The Financial Times is standing its ground on its Piketty accusations

posted at 4:01 pm on May 27, 2014 by Erika Johnsen

After the Financial Times released the findings of its investigation into “Capital in the Twenty-First Century” author Thomas Piketty’s number-crunching on Friday, pointing to instances of cherry-picked data and non-sequitur math used to prove a foregone conclusion, Piketty published a response that — as Ricochet writer King Banaian explained for us here at HotAir over the long weekend — didn’t do much to answer the questions that the FT’s analysis raised. Despite the defenses coming from the Left on Piketty’s behalf, the FT’s editorial board is standing by its conclusions in a piece they published this morning. Although the editors do indeed commend Piketty for publishing all of his spreadsheets online, they evidently do not feel at all cowed in reasserting that “his thesis that capitalism has a natural tendency for wealth to become ever more concentrated in the hands of the rich” has a heck of a lot wrong with it. Worth the read:

Data on the distribution of wealth are notoriously unreliable, so any comparisons with more than 100 years ago must also be looked at with scepticism. Even if Prof Piketty’s figures were flawless – something which he too accepts is impossible – wealth inequalities would still be much lower than in the early 20th century. Modern America and Europe are nothing like Downton Abbey.

Other conclusions from the best-seller are also unconvincing. The FT has found grounds to question the finding that the holding of wealth by the rich in Europe has increased since 1980. Without that result, there cannot be an iron law of capitalism that leads to ever rising inequality. …

Even if wealth inequalities were to rise, it is important to understand the reasons for this increase. There is a gulf of difference between wealth derived from entrepreneurial skills and inheritance. There will also be a natural tendency for wealth concentrations to rise in an ageing society, as people need to stash more in private pensions to prepare for a long retirement. This is not to say that, in the modern world, there are no cases in which wealth for the few is inhibiting opportunities for the many. But rather than simply assuming there is a central contradiction in capitalism, one should seek the specific causes.


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“Non-workers, unite” — new marxist slogan

Schadenfreude on May 27, 2014 at 4:06 PM

At former Enron executive Paul Krugman’s house, it’s time to turn out the lights, the party’s over.

itsspideyman on May 27, 2014 at 4:12 PM

“Non-workers, unite” — new marxist slogan

Schadenfreude on May 27, 2014 at 4:06 PM

ROFL!

RedRedRice on May 27, 2014 at 4:12 PM

“Arguing with a liberal is like playing chess with a pigeon. No matter how good you are at chess, the pigeon is just going to knock over all the pieces, crap on the board, and strut around the table looking victorious.” (c)

Rix on May 27, 2014 at 4:13 PM

This is not to say that, in the modern world, there are no cases in which wealth for the few is inhibiting opportunities for the many.

Jolly good of them not to nacker about on that bit.
Though they’ll get a good fight on it here.

verbaluce on May 27, 2014 at 4:14 PM

Lord obama

Schadenfreude on May 27, 2014 at 4:16 PM

At former Enron executive Paul Krugman’s house, it’s time to turn out the lights, the party’s over.

itsspideyman on May 27, 2014 at 4:12 PM

Nope, he’s just doing muscle stretching now to gain more flexibility for when he starts twisting himself in a pretzel trying to defend the undefensible Piketty theory.

jimver on May 27, 2014 at 4:18 PM

Where Thomas Friedman lives…he can move out and let the poor move in.

Schadenfreude on May 27, 2014 at 4:20 PM

This is not to say that, in the modern world, there are no cases in which wealth for the few is inhibiting opportunities for the many.

Jolly good of them not to nacker about on that bit.
Though they’ll get a good fight on it here.

verbaluce on May 27, 2014 at 4:14 PM

Well, the one glaring instance where that is true is fascism – where the government colludes with business. And you will in fact see a lot of criticism of that on Hotair.

And it’s one thing to say that you can find an instance of something occurring and another thing entirely to say that something is ubiquitous and a fundamental problem facing society (which Piketty does). Jolly good of you not to nacker on about this crucial distinction though.

gwelf on May 27, 2014 at 4:22 PM

Now if Piketty could do an analysis of the concentration of political power within countries over time, that would be truly interesting. Did the turn-of-the-century robber barons have more influence over the lives of average Americans compared to the Harry Reid’s, Barack Obama’s and George Soros’s of today?

Socratease on May 27, 2014 at 4:23 PM

Wealth accumulation, legally undertaken, can never be grounds for redistribution.

I’m not wealthy and have no issues with people getting wealthy. I do not covet what they have. I have a huge problem with people who do covet their neighbor’s wealth. What has the recipient of redistribution done to deserve the product of his neighbor’s labors? Nothing!

No one owes anyone anything merely because they exist and are less well off than someone else.

It’s beyond disgusting that people feel entitled to something that belongs to someone else.

This is what Liberalism and Big Government have enabled. A parasitic, debilitating sickness. This is the real greed.

Charlemagne on May 27, 2014 at 4:23 PM

Douchebag dumbass doesn’t understand that where wealth for the few does inhibit opportunity for the many, it is in corrupt command and control economies, not free market economies.

novaculus on May 27, 2014 at 4:24 PM

A liberal with a spreadsheet???? OMG, too funny. I really can’t stop laughing.

Letting a communist loose with economics is like leaving a puppy with a gallon of ice cream. The puppy feels great, but we have to clean up the mess, and the poop.

faraway on May 27, 2014 at 4:24 PM

No way. We will quickly agree that this is systemic in socialism. This is what Obama’s fiscal and regulatory policies are creating here.

blink on May 27, 2014 at 4:18 PM

It’s good to finally see verbaluce agree that ObamaCare is harming the economy and stifling economic opportunity.

It’s good to finally see verbaluce agree that Obama’s policies of favoring big corporations over a free market is harmful to economic opportunity and growth.

gwelf on May 27, 2014 at 4:25 PM

A liberal with a spreadsheet???? OMG, too funny. I really can’t stop laughing.

Letting a communist loose with economics is like leaving a puppy with a gallon of ice cream. The puppy feels great, but we have to clean up the mess, and the poop.

faraway on May 27, 2014 at 4:24 PM

And since it’s chocolate ice cream, the vomit.

Steve Eggleston on May 27, 2014 at 4:29 PM

This is not to say that, in the modern world, there are no cases in which wealth for the few is inhibiting opportunities for the many.

Jolly good of them not to nacker about on that bit.
Though they’ll get a good fight on it here.

verbaluce on May 27, 2014 at 4:14 PM

This is also very disingenuous because socialism in practice has NEVER produced more prosperity and economic opportunity for people. It has done a great job of reducing income inequality by taking and redistributing wealth from the “rich”. But this is a hard sell for socialists to make: we’ll take from the rich and you won’t be any better off and there’s a very high chance you’ll have less economic opportunity because self-interested rich capitalists are better at growing an economy than self-interested unaccountable incompetent state bureaucrats.

gwelf on May 27, 2014 at 4:29 PM

Bad data leads to bad conclusions.

rbj on May 27, 2014 at 4:29 PM

Yeah, he walked right into that one.

blink on May 27, 2014 at 4:29 PM

It’s easy to do when he doesn’t even bother to really understand conservative/libertarian principles and instead boils down our arguments to (1) Racism and (2) Love of big corporations

gwelf on May 27, 2014 at 4:31 PM

And the anti-gun lobby is still standing its ground re: Michael Bellesiles.

Judge_Dredd on May 27, 2014 at 4:33 PM

I also love the supreme irony of this.

Piketty essentially argues that people like him should be put in charge of the economy but he either fudged his numbers – making him corrupt – or screwed up revealing he’s incompetent to run an economy.

gwelf on May 27, 2014 at 4:33 PM

A liberal with a spreadsheet???? OMG, too funny. I really can’t stop laughing.

Letting a communist loose with economics is like leaving a puppy with a gallon of ice cream. The puppy feels great, but we have to clean up the mess, and the poop.

faraway on May 27, 2014 at 4:24 PM

Lol, yep, he created the Paris School of Economics, much modelled on the good ole socialist London School of Economics to get some sense into alas, the already insanely soclialist French :), and possibly into the rest of the world who didn’t have the ‘privilege’ to experience with the grand vision of socialism in the past…

jimver on May 27, 2014 at 4:34 PM

the leftist mind is a bizarre thing to behold. Kind of an amygdala with eyes and a mouth that keeps saying ‘give me your money’…and simple variations (like give me your guns)

I ask, compared to what? North Korea? Cuba? Any of the third world hell holes where the bandits at the top skim most the stuff for themselves? Compared to the Kings and Queens of history, the Dynasties that ruled for 100s of years. People always hoping to get a benign despot, a kindly King.

Our country was the first to throw off a Kingdom…not for another Kingdom but for something new…an experiment for free men

barry and the left want to restore a kingdom…and make no mistake, barry said he thought we could build a Kingdom on Earth

study up on your history barry…there’s been a lot of them

r keller on May 27, 2014 at 4:39 PM

Piketty essentially argues that people like him should be put in charge of the economy but he either fudged his numbers – making him corrupt – or screwed up revealing he’s incompetent to run an economy.

gwelf on May 27, 2014 at 4:33 PM

What’s this either/or of which you speak?

Steve Eggleston on May 27, 2014 at 4:42 PM

The purpose of regulation is to entrench and enrich existing players while establishing barriers to entry for new players or competing technologies. This is simply axiomatic. No matter how debilitating, existing businesses are better-positioned to absorb regulatory costs than those trying to establish a foothold.

Immolate on May 27, 2014 at 4:45 PM

War on Women Continues

France’s ‘rock star’ economist Thomas Piketty ‘beat former lover’

France’s culture minister Aurelie Filippetti claims her relationship with Piketty came to a violent end

sentinelrules on May 27, 2014 at 4:43 PM

Not exactly a gentleman, Monsieur Piketty :)

jimver on May 27, 2014 at 4:46 PM

gwelf on May 27, 2014 at 4:33 PM

Embrace the meaning of “and”, gwelf ;-)

lineholder on May 27, 2014 at 4:47 PM

What’s this either/or of which you speak?

Steve Eggleston on May 27, 2014 at 4:42 PM

I was being generous. =)

gwelf on May 27, 2014 at 4:48 PM

Embrace the meaning of “and”, gwelf ;-)

lineholder on May 27, 2014 at 4:47 PM

I stand corrected =)

gwelf on May 27, 2014 at 4:50 PM

These are great comments –

BUT where is Libby Freordie? In his/her/its absence, Schadenfreude should have already referenced a quote from that “great thinker” but I do not see one. Slipping?

Chuck Ef on May 27, 2014 at 5:01 PM

At former Enron executive Paul Krugman’s house, it’s time to turn out the lights, the party’s over.

itsspideyman on May 27, 2014 at 4:12 PM

Twenty thousand square feet of house….that’s a lot of lights, the servants will be busy throwing switches for a good three hours or so.

Bishop on May 27, 2014 at 5:10 PM

you can see why the climate chicken little’s will not publish their data, can you imagine it getting picked over like his.

RonK on May 27, 2014 at 5:12 PM

King Banian is really tearing Piketty apart on todays TEMS.

gwelf on May 27, 2014 at 5:13 PM

At former Enron executive Paul Krugman’s house, it’s time to turn out the lights, the party’s over.

itsspideyman on May 27, 2014 at 4:12 PM

Yep, Brayam must be despondent. I’m sure he will show up soon to commiserate with the other prog trolls as soon as hockey season ends up there.

slickwillie2001 on May 27, 2014 at 5:37 PM

The great lie in Socialism is that those who profess it to be the morally superior system always see themselves not as the average member of the common worker’s class, but the 1% of the elites who run the system.

Can you see Van Jones or Bill Ayers as a factory worker in the socialist paradise?

BigAlSouth on May 27, 2014 at 5:40 PM

A liberal with a spreadsheet???? OMG, too funny. I really can’t stop laughing.

Letting a communist loose with economics is like leaving a puppy with a gallon of ice cream. The puppy feels great, but we have to clean up the mess, and the poop.

faraway on May 27, 2014 at 4:24 PM

And since it’s chocolate ice cream, the vomit the corpse.

Steve Eggleston on May 27, 2014 at 4:29 PM

It’s not like it’s any kind of a surprise that liberal sophistry causes real deaths.

CapnObvious on May 27, 2014 at 5:41 PM

Free-market capitalism is the worst system of economics the world has ever seen, with the exception of all the other methods that have been tried.
h/t Churchill

questionmark on May 27, 2014 at 5:56 PM

FT:

Other conclusions from the best-seller are also unconvincing. The FT has found grounds to question the finding that the holding of wealth by the rich in Europe has increased since 1980. Without that result, there cannot be an iron law of capitalism that leads to ever rising inequality.

in other words, rich are not getting richer and inequality is not rising! pfff! i dont believe it! FT is full of morons!

nathor on May 27, 2014 at 6:06 PM

in other words, rich are not getting richer and inequality is not rising! pfff! i dont believe it! FT is full of morons!

nathor on May 27, 2014 at 6:06 PM

I don’t believe that’s what FT is claiming, rather they are saying that “his thesis that capitalism has a natural tendency for wealth to become ever more concentrated in the hands of the rich” is inaccurate.

questionmark on May 27, 2014 at 6:11 PM

It’s not like it’s any kind of a surprise that liberal sophistry causes real deaths.

CapnObvious on May 27, 2014 at 5:41 PM

Given lieberals welcome murder as long as it’s primarily practiced against their class enemies,….

BTW, thanks for the ReWrite™.

Steve Eggleston on May 27, 2014 at 6:12 PM

Even if wealth inequalities were to rise, it is important to understand the reasons for this increase. There is a gulf of difference between wealth derived from entrepreneurial skills and inheritance.

is FT accepting that inequality from inheritance is wrong or less good? wow

There will also be a natural tendency for wealth concentrations to rise in an aging society, as people need to stash more in private pensions to prepare for a long retirement.

this is wrong! the issue is wealth inequality. meaning that the wealth the rich accumulates still manages to be greater in % despite everybody elses save their pennies to live in retirement

This is not to say that, in the modern world, there are no cases in which wealth for the few is inhibiting opportunities for the many.

ah, FT folded! what was is the title of this article? FT standing their ground? lol!

But rather than simply assuming there is a central contradiction in capitalism, one should seek the specific causes.

cause: rich are too rich!
solution: eat the rich! joking! just tax them gently!

piketty mania continues unabated. I smell a fresh leftist populist wave proudly campaigning on taxes for the rich without fear of “socialist” epithets. oh oh!

nathor on May 27, 2014 at 6:24 PM

I don’t believe that’s what FT is claiming, rather they are saying that “his thesis that capitalism has a natural tendency for wealth to become ever more concentrated in the hands of the rich” is inaccurate.

questionmark on May 27, 2014 at 6:11 PM

read again, they question that since the 80ths the rich have not gotten richer and that conclusion is needed to prove piketty main point, that R > G leading to wealth acumulation.

the main point of FT argumentation is that the rich are not getting richer! its ludicrous!

nathor on May 27, 2014 at 6:31 PM

Already explained above.

Obviously, this happens with socialist fiscal and regulatory policies. Nobody is denying the wealth inequality caused by non-capitalistic systems.

blink on May 27, 2014 at 6:36 PM

meh that is quite an debatable interpretation. FT says:

This is not to say that, in the modern world, there are no cases in which wealth for the few is inhibiting opportunities for the many.

at face value it seems a clear critique of inequality. its an quite an extrapolation to understand FT was referencing corruption or the regulation cronyism.

nathor on May 27, 2014 at 6:55 PM

“Non-workers, unite” — new marxist slogan

Schadenfreude on May 27, 2014 at 4:06 PM

naa, the new slogan will be, tax the rich!

nathor on May 27, 2014 at 7:01 PM

naa, the new slogan will be, tax the rich!

nathor on May 27, 2014 at 7:01 PM

jimver on May 27, 2014 at 7:32 PM

naa, the new slogan will be, tax the rich!

nathor on May 27, 2014 at 7:01 PM

It’s eating you up insid, isn’t it… the rich envy thing :)…relax and try to think of somehting else meanwhile, espacially that it’s not going to happen, if France (that’s already socialist like heck) rejects it, it is a good indication that people are tired of cheap populism epitomized in ‘tax the rich’.

jimver on May 27, 2014 at 7:36 PM

the main point of FT argumentation is that the rich are not getting richer! its ludicrous!

nathor on May 27, 2014 at 6:31 PM

You and your points are the only ludicrous things here. As for Piketty’s book, back on the back shelve :). Here’s another FT piece, this time a humorous one, for you to lighten up a bit, lest you die of so much rich envy :)

jimver on May 27, 2014 at 7:41 PM

the main point of FT argumentation is that the rich are not getting richer! its ludicrous!

nathor on May 27, 2014 at 6:31 PM

You and your points are the only ludicrous things here. As for Piketty’s book, back on the back shelve :). Here’s another FT piece, this time a humorous one, for you to lighten up a bit, lest you die of so much rich envy :)

jimver on May 27, 2014 at 7:41 PM

Worse than the back shelf, the publisher should be sued in a class action for fraud and the book sellers should have to give refunds.

slickwillie2001 on May 27, 2014 at 8:44 PM

at face value it seems a clear critique of inequality. its an quite an extrapolation to understand FT was referencing corruption or the regulation cronyism.

nathor on May 27, 2014 at 6:55 PM

Ahaha… what the hell?

spinach.chin on May 27, 2014 at 8:51 PM

But rather than simply assuming there is a central contradiction in capitalism, one should seek the specific causes.

A great number of failed political and social experiments stem from one-solution-fits-all-cases thinking.

AesopFan on May 28, 2014 at 12:59 AM

You and your points are the only ludicrous things here. As for Piketty’s book, back on the back shelve :). Here’s another FT piece, this time a humorous one, for you to lighten up a bit, lest you die of so much rich envy :)

jimver on May 27, 2014 at 7:41 PM

after piketty there can be the sound intellectual argument that taxing the rich can be good for the economy and society! It feels great!

instead of denying piketty we should embrace him! and have a new left right divide:

left motto:tax the rich, make government bigger!
right motto: tax the rich, lower income taxes, pay the public debt!

its not envy! its shameless self interest at the expense of the rich without the guilt of screwing up the economy! yay!

nathor on May 28, 2014 at 1:10 AM

All Leftist economic plans violate Providence’s Tenth Commandment. Every last one of them.

Leftist economic systems have caused great deprivation, economic destruction, and worse, violent government-sanctioned mass murder (to the tune of over 100 million souls).

Is it any wonder the Democrats booed Providence in their most recent Presidential convention in the Carolinas?

John Hitchcock on May 28, 2014 at 1:30 AM

Oh, and nathor, over-use of a thing causes the value of the thing to fall. Have you not learned from your kind’s severe over-use of the race card? So cut it out with the overuse of exclamation marks, at least until you learn what its use is for.

And you’re dead wrong about what you claim the right wants. The right has no desire to soak the rich, knowing it’s the rich investors and business owners that create the jobs for fools like you to earn an honest living.

And any claim that the desire to take from the wealthy is not envy is a flat-out, bald-faced lie. And as Satan is the father of lies, you are doing your father’s work, as the Son of Man would (and has) say.

John Hitchcock on May 28, 2014 at 1:35 AM

And you’re dead wrong about what you claim the right wants. The right has no desire to soak the rich, knowing it’s the rich investors and business owners that create the jobs for fools like you to earn an honest living.

wrong! excessive wealth accumulation and inequality might actually be bad for economy, causing social instability, limiting social mobility and reducing consumption. I am no communist, inequality is very necessary for the capitalist system to work and piketty says this very explicitly. the issue here is excessive inequality. is there a limit? when does it become bad to the capitalist system? there must be a limit no?

And any claim that the desire to take from the wealthy is not envy is a flat-out, bald-faced lie. And as Satan is the father of lies, you are doing your father’s work, as the Son of Man would (and has) say.

John Hitchcock on May 28, 2014 at 1:35 AM

yawn, I am atheist and that is a meaningless, silly religious rant. envy is just an emotion that can be motivating or unhealthy if in excess. personally I really think envy is not strong on me and i am content with few material goods. my wife however… uff :(

its not the first time I am accused of envy in this “tax the rich” argument by religious minded and I start to think some christians are really sheep! what a great religion to keep the exploited populace tamed. ahah!

I think it more in terms of justice. there is nothing wrong in questioning if you get your fair piece of the pie of the wealth of the society you live in and if the system will work for you and your childreen.

nathor on May 28, 2014 at 2:32 AM

All Leftist economic plans violate Providence’s Tenth Commandment. Every last one of them.

Leftist economic systems have caused great deprivation, economic destruction, and worse, violent government-sanctioned mass murder (to the tune of over 100 million souls).

Is it any wonder the Democrats booed Providence in their most recent Presidential convention in the Carolinas?

John Hitchcock on May 28, 2014 at 1:30 AM

what an exaggeration about theft! no one is talking about 100% expropriation. say we tax rich on their wealth 1% a year. a millionare would go from 1.000.000 to ~ 900.000 in ten years! that is, if he had no capital income of that wealth. ah! the rich can cry me a river!

nathor on May 28, 2014 at 2:41 AM

Nathor, envy is never good. Nothing good ever comes of envy. And the top 40 percent of income earners already pay 106 percent of Federal Income Taxes. One hundred six percent. That’s more than all federal income taxes paid. That means, yes, the bottom 40 percent pays a whopping -13 percent! That’s right, negative thirteen percent. That means their income taxes amount to the government saying “here, take some money you didn’t earn”.

And Justice? You don’t know the meaning of the word. If you want justice, quit taking money away from the people who rightfully have it (their money) so you can give it to people who have no business taking it out of my back pocket.

Socialism was tried here 400 years ago. Half the people starved to death. When free-market capitalism was put in its place, not only did the people quit starving to death, but they also became heavy exporters of the food they produced.

History, it’s not something to be ignored, just because you want socialism to work for the first time ever, this time.

John Hitchcock on May 28, 2014 at 4:30 PM

Nathor, envy is never good. Nothing good ever comes of envy. And the top 40 percent of income earners already pay 106 percent of Federal Income Taxes. One hundred six percent. That’s more than all federal income taxes paid. That means, yes, the bottom 40 percent pays a whopping -13 percent! That’s right, negative thirteen percent. That means their income taxes amount to the government saying “here, take some money you didn’t earn”.

amazingly many of the rich dont pay income taxes, they live of capital income. labor is taxed and wealth not, this is really wrong. the main reason is because income is way easier to tax than wealth.

And Justice? You don’t know the meaning of the word. If you want justice, quit taking money away from the people who rightfully have it (their money) so you can give it to people who have no business taking it out of my back pocket.

R > G. meaning a rich can do nothing, live of capital and see his wealth grow. taxing the wealth so that the rich need to actually work to see their capital pile grow seems a just system to me.

Socialism was tried here 400 years ago. Half the people starved to death. When free-market capitalism was put in its place, not only did the people quit starving to death, but they also became heavy exporters of the food they produced.

i dont want socialism, it sucks and does not work. no one is talking socialism here. just a tweak to the capitalist system.

History, it’s not something to be ignored, just because you want socialism to work for the first time ever, this time.

John Hitchcock on May 28, 2014 at 4:30 PM

only capitalism works, but it can work better.

nathor on May 29, 2014 at 5:51 AM