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‘No Empirical Evidence’ for Thomas Piketty’s Inequality Theory

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Re: ‘No Empirical Evidence’ for Thomas Piketty’s Inequality Theory

#31

Post by dredmorbius »

I'm not terribly surprised to find Mr. Goes has worked with the Cato Institute, one of a network of hundreds of policy think tanks worldwide under the Atlas Network and strongly tied to the Mont Pelerin Society with a very specific ideological agenda. Though it's curious Mr. Talley's brief note fails to mention those bona fides. Collectively, these institutions have been on the far side from truth on debates over tobacco, asbestos, leaded petrol and paint, the ozone hole, and now global warming.

This isn't to say that Mr. Goes' analysis is flawed, I've yet to look at it. But the glee with which it's being picked up by the Murdoch/Newscorp WSJ, and from a quick bit of DDGing, numerous bloggers and commentators, suggests a wee bit of bias could be present. The lack of substantive description of the study by Talley doesn't suggest much of strength either.

Certainly other IMF and World Bank economists have found Piketty credible.

http://carlosgoes.com/resume/

https://www.atlasnetwork.org/partners/global-directory

https://www.atlasnetwork.org/partners/global-directory/cato-...

https://www.atlasnetwork.org/partners/global-directory/mont-...

https://www.worldcat.org/title/road-from-mont-pelerin-the-ma...

Re: ‘No Empirical Evidence’ for Thomas Piketty’s Inequality Theory

#32

Post by berntb »

coldtea wrote: post #18
berntb wrote: post #16

Earlier quoted context omitted.

It is a classic conspiracy theory to say that most of a scientific field is a fraud from (political) ideology. (That is, your statement presupposes most people of the field are either idiots, fanatics or crooks.) I'd be interested if you can back that up? (With non ideological sources, of course.) Edit: Considering the numbers, there are going to be some true conspiracy theories... and mass hypnosis from unverifiable…

> That is, your statement presupposes most people of the field are either idiots, fanatics or crooks. Kind of like there have been hundreds of thousands of Freudian psychoanalysts (considered scientists) in the 20th century until now? Or how people consider (and increasingly clinics embrace) homeopathists as doctors and scientists? With their own educational programs, journals and everything too. In any case there's…

So you lack references (without an ideological angle) that dismiss economics as a science -- which I asked after?

That some sciences can't use the scientific method (do experiments etc) like some parts of geology, don't counter my point. [Edit: Unless your point really is that you dismiss palaeontology et al in an equal way, too?]

(Or are you arguing that 80% of most everything which aren't based on mathematical proofs are bad?)

Edit: This is an innocent question about getting references to strong claims that a science has 0 "scientific content". I know some people whose integrity and intelligence I trust, which later went the academic track in economics. That gave in total 4 down votes -- but still without a reference?

Re: ‘No Empirical Evidence’ for Thomas Piketty’s Inequality Theory

#33

Post by notahacker »

chakkop wrote: post #23
notahacker wrote: post #21

Earlier quoted context omitted.

Piketty isn't really talking about "inequality in material incomes" so much as a theory that a small proportion of dynasties tends to accuulate such a large proportion of national resources that the economy ceases to operate like a competitive market and becomes a means for those holding the majority of the wealth to extract rent from those holding the diminishing remainder. That can be a problem even if you find som…

Nearly every assumption in this argument of Piketty's is flawed. Is it only the rich that have capital? What about human capital? What about creative destruction--the entry of new market players? Don't the rich (and their children) often squander their capital? More to the point: look at the evidence of the many rich people around us. Did they build this wealth by banking on r > g, or by putting idea upon idea and cr…

The book attempts to address these in rather more detail than can be managed here, but human capital isn't likely to get you to the ranks of fabulously wealthy without the backing of VCs and their already fabulously wealthy LPs, and wealthy dynasties are generally much better at structuring their portfolios to avoid being wiped out by "creative destruction" than smaller business owners. Piketty argues that our concept of "the rich" is heavily shaped by lists which are biased towards those who create companies because their wealth is much easier to estimate than the diversified portfolios of family dynasties, and that distinguishing between the two isn't easy either (Warren Buffet, for example, is entirely self-made but has done so entirely through disproportionately successful bets on r > g rather than creating something new, and many of the entrepreneurs that have succeeded by creating and marketing something new take the eminently sensible decision to diversify those riches and become rentiers to let their fortunes continue to grow later in life). Whether he's right or wrong about the composition of the rich in general, it's pretty obvious the HN concept of the rich is skewed towards the Zuckerbergs we can aspire to emulate rather than the Koch brothers we can't.

Re: ‘No Empirical Evidence’ for Thomas Piketty’s Inequality Theory

#35

Post by wslh »

chakkop wrote: post #23
notahacker wrote: post #21

Earlier quoted context omitted.

Piketty isn't really talking about "inequality in material incomes" so much as a theory that a small proportion of dynasties tends to accuulate such a large proportion of national resources that the economy ceases to operate like a competitive market and becomes a means for those holding the majority of the wealth to extract rent from those holding the diminishing remainder. That can be a problem even if you find som…

Nearly every assumption in this argument of Piketty's is flawed. Is it only the rich that have capital? What about human capital? What about creative destruction--the entry of new market players? Don't the rich (and their children) often squander their capital? More to the point: look at the evidence of the many rich people around us. Did they build this wealth by banking on r > g, or by putting idea upon idea and cr…

> Is it only the rich that have capital? What about human capital?

There is a huge difference between the liquidity of each one.

> ... or by putting idea upon idea and creating something new?

A very tiny fraction of new creations make someone rich. Most fail or are insignificant in terms of capital.

Re: ‘No Empirical Evidence’ for Thomas Piketty’s Inequality Theory

#36

Post by paganel »

coldtea wrote: post #7
nanis wrote: post #3

Earlier quoted context omitted.

> I only did mathematical modeling for HPC systems, not economies. No worries. Economics content in Piketty's arguments is zero.

And scientific content in most economists is zero. It's 80% ideology + 20% math used to prove their point based on ideological assumptions. Which is also why economics and economists managed to ever make 0 predictions for anything more complicated than the most basic of models, and have failed time and again to predict real world outcomes. And then they get in bed with power, as advisors, ministers, etc -- talk about…

> Which is also why economics and economists managed to ever make 0 predictions for anything more complicated than the most basic of models, and have failed time and again to predict real world outcomes.

I think present-day economics is at the point where the science of history was at the end of the 19th - the beginning of the 20th century, i.e. most of them still believe that they somehow can predict the future based on past economic events, the same as some historians believed they they could predict our future based on past events from our history. Popper (among others) proved in his "The Poverty of Historicism" (https://en.wikipedia.org/wiki/The_Poverty_of_Historicism) why "scientific prediction" is a futile thing.

What economics tries to bring new to the table is math (or what they consider as math), apparently that should make us laymen believe that what they're doing is more than crystal-ball guessing.

Re: ‘No Empirical Evidence’ for Thomas Piketty’s Inequality Theory

#37

Post by carlob »

argonaut wrote: post #5
jcbeard wrote: post #2

Umm, send this to peer review. Here's the link to Góes actual paper( http://www.imf.org/external/pubs/ft/wp/2016/wp16160.pdf ) published as an IMF working report which doesn't even have the backing of the IMF/managers/etc. I doubt it'd get published if reviewed. Really, out of the centuries of data they could have pulled in, they chose to use 1980 through 2012? Return on the capital is not ~1%....flawed assumptions,…

The WSJ didn't present the paper as peer-reviewed fact. It's also not like Piketty's book was peer-reviewed either...

Piketty's book was not peer-reviewed, but as it's often the case in all fields you first publish a bunch of peer-reviewed articles on a subject and then you summarize and clarify stuff putting together a book.

So the book itself might not be peer-reviewed, but many of the findings within are

Re: ‘No Empirical Evidence’ for Thomas Piketty’s Inequality Theory

#38

Post by jamesblonde »

legulere wrote: post #26
chakkop wrote: post #8

I'm curious - does anyone else think that the equality that matters is equality in material outcomes? I think that would be such a boring world. The real equality that matters is equality in dignity as human beings, equality before the law, equality in our respect to each other. I think the developed world has made monumental strides on these fronts, which are spreading around the world too. (Even though, of course,…

Extreme material inequality can't be explained by some people performing better, so it's pretty obvious that it is unjust. How can unjust distribution of the material wealth be moral? How can you morally justify that some people have to work more than 40 hours per week to be able to barely scrape by, while others can just enjoy their lives luxuriously without working at all. Oh and in fact, poor people in western soc…

How extreme can material inequality get before it's a problem? Well the Walton family have the same amount of money (wealth) as the bottom 160 million Americans. How much more extreme does it have to get before it doesn't become the issue?

http://www.politifact.com/wisconsin/statements/2013/dec/08/o...

Re: ‘No Empirical Evidence’ for Thomas Piketty’s Inequality Theory

#39

Post by denzil_correa »

argonaut wrote: post #5
jcbeard wrote: post #2

Umm, send this to peer review. Here's the link to Góes actual paper( http://www.imf.org/external/pubs/ft/wp/2016/wp16160.pdf ) published as an IMF working report which doesn't even have the backing of the IMF/managers/etc. I doubt it'd get published if reviewed. Really, out of the centuries of data they could have pulled in, they chose to use 1980 through 2012? Return on the capital is not ~1%....flawed assumptions,…

The WSJ didn't present the paper as peer-reviewed fact. It's also not like Piketty's book was peer-reviewed either...

> It's also not like Piketty's book was peer-reviewed either...

Curious, what is exactly a peer-reviewed book? Could you give me some examples of one?

Re: ‘No Empirical Evidence’ for Thomas Piketty’s Inequality Theory

#40

Post by js8 »

T2_t2 wrote: post #29
forreal2 wrote: post #17

Many of these kind of "studies" need the author to have actually witnessed at least one or twice how a person, man,woman, children, opening a trash bag looking for food, and then they'd know how the face of a hungry human being looks like.

What would that fix? A big part of modern, first world ideology is that we think the problem is caring. That if only we understood, or cared, the world would be better. People need to care and understand transgender people, or people who have lacked education, or poor people. That if only they cared, we could fix the problem. Dr Martin Luther King jr gave one of the most needed, most important speeches of all time. H…

I don't understand why this has to be a dichotomy? Why cannot you be a caring, empathetic person, while also rationally maximizing efficiency of your actions? There are people like that.

And yes, sometimes empathy is needed to motivate people to take action. For example: http://www.aljazeera.com/indepth/features/2016/08/greece-fis...

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