Posted by: Dirk | May 26, 2014

Piketty: Financial Times using double standards?

I was a bit amazed to see the FT claiming that Thomas Piketty’s findings are ‘undercut by errors’. Paul Krugman defended him, and Piketty has hit back at the FT claiming that they are ‘dishonest’, as The Guardian reports. What surprises me most is that the FT attacks the claim that inequality has increased when it is quite obvious. Even the FT has featured book reviews which have the increase in inequality as the major topic. In November 2012, they features are review on a book by Chrystia Freeland named ‘Plutocrats: the rise of the New Global Super-Rich’. Freeland is a former deputy editor of the FT, and you can imagine what she was writing about. Here is an excerpt from the review of the book published by the FT:

The inequality of incomes and wealth that has been widening in virtually all western countries since the 1980s, and arrived in even more spectacular form in emerging economies such as China, India, Russia and Mexico, is an unmistakable and undeniable feature of our times. The difficulty is to know what to think – and even more important, do – about it.

That is interesting. The reviewer accepted Freeland’s story and in no way criticizes her data although she is a) not an expert and b) doesn’t paint the full picture as Piketty does. Let us compare that snippet with the FT article attacking Piketty:

The data underpinning Professor Piketty’s 577-page tome, which has dominated best-seller lists in recent weeks, contain a series of errors that skew his findings. The FT found mistakes and unexplained entries in his spreadsheets, similar to those that last year undermined the work on public debt and growth of Carmen Reinhart and Kenneth Rogoff.

The central theme of Prof Piketty’s work is that wealth inequalities are heading back up to levels last seen before the first world war. The investigation undercuts this claim, indicating there is little evidence in Prof Piketty’s original sources to bear out the thesis that an increasing share of total wealth is held by the richest few.

So, while in 2012 ‘inequality of incomes and wealth [was an] unmistakable and undeniable feature of our times’, two years later ‘there is little evidence in Prof Piketty’s [the most well-known researcher of this field] original sources to bear out the thesis that an increasing share of total wealth is held by the richest few’.

Is it perhaps possible that the FT has been using double standards here?


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