April 21, 2014
Piketty is Back
Jane Goodall studied gorillas. She contributed much to academic research and also brought interesting facts and riveting footage to lay people.
Thomas Piketty studies income inequality; he seeks it with the same intensity as Ms. Goodall -- mutatis mutandis. Wikipedia points out "Piketty has close connections with the French socialist party, and took part in the economic commission of that party from 1995 to 1997." His 2004 paper with Emanuel Saez is probably the most frequently cited academic work on inequality. Alan Reynolds's "Income and Wealth" is generally a book length refutation.
While he has strong views, he is a serious academic and those views are worthy of scrutiny. His new book, Capital in the 21st Century" has received rave reviews from the left and I exchanged some messages with a good friend of this blog who regretted that most of the opposition was political and polemical. I liked Christopher Demuth's QOTD-achieving WSJ editorial.
While it is not an economic refutation, Clive Crook's piece in Bloomberg View is a good read and inspired my "Inequalities in the Mist" comparison. Piketty, sez Crook, does superb research -- but then takes imaginative leaps from the data to reach conclusions.
Piketty's terror at rising inequality is an important data point for the reader. It has perhaps influenced his judgment and his tendentious reading of his own evidence. It could also explain why the book has been greeted with such erotic intensity: It meets the need for a work of deep research and scholarly respectability which affirms that inequality, as Cassidy remarked, is "a defining issue of our era."
If that is not sufficiently conclusive for you, keep in mind Paul Krugman likes it.
Hat-tip: @yipeedogEconomics and Markets Posted by John Kranz at April 21, 2014 10:12 AM