The Financial Times used the data that Piketty has made publically available to raise questions about his central thesis. It argues that the data do not support Piketty's claim that wealth inequality is heading back to where it was in the "Gilded Age". That, however, is not Piketty's central thesis. He holds that the ownership of capital is already concentrated and that the return on capital will outpace the growth in wage income. The FT critique does not have anything to say about this point.
This article makes another contribution for those who want to understand Piketty. It describes the four interrelated dominoes that ties his thesis together. The FT critique only touches upon one of the four dominoes and its critique is not conclusive. However, the FT has shifted the debate in an important way. It will no longer be about how we should deal with the relative growth in capital income and wage income. It will degenerate into a debate over minor issues in the data analysis. It will also become more like the debate over climate change. Denialists will have an easy answer to those who are concerned about Piketty's central thesis. They will claim that Piketty fudged the data. It only took a few dissenting climate scientists to provide ammunition for climate change denialists.
Post a Comment