Was a highly praised 2013 book built on flawed data?
Thomas Piketty's 'Capital in the 21st Century' is being critiqued by a pair of academic studies, both of which claim to have uncovered factual errors and flawed data.
Economist and author Thomas Piketty been called 2014's most influential thinker; was offered France's highest honor, the Legion of Honor; and was invited to the White House due to his renowned book, "Capital in the 21st Century," which the New York Times' Paul Krugman called “the most important economics book of the year — and maybe of the decade."
Now, a pair of academic studies claims to have uncovered a series of factual errors and flawed data in Mr. Piketty's celebrated book, that it claims, pokes holes in the very premise of his argument.
In "Capital," Piketty tackles the monstrous subject of wealth and inequality, and how the concentration of wealth and mounting inequality has played out in key economic and social patterns. Among his central arguments is that governments should more aggressively tax capital to combat capitalism’s inherent tendency toward higher levels of inequality.
Many within and without the economic community have applauded Piketty's book and his central premise.
But two new studies have raised questions about the accuracy of Piketty's data, with some even calling his central premise into question.
One new study found more than 10 errors in Piketty's book, and says the errors suggest a strong partisan bias.
“[The errors] serve to paint ostensibly market-friendly Republican presidents as ogres, while liberal Democrats are the heroes of the working class,” wrote economists Phillip Magness of George Mason University and Robert P. Murphy of the Institute for Energy Research in their paper, accepted by the Journal of Private Enterprise.
Among the errors: getting historical dates wrong, mis-attributing massive tax increases to the wrong president, and incorrectly claiming the minimum wage never increased under either President Bush.
The study also found that in building some of his charts, Piketty switched between data sets in a way that was biased in favor of his argument.
As such, the study authors claim that Piketty “cherry-picked data points to construct a trend line that mirrors his predictions.”
Another study came to similar conclusions.
University of California Berkeley economics professor Alan Auerbach and American Enterprise Institute economist Kevin Hassett also concluded that Piketty misused data points to make false conclusions.
“He cherry-picks, the data sometimes don’t match the sources that he cites, and he changes the data to make the charts look better without accurately documenting it,” Mr. Hassett said of Piketty's research.
But while Hassett has said that so many things are off in the book that it affects the book's conclusion, Piketty is standing by his research.
“I am really sorry if I attributed one specific tax decision to FDR instead of Hoover, etc." he told Fox News. "Many readers do mention typos of this sort, and of course they will be corrected in future editions; but I really do not see anything here that's affecting any conclusion."
It's not the first time Piketty's work has been sharply critiqued. The Financial Times published a scathing critique of "Capital" earlier this year, including what it claimed were errors that brought his premise into question.
Piketty responded with a sharply-worded 4,400-word response.
Now, as then, we suspect, Piketty isn't giving an inch.