Economist Thomas Piketty on Thursday released the most eagerly awaited update to a technical index in the history of publishing, responding to criticisms of his book published by the Financial Times. In a detailed, 10-page, point-by-point rebuttal, Piketty explains how he arrived at the numbers in Capital in the Twenty-First Century that the FT called into question, and in doing so questions the seriousness of the project undertaken by the British financial paper.
Overall, Piketty's response boils down to a few separate arguments. For one, he notes, almost none of the alleged errors the FT found in his book change his thesis in any meaningful way. Second, he adds, the alleged errors are not, in fact, errors at all, but the result of confusion or carelessness on the part of the FT. And third, where there is a disagreement that would lead to a substantial change in Piketty's findings, the FT has little support for its argument that Piketty was wrong and they are right; rather, economists who have studied the issue support Piketty's data analysis over that of the FT. Further, he adds, the FT ignores robust evidence that has emerged since his book was published that supports his findings.
"My problem with the FT criticisms is twofold. First, I did not find the FT criticism particularly constructive. The FT suggests that I made mistakes and errors in my computations, which is simply wrong, as I show below. The corrections proposed by the FT to my series (and with which I disagree) are for the most part relatively minor, and do not affect the long run evolutions and my overall analysis, contrarily to what the FT suggests," Piketty writes. "Next, the FT corrections that are somewhat more important are based upon methodological choices that are quite debatable (to say the least). In particular, the FT simply chooses to ignore the Saez-Zucman 2014 study, which indicates a higher rise in top wealth shares in the United States during recent decades than what I report in my book (if anything, my book underestimates the rise in wealth inequality). Regarding Britain, the FT seems to put a lot of trust in self-reported wealth survey data that notoriously underestimates wealth inequality."
Piketty put all of his data online in the form of Excel sheets, which are difficult for a novice to follow. The FT never asked Piketty to walk them through his notes, instead charging that some of his numbers had come from "thin air." Some of the resulting embarrassment endured by the paper could possibly have been avoided.
In response to a particular nit the FT picked about differential mortality, Piketty says:
What I find somewhat puzzling in this controversy is the following: (i) the FT journalists evidently did not read carefully the technical research papers and excel files that I have put on-line; (ii) whatever adjustment one makes to correct for differential mortality (and I certainly agree that there are uncertainties left regarding this complex and important issue), it should be clear to everyone that this really has a relatively small impact on the long-run trends in wealth inequality. This looks a little bit like criticism for the sake of criticism.
Read Piketty's full response on his website.
Piketty will appear for a one-hour joint interview with Elizabeth Warren, hosted by The Huffington Post, this Saturday in Boston. The event will be held at the Old South Meeting House at 10 a.m. and admission is free on a first-come, first-serve basis. The interview will be broadcast on HuffPost Live at 8:30 p.m. EST on Monday, June 2. Click here to get an alert when it goes live.
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Watch Piketty's previous interview with HuffPost Live.