Piketty, darling of the left, appears to have fudged his data
The Financial Times’ economics editor has published two important pieces of detective work on French economist Thomas Piketty that suggest he manipulated his data to get the conclusion he wanted, that wealth inequality is growing, as an inevitable result of capitalism.
As you may know, Piketty has been hailed as the 21st century’s version of Marx, consciously updating Das Kapital for a post-industrial world. But it may be that his version is no more scientific than was Marx’s “scientific socialism.”
Chris Giles writes in Piketty findings undercut by errors:
The central theme of Prof Piketty’s work is that wealth inequalities are heading back up to levels last seen before the first world war. The investigation undercuts this claim, indicating there is little evidence in Prof Piketty’s original sources to bear out the thesis that an increasing share of total wealth is held by the richest few.
Prof Piketty, 43, provides detailed sourcing for his estimates of wealth inequality in Europe and the US over the past 200 years. In his spreadsheets, however, there are transcription errors from the original sources and incorrect formulas. It also appears that some of the data are cherry-picked or constructed without an original source.
It is one thing to make mistakes, but quite another to cherry pick data or just make it up.
…once the FT cleaned up and simplified the data, the European numbers do not show any tendency towards rising wealth inequality after 1970. An independent specialist in measuring inequality shared the FT’s concerns.
Contacted by the FT, Prof Piketty said he had used “a very diverse and heterogeneous set of data sources ... [on which] one needs to make a number of adjustments to the raw data sources.
“I have no doubt that my historical data series can be improved and will be improved in the future ... but I would be very surprised if any of the substantive conclusion about the long-run evolution of wealth distributions was much affected by these improvements,” he said.
As Giles notes, until he went into the details of the spreadsheets used by Piketty, there had been almost universal praise for the quality of his statistical work.
In Data problems with Capital in the 21st Century, Giles writes:
…when writing an article on the distribution of wealth in the UK, I noticed a serious discrepancy between the contemporary concentration of wealth described in Capital in the 21st Century and that reported in the official UK statistics. Professor Piketty cited a figure showing the top 10 per cent of British people held 71 per cent of total national wealth. The Office for National Statistics latest Wealth and Assets Survey put the figure at only 44 per cent.
This is a material difference and it prompted me to go back through Piketty’s sources. I discovered that his estimates of wealth inequality – the centrepiece of Capital in the 21st Century – are undercut by a series of problems and errors. Some issues concern sourcing and definitional problems. Some numbers appear simply to be constructed out of thin air.
When I have tried to correct for these apparent errors, a rather different picture of wealth inequality appeared.
Two of Capital in the 21st Century’s central findings – that wealth inequality has begun to rise over the past 30 years and that the US obviously has a more unequal distribution of wealth than Europe – no longer seem to hold.
Without these results, it would be impossible to claim, as Piketty does in his conclusion, that “the central contradiction of capitalism” is the tendency for wealth to become more concentrated in the hands of the already rich and “the reason why wealth today is not as unequally distributed as in the past is simply that not enough time has passed since 1945”.
It may be too soon to conclude that we have been defrauded, but it is not too soon to suspect that this may be the case.
As Bryan Preston of PJ Media writes:
Picketty’s soft-Communist work has set pretty much the entire Democrat commentariat afire this year. So watch them retreat to some version of the fake-but-accurate meme since he has been exposed.
Because, Communists lie.