"If the FT's attack on the radical economist's 'rising inequality' thesis is right, then all the gross designer bling in its How To Spend It section can be morally justified"
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| "The adverts in the FT and other reputable papers – mainly for large watches, first-class air travel, portable fine art etc – should be collectively retitled 'How To Hide It'." Link to Paul Mason, The Guardian |
"Thomas Piketty's Capital was still No 3 on the Amazon bestseller list when the Financial Times dropped its front-page bombshell. By picking through the spreadsheets the 'rock-star French economist' had placed online, the FT concluded that his key data appeared to be 'constructed out of thin air'.
"Piketty's claim that inequality in the west has risen since the 1970s is wrong, says the FT's Chris Giles. And on this basis, Piketty's view that rising inequality is the central contradiction of capitalism, and will get worse, is also wrong.
"It is always right to trawl through data. There is so much grossing and smoothing in economics, and so little of the realtime peer review that happens in science, that data should always be challengable. But the gleeful response to Piketty's 'errors' on the rightwing Twittersphere did not happen because some FT pointy-heads discovered a few fat-finger inputs.
"It happened because, if Giles is right, then all the gross designer bling advertised in the FT's How To Spend It can be morally justified: it is evidence of rising social wealth in general, not the excess of a few Rolex types."
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| Link to Evan Davis on web site |
The Spectator:
"Has Thomas Piketty met his match? Well, I think I might have met his match. She's called Deirdre McCloskey"
"...To me, this is one big distinction at the heart of the wealth equality debate: whether capital — past accumulation of savings — gets to devour the future, or whether the future is created afresh by each generation.
"This argument is a struggle between those who think riches are created from riches, and those who think riches are created from rags. Are big profits best viewed as a generous return on capital, in the way that worries Piketty? Or as coming from innovation that ultimately benefits us all?
"The answer to that question determines what should be done about inequality. Piketty wants a progressive tax on wealth to prevent high returns entrenching the power of the richest. McCloskey, needless to say, is not keen on redistribution. Taking from today’s rich may give you a one-off uplift in the incomes of the poor of, say 30 per cent, she says; but that is nothing to the uplift from innovation and growth, which can double incomes every generation.
"So much for the central disagreement between them. Here’s my problem. Many people with strong views on inequality consciously or unconsciously think of this as a binary choice: profits go to either a deserving or undeserving rich, depending on your view. It’s all about capital, or all about wealth creation. But I struggle to see it that clearly. I’d like to know how much of the return on capital that so concerns Piketty is actually income earned from entrepreneurial wealth creation. I’d also like to know how important that income is to innovation.
"Piketty is well aware of this vulnerability in his argument. He says:
"The return on capital often inextricably combines elements of true entrepreneurial labour, pure luck and outright theft."
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| Link to web site and video |
CNN:
"Did Piketty get it wrong? Analysis questions author's data"
"This is how they argue in economics: over spreadsheets.
"On one side is Thomas Piketty, author of the best-selling tome "Capital in the Twenty-First Century." He argues that wealth inequality is growing and "threatens to generate extreme inequalities that stir discontent and undermine democratic values," and published the data behind his conclusions online.
"Piketty's book became a best-seller.
"His adversary is Chris Giles, economics editor of the Financial Times."
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