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Could you explain what facts you believe Piketty conveys? What is the importance? I'm about halfway through the book, but apart from a bunch of historical data

Could you explain what facts you believe Piketty conveys? What is the importance? I'm about halfway through the book, but apart from a bunch of historical data ("wealth inequality was high, then low, then high", "really bad things like war and depression reduce inequality, while growth increases it"), I can't figure out what the actual point of the book is. Piketty certainly doesn't clearly state his theory in the first 400 or so pages. If it's about inequality caused by inherited capital, Piketty only supports this claim in the historical era (Jane Austen/Balzac/etc). He says very little about the present. He also seems unaware that there is a world outside of the US, UK and France (and maybe also Sweden+Germany). That's quite a strange omission given that the vast majority of inequality in the world is not within the west, but between the west and the rest. (As I mentioned, I'm only halfway through, so feel free to correct me if the rest of the book is different.)

vanderZwan 13y ago
> He also seems unaware that there is a world outside of the US, UK and France (and maybe also Sweden+Germany). I'm not even halfway into the book, but he apologises for this at the beginning, especially the focus on France, and gives justifications for this. Simply put, he doesn't have data (yet) for most of the rest of the world. France gets extra attention because it is the country for which he has the most and oldest data, and has had less drastic changes compared to the US, which has grown two orders of magnitude in population in the same time.
- yummyfajitas 13y ago
  That's a perfectly valid reason for leaving Asia/Africa out of the 200-year long timeseries. Nevertheless, a discussion of inequality which doesn't even acknowledge the vast gaps between a Yank/Frenchy/Brit and an Indian/Chinese/Nigerian is woefully incomplete almost to the point of dishonesty. (I say "almost" because I've met enough ignorant westerners to realize that dishonesty is not the only explanation for this. I don't understand it myself, but some people's vision truly does stop at the border. )
  - vanderZwan 13y ago
    Fair point, but I think we're drifting away from the issue that the book is trying to address, which is the consequence of capitalist economic policy on inequality. Not inequality in general. Of course countries that have different economic policies are very interesting for comparison and to find better ways of addressing the issues with capitalism, but they are not necessary to answer that question.
    - yummyfajitas 13y ago
      The effect of capitalistic economic policy has been drastic reductions in global inequality as China/India/others have become wealthier. Immigration (at least in the short run [1]) has even larger effects. [1] In the long run I'd be concerned about the damage immigrants might do in the voting booth, but that's a non-economic problem.
      - deleted 13y ago
        [deleted]
      - chongli 13y ago
        capitalistic economic policy has been drastic reductions in global inequality Do you have any data to support this claim?
mrow84 13y ago
I haven't got the book, but the hypothesis it claims to offer evidence for is given in the introduction, which is available online at [0]: "When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based." Indeed, you yourself wrote an interesting blog post essentially regarding technicalities of that point [1]. You note that he has (as far as you have read) said little about the present, so he may not have substantiated the conditions necessary for his hypothesis in the present day, but it's a little unfair to suggest that a hypothesis doesn't exist. [0] http://www.hup.harvard.edu/features/capital-in-the-twenty-first-century-introduction.html http://www.hup.harvard.edu/features/capital-in-the-twenty-fi... [1] http://www.chrisstucchio.com/blog/2014/piketty_inequality_and_volatility.html http://www.chrisstucchio.com/blog/2014/piketty_inequality_an...
- yummyfajitas 13y ago
  If that is the claim of the book, he has not made any attempt whatsoever to support it as of the halfway point of the book. So far, all I've read from him is some assorted data suggesting r has historically been bigger than g except when it wasn't, and that inequality grows except when bad things happen. If he wants to show that r > g has any effect on inequality, he needs to do a LOT more than he's done. Historic timeseries of the sort he presents are completely incapable of demonstrating this point - you need longitudinal microdata for that, together with a far more detailed theory than "r > g". If you simply have r > g (ignoring volatility, as he's done so far), and treat capital as homogeneous (as he's mostly done so far), then this will explicitly NOT happen: http://www.chrisstucchio.com/blog/2014/piketty_inequality_and_volatility.html#comment-1352815560 http://www.chrisstucchio.com/blog/2014/piketty_inequality_an... Maybe he does this in the rest of the book, but I'm far less hopeful as I read more. To paraphrase Eliezer Yudkowsky: But the real cleverness is in how inequality was marketed. They left out the math. http://lesswrong.com/lw/vv/logical_or_connectionist_ai/ http://lesswrong.com/lw/vv/logical_or_connectionist_ai/
  - arethuza 13y ago

vanderZwan 13y ago

> He also seems unaware that there is a world outside of the US, UK and France (and maybe also Sweden+Germany). I'm not even halfway into the book, but he apologises for this at the beginning, especially the focus on France, and gives justifications for this. Simply put, he doesn't have data (yet) for most of the rest of the world. France gets extra attention because it is the country for which he has the most and oldest data, and has had less drastic changes compared to the US, which has grown two orders of magnitude in population in the same time.

yummyfajitas 13y ago
That's a perfectly valid reason for leaving Asia/Africa out of the 200-year long timeseries. Nevertheless, a discussion of inequality which doesn't even acknowledge the vast gaps between a Yank/Frenchy/Brit and an Indian/Chinese/Nigerian is woefully incomplete almost to the point of dishonesty. (I say "almost" because I've met enough ignorant westerners to realize that dishonesty is not the only explanation for this. I don't understand it myself, but some people's vision truly does stop at the border. )
- vanderZwan 13y ago
  Fair point, but I think we're drifting away from the issue that the book is trying to address, which is the consequence of capitalist economic policy on inequality. Not inequality in general. Of course countries that have different economic policies are very interesting for comparison and to find better ways of addressing the issues with capitalism, but they are not necessary to answer that question.
  - yummyfajitas 13y ago
    The effect of capitalistic economic policy has been drastic reductions in global inequality as China/India/others have become wealthier. Immigration (at least in the short run [1]) has even larger effects. [1] In the long run I'd be concerned about the damage immigrants might do in the voting booth, but that's a non-economic problem.
    - deleted 13y ago
      [deleted]
    - chongli 13y ago
      capitalistic economic policy has been drastic reductions in global inequality Do you have any data to support this claim?

mrow84 13y ago

I haven't got the book, but the hypothesis it claims to offer evidence for is given in the introduction, which is available online at [0]: "When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based." Indeed, you yourself wrote an interesting blog post essentially regarding technicalities of that point [1]. You note that he has (as far as you have read) said little about the present, so he may not have substantiated the conditions necessary for his hypothesis in the present day, but it's a little unfair to suggest that a hypothesis doesn't exist. [0] http://www.hup.harvard.edu/features/capital-in-the-twenty-first-century-introduction.html http://www.hup.harvard.edu/features/capital-in-the-twenty-fi... [1] http://www.chrisstucchio.com/blog/2014/piketty_inequality_and_volatility.html http://www.chrisstucchio.com/blog/2014/piketty_inequality_an...

yummyfajitas 13y ago
If that is the claim of the book, he has not made any attempt whatsoever to support it as of the halfway point of the book. So far, all I've read from him is some assorted data suggesting r has historically been bigger than g except when it wasn't, and that inequality grows except when bad things happen. If he wants to show that r > g has any effect on inequality, he needs to do a LOT more than he's done. Historic timeseries of the sort he presents are completely incapable of demonstrating this point - you need longitudinal microdata for that, together with a far more detailed theory than "r > g". If you simply have r > g (ignoring volatility, as he's done so far), and treat capital as homogeneous (as he's mostly done so far), then this will explicitly NOT happen: http://www.chrisstucchio.com/blog/2014/piketty_inequality_and_volatility.html#comment-1352815560 http://www.chrisstucchio.com/blog/2014/piketty_inequality_an... Maybe he does this in the rest of the book, but I'm far less hopeful as I read more. To paraphrase Eliezer Yudkowsky: But the real cleverness is in how inequality was marketed. They left out the math. http://lesswrong.com/lw/vv/logical_or_connectionist_ai/ http://lesswrong.com/lw/vv/logical_or_connectionist_ai/
- arethuza 13y ago