Sean Collins says “thou shalt not doubt St. Thomas”:
The Piketty-FT debate should be seen for the arcane technical dispute that it is, but instead many claimed that it was a Big Deal, a decisive political debate for our times. This overblown reaction highlights how Pikettymania has got out of control. Your attitude to Piketty’s Capital – a 700-page tome that many have not read – has become a badge indicating that you are right-on (or not) when it comes to inequality.
Pikettymania took flight when the left hailed him as extraordinary, a hero, and claimed his book would utterly transform the policy discussion towards questioning capitalism. Liberal economist Paul Krugman considers Capital ‘the most important economics book of the year – and maybe the decade’. Even those who disagree with the content feel obliged to claim the book is exceptional; for example, Lawrence Summers, a top economist in the Clinton and Obama administrations, says it is a ‘Nobel Prize-worthy contribution’, even though he finds Piketty’s theory to be wrong.
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When the Great Man himself responded to the FT, his annoyance at having to deal with someone raising questions about his awesome work was clear. ‘Ridiculous’ and ‘dishonest’ was how he initially described the FT’s findings. In his full reply, he says the FT’s points were ‘criticism for the sake of criticism’ — in other words, this wasn’t a genuine search for the truth. In response to a number of the FT’s specific charges, Piketty says that he often had to adjust the data because of their inadequacies, and he applied his best judgment. He admits that in a few cases he could have been more explicit in describing his adjustments.
Such a response may lead to more questions, but not from his loyal supporters, who were busy celebrating Piketty’s ‘victory’ over the FT. ‘Piketty’s devastating point-by-point rebuttal’, says Robert Kuttner, shows that Giles ‘made a fool of himself’. Economist and New York Times contributor Justin Wolfers tweeted, ‘Debate’s over folks’ — providing further evidence for Joel Kotkin’s theory of the spread of a ‘debate is over’ syndrome among the modern left, which seeks to impose a stifling conformity on a variety of issues (from climate change to the causes of poverty and the definition of marriage, among others). Krugman concluded that the FT-Piketty debate showed the persistence of inequality ‘deniers’ — the same term of abuse thrown at today’s heretics who dare to question climate-change orthodoxy.
This anti-intellectual ‘nothing to see here, folks’ approach is wrong; more, not less, debate should be encouraged. Piketty’s data is fair game, but there’s much more to his argument that should be questioned, too. Even if Piketty’s figures are perfect, he still cannot explain why inequality changes over time, nor back up his predictions for the future. Moreover — as I pointed out in my review of his book — we should challenge the elite’s obsession with the lives of the rich and famous, which distracts from a proper discussion about economic growth and increasing living standards for all.
