Financial Times: We’ve found some, ahem, “serious inconsistencies” in Thomas Piketty’s numbers

posted at 4:41 pm on May 23, 2014 by Erika Johnsen

As Ed already noted during the advent of Thomas Piketty’s not-so-revolutionary “Capital in the Twenty-First Century,” there are some serious fundamental flaws in the Piketty narrative in which modern economic growth has somehow ravaged the lower and middle classes while the upper echelons of society enjoyed the lion’s share of the benefits, and we are now supposedly in the midst of an income-inequality crisis. Piketty got very obviously picky and choosey with a whole lot of the data points he used to construct his arguments, and the Financial Times just did their own investigation into the exact math he employed. The results?

But, according to a Financial Times investigation, the rock-star French economist appears to have got his sums wrong.

The data underpinning Professor Piketty’s 577-page tome, which has dominated best-seller lists in recent weeks, contain a series of errors that skew his findings. The FT found mistakes and unexplained entries in his spreadsheets, similar to those which last year undermined the work on public debt and growth of Carmen Reinhart and Kenneth Rogoff. …

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.

For example, once the FT cleaned up and simplified the data, the European numbers do not show any tendency towards rising wealth inequality after 1970.


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Math is hard.

philw1776 on May 23, 2014 at 4:44 PM

When is Allah’s next post?

coolrepublica on May 23, 2014 at 4:44 PM

It also appears that some of the data are cherry-picked or constructed without an original source.

So he’s a climate scientist as well as being an economics genius?

Marxism is for dummies on May 23, 2014 at 4:47 PM

Woops.

Critic2029 on May 23, 2014 at 4:47 PM

I am shocked — shocked! — to find fudging of statistics by a socalistic economist.

There Goes the Neighborhood on May 23, 2014 at 4:49 PM

Heh, imagine that. Communism would work if it just didn’t have to deal with the truth.

Ellis on May 23, 2014 at 4:49 PM

And thus the importance of showing your data. He should have hid the decline instead.

cptacek on May 23, 2014 at 4:49 PM

It isn’t about reality with these people. It’s about ideology.

crankyoldlady on May 23, 2014 at 4:49 PM

Obviously The Financial Times didn’t use the Common Core method. Then they would see that there aren’t any issues at all.

chuckfinlay on May 23, 2014 at 4:50 PM

He should change his name to Cherry Piketty.

hepcat on May 23, 2014 at 4:50 PM

a liberal lied. maybe FT can check on if water is wet next.

t8stlikchkn on May 23, 2014 at 4:51 PM

“So making sh!t up isn’t cool?”
/Piketty

Bitter Clinger on May 23, 2014 at 4:52 PM

Absolutely stunning!

bazil9 on May 23, 2014 at 4:52 PM

Wake me when you find a marxist who isn’t lying.

rbj on May 23, 2014 at 4:55 PM

cacher le déclin!

Left Coast Right Mind on May 23, 2014 at 4:56 PM

Well, I know that when I’m working on spreadsheets for work and the formula doesn’t produce the number I want, I always multiply by two as well so I don’t see the problem here.

Grammar Nazi on May 23, 2014 at 4:58 PM

IIRC the Reinhardt et al. error was in one cell of a spreadsheet. They issued a correction…and the bottom line was that with debt over 90 percent the growth rate was slightly over 1 percent as opposed to under 1 percent.

there was never accusations of cherry picking. The left was overjoyed that this error…and i await the methodical and transparent corrections to be published about these errors

as well…all (if the fullness of time /s

r keller on May 23, 2014 at 4:58 PM

It also appears that some of the data are cherry-picked or constructed without an original source.

Hide the Decline … all the coolest leftist turds are doing it!

ThePrimordialOrderedPair on May 23, 2014 at 4:58 PM

cacher le déclin!

Left Coast Right Mind on May 23, 2014 at 4:56 PM

It sounds better in French.

crankyoldlady on May 23, 2014 at 4:59 PM

cacher le déclin!

Left Coast Right Mind on May 23, 2014 at 4:56 PM

You beat me to it .. and in French, too!

ThePrimordialOrderedPair on May 23, 2014 at 5:00 PM

Rumor is he worked with Mikey Mann who showed him how to get the results he wanted.

darwin on May 23, 2014 at 5:01 PM

there was never accusations of cherry picking. The left was overjoyed that this error…and i await the methodical and transparent corrections to be published about these errors

as well…all (if the fullness of time /s

r keller on May 23, 2014 at 4:58 PM

i have no idea what happened…i’m blaming windows 8

r keller on May 23, 2014 at 5:01 PM

Details… schmetails.

I mean really – are the numbers all that important? Can’t we just accept the premise that Capitalism sucks? /

Hill60 on May 23, 2014 at 5:02 PM

Financial Times: We’ve found some, ahem, “serious inconsistencies” in Thomas Piketty’s numbers

Unexpectedly…

Oh and, “What difference, at this point, does it make?”

Oxymoron on May 23, 2014 at 5:02 PM

Now all he needs is some hollywood dolt like matt damon or sean penn to make a “documentary” and give their seal of approval and presto …. it will be a nobel prize for picketty.
After that, no one will even know how he lied .
Then the circle of deceit will be complete.
I wonder what the trolls have to say
:)

burrata on May 23, 2014 at 5:02 PM

In any event, as wealth grows it is natural that the absolute differences in wealth grow along with it. There’s nothing bad about that. In fact, if wealth differences were shrinking that would generally be a sign of a stagnant or dying economy. Of course, we know that the nihilistic left wants stagnation and death. That’s their dream.

ThePrimordialOrderedPair on May 23, 2014 at 5:03 PM

Sounds similar to “hide the decline” trick.

jmtham156 on May 23, 2014 at 5:03 PM

It’s always politics first with the left.

rickv404 on May 23, 2014 at 5:05 PM

Math is just part of the capitalist false consciousness.

gwelf on May 23, 2014 at 5:05 PM

He meant well.

/

LetsBfrank on May 23, 2014 at 5:06 PM

“Because REAGAN.”

-Senator WigWam Lies-A-Lot

portlandon on May 23, 2014 at 5:06 PM

There was absolutely no Income Inequality in feudal Europe.

Damn Capitalists!

WryTrvllr on May 23, 2014 at 5:06 PM

Fuzzy Math.

swamp_yankee on May 23, 2014 at 5:07 PM

Economics is a subject that does not greatly respect one’s wishes.

Nikita Khrushchev

Dolce Far Niente on May 23, 2014 at 5:08 PM

Liberal economists and climate ‘scientists’ playing fast and loose with the facts to support silly policies. Why am I not surprised?

rmkdbq on May 23, 2014 at 5:09 PM

Um, except for the one idiot who tried to change the subject, where are the ignorant trolls who were trumpeting this guy earlier?

cozmo on May 23, 2014 at 5:09 PM

Thank goodness this came out! I have cancelled the transfer of my enormous wealth to the Nancy Pelosi Pork for Little People Fund and have rescinded my order for sackcloth and ashes.

Whew! That was close.

IndieDogg on May 23, 2014 at 5:10 PM

He should change his name to Cherry Piketty.

hepcat on May 23, 2014 at 4:50 PM

We have a winner!

Grammar Nazi on May 23, 2014 at 5:10 PM

Marxism is for dummies on May 23, 2014 at 4:47 PM

Ha!

LetsBfrank on May 23, 2014 at 5:06 PM

Yeah, I mean, this is really a rough crowd here at hot air.

I bet Libby Freordie loves this guy as much as Elizabeth Warren, anyway. It is the thought that counts, after all.

Chuck Ef on May 23, 2014 at 5:10 PM

For the French, the essence of math is truly found in the passion of the seeker!

swamp_yankee on May 23, 2014 at 5:11 PM

Cherry Piketty.

hepcat on May 23, 2014 at 4:50 PM

LOL

Fallon on May 23, 2014 at 5:12 PM

Why are leftists such suckers? Are that desperate to have their idiocy validated?

NotCoach on May 23, 2014 at 5:13 PM

Unenlightened Americans, cant appreciate math for the true art that it is.

swamp_yankee on May 23, 2014 at 5:14 PM

Prof Piketty, 43, provides detailed sourcing for his estimates of wealth inequality in Europe and the US…

Well, there’s the problem: He is young and foolish yet.

[repeat ten times fast...]

Newtie and the Beauty on May 23, 2014 at 5:15 PM

Um, except for the one idiot who tried to change the subject, where are the ignorant trolls who were trumpeting this guy earlier?

cozmo on May 23, 2014 at 5:09 PM

Still trumpeting him. You can’t beat a dumb idea out of a liberal’s head. If Piketty told them lead makes for great life preservers, they would all drown before letting go.

WryTrvllr on May 23, 2014 at 5:15 PM

Well, I know that when I’m working on spreadsheets for work and the formula doesn’t produce the number I want, I always multiply by two as well so I don’t see the problem here.

Grammar Nazi on May 23, 2014 at 4:58 PM

You and Piketty are amateurs. Screw the formula and just enter the number you want.

NotCoach on May 23, 2014 at 5:15 PM

Why are leftists such suckers? Are that desperate to have their idiocy validated?

NotCoach on May 23, 2014 at 5:13 PM

They’re that desperate to spread their misery. Nothing ticks off a leftist more than a happy person or a thriving economy. Leftists are determined to stamp out all enjoyment, pervert and destroy all traditions, and kill all signs of civilization.

ThePrimordialOrderedPair on May 23, 2014 at 5:16 PM

Thought Squaw and Piketty were doing a pow wow together? That should be a winner.

Goodie on May 23, 2014 at 5:16 PM

I bet Libby Freordie loves this guy as much as Elizabeth Warren, anyway. It is the thought that counts, after all.

Chuck Ef on May 23, 2014 at 5:10 PM

LibFree is kind of like antimatter. If we ever came in contact with him(or her) it would be annihilation.

jmtham156 on May 23, 2014 at 5:18 PM

But he’s SOOOOO SMART!

CycloneCDB on May 23, 2014 at 5:21 PM

Why are leftists such suckers? Are that desperate to have their idiocy validated?

NotCoach on May 23, 2014 at 5:13 PM

I think the middle class is the sucker. Every leftist scheme appears to be geared towards enriching the leftists by stealing from the middle class.

Leftists grow government because it not only gives them more power, but oodles more money … taxpayer money. They’re literally swimming in it.

darwin on May 23, 2014 at 5:25 PM

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.

Translation: He fudged the numbers. Is anyone else surprised?

Newtie and the Beauty on May 23, 2014 at 5:27 PM

CPS changing the way is measures uninsured
BLS changes the way it “counts” the unemployed
hide the decline
CBO scoring of obamacare
ICE deportation statistics
pikety
they lie. and lie with numbers. orwellian.

t8stlikchkn on May 23, 2014 at 5:31 PM

For all of you that shelled out $24.99 for a book you didn’t know was fiction, don’t worry that book will still make a nice starter log this winter.

Ellis on May 23, 2014 at 5:32 PM

If you listen carefully you can hear Brayam crying, all the way up in Canada.

slickwillie2001 on May 23, 2014 at 5:37 PM

If he has any spare time on his hands, I’m sure the ‘scientists’ in the AGW religious organizations would be able to find further work for Piketty. He has all the skill sets they need.

slickwillie2001 on May 23, 2014 at 5:39 PM

If you listen carefully you can hear Brayam crying, all the way up in Canada.

slickwillie2001 on May 23, 2014 at 5:37 PM

Gee, I forgot all about that guy.

Bitter Clinger on May 23, 2014 at 5:48 PM

If you listen carefully you can hear Brayam crying, all the way up in Canada.
slickwillie2001 on May 23, 2014 at 5:37 PM

That’s how they always sound in Canada.

Nutstuyu on May 23, 2014 at 5:52 PM

It’s like Obama math where 2+2 = RACISM !

viking01 on May 23, 2014 at 5:55 PM

I bet Libby Freordie loves this guy as much as Elizabeth Warren, anyway. It is the thought that counts, after all.

Chuck Ef on May 23, 2014 at 5:10 PM

Wrong, he thinks Piketty is not radical enough. Actually you’d be surprised but this is why he’s considered so meh in tye French intellectual circles and in general (he’s nowhere close to the super hero status that they assigned him here), because he’s not radical enough. While he made headlines in the french news these past few months, it was merely because most French editors, bloggers etc were trying to figure out what was the American left’s fascination with this guy who so ‘tame’ by the French left standards. Importanf note, the left in france is waaaay to the left of the left here, and the crazy-radical left there is off the charts, you can’t quantify their insanity because there is no known (to man) metric/yardstick to measure those levels of crazy.

jimver on May 23, 2014 at 6:02 PM

Breathlessly awaiting bayam’s spin on this…

Del Dolemonte on May 23, 2014 at 6:08 PM

just because the specific numbers might need a little tweaking it doesnt mean pikettys overall point is wrong. i for one dont need any study to tell me what i can see with my own two eyes around me ever single day. inequality is killing the american dream.

ThisIsYourBrainOnKoch on May 23, 2014 at 6:12 PM

just because the specific numbers might need a little tweaking it doesnt mean pikettys overall point is wrong. i for one dont need any study to tell me what i can see with my own two eyes around me ever single day. inequality is killing the american dream.

ThisIsYourBrainOnKoch on May 23, 2014 at 6:12 PM

it actually means exactly that, that Piketty’s overall point is wrong. That’s the whole point Giles is making in his FT article, after he checked Piketty’s data. 1) The exact level of European inequality in the last fifty years is impossible to determine, as it depends on the sources you use (P used a mish mash of sources to obfuscate the results) . 2) Whichever level you pick – and unlike what Piketty claims – wealth concentration among the richest people has been pretty stable for 50 years in both Europe and the US. There is no upward trend. So, P is wrong.

jimver on May 23, 2014 at 6:33 PM

Confirmation bias, paying attention to only those things which back you up, is strong in today’s politics. All sides are affected by it, and a wise person should pay attention to whom they are paying attention.

However, one particular side of US politics claims to be the “party of science.” They have heard that Piketty rips capitalism to shreds (not that they’ve actually read his book) and that settles that – it’s confirmed.

The fact that he made stuff up to enhance his math has no connection to the belief that he has “proven” capitalism sucks. The message, once proclaimed, cannot be recalled in the popular vernacular.

It don’t matter now that he lied. The “party of science” loves what he has to say, therefore he is still correct, no matter how wrong he really may be.

If you would like another example, just think about climate “science.” Would you take ExxonMobil’s word for it if they proclaimed that they had “science” on their side? No.

So why should I believe that the folks who need to make a living at lying about climate change are telling the truth about the “science” proving climate change?

DublOh7 on May 23, 2014 at 7:22 PM

For example, once the FT cleaned up and simplified the data, the European numbers do not show any tendency towards rising wealth inequality after 1970.

What’s that, a liberal lying liar who lies? How usual.

RJL on May 23, 2014 at 7:26 PM

So once you take out the fudging and making up of numbers you get a result of capitalism actually DECREASING wealth inequality?

Yet another Leftist falsifying numbers to please his preconceptions of the world. Thus they prescribe things to INCREASE wealth inequality while saying it will DECREASE it.

As my Uncle Joe used to say:

Figures don’t lie.

But liars sure can figure.

ajacksonian on May 23, 2014 at 7:31 PM

i for one dont need any study to tell me what i can see with my own two eyes around me ever single day. [Envy about perceived] inequality is killing the american dream.

ThisIsYourBrainOnKoch on May 23, 2014 at 6:12 PM

Just a little correction, TIYBOK, because you make the same mistake as others by assuming that all inequality stems from the same root causes, which it does not.

Inequality (of wealth, presumably, since that is the context of your statement) is not “killing the American Dream”: to say that it is implies you believe that the American Dream is defined by lack of inequality, which is a logical tautology and therefore meaningless as a point of discussion.

The American Dream, in common understanding, is to have a productive, pleasurable life, with liberty guaranteed by the sanctity of person and property.

Inequality in wealth is not antithetical to this concept (people have differing productivity and different pleasures, after all), but it is also not the inevitable consequence of it (one can envision a community of people who voluntarily disburse their “excess” wealth to others because it pleases them to do so).

People who achieve these goals in life have no need to envy others who have greater material goods; inequality of results resulting from different productivity, or lack of generosity thereafter, does not kill the American Dream, so long as no one else is prevented from having the liberty to pursue the kind of life they choose.

A malignant inequality in wealth generally occurs when one or more of the elements of the American Dream is perverted by an outside force, most often government or quasi-government forces (unions, political machines, regulatory predators); or when criminal elements are not restrained by the government (gangs, monopolistic business cabals); or when a person becomes unproductive through deliberate obstruction of their right to choose their own course in life or of their liberty in person or property.

Preventing or correcting a malignant inequality requires addressing its particular root causes, not just confiscating the “excess” wealth of some and giving it to others; particularly when the persons whose wealth is confiscated are not the instigators of the malignancy.

People who become unproductive by choice or by chance have no claim on the goods of others, but their envy leads them to take steps to eradicate this natural (and non-malignant) inequality by force, which must in some way pervert one or more elements of the American Dream, and thus itself becomes a cause of malignant inequality.

These all have the effect of killing the American dream by degrees, because people are prevented from obtaining that which would otherwise be the reward of their efforts.

Inequality is a symptom, not a disease.

* * *
And the plural of anecdote is not data, even if you see it with your own two eyes.
However, if you choose to elaborate, we would be interested in hearing the details that surround you every single day, because all data does ultimately derive from the multiplication of specific instances, and anecdotes give researchers a place to start.

AesopFan on May 23, 2014 at 8:00 PM

just because the specific numbers might need a little tweaking it doesnt mean pikettys overall point is wrong. i for one dont need any study to tell me what i can see with my own two eyes around me ever single day. inequality is killing the american dream.

ThisIsYourBrainOnKoch on May 23, 2014 at 6:12 PM

I think what you really meant is, ” I , for one, won’t allow reality to invade my space and allow truth to totally decimate all the bullshyt my professors taught me over the past 16 years at a mere cost of 250k”

Capitalism CREATED the middle class. Now flip those burgers, serf.

WryTrvllr on May 23, 2014 at 10:14 PM

Who cares anyway? Why is income diversity a bad thing? I have never heard a persuasive answer to that question. If someone creates wealth, why should someone else be entitled to take it? Picketty is an idiot that wrote a book that appeals to the uneducated masses but is meaningless when applied to reality. It is a complete misunderstanding of basic economics at best.

Ellis on May 23, 2014 at 10:21 PM

AesopFan on May 23, 2014 at 8:00 PM

That was, like, a 12th +3 grade reading level, and thus totally ineffective for its purpose.

WryTrvllr on May 23, 2014 at 10:25 PM

Math is hard.
philw1776 on May 23, 2014 at 4:44 PM

No it’s not. What is hard however, is proving something exists, when it doesn’t actually.

EvilMonk on May 24, 2014 at 12:51 AM

They can’t even make up numbers correctly!

tenore on May 24, 2014 at 2:11 AM

Of course there’s income inequality and it’s increasing. Don’t need any phony studies – just need to open your eyes. Millions out of work. Millions getting their hours cut. Prices are up, while millions have their incomes reduced. The main cause is government and cronyism.

RayBacliff on May 24, 2014 at 9:56 AM

I, for one, will not stop until every single last “poor” person has an iPhone and cable TV! I will do whatever it takes. I will not tire, will not become distracted, will not rest, will not… err… what?.. oh.

[cracks beer and settles into hammock]

stvnscott on May 24, 2014 at 10:14 AM