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Thomas Piketty accuses Financial Times of dishonest criticism

42 points by xmpir 12y ago

selmnoo 12y ago
I'd always thought Financial Times was a very decent news journal outlet, sure a little right-inclined but generally trustable much like the Economist. I thought they wouldn't be up to dirty tricks, then I saw the image they used for the Piketty article: http://www.ft.com/intl/cms/s/2/e1f343ca-e281-11e3-89fd-00144feabdc0.html#axzz32phbsY00 http://www.ft.com/intl/cms/s/2/e1f343ca-e281-11e3-89fd-00144... They deliberately used that image (scratching his head, looking confused, etc.) to paint a certain narrative. That's just a really low way to go.
- panarky 12y ago
  I used to read the FT and the Economist thoroughly, and felt I was well informed. Maybe I thought they were high-quality publications because their ideology aligned with mine. But I matured and my blind belief in the power of free, unregulated markets was challenged by many examples of abject market failure in the real world. I still read FT and the Economist, but with a much more jaundiced eye. Much of what they say is reflexive, ideological, based on either blind belief or self-interest.
  - dobbsbob 12y ago
    There's a reason the Economist doesn't credit articles to authors, so it appears as received wisdom from seasoned economists/political insiders instead of actually being written by a 20something hipster intern. If you save a few issues they will contradict themselves every couple of months especially on articles about Russia. where Putin is the hero of capitalism in one issue then an evil protectionist Bolshevik in another. Europe's future will be declared as under the whims of Russia then a few issues later they claim Russia has little influence. It's a borderline tabloid rag, so is the FT.
  - gsz 12y ago
    Everybody is biased. Having a somewhat left-of-centre bias myself, I like to read the FT and the Economist precisely because they don't simply reinforce my beliefs.
- greghinch 12y ago
  The thing you have to remember about the British press (and the majority of their readership) is, more than anything else, they love taking someone of notoriety down a peg. You can just hear the tuts and proclamations of "well this is why you don't stick your neck out!"
- udev 12y ago
  Yes, I observed the same thing. And they keep using this image for several articles.
- schultkl 12y ago
  Does the FT maintain a firewall between the editorial board and the reporting of news staff? The Wall Street Journal, historically (though not as sure now that Rupert Murdoch owns it), has had such a distinction...a predominantly rightward editorial staff but relatively even-handed news reporting.
QuantumChaos 12y ago
On the one hand, Krugman, Summers, and other economists praise Piketty primarily for his unique, groundbreaking empirical work on income inequality. On the other hand, when FT critique his empirical work, Piketty says that his work has already been superceded by other work that proves income inequality is growing. So nothing the FT can say about Piketty's work will overturn this now well established fact. So which is it? I'm inclined to go with the former, because those economists focused on Piketty's empirical work and downplayed his theoretical work and policy suggestions. And my own knowledge of economics informs me that detailed empirical work of this sort is not done enough. So I think that while Piketty might consider the empirical part of his book to be a detail, in fact it is a very important matter. All that remains is how valid FT's criticism is, and how much it changes the results.
- gopher1 12y ago
  Why can't it be both? You might have a question as to why Piketty gets so much credit, but the two are not mutually exclusive.
  - QuantumChaos 12y ago
    You are right, this is possible. But I am assuming that the Krugman, Summers and other reviewers (at least somewhat) did their homework, and were correct in saying that Piketty's empirical work was unique and important.
- youngtaff 12y ago
  The FT is pretty open in it's questioning of the data - http://blogs.ft.com/money-supply/2014/05/23/data-problems-with-capital-in-the-21st-century/ http://blogs.ft.com/money-supply/2014/05/23/data-problems-wi... Rather than accuse them of dishonesty surely all Piketty has to do is explain where their analysis is wrong?
  - vanderZwan 12y ago
    He and others (including critics of his work) have, as far as I can tell? > While the available data was "imperfect", it did not undermine his central argument about widening inequality, he said. "Where the Financial Times is being dishonest is to suggest that this changes things in the conclusions I make, when in fact it changes nothing. More recent studies only support my conclusions, by using different sources." > Scott Winship, an economist at the right-leaning Manhattan Institute for Policy Research, and notable critic of Piketty's analysis, said the FT's allegations weren't "significant for the fundamental question of whether Piketty's thesis is right or not". In an email to Bloomberg news agency, he wrote: "It's hard to think Piketty did something unethical when he put it up there for people like me to delve into his figures and find something that looks sketchy … Piketty has been as good or better than anyone at both making all his data available and documenting what he does generally."
anon1385 12y ago
Ignoring the merits or not of the criticisms, I did find it interesting to compare how much effort the FT and Economist put into finding errors in this work and how much exposure they gave their findings, compared with the way they have largely ignored problems in other far more influential studies that were much more flawed. For example Tol 2009, a flawed paper about the economic impacts of climate change which concluded that moderate warming would be economically beneficial[1]. That was cited (although not generally named) in numerous FT and Economist editorials and opinion pieces over the years yet as far as I'm aware they have not published anything about the recent correction. It was used as the basis for serious national and international policy and has contaminated many subsequent studies in the field. For years the author made regular appearances pushing the importance of the finding in western media. Yet even a fairly basic review of the paper would have spotted some of the errors (it was a meta-analysis and some of the values from other paper were copied incorrectly or had the sign reversed) i.e. even an FT intern could have spotted the mistakes. Updates to the paper indicate that the entire result was based on fitting a curve to a single outlier (a study by the same author) and additional studies since 2009 give a very different picture when included. As far as I'm aware Piketty's work has had little to no real world impact as yet to government policy or widespread public opinion (I might be wrong of course). Any errors it contained, while worth correcting, don't seem like they would have an earth shattering impact worthy of front page exposure and double page spreads while retractions in more influential studies go unreported. [1] More about that here: http://www.washingtonpost.com/blogs/monkey-cage/wp/2015/05/23/the-gremlins-did-it-iffy-curve-fit-drives-strong-policy-conclusions/ http://www.washingtonpost.com/blogs/monkey-cage/wp/2015/05/2... and http://andthentheresphysics.wordpress.com/2014/05/05/tols-corrections/ http://andthentheresphysics.wordpress.com/2014/05/05/tols-co...
- TheAnimus 12y ago
  > the way they have largely ignored problems in other far more influential studies that were much more flawed. From the FT article on the matter >Nobel Prize-winning economists have heaped praised on Mr Piketty’s work. Professor Paul Krugman of Princeton University said it was safe to say the book “will be the most important economics book of the year – and maybe of the decade”. It is something that clearly had been billed as an influential book, even the leader of the opposition in my country commented on it. Clearly someone felt it was worthy of review. Meanwhile, I'm not aware of any of my nations political leaders basing policy on the Tol 2009 paper. Generally such academic papers don't reach as many readers as this book has/will/wouldhave. I think the question of one investigation being a sign of a systemic bias is a bit of a moot point.
yummyfajitas 12y ago
I love the classical "he said, she said". The fact is, Piketty's numbers appear to be incorrect. It is no longer remotely close to clear that wealth inequality is going up, particularly at the top, at least from what we see in Piketty's book. The FT corrections show that inequality has not increased in the UK, and different weighting schemes (e.g. population weighting across countries) can completely make his effects vanish. Krugman showed that income inequality, particularly below the 99'th percentile, is going up. Income (including capital income) != wealth. Now maybe other sources prove him correct. If so, this response is far from convincing - why not just cite those other sources? And if that's the case, why did anyone care about his book to begin with? In any case, Piketty is to be commended for releasing his data/methodology. Just think - if he didn't do this, it would have taken years for his errors to be discovered.
- barrkel 12y ago
  In order for income inequality to not lead to wealth inequality, we need to believe that poor people save more of their income than wealthy people - which seems rather difficult. I think it is clear from other sources that wealth inequality is going up, and the FT is pushing its findings too far.
  - bru 12y ago
    >In order for income inequality to not lead to wealth inequality, we need to believe that poor people save more of their income than wealthy people - which seems rather difficult. Yes, but that's actually what the FT refutes (center of 3rd § of the article): > The newspaper concluded there was little evidence in Piketty's original sources to bear out his theory that the richest were accumulating more wealth
  - yummyfajitas 12y ago
    In order for income inequality to not lead to wealth inequality, we need to believe that poor people save more of their income than wealthy people - which seems rather difficult. Or that wealthy people achieve diminishing returns on investment as their wealth grows. I.e., my startup might grow 10-fold, but Facebook is unlikely to. Even if you assume Piketty's "r > g" macro-level hypothesis, there are a lot of microeconomic theories completely compatible with it. Not all of them result in increasing inequality. http://www.chrisstucchio.com/blog/2014/piketty_and_inequality.html http://www.chrisstucchio.com/blog/2014/piketty_and_inequalit... (But now we are moving into the topic of Piketty's theoretical weaknesses, which are supposedly irrelevant because his data is so great.) I think it is clear from other sources... [citation needed] And if other sources prove this point, why was Piketty's book such a sensation?
QuantumChaos 12y ago
The article quotes from a critic of Piketty, Scott Winship, but the strange nature of of the quotes (highly selective and including quotes on irrelevant matters) made me suspicious. Here are the latest tweets on the matter by him: 1/Quoted in Bloomberg today re #Piketty but sounds like I side w him on rising wealth ineq & US wealth ineq>Europe. 2/To be clear, I don't. Think his original results failed to make that case, which is why I'm less worked up than some abt alleged probs. 3/But UK--&, I now believe, US--methods need to be explained by #Piketty, else looks pretty bad. Just not CONSEQUENTIAL 4 overall thesis This is the part of the article that quotes Winship: > Scott Winship, an economist at the right-leaning Manhattan Institute for Policy Research, and notable critic of Piketty's analysis, said the FT's allegations weren't "significant for the fundamental question of whether Piketty's thesis is right or not". In an email to Bloomberg news agency, he wrote: "It's hard to think Piketty did something unethical when he put it up there for people like me to delve into his figures and find something that looks sketchy … Piketty has been as good or better than anyone at both making all his data available and documenting what he does generally."
- mpweiher 12y ago
  Not sure what your beef is, your quotes etc. exactly match what the Guardian wrote about S.W.: 1. He disagrees with Piketty's conclusion 2. He finds the FT's criticisms insignificant wrt. Piketty's conclusion. So: he also thinks Piketty is wrong, but not for the reasons the FT claims, and he thinks that what the FT claims is inconsequential to whether Piketty is wrong or right.
  - QuantumChaos 12y ago
    Reposting my reply to your other comment in this thread (feel free to continue discussion on either thread). According to Winship, Piketty's results are wrong/irrelevant for other, independent reasons. But not everyone shares this view, so Winship is clarifying that, for people who were initially convinced by Piketty's analysis, the FT criticism is important. But it is not important for Winship because even without the FT criticism, he has independent reasons to discounting Piketty's analysis. I hope this explains my "beef" with the use of Winship's quotes.
weddpros 12y ago
The rich get richer faster than others because they're better at it... That's why they're rich in the first place. Does it take 700 pages to understand it? Think about it: most people don't even try to get richer !
weddpros 12y ago
The rich get richer faster than others because they're better at it... That's why they're rich in the first place. Does it take 700 pages to understand it? Think about it: most people don't even try to get richer !

42 points by xmpir 12y ago

I'd always thought Financial Times was a very decent news journal outlet, sure a little right-inclined but generally trustable much like the Economist. I thought they wouldn't be up to dirty tricks, then I saw the image they used for the Piketty article: http://www.ft.com/intl/cms/s/2/e1f343ca-e281-11e3-89fd-00144feabdc0.html#axzz32phbsY00 http://www.ft.com/intl/cms/s/2/e1f343ca-e281-11e3-89fd-00144... They deliberately used that image (scratching his head, looking confused, etc.) to paint a certain narrative. That's just a really low way to go.

panarky 12y ago
I used to read the FT and the Economist thoroughly, and felt I was well informed. Maybe I thought they were high-quality publications because their ideology aligned with mine. But I matured and my blind belief in the power of free, unregulated markets was challenged by many examples of abject market failure in the real world. I still read FT and the Economist, but with a much more jaundiced eye. Much of what they say is reflexive, ideological, based on either blind belief or self-interest.
- dobbsbob 12y ago
  There's a reason the Economist doesn't credit articles to authors, so it appears as received wisdom from seasoned economists/political insiders instead of actually being written by a 20something hipster intern. If you save a few issues they will contradict themselves every couple of months especially on articles about Russia. where Putin is the hero of capitalism in one issue then an evil protectionist Bolshevik in another. Europe's future will be declared as under the whims of Russia then a few issues later they claim Russia has little influence. It's a borderline tabloid rag, so is the FT.
- gsz 12y ago
  Everybody is biased. Having a somewhat left-of-centre bias myself, I like to read the FT and the Economist precisely because they don't simply reinforce my beliefs.
greghinch 12y ago
The thing you have to remember about the British press (and the majority of their readership) is, more than anything else, they love taking someone of notoriety down a peg. You can just hear the tuts and proclamations of "well this is why you don't stick your neck out!"
udev 12y ago
Yes, I observed the same thing. And they keep using this image for several articles.
schultkl 12y ago
Does the FT maintain a firewall between the editorial board and the reporting of news staff? The Wall Street Journal, historically (though not as sure now that Rupert Murdoch owns it), has had such a distinction...a predominantly rightward editorial staff but relatively even-handed news reporting.

QuantumChaos 12y ago

On the one hand, Krugman, Summers, and other economists praise Piketty primarily for his unique, groundbreaking empirical work on income inequality. On the other hand, when FT critique his empirical work, Piketty says that his work has already been superceded by other work that proves income inequality is growing. So nothing the FT can say about Piketty's work will overturn this now well established fact. So which is it? I'm inclined to go with the former, because those economists focused on Piketty's empirical work and downplayed his theoretical work and policy suggestions. And my own knowledge of economics informs me that detailed empirical work of this sort is not done enough. So I think that while Piketty might consider the empirical part of his book to be a detail, in fact it is a very important matter. All that remains is how valid FT's criticism is, and how much it changes the results.

gopher1 12y ago
Why can't it be both? You might have a question as to why Piketty gets so much credit, but the two are not mutually exclusive.
- QuantumChaos 12y ago
  You are right, this is possible. But I am assuming that the Krugman, Summers and other reviewers (at least somewhat) did their homework, and were correct in saying that Piketty's empirical work was unique and important.
youngtaff 12y ago
The FT is pretty open in it's questioning of the data - http://blogs.ft.com/money-supply/2014/05/23/data-problems-with-capital-in-the-21st-century/ http://blogs.ft.com/money-supply/2014/05/23/data-problems-wi... Rather than accuse them of dishonesty surely all Piketty has to do is explain where their analysis is wrong?
- vanderZwan 12y ago
  He and others (including critics of his work) have, as far as I can tell? > While the available data was "imperfect", it did not undermine his central argument about widening inequality, he said. "Where the Financial Times is being dishonest is to suggest that this changes things in the conclusions I make, when in fact it changes nothing. More recent studies only support my conclusions, by using different sources." > Scott Winship, an economist at the right-leaning Manhattan Institute for Policy Research, and notable critic of Piketty's analysis, said the FT's allegations weren't "significant for the fundamental question of whether Piketty's thesis is right or not". In an email to Bloomberg news agency, he wrote: "It's hard to think Piketty did something unethical when he put it up there for people like me to delve into his figures and find something that looks sketchy … Piketty has been as good or better than anyone at both making all his data available and documenting what he does generally."

anon1385 12y ago

Ignoring the merits or not of the criticisms, I did find it interesting to compare how much effort the FT and Economist put into finding errors in this work and how much exposure they gave their findings, compared with the way they have largely ignored problems in other far more influential studies that were much more flawed. For example Tol 2009, a flawed paper about the economic impacts of climate change which concluded that moderate warming would be economically beneficial[1]. That was cited (although not generally named) in numerous FT and Economist editorials and opinion pieces over the years yet as far as I'm aware they have not published anything about the recent correction. It was used as the basis for serious national and international policy and has contaminated many subsequent studies in the field. For years the author made regular appearances pushing the importance of the finding in western media. Yet even a fairly basic review of the paper would have spotted some of the errors (it was a meta-analysis and some of the values from other paper were copied incorrectly or had the sign reversed) i.e. even an FT intern could have spotted the mistakes. Updates to the paper indicate that the entire result was based on fitting a curve to a single outlier (a study by the same author) and additional studies since 2009 give a very different picture when included. As far as I'm aware Piketty's work has had little to no real world impact as yet to government policy or widespread public opinion (I might be wrong of course). Any errors it contained, while worth correcting, don't seem like they would have an earth shattering impact worthy of front page exposure and double page spreads while retractions in more influential studies go unreported. [1] More about that here: http://www.washingtonpost.com/blogs/monkey-cage/wp/2015/05/23/the-gremlins-did-it-iffy-curve-fit-drives-strong-policy-conclusions/ http://www.washingtonpost.com/blogs/monkey-cage/wp/2015/05/2... and http://andthentheresphysics.wordpress.com/2014/05/05/tols-corrections/ http://andthentheresphysics.wordpress.com/2014/05/05/tols-co...

TheAnimus 12y ago
> the way they have largely ignored problems in other far more influential studies that were much more flawed. From the FT article on the matter >Nobel Prize-winning economists have heaped praised on Mr Piketty’s work. Professor Paul Krugman of Princeton University said it was safe to say the book “will be the most important economics book of the year – and maybe of the decade”. It is something that clearly had been billed as an influential book, even the leader of the opposition in my country commented on it. Clearly someone felt it was worthy of review. Meanwhile, I'm not aware of any of my nations political leaders basing policy on the Tol 2009 paper. Generally such academic papers don't reach as many readers as this book has/will/wouldhave. I think the question of one investigation being a sign of a systemic bias is a bit of a moot point.

yummyfajitas 12y ago

I love the classical "he said, she said". The fact is, Piketty's numbers appear to be incorrect. It is no longer remotely close to clear that wealth inequality is going up, particularly at the top, at least from what we see in Piketty's book. The FT corrections show that inequality has not increased in the UK, and different weighting schemes (e.g. population weighting across countries) can completely make his effects vanish. Krugman showed that income inequality, particularly below the 99'th percentile, is going up. Income (including capital income) != wealth. Now maybe other sources prove him correct. If so, this response is far from convincing - why not just cite those other sources? And if that's the case, why did anyone care about his book to begin with? In any case, Piketty is to be commended for releasing his data/methodology. Just think - if he didn't do this, it would have taken years for his errors to be discovered.

barrkel 12y ago
In order for income inequality to not lead to wealth inequality, we need to believe that poor people save more of their income than wealthy people - which seems rather difficult. I think it is clear from other sources that wealth inequality is going up, and the FT is pushing its findings too far.
- bru 12y ago
  >In order for income inequality to not lead to wealth inequality, we need to believe that poor people save more of their income than wealthy people - which seems rather difficult. Yes, but that's actually what the FT refutes (center of 3rd § of the article): > The newspaper concluded there was little evidence in Piketty's original sources to bear out his theory that the richest were accumulating more wealth
- yummyfajitas 12y ago
  In order for income inequality to not lead to wealth inequality, we need to believe that poor people save more of their income than wealthy people - which seems rather difficult. Or that wealthy people achieve diminishing returns on investment as their wealth grows. I.e., my startup might grow 10-fold, but Facebook is unlikely to. Even if you assume Piketty's "r > g" macro-level hypothesis, there are a lot of microeconomic theories completely compatible with it. Not all of them result in increasing inequality. http://www.chrisstucchio.com/blog/2014/piketty_and_inequality.html http://www.chrisstucchio.com/blog/2014/piketty_and_inequalit... (But now we are moving into the topic of Piketty's theoretical weaknesses, which are supposedly irrelevant because his data is so great.) I think it is clear from other sources... [citation needed] And if other sources prove this point, why was Piketty's book such a sensation?

QuantumChaos 12y ago

The article quotes from a critic of Piketty, Scott Winship, but the strange nature of of the quotes (highly selective and including quotes on irrelevant matters) made me suspicious. Here are the latest tweets on the matter by him: 1/Quoted in Bloomberg today re #Piketty but sounds like I side w him on rising wealth ineq & US wealth ineq>Europe. 2/To be clear, I don't. Think his original results failed to make that case, which is why I'm less worked up than some abt alleged probs. 3/But UK--&, I now believe, US--methods need to be explained by #Piketty, else looks pretty bad. Just not CONSEQUENTIAL 4 overall thesis This is the part of the article that quotes Winship: > Scott Winship, an economist at the right-leaning Manhattan Institute for Policy Research, and notable critic of Piketty's analysis, said the FT's allegations weren't "significant for the fundamental question of whether Piketty's thesis is right or not". In an email to Bloomberg news agency, he wrote: "It's hard to think Piketty did something unethical when he put it up there for people like me to delve into his figures and find something that looks sketchy … Piketty has been as good or better than anyone at both making all his data available and documenting what he does generally."

mpweiher 12y ago
Not sure what your beef is, your quotes etc. exactly match what the Guardian wrote about S.W.: 1. He disagrees with Piketty's conclusion 2. He finds the FT's criticisms insignificant wrt. Piketty's conclusion. So: he also thinks Piketty is wrong, but not for the reasons the FT claims, and he thinks that what the FT claims is inconsequential to whether Piketty is wrong or right.
- QuantumChaos 12y ago
  Reposting my reply to your other comment in this thread (feel free to continue discussion on either thread). According to Winship, Piketty's results are wrong/irrelevant for other, independent reasons. But not everyone shares this view, so Winship is clarifying that, for people who were initially convinced by Piketty's analysis, the FT criticism is important. But it is not important for Winship because even without the FT criticism, he has independent reasons to discounting Piketty's analysis. I hope this explains my "beef" with the use of Winship's quotes.

weddpros 12y ago

The rich get richer faster than others because they're better at it... That's why they're rich in the first place. Does it take 700 pages to understand it? Think about it: most people don't even try to get richer !

weddpros 12y ago