To Err Is Human

So, apparently too is the refusal to acknowledge mistakes. I located the post I was looking for, this post at Zerohedge on the data errors I mentioned yesterday in Thomas Piketty’s (PEE-keh-tee’s) work. Here’s the summary:

In the interest of brevity, I had to limit my quotations from Summers’ review. But I hope the limited excerpts above show my point: Summers was absolutely devastating in his critique of the theory underlying Piketty’s book. Yet Summers overall kept coming back to praise it, because Piketty gosh darn it had done “meticulous” work documenting the disturbing accumulation of wealth among the super rich over the last few decades. Except, as it turns out, that maybe a big chunk of those results were due to stupid mistakes or worse.

I think we’ll be able to gauge how much reputational damage has been done to Dr. Piketty when we see whether he gets his Nobel award (contrary to popular opinion there is no Nobel Prize for economics).

The science is kind of interesting. There are some interesting aspects of what the data reveal even with the corrected data, illustrated in the linked post. Britain appears largely to have returned to its downward trend in the concentration of wealth after a brief uptick around 2000. That alone is sufficient to refute Dr. Piketty’s central claim.

Wealth appears to be increasingly concentrated in the United States but not catastrophically so. To my eye we appear to have a much longer cycle.

Did the Panic of 1907 really knock the socks off the Gilded Age? If that’s the case it would be interesting since it suggests that the Fed and Treasury working in tandem are producing the worsening distribution in wealth. IMO that’s obvious but it’s nice to have some confirmation of it.

2 comments… add one

  • PD Shaw

    I noticed early on a tendency of right-of-center economists to praise Piketty’s work, while taking serious issue with parts of it. And it led me to suspect that Piketty was proving to be useful to discredit an opinion. A Rope-a-dope strategy.

  • steve

    The part that deserves praise is the effort to collect and analyze all of the data. Putting it online for people to examine. I dont think many people beleive his policy proposals possible.


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