5 ms·

> If someone can provide a definition of rich and can show the majority of people meeting that definition of rich stay in that class for very long, I'd be inter

> If someone can provide a definition of rich and can show the majority of people meeting that definition of rich stay in that class for very long, I'd be interested in seeing the data supporting it. Isn't that "Capital in the Twenty-First Century"? It's proved.

ChrisLomont 11y ago
The class as a whole may have increasing wealth, but that does not mean the people in the class at one snapshot in time remain there. Care to cite where in that book they make a definition of rich, and then show that exactly those people in the rich group remain there? I have not seen anyone claim the books shows this. The class of rich people is very fluid, as the above datasets show. In academic circles, there is ample criticism of that book, so much that it's considered wrong on many points by economists of all political persuasions. It's right about some things, provides a lot if good material, but is also wrong in many things, so don't just take all it says as truth without reading ample scholarly work after it's publication. Google is your friend here.
- jellicle 11y ago
  > In academic circles, there is ample criticism of that book, so much that it's considered wrong on many points by economists of all political persuasions. No, there isn't. Only Fox News believes that. You clearly haven't read Piketty's book. Among other things, he has excellent data from several countries showing most of all wealth is inherited. Some 70% in France, over 50% in the U.S. That is, in France, for every 100 euros of wealth of any type whatsoever, 70 of those were inherited from one's parents. In the U.S. for every $100 of any sort of wealth whatsoever, over $50 was inherited from one's parents. Most of all wealth is inherited, not worked for. By definition, dynastic wealth shifts around a bit. A billion into this trust (dedicated for grandchildren and great-grandchildren), a billion into that trust dedicated for maintenance of the family's real estate holdings. A given individual may fall in or out of limited rankings such as the Forbes 400. But so what? The 493rd richest person in America is still very very rich, and will remain so until that person decides to distribute their wealth to their heirs (and for that matter, moving out of the top 400 may have been due to providing for the heirs). There are also lots of studies about income mobility. The U.S. has lower income mobility than most nations. In general, if you are born poor, you're quite unlikely to ever reach the top quintile of income. (The top quintile of household income in the U.S. is just over $100K, which I suspect many Silicon Valleyers wouldn't even call "rich".) So one way to write this would be: if you are born poor, you are very unlikely to ever live in a household where there are two earners that each earn a bit over $50K. About 8% of those born poor will ever reach that level of income. http://www.equality-of-opportunity.org/ http://www.equality-of-opportunity.org/
  - ChrisLomont 11y ago
    >No, there isn't. Only Fox News believes that. Here [1] is the first page google returned when I asked for a summary of criticism. Although many would dislike heritage, the critique contains ample references to well respected academics (including some from MIT, Yale, etc.) Here's [2] a widely circulated report on a paper by a MIT grad student showing a significant alternative explanation to Piketty. Here's the actual paper [3]. Here's Krugman [4], pretty much of the same political persuasion as Piketty, summarizing some serious critique and errors in Piketty. Here's [5] other economists claiming Piketty had conclusion altering errors in his data (but if I recall, Piketty later fixed some, but not all, of these errors. The corrections are not in the book as far as I know) Here [6] famous author, economist, and statistician Nassim Taleb proves that Piketty's math is flawed. Here is an easier intro (andother critiques, repeated in the literature) from his notebooks [7, #156 and #158]. I could go on and on, there is ample research going on, but I've amply demonstrated that your claim that it's only Fox News is completely wrong. >The U.S. has lower income mobility than most nations. Only when measured as quintiles, and a lot of that effect is the US has larger dollar value quintiles than most. If a quintile here takes $40K to move across and only $30K in another country, you can have people here with more dollar mobility and less quintile mobility. Please check your source for your claim and see if they measure by quintile or by PPP adjusted dollars. There is a difference. Here [8] is an overview of some issues and references to papers showing how the results change if talking about quintile mobility or dollar mobility. Related, probably the largest study to day on US mobility [9] based on tracking IRS data found that mobility in the US is relatively unchanged for many decades. >In general, if you are born poor, you're quite unlikely to ever reach the top quintile of income. In terms of absolute mobility, 90% of those born into the bottom end up better off than their parents [10, Fig 1]. From the same dataset, the majority born into the bottom quintile do not stay there [Fig 2, 55% leave], and similarly the majority of those born into the top quintile do not stay there [about 55% leave]. So one way to write this would be: if you are born poor or rich, you are most likely to move towards the median. [1] http://www.heritage.org/research/reports/2014/09/understanding-thomas-piketty-and-his-critics http://www.heritage.org/research/reports/2014/09/understandi... [2] http://www.economist.com/blogs/freeexchange/2015/03/wealth-inequality?fsrc=scn/tw/te/bl/ed/nimbysinthetwentyfirstcentury http://www.economist.com/blogs/freeexchange/2015/03/wealth-i... [3] http://www.mit.edu/~mrognlie/piketty_diminishing_returns.pdf http://www.mit.edu/~mrognlie/piketty_diminishing_returns.pdf [4] http://krugman.blogs.nytimes.com/2014/05/24/is-piketty-all-wrong/?_r=0 http://krugman.blogs.nytimes.com/2014/05/24/is-piketty-all-w... [5] http://www.ft.com/intl/cms/s/2/e1f343ca-e281-11e3-89fd-00144feabdc0.html#axzz32YyA0Zcp http://www.ft.com/intl/cms/s/2/e1f343ca-e281-11e3-89fd-00144... [6] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2434363 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2434363 [7] http://www.fooledbyrandomness.com/notebook.htm http://www.fooledbyrandomness.com/notebook.htm [8] http://www.heritage.org/research/reports/2013/07/a-guide-to-understanding-international-comparisons-of-economic-mobility http://www.heritage.org/research/reports/2013/07/a-guide-to-... [9] http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf [10] http://www.frbsf.org/economic-research/publications/economic-letter/2013/march/us-economic-mobility-dream-data/ http://www.frbsf.org/economic-research/publications/economic...
- crimsonalucard 11y ago
  There is criticism for the book, of course. However similar to evolution, although there is controversy, it is the prevailing theory among academia.
  - ChrisLomont 11y ago
    > it is the prevailing theory among academia. What do you mean by "it"? The entire book? Some small part of it? The only place I've seen a poll about what those in academia think about a central theme of the book is this one [1]. The question posed is central to the book, and only 2% agree with the statement, 47% disagree, and 16% strongly disagree (the rest are uncertain or no opinion). 2% agreeing with such a central tenet while 65% disagree or strongly disagree hardly seems like this can be the prevailing theory among academia. Read some of their responses - many have short points or links to literature. This site, btw, has awesome questions about economic questions put to a poll of about 100 leading economists, and is an interesting source to see what issues they agree upon and which they don't. [1] http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_5v7Rxbk8Z3k3F2t http://www.igmchicago.org/igm-economic-experts-panel/poll-re...

ChrisLomont 11y ago

The class as a whole may have increasing wealth, but that does not mean the people in the class at one snapshot in time remain there. Care to cite where in that book they make a definition of rich, and then show that exactly those people in the rich group remain there? I have not seen anyone claim the books shows this. The class of rich people is very fluid, as the above datasets show. In academic circles, there is ample criticism of that book, so much that it's considered wrong on many points by economists of all political persuasions. It's right about some things, provides a lot if good material, but is also wrong in many things, so don't just take all it says as truth without reading ample scholarly work after it's publication. Google is your friend here.

jellicle 11y ago
> In academic circles, there is ample criticism of that book, so much that it's considered wrong on many points by economists of all political persuasions. No, there isn't. Only Fox News believes that. You clearly haven't read Piketty's book. Among other things, he has excellent data from several countries showing most of all wealth is inherited. Some 70% in France, over 50% in the U.S. That is, in France, for every 100 euros of wealth of any type whatsoever, 70 of those were inherited from one's parents. In the U.S. for every $100 of any sort of wealth whatsoever, over $50 was inherited from one's parents. Most of all wealth is inherited, not worked for. By definition, dynastic wealth shifts around a bit. A billion into this trust (dedicated for grandchildren and great-grandchildren), a billion into that trust dedicated for maintenance of the family's real estate holdings. A given individual may fall in or out of limited rankings such as the Forbes 400. But so what? The 493rd richest person in America is still very very rich, and will remain so until that person decides to distribute their wealth to their heirs (and for that matter, moving out of the top 400 may have been due to providing for the heirs). There are also lots of studies about income mobility. The U.S. has lower income mobility than most nations. In general, if you are born poor, you're quite unlikely to ever reach the top quintile of income. (The top quintile of household income in the U.S. is just over $100K, which I suspect many Silicon Valleyers wouldn't even call "rich".) So one way to write this would be: if you are born poor, you are very unlikely to ever live in a household where there are two earners that each earn a bit over $50K. About 8% of those born poor will ever reach that level of income. http://www.equality-of-opportunity.org/ http://www.equality-of-opportunity.org/
- ChrisLomont 11y ago
  >No, there isn't. Only Fox News believes that. Here [1] is the first page google returned when I asked for a summary of criticism. Although many would dislike heritage, the critique contains ample references to well respected academics (including some from MIT, Yale, etc.) Here's [2] a widely circulated report on a paper by a MIT grad student showing a significant alternative explanation to Piketty. Here's the actual paper [3]. Here's Krugman [4], pretty much of the same political persuasion as Piketty, summarizing some serious critique and errors in Piketty. Here's [5] other economists claiming Piketty had conclusion altering errors in his data (but if I recall, Piketty later fixed some, but not all, of these errors. The corrections are not in the book as far as I know) Here [6] famous author, economist, and statistician Nassim Taleb proves that Piketty's math is flawed. Here is an easier intro (andother critiques, repeated in the literature) from his notebooks [7, #156 and #158]. I could go on and on, there is ample research going on, but I've amply demonstrated that your claim that it's only Fox News is completely wrong. >The U.S. has lower income mobility than most nations. Only when measured as quintiles, and a lot of that effect is the US has larger dollar value quintiles than most. If a quintile here takes $40K to move across and only $30K in another country, you can have people here with more dollar mobility and less quintile mobility. Please check your source for your claim and see if they measure by quintile or by PPP adjusted dollars. There is a difference. Here [8] is an overview of some issues and references to papers showing how the results change if talking about quintile mobility or dollar mobility. Related, probably the largest study to day on US mobility [9] based on tracking IRS data found that mobility in the US is relatively unchanged for many decades. >In general, if you are born poor, you're quite unlikely to ever reach the top quintile of income. In terms of absolute mobility, 90% of those born into the bottom end up better off than their parents [10, Fig 1]. From the same dataset, the majority born into the bottom quintile do not stay there [Fig 2, 55% leave], and similarly the majority of those born into the top quintile do not stay there [about 55% leave]. So one way to write this would be: if you are born poor or rich, you are most likely to move towards the median. [1] http://www.heritage.org/research/reports/2014/09/understanding-thomas-piketty-and-his-critics http://www.heritage.org/research/reports/2014/09/understandi... [2] http://www.economist.com/blogs/freeexchange/2015/03/wealth-inequality?fsrc=scn/tw/te/bl/ed/nimbysinthetwentyfirstcentury http://www.economist.com/blogs/freeexchange/2015/03/wealth-i... [3] http://www.mit.edu/~mrognlie/piketty_diminishing_returns.pdf http://www.mit.edu/~mrognlie/piketty_diminishing_returns.pdf [4] http://krugman.blogs.nytimes.com/2014/05/24/is-piketty-all-wrong/?_r=0 http://krugman.blogs.nytimes.com/2014/05/24/is-piketty-all-w... [5] http://www.ft.com/intl/cms/s/2/e1f343ca-e281-11e3-89fd-00144feabdc0.html#axzz32YyA0Zcp http://www.ft.com/intl/cms/s/2/e1f343ca-e281-11e3-89fd-00144... [6] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2434363 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2434363 [7] http://www.fooledbyrandomness.com/notebook.htm http://www.fooledbyrandomness.com/notebook.htm [8] http://www.heritage.org/research/reports/2013/07/a-guide-to-understanding-international-comparisons-of-economic-mobility http://www.heritage.org/research/reports/2013/07/a-guide-to-... [9] http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf [10] http://www.frbsf.org/economic-research/publications/economic-letter/2013/march/us-economic-mobility-dream-data/ http://www.frbsf.org/economic-research/publications/economic...
crimsonalucard 11y ago
There is criticism for the book, of course. However similar to evolution, although there is controversy, it is the prevailing theory among academia.
- ChrisLomont 11y ago
  > it is the prevailing theory among academia. What do you mean by "it"? The entire book? Some small part of it? The only place I've seen a poll about what those in academia think about a central theme of the book is this one [1]. The question posed is central to the book, and only 2% agree with the statement, 47% disagree, and 16% strongly disagree (the rest are uncertain or no opinion). 2% agreeing with such a central tenet while 65% disagree or strongly disagree hardly seems like this can be the prevailing theory among academia. Read some of their responses - many have short points or links to literature. This site, btw, has awesome questions about economic questions put to a poll of about 100 leading economists, and is an interesting source to see what issues they agree upon and which they don't. [1] http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_5v7Rxbk8Z3k3F2t http://www.igmchicago.org/igm-economic-experts-panel/poll-re...