Piketty and nitpicky (updated with link to Piketty’s refutation of FT)

I have a couple of pieces up on the topic that’s likely to consume much of my attention for some time to come: Piketty’s Capital in the 21st century.

Here’s a long review article at Inside Story focusing on the conditions that have made Piketty a bestseller. And here, at The Drum is my take on claims by Chris Giles at the Financial Times that Piketty’s data is fatally flawed.

Update Piketty has responded to the Financial Times. To sum up, as I said in the Drum piece, the criticisms are (mostly incorrect) nitpicks except for the point about UK wealth inequality. Here Piketty’s demolition is convincing. The FT hasn’t used a consistent series. Rather, it’s taken a recent survey estimate (likely to underestimate wealth) and spliced it onto older estate data to produce the counterintuitive finding that the inequality of wealth hasn’t increased.

168 thoughts on “Piketty and nitpicky (updated with link to Piketty’s refutation of FT)

  1. @Ikonoclast
    The alternatives ‘everything is happening according to a plan’ and ‘everything is happening by accident’ constitute a false dichotomy.

  2. @J-D

    “Literal”, of course not – the names are different for a start.

    Think Pat Tillman, Jessica Lynch, Nurse Nayirah’s incubator babies and so on.

    I haven’t yet seen any evidence that the Bergdahl story “was entirely fabricated from beginning to end”, and I’m in no position to assert with certainty to what extent it has been fabricated/embellished/manipulated, if at all.

  3. We also owe our current individual ability to accumulate in large part to the work (of any and all kinds) done by all of those who have gone before us .From those who lived nasty short lives down mines, or died as infants ,to those who won Nobel prizes or changed history on the big stage .As the currently living we all benefit from ,and have a right to, share in that massive collective effort .

    At the risk of confusing my point about taxation/redistribution/sharing ;- in a similar but inverted way although a particular man may not be sexist ,or a particular Australian not racist, – all men benefit from the history of sexism, and all Australians (except Aborigines -mostly) benefit from that of racism.

  4. @yuri
    You seem to naively assume that the super wealthy wander down to the newsagent at tax time, pick up a form and fill it would at the kitchen table. I can assure you that the CEO of the CBA is extraordinarily grateful that you paint him as such a simple soul. His bank manager, accountant, trust holder, off shore banker and legal team would also like to offer their sincere thanks …

  5. @sunshine

    If you like, we also owe our current state to all the animals that have willingly or unwillingly helped us on the way. If one looks back, there was time when, say, slaves weren’t really considered human. As we moved forwards, we’ve gradually incorporated all humans, and now even some animals (dolphins, whales) as not simply things to exploit.

    The right, as far as I understand it, would prefer to go back.

  6. @Megan
    Pat Tillman was killed while serving as a soldier in Afghanistan and the inaccurate reporting of important details was not deliberately concerted by the government for propaganda purposes.

    Jessica Lynch was captured while serving as a soldier in Iraq and the inaccurate reporting of important details was not deliberately concerted by the government for propaganda purposes.

    Nayirah’s testimony to the Congressional Human Rights Caucus may have borne as little relationship to the facts as the story concocted in Wag The Dog, and may have been concocted for propaganda purposes; but the evidence does not establish that it was deliberately concerted by government.

    You can look at Wag The Dog and see a story about people telling stories that aren’t true and other people believing them because it’s politically convenient; that is something that happens, and happened well before the film was made, so there’s nothing specially prescient about that.

    You can also at Wag The Dog and see a story about a government-organised conspiracy to create a false story for propaganda purposes; that isn’t strictly prescient either, as it has happened before: for example, in the case of the Gleiwitz Incident, and Operation Himmler more generally. However, the death of Pat Tillman, the capture of Jessica Lynch, and the capture of Bowe Bergdahl are not examples of such, and it’s not clear that the Kuwaiti incubator stories were either.

  7. @J-D

    Your big thing is evidence and precision of language.

    the inaccurate reporting of important details was not deliberately concerted by the government for propaganda purposes

    What is the evidence upon which you make this boldly unequivocal assertion of fact?

  8. @Megan
    Yes, I value evidence, and yes, I value precision. Do you think those are bad things?

    A thorough analysis of the Tillman and Lynch cases would take more time, space, and effort than I feel like expending. If your position is that I haven’t presented the evidence to make my case and that there’s no reason why you should take my word for it, you are correct.

    On the other hand, those cases don’t parallel the Wag The Dog scenario unless the government arranged Tillman’s death (or arranged to fake it) and/or arranged Lynch’s capture (or arranged to fake it). Is that what you’re saying?

    If you are interested in what sort of scenario I might suggest to provide an alternative explanation to deliberate government fakery, I can do that without my full analysis of why that kind of explanation is to be preferred.

  9. Faust 2/44,

    It is amazing how people who profit most from access to the business opportunities obtainable from large populations of orderly, well educated, suitably wealthy, mobile, and readily contactable bodies of workers and consumers somehow feel that such access should be available to them for free. Think of the taxes you pay as a progressive market access fee and be gratefull it isn’t Frank Lowey who is setting the rates.

  10. @J-D

    I will make an assertion, carrying as much weight as yours.

    You are so blindly pro-USA Government (or perhaps a ‘persona management’ bot) that you are incapable of honestly discussing anything that might put the US in a less than glorious light.

    Back to the actual facts about which we were talking, though. Wikipedia (usual caveats) says about Tillman and Lynch:

    “On July 14, 2008, the House Committee on Oversight and Government Reform released a proposed report titled “Misleading Information from the Battlefield: The Tillman and Lynch Episodes”.[36][37] The committee stated that its “investigation was frustrated by a near universal lack of recall” among “senior officials at the White House” and the military. It concluded:

    The pervasive lack of recollection and absence of specific information makes it impossible for the Committee to assign responsibility for the misinformation in Specialist Tillman’s and Private Lynch’s cases. It is clear, however, that the Defense Department did not meet its most basic obligations in sharing accurate information with the families and with the American public.

    That would be “deliberate government fakery” unless you live in a jar on a shelf in a pro-USA think tank, I would disrespectfully suggest.

    Don’t ever dare to pretend to take haughty points of either evidence or language with me ever again after that insulting cop-out.

  11. @Collin Street
    Can I just belatedly reply to your comment at #17 on page 2 – your bit in brackets isn’t the only problem with inequality, there are a lot of other things that are worse – across all social classes – in more unequal societies, mental health and violence being two outstanding examples

    If you haven’t already, do read Wilkinson and Pickett

  12. Megan

    Sounds like J-D is good at ‘man-spaining’ – even women do it to people they judge as being overly emotional and lacking in precision and accuracy – and of course J-D is too intelligent for that sort of cognitive response.

    Freud would diagnose an ‘anal’ personality.

    But I love the ‘bot’ diagnosis. lol

  13. @J-D
    Look, Yuri’s a bait and switch kind of guy. Not worth the keystrokes or the eye movements. I mean you point about the Oxbridge scenario was a good one but Yuri avoids answering it and starts another thought bubble. Likewise your answer to his claim that you pinned them on something they didn’t say which they plainly did. Yuri’s debating style is stream of consciousness.

  14. @faust
    Why do you deserve it? Why does James Packer deserve the money that his father inherited from his father who received extraordinary patronage for serving the narrow self interest of the powerful? Best not to personalise things as they tend to come back on you.

  15. @Megan
    The Tillman Story, a documentary on the topic, doesn’t claim that the circumstances of Tillman’s death were fabricated, it does show that the military attempted to cover up the fact that he was probably killed by friendly fire. It demonstrates the difficulty of achieving this and ultimately the folly as the mistakes that lead to Tillman’s death were far more widely publicised than they would have been had the military admitted their mistake. Wag the Dog is a fabrication in the literal and diegetic senses.

  16. Once upon a time, @J-D , I had a friend who would go to parties and mercilessly denigrate some poor girl, until she would finally crack and make a comment about his not inconsiderable weight. At which point he would go, “Oooh, getting personal are we?”

  17. @patrickb

    My argument is (and I would say, the evidence suggests) that it was much more than that.

    The story of Tillman’s death was deliberately falsified by the US government, with the collaboration of the establishment media, for the domestic political purposes of fabricating a “war hero” narrative to help re-elect Bush and shore up flagging support for its illegal wars of aggression.

    In other words, the story was entirely deliberately fabricated government propaganda.

  18. @John Brookes
    If I have made any comments that are denigratory of anybody, I regret them, and I would appreciate having them drawn to my attention so that I can strive to avoid similar comments in future.

  19. > I regret them

    You can’t actually regret something hypothetically, you know. If you don’t know about it you aren’t thinking about it — a fortiori aren’t “regretting” it — and your “if” right at the start declaims knowledge.

    It’s little inconsistencies like this that show you don’t actually mean what you write. Or possibly that you don’t appreciate the meaning your words convey to others: I want to be charitable, but I’m not sure which that would be.

  20. How plausible does this sound:

    After a brief exchange of handshakes between the insurgents and US soldiers, Sgt Bergdahl moved unsteadily towards the helicopter.

    “Don’t come to Afghanistan again. Next time, nobody will release you,” one of the gun-toting militants is heard telling the US soldier in the 17-minute video, which has not been independently verified as authentic.

    “Not been independently verified as authentic”? What is that supposed to mean? That it isn’t really ‘Bowe Bergdahl’? That the video might be a Wag The Dog exercise? WTF?

    The US spies on the entire world, all the time. Their President draws up death lists every Tuesday targeting innocent people for execution. Recently he executed an Australian without any process whatsoever.

    But we’re supposed to believe that there was this cordial handover of “Good Old Shoe” without a shot fired?

    I suggest that, given all the evidence, it would be best to treat this story as odd – at the very least.

  21. @J-D

    Speaking strictly for myself, I don’t think you want to denigrate people, but I have found, in the past when I was a delicate shrinking violet, that when there were people with your ‘need’ for what you call accuracy, I would not contribute to any conversation in case I was patronised by someone who was needy in the way you are. Poor poor pitiful me eh?

    But it seems to me that we do need to value contributions that other personalities and intelligences have to offer. Do you understand your motivation?

  22. @Collin Street
    True. I can’t regret them if I don’t know what they are. I could have expressed myself more clearly.

    When I consider the possibility that anything I have written may be denigratory of any commenters here, I experience a sense of regret, although strictly speaking I can’t say that my remarks are the object of my regret without knowing which the remarks in question are. This is part of why I would appreciate having them drawn to my attention.

  23. @Megan
    A Web search for the expression ‘independently verified as authentic’ finds references to a number of video clips, at least one paper document, at least one audio recording, and ‘encrypted messages’ apparently electronic. Some of these references are in positive form and some in negative form (‘not independently verified as authentic’). None of them explain how a video clip (or whatever else) was or could be ‘independently verified as authentic’. I don’t know the explanation of that, but I do know the concept isn’t one that was invented just for the Bowe Bergdahl story. If that’s something odd about the story, it’s something odd about many stories, and odd things do happen in real life.

    Wikipedia cites an article in TIME that reports that Bowe Bergdahl’s father grew a beard in an effort to understand the Taliban better. That’s an odd thing to do. But people do things as odd as that and odder.

    News reports state Bowe Bergdahl was released by the Taliban in exchange for the release of five people from Guantanamo Bay. I don’t see anything odd or implausible about the (ancient) concept of prisoner exchange, which also wasn’t invented just for this story.

  24. Human do do odd things; this may be a feature of human nature and perhaps one of the reasons we so irrationally dislike inequality – even if we appear to be doing ok down here on the bottom – and have a need to feel ‘equally’ valued.

    It seems that Neanderthals were not odd; apparently they have obtained (admittedly) degraded DNA from a Neanderthal bone and these people seem to lack the genes that have been identified with mental ‘disorders’ in humans. Feel free to update my understanding of this idea if anyone has any more information.

    There is also a behavioural trait that leads to a diagnosis of ODD – Oppositional Defiance Disorder – in young people, that seems to be increasing; either the trait or the diagnosis.

  25. I do not think I have read any more stupid comment than by wmmbb and that capitalist patsy – Steve Kates.

    Both jokers are ignorant of the fundamental principle of ceteris paribus

    Picketty’s mechanism notes that when the price is too high relative to demand, purchasers switch to substitutes and he gives two examples (real estate and oil prices).

    As a consequence of this substitution, demand must fall and some suppliers (the more expensive ones) will also exit (or adjust their costs).

    Of course demand for substitutes will increase and more suppliers will be attracted here.

    This is just so obvious that we can all have a good laugh at the nitwits surrounding Judith Sloan and all the other badmouths at Catallaxy.

  26. In Western educated industrialised rich democratic (WEIRD) places there has recently developed a strong tendency to see people (and everything) as autonomous units rather than any more holistic view . This is unusual for human beings and for us weird’os this now happens even on the level of basic perceptual style .Moral psychologists have tested this – shown pictures weird people recall individual objects well ,whereas those from other backgrounds better recall the relations between the objects . This reminds me of a (white) friend of mine who grew up in an Aboriginal community ,at school when asked to draw a picture of everyone in the new pool .He drew a picture featuring him and and a few others ,but the Aboriginal kids drew views from above (like their map-like paintings) with black spots in the pool for them and Joe represented by a white spot .I think that our emphasis on the individual right to happiness ,consumption ,competition ,recognition, etc began in the 60’s and exploded in the 70’s with the development of the primacy of youth culture in the context of consumer culture.

  27. @Julie Thomas
    There are some genetic correlates of mental disorder but in nearly all cases they are quite weak. There have been some big number genetic analyses done and typically a large number – like hundreds – of genes are found found to contribute things like bipolar disorder but the total explaining power is small. So, you might say that families and life history create mental disorder, not genes. A similar result in PTSD research is that people develop PTSD after prolonged exposure to high levels of stress. The tipping point is different for different individuals and will have a genetic component but without the exposure you won’t get it. (If you are interested, there’s an amusing true story of psychologist, James Fallon, who discovered he had the brain scan and genetic markers of a psychopath; he put his different life path down to a loving mother.)

    So, I’d say it is difficult to draw strong conclusions about the mental health of Neanderthals from their DNA. There might be some missing genes but mental conditions are highly polygenetic and the environment is more important. Some anthropological evidence indicates they may have less capacity for language, imagination and symbolism which suggests to me that they may have been less prone to mental problems but this is all pretty speculative. The mental characteristics of Neanderthals relative to fully modern humans is actively debated by anthropologists.

  28. @Julie Thomas
    I don’t intend to denigrate anybody here, but regardless of whether that’s good enough for anybody else, it’s not good enough for me. Intent is not magic. An injury doesn’t stop being injurious just because it wasn’t intended and an insult doesn’t stop being insulting just because it wasn’t intended to insult. If I step on your foot, I need to get off your foot. If I step on your foot without intending to do it, I need to get off your foot. If I step on your foot because I didn’t know any better, then I need to learn better and I also need to get off your foot. This is part of why I would like to have my attention drawn to any remarks I may have made that were (unintentionally) denigratory of any commenters here.

    I think what I wrote was not that I need accuracy but that I value precision. I am aware that precision is not always attainable, but I’m not going to stop valuing it because of that. Subject, of course, to whatever constraints may be imposed by our host, we each have to make our own choices about what we post here and about how we respond to other commenters. I am aware of the possibility that the way I approach discussion may discourage other people from interacting with me, and I make my choices in that knowledge.

    I do value other people’s contributions. I don’t value all of them equally: I think that would be a mistake.

    Asking me whether I understand my own motivations strikes me as an odd sort of question. How much do people ever understand their own motivations? Partially, I guess. If you guess at some motive of mine that you think I’m unconscious of, I’m interested to hear about it.

  29. And carrying on with the idea of mental disorders, I suspect that our propensity for these disorders has an evolutionary advantage for the species as a whole. You get the humour of Spike Milligan, the art of van Gogh, and no doubt many other spectacular individual achievements that normal sane people would not do. And for every one of these there are hundreds or thousands who’s mental state did not allow a useful contribution.

  30. > This is part of why I would like to have my attention drawn to any remarks I may have made that were (unintentionally) denigratory of any commenters here.

    How would doing that benefit us, though?

    All I can see you can do when your attention is drawn to stuff is to say, “oh, please draw my attention to it in future” and “if I’ve offended people I’m sorry, if they’re offended”. I’m not seeing actual intent-to-change-behaviour being expressed.

  31. @Jim Birch

    I did read the James Fallon blog or article and agree with everything you say and I do know that the Neanderthal speculation is very speculative. I like speculation, I prefer not to nitpick but to speculate and even fantasise about the patterns I see. I am not judging.

    I agree that it is another human being – a mother is probably best and ideally a village – can prevent a child with a so-called psychopathic brain from becoming one. This is another fantasy I have, that with the knowledge we have now – incomplete as it is – about child development, we could raise adults, rather than the damaged children that most human beings are.

  32. @J-D

    Yep I agree with you about the way you prefer to interact.

    I find it unusual that you don’t want to understand what motivates you or what it is that ‘determines’ why you do the things you do. I wonder about motivation all time and why do people do what they do. I guess we are different.

  33. @Collin Street
    I wrote earlier ‘I would appreciate having them [that is, comments of mine that denigrate people] drawn to my attention so that I can strive to avoid similar comments in future’. Does that not look to you like an expression of intent to change behaviour?

    I suppose that if you don’t see any benefit to yourself in drawing my attention to the specific comments you consider denigratory, then you may choose not to do it. That’s up to you.

  34. @Julie Thomas
    I would like to achieve greater insight into my own motivations if that’s possible. That’s why I wrote: ‘If you guess at some motive of mine that you think I’m unconscious of, I’m interested to hear about it.’

  35. @Jim Birch

    And the other bit of evidence for the idea that one of the things that differentiates us from Neanderthals is that we are more ‘irrational’ than they were and that this might be one of the things that gave us an evolutionary advantage over them. is that it seems ‘we’ can understand they way they organise their ritual places but the way homo sapiens organise their special places is more ‘odd’.

    We are way off topic but I did try to return to inequality.

  36. @J-D

    I don’t put much faith in my ability to be consistent or reliable in my insights; they are often wrong or missing something important but occasionally there is something that makes sense.

    I learned much of what provided me with the ability to be more rationally self-critical totally from doing a psych degree.

    I always had the interest in people, but coming from a socially isolated family with aspie traits – so obvious now looking back – I had no inkling that there were explanations. It was like, in lectures and tutes – and regional universities back in the ’90’s had some very good teachers – that everything that was very easy to understand and to critique actually.

    I think that ‘mindfulness’ techniques are the most rational and functional therapy that I have come across for self-understanding.

  37. > Does that not look to you like an expression of intent to change behaviour?

    No, not really. Expression of intent to change behaviour looks like

    “Oh, yes. I see. Let me think on that.”.

    [your essential problem here is that you’re treating this as a future hypothetical-potential, but it’s actually current reality. “What you would do if people told you your behaviour is problematic”…

    … well, people are telling you your behaviour is problematic, and what you’re doing about it is… quibbling?]

  38. @J-D

    My comment was in jest, more to remember the party exploits of my friend than to get stuck into you. I think other people are mainly complaining about your arguing style.

  39. I wrote an answer.

    It took me twenty minutes. More, probably.

    It went into all sorts of detail about how answering questions takes time and it’s not something you can just demand of people constantly. How I didn’t owe you a half-hour of my life but that I was willing to give it to you anyway. How living with uncertainty was part of the human condition.

    Still didn’t like it. Fixing it would have taken another… I don’t know. Maybe ten more minutes, maybe half an hour. More time than I was willing to give you, more time than I was comfortable being asked for. More than you should have asked for.

    Drop more stuff, is my advice. Live with more uncertainty, don’t ask so many questions and nail down every detail, it’s not worth the cost you’d be imposing on others. Some questions, sure. Sometimes. But other stuff you can let slide. Going to have to let slide, because noone owes you what you want, and after a while even just asking is asking too much.

  40. Leaving aside the question of whether “denigratory” or “concerted” are real words, let’s come full circle:

    A positive assertion of fact was made:

    the inaccurate reporting of important details was not deliberately concerted by the government for propaganda purposes

    The assertion of fact was made by a commenter who routinely demands evidence and precision of language from others, and who pretends to genuine intellectual inquiry.

    Not unreasonably, evidence was requested to back such a positive assertion of fact.

    The answer was a mixture of “I don’t have time” and some pointlessly rhetorical questions.

    The commenter was dismissed on the grounds of being a blowhard concern troll pushing a pro-US government barrow.

  41. Phew! Back from my trip to Sanity Spa on the moon (the latest upmarket mental health retreat for the aspiringly rich – or is the richly aspiring – anyway it was the promise accompanied by fetching pictures to help prolong my sex life for 60 years which grabbed me). They’re still at it!

    I could have gone mad trying to pursue J-D’s nose-to-the-grindstone aspergerish nit-seeking while still with trainers on in the word business and Julie Thomas determined not to out asprrgered in her parallel vision-restricted tunnel.

    As it is I have had been putting in good work shifting assets out of Australia now that M. Piketty seems to have excited the high minded confiscating instinct around the chattering world. Mind you it is harder to threaten one’s nearest and dearest with the invention of the machine by which you CAN take it with you if you haven’t your flashier baubles, Picassos and Chateau Yquems about to flaunt, but in this imperfect world all sorts of little sacrifices and compromises are necessary.

    But dear J-D try to use the contributions of those who just may have something in the corpus of their knowledge, experience, imagination and invention to improve or at least enrich or enlarge your own thinking. It is even just possible that you could come out of a blog purge as a wiser person.

  42. @Megan
    “first nations”? Is that what Pilgerisation does to the otherwise evergreen brain?

    That North American import is a doubly implausible misdescription of our indigenous peoples’ past reality. Whatever may be said of groups of people in communities of tens, indeed hundreds probably in America, of thousands, to apply the word “nations” to hunter-gatherer bands of their necessarily much smaller size smacks not only of mindless PC but of the cringeingly patronising. Then there is the problem of “first” in relation to the Tasmanians and their related but mostly later arriving mainland cousins as at 1788. How many waves of immigrants were there in 50,000 years, of what ethnicities – defined by culture and/or genetic kinship. (Think of the Bradshaws and later styles of painting and what is portrayed. Think of wavy-haired majority “Aborigines” and the pygmy negritos whose descendants are still to be found in northern Queensland).

  43. @yuri

    But Yuri think into the future and when you are old and can’t wipe your own arse, no matter how hard you work squirrelly away your money and tripping out on sexual conquests, I wonder will you be able to afford a nurse who will not spit in your food or make fun of the size of your IQ.

    Even that very rich man, Michael Jackson could not buy a doctor who cared for him.

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