving. My distaste for Paul Krugman stems directly from his inability to resist ad hominems and a dozen other forms of logical fallacy. I wish to see his method of operating extirpated, not to perpetuate it by indulging in it myself. I will not claim he is wrong because I find him personally repugnant. He is wrong because he makes claims in public for incorrect ideas, argued through the use of appeals to emotion, ad hominems, circular reasoning, etc., and indeed, the reason I find him personally repugnant is because of his gleeful use of such methods.

    Maintaining the discipline of avoiding logical fallacies in argument, especially the ad hominem attack, in no way means one is required to be anything less than forceful in discussing the substance. Piketty’s ideas are absurd and ill supported, and there is nothing wrong with stating that bluntly. Maintaining such discipline also in no way requires that one avoid expressing distaste for particular individuals. What it requires is that one scrupulously avoid the mistake of conflating one’s distaste for a substantive argument.

    As a practical matter, the ad hominem approach is also not particularly convincing except to members of one’s in group. It is, for example, all to easy to say, of a socialist, “but he’s a socialist!”, as though that was a convincing argument to someone who does not understand why socialism might be a problem. It is always far better to explain that your target’s policy prescriptions would lead to mass suffering, and to demonstrate why this is indeed so in a manner that they can readily understand, rather than to attach labels to your opponents that may or may not have any interesting meaning to others who do not already agree with you.

  • Runcie Balspune

    The problem is that this is just helping the truth tie its laces a bit faster, the lie is already out in print and being devoured slavishly by lefties, just like many publications before it (The Spirit Level and all the way back to the Protocols of the Elders of Zion). No amount of analysis or debunking is going to save it now.

    Picketty, Krugman and their ilk are more like religionists, who start with a premise that is deemed to be true and work backwards. Even reality is not going to be enough to dissuade them, because by doing so you will undermine their whole world-view and philosophy. That is precisely why they behave towards accurate criticism so.

  • Johnathan Pearce (London)

    Krugman’s career as a newspaper columnist (rather than as a professional economist who has actually written good things on trade) is largely driven by a complete lack of any sense of shame, or contrition for errors made. I sometimes wonder what the late Milton Friedman, who had a regularly Newsweek column, would have made of him.

    The Piketty phenomenon is example of how, so long as your message confirms the views of certain people, a bit of factual jiggery-pokery is tolerated. We should, by the way, not assume that this doesn’t happen on the libertarian side. For instance, I have read that Murray Rothbard could be naughty in this regard.

  • Perry Metzger (New York, USA)

    Jonathan Pierce: Rothbard was, sadly, quite frequently amenable to trimming, tucking and retouching the truth if the original did not suit his needs. I find this sort of thing unacceptable, and it is one of the reasons I am not more of a Rothbard fan.

  • Nick (Blame The French) Gray

    I wonder if Piketty is a joker? Perhaps he is simply presenting a flawed book as an example of how the left will accept anything that seems to conform to their biases? Le Affaire Piketty could damage the left for years!

  • Sigivald

    Holy Bellesiles, Batman.

    Fabricated data? Shocking.

    (I’m with Mr. Metzger – I don’t know about the data, but Rothbard was big on handwaving and assertion in his political statements.

    Man, Economy, and State runs off the rails right when he gets to State.)

  • Plamus

    I recommend that connoisseurs of schadenfreude read all of Professor Krugman’s writings in The New York Times on the subject of Piketty.

    How about no? The amount of malicious stupidity that Krugman and his fanboys generate never fails to depress me, and I am willing to risk the brain damage.

  • Laird

    So Piketty’s book is the equivalent of Michael Mann’s hockey stick graph. At least we had the sense to figure that out much more quickly this time. It appears that we’re learning.

    Perry M, I don’t disagree with anything you said about ad hominem attacks. But my aversion to, and attacks on, Krugman are far from ad hominem. My problem is that he is, at best, a mediocre economist (although he is a first-rate polemicist). He is our generation’s answer to JM Keynes: a second-rate mind who has amassed a huge but wholly undeserved reputation by pandering to the political class. Keynes was not an economist but rather a dilettante, serving up large helpings of previously discredited and internally inconsistent economic theories in fancy new dress.* Krugman is no better. His much-vaunted Nobel Prize was wholly unmerited, as I’ve discussed here on more than one occasion and I’m not inclined to repeat myself again. (It was awarded the year before Barack Obama’s Nobel Prize, which tells you all you need to know about the political milieu in which it was awarded.) He has parleyed that honor into fortune and fame; good for him. P.T. Barnum grew rich, too. But in truth Krugman is the Wizard of Oz: a gigantic fraud who has somehow convinced most of the world that he is a Great and Wise Man. Even his detractors, when objecting to some particularly moronic essay in the Times, tend to reflexively assert that he is a competent economist in certain areas (generally international trade). But I defy anyone to produce one original and perceptive thing he has written.

    * As Hazlett perceptively noted about Keynes’ General Theory: “What is original in the book is not true; and what is true is not original. In fact, even most of the major errors in the book are not original, but can be found in a score of previous writers.”

  • John Mann

    Giles may be proved correct, but the truth of the matter is that there are still those who are not convinced, and the debate about Piketty’s book is still ongoing.

    See, for example, http://www.economist.com/blogs/freeexchange/2014/05/inequality-0

  • Perry Metzger (New York, USA)

    “Laird” writes:

    I don’t disagree with anything you said about ad hominem attacks. But my aversion to, and attacks on, Krugman are far from ad hominem.

    I have no objections to disliking Krugman for what he says, which appears to be what you are doing. I only object to when people claim we should not believe something because of who has said it.

    (As much as I hate Karl Marx, it would be silly to claim Das Kapital is wrong because it was written by a known Marxist…)

  • Laird

    Perry, no need for that quotation marks; Laird is my name.

  • Rob

    A better comparison of Piketty’s book would be with “The Spirit Level”, which the Left wet it’s collective pants over in excitement and which also turned out to be a load of cherry picked balls.

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