5 ms·

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 re

by mrow84 12y 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 12y 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 12y ago
  I must say that, possibly because of my own background as a reformed AI researcher, that article on "Logical or Connectionist AI?" you refer to there is far more interesting than the original article! [NB It was probably Drew McDermott's "A Critique of Pure Reason" that fatally damaged my interest in symbolic AI].
- mrow84 12y ago
  When you say that he gives "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", does he make no attempt to correlate his time series of (r - g) with inequality data? If such a correlation was found, that would obviously represent evidence to support his hypothesis. His claim that I quoted is a causal one, however, as I am sure you are aware, it is very standard practice in all fields of inquiry to propose causal relationships from careful and qualified analyses of correlations. You are of course correct that demonstrating causality would require more than time series analysis, however a lack of causal analysis cannot be taken of itself to invalidate a well-identified correlation (I am of course assuming good faith and rigour on his part, which I am not in a position to attest to at the moment). Contrary data, or an explanation of a mechanism that would induce the identified correlation without the proposed causal relationship should now be sought to invalidate his claims, simply saying that he has only shown correlation is probably not enough. Finally, could you just explain this a bit more, I didn't quite get it: "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: ..."
  - yummyfajitas 12y ago
    There is no careful analysis. The graphs have basically 3 features: high inequality until the great depression, then low inequality, then inequality rises again. He doesn't have much in the way of graphs of r-g. Rather than explaining why you need more than just a correlation, I'll link to the Lucas Critique: http://en.wikipedia.org/wiki/Lucas_critique http://en.wikipedia.org/wiki/Lucas_critique Finally, could you just explain this a bit more Not sure I can explain better than the comment I linked to. If your capital and mine grow at the same rate, we'll have the same ratio of capital forever. I.e., my wealth will be X exp(rt), yours will be Y exp(rt). This seems to be Piketty's implicit model in most of the book, though once or twice he calls it unrealistic. But he never actually states explicitly what his model is, so it's a bit hard for me to be sure.

by mrow84 12y ago

yummyfajitas 12y 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 12y ago
I must say that, possibly because of my own background as a reformed AI researcher, that article on "Logical or Connectionist AI?" you refer to there is far more interesting than the original article! [NB It was probably Drew McDermott's "A Critique of Pure Reason" that fatally damaged my interest in symbolic AI].
mrow84 12y ago
When you say that he gives "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", does he make no attempt to correlate his time series of (r - g) with inequality data? If such a correlation was found, that would obviously represent evidence to support his hypothesis. His claim that I quoted is a causal one, however, as I am sure you are aware, it is very standard practice in all fields of inquiry to propose causal relationships from careful and qualified analyses of correlations. You are of course correct that demonstrating causality would require more than time series analysis, however a lack of causal analysis cannot be taken of itself to invalidate a well-identified correlation (I am of course assuming good faith and rigour on his part, which I am not in a position to attest to at the moment). Contrary data, or an explanation of a mechanism that would induce the identified correlation without the proposed causal relationship should now be sought to invalidate his claims, simply saying that he has only shown correlation is probably not enough. Finally, could you just explain this a bit more, I didn't quite get it: "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: ..."
- yummyfajitas 12y ago
  There is no careful analysis. The graphs have basically 3 features: high inequality until the great depression, then low inequality, then inequality rises again. He doesn't have much in the way of graphs of r-g. Rather than explaining why you need more than just a correlation, I'll link to the Lucas Critique: http://en.wikipedia.org/wiki/Lucas_critique http://en.wikipedia.org/wiki/Lucas_critique Finally, could you just explain this a bit more Not sure I can explain better than the comment I linked to. If your capital and mine grow at the same rate, we'll have the same ratio of capital forever. I.e., my wealth will be X exp(rt), yours will be Y exp(rt). This seems to be Piketty's implicit model in most of the book, though once or twice he calls it unrealistic. But he never actually states explicitly what his model is, so it's a bit hard for me to be sure.