Happy Memorial Day weekend, everyone!
French economist Thomas Piketty's extraordinarily popular book, Capital in the Twenty-First Century, is on my must-read list. The central arguments in his treatise are already well known. Today's revelations by The Financial Times of "flawed data" supporting his conclusions, however, subject his arguments to serious doubt.
Sure, the FT is ideologically resistant to
Professor Piketty's data-rich findings of growing wealth inequality in the U.S.
and Europe and, most certainly, to his call for a wealth tax. Yet, it is unlikely that the paper's exhaustive review of Piketty's data analyses is wrong.
The FT reports that Piketty's work suffers from:
"fat-finger errors of transcription, suboptimal averaging techniques,
multiple unexplained adjustments to numbers, data entries with no sourcing,
unexplained use of different time periods; and inconsistent uses of source
data." The paper concludes that these problems "are sufficiently serious
to undermine Professor Piketty's claims."
Whew! Other than that Mrs.
Lincoln, how was the play?
This is all regrettable. The FT's investigation will appropriately discredit some of Piketty's arguments, although they likely still have merit in the context of today's essential conversation about
wealth inequality. To be fair, Piketty chose to make so many of his
spreadsheets, tables and raw data publicly available to bolster his wealth-inequality
arguments and expand dialogue on the subject. It looks like he snared himself in a trap of his own making, however, assuming The Financial Times is correct.
So here's another reminder to resist blind allegiance to data. Suffice it to say that we must always assess data-driven arguments critically, since human beings are
too often capable of errors and worse in the manipulation of numbers. There are obvious reasons now to doubt Piketty's key claims, perhaps even his central premise, but there is no reason to use the FT's important findings to discredit the overall conversation.
Twitter @jessicamcwade