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Why didn’t Piketty’s Harvard publisher spot the errors which the FT has exposed?

24 May 2014

9:53 AM

24 May 2014

9:53 AM

While Americans swooned over Thomas Piketty and his thesis about ever-rising inequality it has taken a Brit, the FT’s Chris Giles, to expose the corruptions in his data. What he has found – on the cover of today’s FT and in detail on a blog here – is shocking because the errors are so basic. And yet on this, Piketty has built a manifesto for all kinds of tax rises. It makes you wonder how his publisher, Harvard University Press, allowed such flaws to enter print.

Chris Giles’ report is worth reading in full, but here are a couple of examples should give you a flavour of what he has found. It started when he came across a fairly major mistake. As he says in his blog:

Piketty cited a figure showing the top 10 per cent of British people held 71 per cent of total national wealth. The Office for National Statistics latest Wealth and Assets Survey put the figure at only 44 per cent. This is a material difference and it prompted me to go back through Piketty’s sources.

As he started to go through the data, he spotted a number of striking anomalies. For example:-

“In [Piketty’s] UK data, instead of using his sources for figures on wealth of the top 10 per cent of the population during the 19th century, Prof Piketty inexplicably adds 26 percentage points to the wealth share of the top 1 per cent for 1870 and 28 percentage points for 1810.”

Then take Piketty’s estimates for inequality in modern Europe:-

“Piketty gives the same weight to Sweden as to France and the UK, even thought it has only one-seventh of the population… For Sweden, he uses data from 2004 to represent those from 2000, even though the source data include an estimate for 2000.”

Any sixthformer would know that you can’t average out results between a massive country and a tiny one. You need to produce a “weighted average,” a concept with which a GCSE maths student ought to be familiar, let alone an economics professor. Average figures for any European metric (i.e., health spending as a share of GDP) need to take account for such population variations.

[Alt-Text]


And where on earth did Piketty get his UK data from? Chris Giles checked his sources, and found no relation between the source and what Piketty published.

“His original sources show consistently very large declines of close to 10 percentage points in wealth held by the rich in the highly inflationary 1970s. Conversely, Piketty shows the super-rich held a greater share of wealth by 1980….The official data series which he says he used for the UK after 1980 shows little increase in inequality over the next 30 years, while Prof Piketty’s figures show a steep rise.”

So where did this “steep rise” come from? The FT asked Piketty to respond, and printed his reply here. It dodges the question. “I have no doubt that my historical data series will be improved in the future,” he says – but we’re not talking about ‘improving’ methodology. We’re talking about simple errors, and seemingly groundless claim of rising inequality in Britain. Where on earth did he get an actual data series purporting to show a steep rise in UK inequality after 1980?

As Chris Giles says, if you run the correct figures – a tiresome, but fairly basic exercise – then Piketty’s thesis collapses.

Two of [Piketty’s] central findings – that wealth inequality has begun to rise over the past 30 years and that the US obviously has a more unequal distribution of wealth than Europe – no longer seem to hold. Without these results, it would be impossible to claim, as Piketty does in his conclusion, that “the central contradiction of capitalism” is the tendency for wealth to become more concentrated in the hands of the already rich.

Chris Giles has pulled the thread of data, and Piketty’s whole book seems to be  unravelling. Which raises another question: did anyone actually fact-check Piketty’s data? Mistakes can creep into data, and I agree with Piketty that inequality is a problem that official data does not fully record. But you can’t just add 2 to a data series (as Chris Giles shows us in the above video) then present this as honest economics. It is editorialised data, which isn’t really economics.

In basing his book on editorialised data, Piketty now looks like an economist who has been behaving like a journalist. He has been rumbled by a journalist, who has been behaving like an economist.

The points Chris Giles so powerfully makes ought to have been picked up by any serious peer review process. BBC Newsnight picked up on this (iPlayer, 28 mins in). (It had a new guest presenter, who looked familiar, below.) Screen Shot 2014-05-24 at 11.22.06This story ought to run. I didn’t think Paul Krugman would respond to the FT, but he has done so here). Why has it taken so long to Fisk? Perhaps the idea of one’s instincts being proving empirically correct is rather intoxicating, which partly explains the success of his book. Perhaps Piketty gave the left intelligentsia a story which (as tabloid hacks say) was “too good to check”.

But what about Harvard University Press? Piketty’s publisher there, Ian Malcolm, is interviewed here. From the sounds of it, he just reprinted the French version without applying the checks and balances that you’d hope would be applied to a Harvard economics book. He says how much money Piketty has made his company, and concluded by saying:

“As long as there is bullshit and inequality, we won’t go out of business.”

Quite.

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Show comments
  • Chance Boudreaux

    Like facts or accuracy have EVER mattered to the kind of people that vote for Obama TWICE.

  • SilentHunter

    Well it’s good to see all the “Righties” standing up for unfettered Capitalism as practised by the City Elite, since we all know just how trustworthy the Bankers are.

    Oh? Hang on!

    Aren’t the Banks all being investigated for mis-selling financial products to the public that they knew to be worthless . . . just to make yet more money for themselves . . . using their best weapon . . . fraud!

    It’s hardly surprising that the FT panders to it’s core base by shouting “foul” whilst pretending that the Bankers are just “misunderstood”.

    I think we can ALL recognise the criminality of the bankers and their supporters here. LOL

    • Chance Boudreaux

      By supporters I suppose you mean the Obama administration? You know, the 2nd Wall Street bailout, the GM taxpayer loss, the Green Jobs boondoggles, the fed Q.E. dollar destroying and other Crony Capitalism pushed by barack “Fore!” Obama and his gaggle of maggots.

      • SilentHunter

        Yeah, Obama is certainly a BIG disappointment when it comes to making Wall Street “pay” for their crimes . . . but I don’t for one moment think that a Republican would do anything about it either.
        I would go further and suggest that the Republicans have no problem in telling Wall Street to “carry on regardless”.

        Sleaze is how the Republican Party operate.

        • Chance Boudreaux

          Well, speaking about America, if you want the media to watch what happens between Government and Wall Street, you WANT a republican as President, since the press will FINALLY do it’s job and report on shady deals. Democrats get a pass.

          • SilentHunter

            No one in their right mind,”wants” a republican as President.

            Look at the success (sic) that George Dubbya was for world peace. LOL

  • global city

    The decision is no doubt simply a commercial one. Ironically publishers know it is easy money to put out tripe like Piketty’s book as so many stupid lefties just lap up anything that is anti capitalist.

    Enjoy the whole thing as a massively funny event.

  • Augustus

    The title of the book alone is a dead giveaway that this ‘economist ‘ aspires to becoming the Karl Marx of the 21st century. A tome that no reputable macroeconomist is going to take seriously anyway, but let’s hope Piketty only asks a pittance for this masterpiece of failed ideas, otherwise he’s certainly going to hate himself.

  • LucieCabrol

    Assumptions about the world are the basic flaw which have caused just about every economic theory to drive into the buffers over the past 100 years….just remember …its not a science…its an art.

  • Mukkinese

    The “errors” were not spotted because they are not errors. None of the figures are crucial to the points made and are merely assumptions to explain any gaps in the process. This is par for the course in such treaties and the FT know that. the bulk of the data is accurate and the reasoning is solid.

    This is just another example of the right trying to muddy the waters. It was inevitable that Piketty would be attacked by the right in some manner, too many people are giving him serious thought and his theories undermine the status quo. We cannot have that…

    • Weaver

      Fair points. Piketty’s work remains interesting and there will always be problems with big data sets. Lets just fix the problem and see how the coefficients change…

      But the left takes far more from Piketty than he proves.

      • LucieCabrol

        The left already have their answer; they just loved this because it sort of fitted the bill as scientific justification to fit that ‘answer’….never mind a few inconsistencies…most people aren’t going to read it anyway…sadly beret wearing teenagers will be quoting paragraphs from Piketty for years to come…groan.

        • Weaver

          At least it’s not as bad as The Spirit Measure.

    • Mrs Josephine Hyde-Hartley

      But making assumptions to cover gaps in some process grossly distorts and overinflates the value of whatever bubble the said process is designed to affect and maintain. Even scientific /knowledge paradigms. ( See TS Kuhn’s Structure of Scientific revolutions 1963)

      For example, the bubble of the financial system famously crashed when ordinary people could see in its place a new reality, ie their futures should probably be better if they cut their potential losses.( See American housing pre-crash and British housing now,perhaps).

      The FT has done a good job for common sense, i think, just in time perhaps.

    • Winston

      Just as it was inevitable that he would be lionized as an instant hero to the Left because he seemingly confirmed their biases and provided cover for the current agenda. You cannot claim there is a statistical trend when you cook the books.

    • JRD_1

      Yes, like “Hide the Decline.”

      Simple set the agenda and back into it. Disgraceful.

  • Igor Karlić

    Lie is the immortal soul of communism.

  • Steeloak

    Leftists never question a narrative that supports their most cherished beliefs. If the author had to fudge the facts to make them fit the narrative, so what? It’s the narrative that matters, not the truth or the facts.

    • Inverted Meniscus

      Agreed that is Socialism to perfection. It is the creed of lies, lying and liars.

  • lgeubank

    “Any sixthformer would know that you can’t average out results between a massive country and a tiny one.”

    Piketty’s method sounds like the recipe for elephant-and-rabbit stew — you put one of each animal in the pot. Does the result taste like the average?

    • Weaver

      More of a turd and ice-cream sandwich.

  • James

    The answer is simple:They wanted his premise to be true so they had blinders on, sheilding the facts from their vision.

  • Ganpati23

    Thank you for Linking Krugman – pity you didn’t quote him.

    He says that while Pikey has to respond to every point, and that he (Kruggers) doesn’t know too much about the Euro data, he’s sure inequality is ri the sing in the US.

    So if the FT chap reckons it’s not, he’s doing something very wrong.

    But you don’t want to print that, so you can get loads of clicks as fruitcakes and loons post their usual drivel. But trying to maintain a modicum of dignity you do link Krug but without saying what he thinks.

    It’s become a complete Rag. No wonder looney tune closet racists are using it as their house journal.

  • Colin

    “Why didn’t Piketty’s Harvard publisher spot the errors which the FT has exposed?”

    They didn’t, because they were desperate for it to be true. A bit like the bbc and the McAlpine smear.

  • daveinboca

    BS & Innumerate economics keep the Harvard Publishing Presses whirring. And their output is 90% approved with the Left’s imprimatur.

  • Conway

    He must have studied at the UEA climatology department.

  • John Smith

    He should have a word with Krugman ..

  • global city

    He just pulled the same stunts as those at the heart of the ‘global warming’ deceit have. It is acceptable, ‘Post Normal’, political activism, where the ends justify the means.

    The easiest way to understand this is if you start reading the book with the conclusions section. he is a Marxist, world governence supporter. The politics soon falls into place.

  • Curnonsky

    All the debate about “inequality” is really about envy, especially on the part of journalists and academics who can’t understand why they are not rewarded as fulsomely as bankers and lawyers.

    Envy is also baked into French culture,so it is no wonder that this book was written by a French academic!

    • Andy

      Not sure bankers are ‘rewarded’. From what I have seen most bankers remuneration & bonuses are at the expense of the shareholders who own the bloody bank. It is called looting. For example Barclays paid out about £800 million in dividends and £3 billion on bonuses ! I call that looting.

      • Curnonsky

        Then either band together with like-minded fellow shareholders and vote in a new slate of directors, or else sell your shares and be done with them. Shareholding is voluntary (now, when the taxpayer is asked/forced to fund things, that’s something else…)

  • Craig

    This is the way of too many “intellectuals”, dig only as deep as you need to prove your point, if the top soil disproves your theory; rearrange so it doesn’t. The ruthless intellects such as Feynman and Friedman have disappeared from public life, the intellectual spirit, which Richard Feynman described so simply: “It doesn’t matter how beautiful your theory is, it doesn’t matter how smart you are or what your name is, if it disagrees with reality; it’s wrong”, has been lost.

  • Tegsie

    Why do people forget about VAT when discussing tax? The rich paying an additional 20% on goods does not hit them as much as it does poorer people.

    • Conway

      Why do people never mention the EU when discussing VAT? It was introduced on behalf of the EEC and part of it goes to Brussels.

  • Jupiter

    Well what a surprise, another lefty numpty caught telling lies.

  • novoludo

    Those getting so excited on here that Piketty has been comprehensively disproven by the FT may need to calm down a little!

    These are extremely complex matters of data selection and interpretation, and economists from all sides of the political spectrum are already picking over the FT analysis, most claiming that it is significant and needs a response, but is rather overblown and does not disprove Piketty’s central inequality thesis.

    A blog from The Economist – hardly a left wing anti-market publication! – has criticised the FT’s analysis in significant places, and has concluded that, on the data presented by the FT so far, “the answer is a definitive no” on the question of whether Piketty’s basic conclusions have been disproven. See here http://www.economist.com/blogs/freeexchange/2014/05/inequality-0?fsrc=rss&utm_source=dlvr.it&utm_medium=twitter.
    There are many more detailed technical critiques already of the FT’s analysis. Just go on Twitter and Google ‘Piketty FT’. The picture is far from clear.
    So Fraser Nelson, following the FT, has written a rather irresponsible and misleading piece here. Unfortunately, as an intelligent man, he surely knows this, which does him no credit.
    The reality is that the jury is very much out on the question of the extent of inequality and any damage it does to society. There is much more work to be done. Fraser’s crowing is inappropriate and unseemly.

  • eoin73

    Nothing on the innumerate froth on the comments section here or in the article really disproves Picketty’s points. In fact most have clearly not even begun the book ( where in fact he does give weight to technological advances and modern health care). What matters is whether r>g long term. Arguing that it isn’t is nonsense. German private capital was almost eliminated after the war, it’s clearly grown since. Rebounding to about 600% of GDP. Same all over Europe. Reversals in the last century were due to war – which brought in, as he points out, most of the high tax rates and destruction of private capital. It’s always bouced back particularly in the last few years of peace. Nobody denies that the 19th increased inequality. The only issue was whether the mid 20th century equalisation were due to capitalism’s internal processes ( Kunutz) or the wars and weatlh taxes. Picketty shows the latter, a few sums wrong won’t correct that. He might be wrong about how this capital is obtained in any generation – although he also makes it clear that growth rates are caused by new industry and wealth and make new capitalists but that secular growth is slowing and this becomes less important – but the rich list prices his point. The ST rich list has doubled its wealth since 2008 ,the median wage has fallen in real terms.

    • Weaver

      Mostly good points…but…

      But there’s a wealth vs. income mistake in your final line. This is the sort of stuff that makes me nervous about Piketty, and many of his supporters. He elides too easily between what the data says and what is justifiable (r>g etc) and what he would really like it to say (inter-generational rentiers win and always get relatively richer etc.).

  • colliemum

    Piketty was “splicing data” – as mentioned by Chris Giles.

    Hm, haven’t we come across ‘splicing data’ to achieve a result already determined but not supported by actual data somewhere else in the not-too-distant past?

    • the viceroy’s gin

      Oh hush, you apostate.

      The economic figures has been scientifically established using tree ring data as proxy for wealth. The tree rings have obviously started shrinking, so wealth obviously has started to shrink. Duh.

      97% of economists agree with this, inshallah.

      • colliemum

        Outstanding comment!

        :-))

  • Augustus

    Piketty is wrong on so many counts. Piketty’s concept that wealth is a closed system; i.e. if you get a nice slice of pie, somebody else must get a smaller piece, is a major fallacy for starters. Wealth can be created. But who’s shocked that a socialist economist is fudging the numbers?

    • Greenslime

      To understand Pikanumber, and for that matter most other French economists, study the Physiocrats upon whose theories the Revolution and, subsequently, Napolean, based their codes. It is centred on land – because you can’t move it. Three hundred years of indoctrination to this view of the world has left a country with very confused views on wealth, an intellectual elite who can’t imagine a world where the centre was not in control. They collectively mistrust entrepreneurial spirit and the pursuit of wealth, especially someone else’s wealth.

      That is why London and New York are full of French people who have decided that they would like a little freedom with their lives and how they live it.

      • Augustus

        It’s all too easy for opponents of large income differences to focus on the very rich. In reality, of course, there’s long been a progressive tax system in advanced economies. And those who barely own anything don’t suffer from inequality, but simply poverty. Happily, real poverty in the world has been diminishing for the last 20 years. Piketty acts as if he’s discovered something completely new. But the key issue around all this, and one that is rarely discussed about capital and wealth, is why inequality is actually such a great evil in the first place?

        • Weaver

          Saw some interesting stuff recently suggesting that inequaity may be the price of having a reasonable growth rate…

          Soceities may get to chose to be equal, or rich, but not both.

    • Katie Cannon

      Then there’s The Father of Capitalism, Adam Smith.

      Smith divided incomes into 3 categories: Wages, profits and rents – which the aristocracy relied upon, and which capitalism would get rid of.

      Then the neoclassicals came along and buried the concept of rent into the concept of simple profits.

      Smith on profits, wages, taxes, and regulations:

      “Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labor above their actual rate… It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms….
      by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens.””

      ““The rich should contribute to the public expense, not only in proportion to their revenue, but something more than that proportion.”

      Denouncing vast differences in wealth and income, Smith praised a fellow economist’s tax proposal:

      “To remedy inequality of riches as much as possible, by relieving the poor and burdening the rich.””

      On regulations:

      ”When the regulation, therefore, is in support of the workman, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.”

      Plus, he was against inheritance, as was Thomas Jefferson, and most of our Founders”

      • Weaver

        Your reading of Smith is good, but he’s honoured for his foundational role, not for his accuracy or modern relevance in economics.

        He gets a LOT plain wrong; (for example he’s still labour-theory-of-value, for crying out loud; though rents is an interesting area for discussion). He’s not quoted by modern economists that much and I’d suggest you can’t really use him as an authority on most of these areas.

  • First L

    Socialists lie in order to justify their beliefs. No one is surprised.

    • Katie Cannon

      To you, The Father of Capitalism would be a Socialist. I really though the Brits were smarter than Americans, and had a better grasp of the history of ideas. This is like reading a stupid American blog.

      Adam Smith, Father of Capitalism, not Socialism:

      “Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labor above their actual rate… It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms….
      by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens.””

      ““The rich should contribute to the public expense, not only in proportion to their revenue, but something more than that proportion.”

      Denouncing vast differences in wealth and income, Smith praised a fellow economist’s tax proposal:

      “To remedy inequality of riches as much as possible, by relieving the poor and burdening the rich.””

      On regulations:

      ”When the regulation, therefore, is in support of the workman, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.”

      Plus, he was against inheritance.

      • Weaver

        As above, Smith is honoured for his foundational role in economics, not the accuracy or modern relevance of his work. I politely reject him as an authority here.

  • you_kid

    Ah, come on Fraser, sweet little FT video. The lessons drawn from all of this are crystal clear: in an asset bubble created by wads of free cash for the few, tax the asset not the income.

    • Inverted Meniscus

      This idiot is posting as Dalai Guavara above but the gibberish is identical.

      • you_kid

        and if that were the case it would magically invalidate the content, chuzzlewitz?

        • Inverted Meniscus

          Gibberish.

          • the viceroy’s gin

            …yes, you’re bigoted against this nutter’s sockpuppets. I guess the nutter is officially declaring to be a race of nutter sockpuppets.

            • Inverted Meniscus

              I think you mean a race of socialist nutter sock puppets.

    • the viceroy’s gin

      …there’s certainly a bubble of your cretinous sockpuppets today, lad.

  • Greenslime

    Gordon Brown, Balls and Co did this sort of thing all the time when they ran the Treasury. The Left lives on lies. The important thing is the destination, not how they get there! They have no shame about how they do it. If they are moving their lips, you can be sure that they are spouting lies or twisted truths.

    And the true irony of this book on the Hades in which we live with helpful suggestions on how to get to the centralist Utopia that they espouse is that Pickanumber will have made himself a tidy little income from the sale of it to gullible East and West Coast Americans. Pound to a pinch of poo that you will find a copy on the bookshelves of virtually every Labour MP and every BBC journo too.

    • Conway

      For socialists, the end justifies the means.

  • Peter Stroud

    As others have said, this incident is very similar to many of the publications supporting CAGW. But in these cases, it was not only the left that believe and allow the dubious data to influence policy. Cameron, Hague, and the majority of the current cabinet refuse to accept the highly probable errors in the IPCC models, because of blind faith in the warmist, climate establishment.

  • Rhoda Klapp8

    This is it, today? Nothing else happening, at all? Just another lefty envy-fest debunked?

    Or does the Spec have to wait for orders to come before making a comment on current political events?

    • colliemum

      No need to ask, surely we know the answer!
      😉

    • Katie Cannon

      Father of Capitalism, Adam Envy-Fest Smith:

      “Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labor above their actual rate… It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms….
      by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens.””

      ““The rich should contribute to the public expense, not only in proportion to their revenue, but something more than that proportion.”

      Denouncing vast differences in wealth and income, Smith praised a fellow economist’s tax proposal:

      “To remedy inequality of riches as much as possible, by relieving the poor and burdening the rich.””

      On regulations:

      ”When the regulation, therefore, is in support of the workman, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.”

      Plus, he was against inheritance, as was Thomas Jefferson, and most of our Founders”

      • the viceroy’s gin

        Oh, so the jocks were communists even back then?

        😉

        • Katie Cannon

          🙂

          I keep forgetting this is a Brit magazine.

          Is that what ya’ll call our Founders? jocks?

          • Chris Morriss

            No, it’s what we call the Pictish tribes north of the border!

          • the viceroy’s gin

            Adam Smith was not one of your “Founders”, fyi.

    • Conway

      I think they are still reeling from the shock that the electorate (so far) hasn’t been cowed by their superior intellect telling them what to think. There will be need for smelling salts and clean linen come Sunday, I suspect.

  • anyfool

    Piketty ignored all the material trappings we now have that even the wealthiest Victorians would find astounding, he then uses lies and deception to screw the rest of the data to suit his model.
    Then university scrutiny panels missed this, or more likely colluded in the deception makes you wonder why we bother with higher education at all.
    Still Miliband will be quoting it for his manifesto, it is the sort of thing of which his father was a skilful exponent.

  • alabenn

    The reason Harvard published this rubbish is because they want to believe it, the truth to them is irrelevant unless it proves their beliefs.
    It is the same with Global Warming they are still quoting debunked data
    These are not universities now, they are Ministries of Truth for the body of socialists and world government fanatics.

  • wycombewanderer

    Climate change, economics or democracy, the left don’t believe in the truth or fairness.

    Still it won’t stop Toynbee flicking her bean whenever she gets to mention Picketty’s name in a column of calumny!

    • HookesLaw

      I do agree but the point goes significantly further.. We are witnessing a sad corruption of science and scientists. Even those not guilty are staying quiet.

      • the viceroy’s gin

        You socialist Camerluvvies aren’t staying quiet, that’s for sure. You love the global warmingist insanity, and all the greenie madness that goes along with it, as well as Darling’s budget and all the socialist spending in it.

        Good little socialist luvvies, you are .

        • Katie Cannon

          How do they pounds you use to pay off your private bank debts get into the private sector?

          • the viceroy’s gin

            Can you try that again in English?

            • Katie Cannon

              Oops, multi tasking.

              How do YOUR (not “they”) pounds you use to pay off your private bank debts get into the private sector?

              • Chris Morriss

                No, ‘fraid I don’t understand this comment either! What are my “private bank debts”? I bank with a publicly-quoted bank, not a private one, and I never have had any debts. Can you try it a third time to see if we understand what it is you are on about?
                Re Adam Smith.
                Yes, I do partially agree with you on this, especially on landlords, who are parasitic on both the capitalist (risking his own money to invest in industry), or the worker, selling his own mental or physical labour.
                Though this was in the days before we were all living in a state that spends its taxpayers’ money like water without a thought of what the money is spent on, knowing that it can raise taxes where and when it likes, whatever the rest of us think about it.

              • the viceroy’s gin

                Where’s that question coming from? I believe my above comment was directed at the socialist Camerluvvie’s hypocrisy, and not currency vectors. I’ve no interest in responding to open ended and unsolicited queries, sorry.

          • Inverted Meniscus

            What?!!!!’mm

            • Katie Cannon

              How do YOUR (not “they”) pounds you use to pay off your private bank debts get into the private sector?

              • Inverted Meniscus

                Sorry still no idea what you are talking about. Try a clear sentence in English.

                • you_kid

                  Look at you chuzzlewitz – you are just trolling everywhere.
                  wake up! Did you wet your pants when Ukip got a staggering 160 seats out of a possible 4,000? Did you do the maths and then celebrate? What is it?

                • Inverted Meniscus

                  What? Gibberish just gibberish.

      • Kennybhoy

        Actually those who stay quiet are worse than the out and out liars…

    • dalai guevara

      “As long as there is bullshit … we won’t go out of business.”

      Beginning a comment on Piketty with “climate change, economics or democracy…” and getting top marks for that exemplifies how low the readership of this rag has fallen.
      Despicable moronic cretinist bean counting on a plate.

      • wycombewanderer

        WTF are you on about?
        The article is about the misrepresentation of statistics and research, the left have form in all three of the areas I mentioned.

        On the evidence you’ve presented you don’t appear to be a reliable judge as to who is a moronic cretin; I have to say!

        • Inverted Meniscus

          Nobody knows. He is a gibberish spouting idiot convinced that he is a genius but is actually……a gibberish spouting idiot. Let us all know if you can work out what he is getting at.

      • Inverted Meniscus

        Then get lost.

      • the viceroy’s gin

        …how many cretinous sockpuppets are you fielding today, lad?

        • Inverted Meniscus

          Two so far Viceroy. Both spouting socialist nuttery and gibberish.

      • global city

        No, it just identifies his world view and where is ideology lies…. and then what he was trying to achieve with his book.

        The facts don’t matter, they have a campaign to win.

    • Katie Cannon

      Yeah, it’s so stupid to believe cigarettes contribute to cancer.

      Lefty conspiracy.

      Here’s the Father of Lefty Free Market Capitalism, Adam Smith:

      “Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labor above their actual rate… It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms….
      by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens.””

      ““The rich should contribute to the public expense, not only in proportion to their revenue, but something more than that proportion.”

      Denouncing vast differences in wealth and income, Smith praised a fellow economist’s tax proposal:

      “To remedy inequality of riches as much as possible, by relieving the poor and burdening the rich.””

      On regulations:

      ”When the regulation, therefore, is in support of the workman, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.”

      Plus, he was against inheritance.

      I really thought Brits were better than Americans regarding a basic understanding of the history of ideas.

      • wycombewanderer

        ”When the regulation, therefore, is in support of the workman, it is
        always just and equitable; but it is sometimes otherwise when in favour
        of the masters.”

        There are equally valid arguments against such regulation.

        For the majority of people, the only asset they possess is their labour.

        If regulation says they can’t sell their labour at X but can sell it at X plus 1 penny or 1 cent then ti is that person who is being disadvantaged by that regulation.

        Likewise regulation favours the big boys not the entrepreneur who can and might make a product or idea that people actually want.

        Imagine if prior to Bill gates and the rest made their squillions a regulatory body had to pre approve their products?

        I’d be sending this by pigeon!

        So regulation isn’t always the answer especially when it eliminates innovation.

        • Katie Cannon

          Of course regulation isn’t always the answer. Always is a really big hurdle to get over. There aren’t many “always” anything.

          Minimum wage laws do not disadvantage labor.

          Gates made part of his fortune off the questionable ability to patent 1s and 0s.

          Can you imagine patenting the ABCs?

          And such regulations do indeed dampen innovation.

          • Weaver

            Depending on their level, minimum wage laws can and do increase unemployment. Existing workers tend to benefit at the expense of unemployed and employers.

            There is a net deadweight cost to this transfer.

            Software patenting is a harder issue, and I would agree the current laws are too defensive. But that is not to say it is not reasonable in principle.

    • Ganpati23

      All these up votes. Seem none of them clicked on the Krugman link who proves the US data shows clearly it is rising.

      Thought not.

      Or the bit where he says that if the FT chap’s getting those results he must be doing something wrong.

      If you believe in truth why don’t you look at the evidence of the nobel prize winner. It was linked.

      Better to sneer.

      • wycombewanderer

        Are you the last person on the planet to take Krugman seriously?

        Or Nobel prizes for that matter in anything other than real science.

        Peace prizes and economics are so devalued by the whackos and loons they’ve been given to recently that no-one takes them seriously

      • Weaver

        Krugman’s nobel is in an area of economics completely removed from his current day-to-day interests and writings. Most economists treat it as conferring less authority than a layman might assume.

  • Andy

    The book was rubbish from cover to cover. It does show the decline in the quality of Harvard University Press, but that is mirrored in the decline of universities.

    • you_kid

      The wattrose weekend ‘a summer food and sport’ pamphlet is more your kind of thing?

  • Shinsei1967

    It was surely clear to an informed layman that although inequality in the UK had probably increased since the C20th lows of the 1970s the Piketty claim that we were close to Victorian levels of inequality was nonsensical hyperbole.

    For one thing Piketty made no allowance for the fact that everyone in the UK has access to “free” health care for life, free education to 18, a welfare safety net and an index-linked state pension on retirement. Capitalise that and the claim that many of the poorest in the UK have “zero wealth”, like their Victorian forebears, is just silly.

    At the other extreme the idea that the rich get ever richer is disproved by looking at the Sunday Times Rich List where the number of landed aristocrats gets fewer ever year (the Duke of Westminster who used to top the charts in the 80s is down to no 10) whilst the top 100 is full of new money earned in retailing, banking, media & technology (as well as the commodity rich foreign oligarchs who just happen to have a flat in Knighsbridge and so get on the UK list).

    • Weaver

      Yes, the lack of welfare goods correction to the data series is a major problem.

      To be fair to Piketty, this is hard to control for…

  • eoin73

    You are wrong. Krugman has covered the story and rubbished the idea (from Giles) that there has been no increase in inequality in the US.

    • Marky

      Krugman’s diagram in his blog post was about income inequality. Piketty and Giles are talking about wealth

  • itdoesntaddup

    Obviously inspired by climate scientists, Piketty’s theory has been picked apart too:

    http://www.conservativehome.com/platform/2014/05/andrew-lilico-next-time-someone-starts-taunting-you-about-r-g-heres-what-to-say.html

    Meanwhile if you want to know what is the biggest contributor to rising inequality in the UK, consider the impact of government subsidised investments on a grand scale from windmills to aircraft carriers to PFI hospitals to HS2, paid for by the little guy while the big guy gets his guaranteed margin. It’s crony government socialism, not capitalism that is at fault.

    • Shinsei1967

      You have the same attitude to data as Picketty. The little guy you speak of is not a net contributor to the tax take of the government. The top 25% earners are the net contributors, so it is they who are paying for aircraft carriers and the NHS, not the little guy.

      • itdoesntaddup

        You have the same attitude to data as Piketty. The government runs a massive deficit, the impact of which is to destroy public wealth: in fact the ONS report the net worth of the public sector is substantially negative.

        • Shinsei1967

          That’s neither here nor there. I was disagreeing with the claim that the “little guy” was paying for all this.

          And governments have been running deficits for pretty much the last 100 years and we are immeasurably richer. Borrowing to invest appears to reap dividends.

          (Which isn’t to say that all government spending is good, but clearly having a healthy and educated population is good for economic growth).

          • alabenn

            The little guy is not paying directly, where do the big guys get the money, it is paid for by millions of little extra costs added to everything around the world, unless it is from the same Magic Money Tree this country is currently living off.

            • Shinsei1967

              It comes from economic growth. You may have noticed we are richer than we were in 1900.

              3% annual growth over the last 100 years adds up. It isn’t a Magic Money Tree unless you wish to define capitalism as such (it is a Money Tree but there is nothing Magic about it).

              • alabenn

                The supposed growth over the last ten years has been provided by borrowing.
                If you borrow £100 and add it to your earned £100 your £200 does not mean you have 50% real of imaginary growth.

                • Katie Cannon

                  The private sector borrows private bank credit.

                  The national government quit borrowing when it went off the gold standard, and used to issue bonds against it’s gold holdings.

                  Here’s how it all works now:

                  http://www.3spoken.co.uk/2011/01/how-governments-super-platinum-credit.html

                • Chris Morriss

                  But even when the UK was still on the gold standard, it had a national debt that it was in no position to pay off. This has been the case since the late 17th century when the BOE was formed, after the English saw how the Dutch government (who were the first to run a national debt) were able to borrow money and spend it, sometimes wisely, though often not.

              • Chris Morriss

                I wonder what is meant when you say we are richer than in 1900?
                This is difficult to measure as there are lots of things we spend our money on that didn’t exist in 1900. Allowing for the real value of the £, then I am sure that in my equivalent profession of Design Engineering, I would have been relatively better off in 1900.

            • Katie Cannon

              “Magic Money Tree”

              Geeze.

              It’s just called “money”, which is always magical because we can magically think in numbers.

              Canines can’t, so don’t use money.

              Money is an accounting relationship: Who owes what to whom in real terms.

              Accounting is counting, which uses numbers — out of thin air!

              You too can write you own IOU, the trick is getting someone to accept it.

              Pounds are an IOU from your government (I’m American) to you. What does the gov owe you? A tax credit.

              Pounds are tax credits.

              All money is credit/debt. It’s what it is.

          • Katie Cannon

            The UK doesn’t actually borrow.

            Rather, they issue a debt backed fiat currency.

            You no longer borrow against your gold holdings.

            http://www.3spoken.co.uk/2011/01/how-governments-super-platinum-credit.html

            • Chris Morriss

              True, though it’s not the sort of thing that is supposed to be said in our dystopian “paradise”!

        • Katie Cannon

          The UK is a monetary sovereign currency — ISSUER.

          It ISSUES the currency you USE, as a currency USER.

          The total deficit (“debt”) is an accounting of how many pounds are in the non-government sector, to a penny.

          The UK creates pounds out of thin air.

          At the national level, pounds are an accounting mark.

          Pounds are a unit of account, like inches are a unit of measure.

          No one owes inches.

          Pay the total deficit down to $0, you’d have $0 in the private sector.

          Here’s how your monetary system works:

          http://www.3spoken.co.uk/2011/01/how-governments-super-platinum-credit.html

          • Chris Morriss

            Sorry Katie, but Debt and Deficit are two different (though interconnected) things. You may have savings of £20,000, and a monthly income of £3000. If in one month you spend £3100, you have incurred a deficit, but you would be a long way from being in debt.

          • itdoesntaddup

            Condescending nonsense. The UK is a thoroughly open economy – especially when it comes to banking. Most of the money supply comes from the banking system, not from the DMO and the BoE, and a lot of it is borrowed internationally – some 450% of GDP in fact last time I looked. Back to school to learn some basic accounting for you, I think.

      • Katie Cannon

        Not if you’re talking about you national government.

        The UK, like America, but not like the Euro using countries, is a monetary sovereign of a fiat currency with floating exchange rates, and owes all it’s obligations in it’s own unit of account, the pound — which it creates out of thin air.

        http://www.3spoken.co.uk/2011/01/how-governments-super-platinum-credit.html

        • Weaver

          Hush, don’t tell folks that. You’ll spook ’em. 😉

    • Katie Cannon

      Not saying how the UK is spending it’s currency is good.

      But the UK, like America, China, India, etc… but not like the Euro USING countries, is a monetary sovereign, so taxes don’t fund your national government — who is a sovereign currency ISSUER, not user.

      Your national gov spends pounds into existence so you have pounds to use.

      I’m American, but here’s a British blog describing how your system works:

      http://www.3spoken.co.uk/2011/01/how-governments-super-platinum-credit.html

      • itdoesntaddup

        Perhaps you hadn’t noticed, but the Greeks, Irish, Spanish, Italian, Portuguese all fail to fund their national governments with taxes. Neither does your government – it borrows from China. Sovereign currency issue is no guarantee of value: ask any country with experience of hyperinflation that makes the government’s currency worthless.

  • Makroon

    Americans have always been partial to a French “intellectual”.
    The name of the game is making money, the publishers would have been pretty sure that few would wade through this stuff.
    They were probably in a hurry. The market for conspiracies, apocalyptic prophesies and quack “solutions”, will always be with us, but is finally waning after the “white heat” of the financial crisis.

    • HookesLaw

      You are right about few wading through it. The book is published it is publicised the press read the publicity which gains wide currency and the story becomes received wisdom and truth. Such is the shallowness of the press

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