Piketty's Capital argues that wealth inequality peaked during the turn of the 20th century. Catastrophic destruction of World Wars I and II, as well as the economic disruption of the Great Depression, took direct and heavy tolls on the world’s capital stock. In doing so, these events destroyed part of the wealth-accumulating mechanisms that Piketty pinpoints as the source of inequality in the earlier era. The result was a stabilizing period during which the wealth distribution for most of the developed world converged at a much lower level of inequality from roughly the 1950s through the 1970s. High taxes prevented the accumulation of wealth until tax reforms tied to Ronald Reagan in the United States and Margaret Thatcher in Britain disassembled the mid-century progressive tax regimes. Inequality, Piketty contends, has been on the rise ever since.
Phillip Magness has an article on Piketty that is severe. He finds that Piketty's data is taken from different sources at different times depending upon the result the data creates. This is a charge of more than inaccuracy, it implies dishonesty. A summary:
"Piketty’s empirical work suffers from several highly problematic characteristics. Empirical demonstrations of the century-long distributional U-shape for three different countries — his main piece of evidence for his inequality thesis — are rendered unreliable by issues including
Put another way, he seems to construct most of his data presentations around a specific historical narrative that he has already embraced as correct. This is an inversion of scientific inquiry, placing the cart of an ideological conclusion before the data horse and — in some cases — selectively ignoring or omitting data points that diverge from that conclusion.
In short, Piketty’s empirical demonstrations of his U-shaped historical pattern suffer from distortions, biases, methodological inconsistencies, and other questionable data decisions that render them unsuitable for drawing interpretive conclusions about his theory or making prescriptive policy recommendations." (Philip Magness)
Phillip Magness has an article on Piketty that is severe. He finds that Piketty's data is taken from different sources at different times depending upon the result the data creates. This is a charge of more than inaccuracy, it implies dishonesty. A summary:
"Piketty’s empirical work suffers from several highly problematic characteristics. Empirical demonstrations of the century-long distributional U-shape for three different countries — his main piece of evidence for his inequality thesis — are rendered unreliable by issues including
- suspect and biased adjustment techniques,
- selective cherry-picking to create trends from ambiguous data sets, and
- grossly insufficient annotation to cross-check and replicate his results where they diverge from their claimed sources.
Put another way, he seems to construct most of his data presentations around a specific historical narrative that he has already embraced as correct. This is an inversion of scientific inquiry, placing the cart of an ideological conclusion before the data horse and — in some cases — selectively ignoring or omitting data points that diverge from that conclusion.
In short, Piketty’s empirical demonstrations of his U-shaped historical pattern suffer from distortions, biases, methodological inconsistencies, and other questionable data decisions that render them unsuitable for drawing interpretive conclusions about his theory or making prescriptive policy recommendations." (Philip Magness)
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