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Why Are Economists Giving Piketty the Cold Shoulder? (2017)

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Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#21

Post by mcguire »

Analemma_ wrote: post #17
coldtea wrote: post #3

Because, "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!". Economists' careers as receivers of grants, policy advisors, members of prestigious think tanks and organizations, and pundits, depends on being good at promoting whatever aligns with the elite's interests. The scientific parts of economics are merely applied math (including game theory), and quite…

Exactly. Capital was years in the making and contained an unprecedented amount of historical empirical data to support its central thesis, and it gets ignored. Meanwhile, Reinhart-Rogoff, a fraudulent paper full of elementary statistical and programming errors that should’ve gotten its authors fired, was loudly paraded around as gospel by politicians on both sides of the Atlantic. Guess which one served elite interes…

The Reinhart and Rogoff Controversy: A Summing Up (https://www.newyorker.com/news/john-cassidy/the-reinhart-and...)

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#22

Post by wycy »

mordymoop wrote: post #15

Are we still talking about this? Within months of the book’s release, readers had found many examples where his data selections had been incomplete. To the extent that the main points were invalidated or made far less convincing. When you include the full data in his analysis, the main conclusions are drawn into question. There are many very thorough blog posts by economists you can easily Google. It’d be like if Ori…

Do you know of a reputable source debunking Capital that makes good arguments?

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#23

Post by crimsonalucard »

cpr wrote: post #2

Tom Woods has a series of good critiques of Piketty. Here’s one: https://tomwoods.com/ep-318-piketty-taken-down-for-good/

This guy cites fox news as calling him the smartest guy in the room. If fox news calls tom woods the smartest guy in the room you can be sure that Tom is as smart, truthful and unbiased as fox news.

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#24

Post by Gimpei »

coldtea wrote: post #3

Because, "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!". Economists' careers as receivers of grants, policy advisors, members of prestigious think tanks and organizations, and pundits, depends on being good at promoting whatever aligns with the elite's interests. The scientific parts of economics are merely applied math (including game theory), and quite…

Not sure if your point holds if you read more of the article, which implies that plenty of economists are critical of wage and wealth disparities just for different reasons. My personal read is that Piketty doesn't bother to come up with a "microfounded" rational for his theory and since this is the bread and butter of macro, his r > g theory hasn't been taken seriously. I will say that the basic empirical work of measuring the increase in inequality over the last fifty years seems to be taken very seriously. At least in my limited view of the discipline.

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#25

Post by burlesona »

This bit really struck me:

“Matthew Rognlie—then a doctoral student, now an assistant professor at Northwestern—took up that line in even greater detail in an article that eventually appeared in the Brookings Papers on Economic Activity, to which he added that the rising capital-to-income ratio in Piketty’s data is disproportionately the result of the price appreciation of certain scarce stores of wealth, primarily housing and the land it sits on, not the quantity accumulation of productive capital that is the subject of the neoclassical theory of economic growth.”

I find that a compelling explanation because it fits with a bunch of the deep problems in the way urban development changed in the 20th century, which in turn have created the frustrating housing situation today.

It’s difficult to summarize this, but in short, modern zoning, the suburban development pattern, and auto dependency, create an economic vicious cycle which tends to polarize economic outcomes, where Places trend toward either the Bay Area or Detroit. (Some reading linked below)

This is most true in the US, but also to varying degrees in many other parts of the world.

In other words, if Rognlie’s quote is true, then it would mean Picketty’s observations are better explained by the bad housing and infrastructure policies of the last 80 years than by “r > g”, and if that’s true then it completely changes what we should do about it.

Some expansion on the development pattern problems:

https://www.strongtowns.org/journal/2016/10/23/portland-hous...

https://www.strongtowns.org/journal/2018/9/17/austins-codene...

https://www.strongtowns.org/the-growth-ponzi-scheme

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#26

Post by xg15 »

yughurt wrote: post #4

I've experienced a similar response from people I talk with. It's such a simple premise and idea that seems oversimplified and lacks nuance. The main issue is that it is so against the way the system currently world, there's no foreseeable solution.

> The main issue is that it is so against the way the system currently world, there's no foreseeable solution.

But you could argue against climate change with much the same logic (and, indeed, a lot of people seem to do). "The conclusions would demand changes to our status quo in a degree of magnitude that hasn't ever been there before, therefore, they must be wrong".

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#27

Post by mcguire »

wavefunction wrote: post #20
mordymoop wrote: post #15

Are we still talking about this? Within months of the book’s release, readers had found many examples where his data selections had been incomplete. To the extent that the main points were invalidated or made far less convincing. When you include the full data in his analysis, the main conclusions are drawn into question. There are many very thorough blog posts by economists you can easily Google. It’d be like if Ori…

I am always interested to read contrasting arguments and weigh a subject's merits based on those arguments so I'd love to see those critiques.

Most of the economics community's criticisms were apparently mentioned in the article. I'll bet the actual reference is to the Financial Times' contested coverage mentioned on the wiki': https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#28

Post by wavefunction »

cpr wrote: post #2

Tom Woods has a series of good critiques of Piketty. Here’s one: https://tomwoods.com/ep-318-piketty-taken-down-for-good/

I'm seeing a lot of signals on that site that throw up red flags and honestly the content is confirming those assumptions. I find this talk radio guy and his guest Phil Magness of George Mason to be the ideologically blinkered ones as I follow their arguments and cross-reference them with what was written in Capital.

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#29

Post by tptacek »

KirinDave wrote: post #16
mordymoop wrote: post #15

Are we still talking about this? Within months of the book’s release, readers had found many examples where his data selections had been incomplete. To the extent that the main points were invalidated or made far less convincing. When you include the full data in his analysis, the main conclusions are drawn into question. There are many very thorough blog posts by economists you can easily Google. It’d be like if Ori…

This would be an excellent time to cite sources.

https://www.cambridge.org/core/journals/social-science-histo...

Re: Why Are Economists Giving Piketty the Cold Shoulder? (2017)

#30

Post by nextstep »

mordymoop wrote: post #15

Are we still talking about this? Within months of the book’s release, readers had found many examples where his data selections had been incomplete. To the extent that the main points were invalidated or made far less convincing. When you include the full data in his analysis, the main conclusions are drawn into question. There are many very thorough blog posts by economists you can easily Google. It’d be like if Ori…

https://www.washingtonpost.com/news/wonk/wp/2014/05/30/piket...
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