Financial Times finds some “serious inconsistencies” in Thomas Piketty’s numbers

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It appears Thomas Piketty’s ode to Marxism has some flaws in it.

Thomas Piketty’s book, ‘Capital in the Twenty-First Century’, has been the publishing sensation of the year. Its thesis of rising inequality tapped into the zeitgeist and electrified the post-financial crisis public policy debate.

But, according to a Financial Times investigation, the rock-star French economist appears to have got his sums wrong.

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 which 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.

Prof Piketty, 43, provides detailed sourcing for his estimates of wealth inequality in Europe and the US over the past 200 years. In his spreadsheets, however, there are transcription errors from the original sources and incorrect formulas. It also appears that some of the data are cherry-picked or constructed without an original source.

For example, once the FT cleaned up and simplified the data, the European numbers do not show any tendency towards rising wealth inequality after 1970. An independent specialist in measuring inequality shared the FT’s concerns.

I am shocked, just shocked, that a socialist economist is fudging the numbers /sarc

Curt served in the Marine Corps for four years and has been a law enforcement officer in Los Angeles for the last 24 years.

18 Responses to “Financial Times finds some “serious inconsistencies” in Thomas Piketty’s numbers”

  1. 1

    Nanny G

    One of Piketty’s concepts is that wealth is a closed system, in other words if you get a nice slice of pie, somebody else must get a smaller piece.
    But that is a major fallacy.
    Wealth can be created.

    Look at sand.
    Just 50 years ago it was nearly worthless.
    Now ”Silicon Valley” has more millionaires all rich off of sand-turned-into-computer-chips.

    More recently a few websites made their owners rich.
    I remember when Matt Drudge was on the radio talking about the $0.001 he made every time his site’s ad was viewed.
    OK, sounds like small potatoes.
    But back then The Drudge Report got almost 1 million views a day!
    $1,000 a day!
    Now he averages 25 million hits a day.
    So, $25,000 a day in income!
    Money out of the air.

    Piketty is wrong on so many counts.

  2. 2

    john

    so the lack of jobs is because …… the “job creators” are not doing their jobs? Remember American corporations are continuing to set record profit highs. And MUCH of that wealth is then transferr3ed out of the USA to offshore banks.
    Of course we could BLAME OBAMA but only if we acknowledge that it is a government’s responsibility to create jobs. Some might consider that SOCIALISM !!!

  3. 3

    mathman2

    Confusing equality of opportunity with equality of outcome is central to Marxism.
    Like their founder, Karl Marx, marxists depend upon others for their sustenance. A good marxist produces nothing of value. There. I said it.
    Let Piketty go live in Iran or North Korea. Those countries have a lot of equality of outcome. All are equally poor. Of course there is no room in those countries for non-producers; they mostly go to jail and die.
    Of course he had to fudge the numbers. If you start off with your conclusion and fabricate data to prove it, you end up with nothing which is of use. That is what Karl did, and his followers have imitated him. If you make it up as you go, it looks lots more convincing. It is wrong, but it is really sexy. That’s the story with CAGW and the hockey stick. That is the story with Fauxcohontas (the putative 1/32 Cherokee Senator from MA). She had a thesis. There was no data to support her thesis, so she made it up. Works every time.
    Go looking at the data and you will be disappointed.
    Oh, well.

  4. 4

    ilovebeeswarzone

    whoever is blocking the KEYSTONE PROJECT,
    better move his whatever, because the NORTH ATLANTIC is moving fast,
    in oil and gas , YOU HAVE THE RUSSIANS THERE AND THE CHINEESE THERE,BYING OIL ,
    AND PRODUCING,
    THE KEYSTONE MIGHT TRAVEL ON THAT ROUTE IF AMERICA DOESN’T MOVE,
    MONEY HAS NO CHOICE,

  5. 5

    Nanny G

    @john:
    Three years ago Obama created SelectUSA – a team of people in embassies abroad and agencies here at home focused on insourcing jobs.
    How’s it doing?
    In 2011 (the year SelectUSA started) we had $230 billion in investments.
    After Obama really got SelectUSA going investments plummeted to $166 billion in 2012.
    Investments recovered to $193 billion last year.
    How many JOBS?
    The February 2008 BLS reported (just as Obama settled into office) a total of 115,862,000 private employment in America.
    Last month, private employment was 116,383,000.
    So, a total of 521,000 new jobs after all Obama’s flailing about it being his constant thought.
    This does not even keep up with population growth as young people leave school and try to find work for their first time.
    He has openly claimed he is ”pivoting” to jobs over 15 times since taking office.
    See page 4 of his plan that pushed the ”Stimulus ” through here:
    http://otrans.3cdn.net/45593e8ecbd339d074_l3m6bt1te.pdf
    We should have had over 137,550,000 jobs by 2010 instead of only 116,383,000 now!
    Obama – such an over promiser!

    Maybe its the way Obama goes about saving or creating jobs.
    Another example:
    He just said, ”If Congress fails to act, nearly 700,000 jobs would be at risk over the next 12 months.”
    His plan?
    Spend $300 billion over the next four years to keep those jobs.
    That’s $107,000 per job per year!
    A little pricy…..for saving existing jobs, not adding one new job.
    But that’s Obama’s pattern: waste a lot of OUR money and a lot of businesses’ energy on little things that won’t really help much.

    Remember ”Cash for Clunkers?”
    What extra costs did Obama tack onto the real costs of each car?
    Edmunds.com says that the $1 billion program actually only added 50,000 new vehicle sales that might not have materialized if the Clunkers program wasn’t enacted. So we taxpayers paid an extra $20,000 per vehicle under the plan.
    Too pricy.
    We cannot sustain such high costs for a few jobs.
    Oh, and look what the unsold cars look like parked all over the planet rusting away rather than being not built or at least recycled:
    http://www.zerohedge.com/news/2014-05-16/where-worlds-unsold-cars-go-die
    Waste.

  6. 6

    MAKAYA

    John,

    When money is sent to offshore banks, what do they do with the money?

    And the government has the task to “create jobs?” Create how? Under what criteria for success? Paid for by whom? Government creates all the jobs in North Korea. Is this the ideal model?

  7. 7

    john

    JOBS ??? capitalists real capitalists care only about shareholder value the DOW and how high profits can go. JOBS/LABOR are costs that they feel should be driven down as low as possible. SOCIALISTS a re the ones that care about jobs

  8. 8

    ilovebeeswarzone

    DAVID MANNING REPORT, ALL AMERICANS SHOULD READ T,
    AND SEE WHAT HE TRYED TO DO TO SAVE AMERICA, HIS SPEECH WAS IN 2011,
    and his demands where not met in 2011
    but still shared by more and more now in 2014,
    this is one smart speech, the best i ever heard, about the problems which america has been facing since 2008 going to 2009 at the first year of inditment of OBAMA,
    DON’T MISS THAT SPEECH, IT’S EXTRAORDINARY, HOW HE HAS THE SECRET TO UNITE ALL AMERICANS, REGARDLESS OF COLOR,

  9. 9

    Gregory_Dittman

    It’s not really the income equality in the U.S. that is a drag on the U.S. economy, but the income equality of the world. 25% of the households in the world live in a building with a working refrigerator. That means 75% of the households don’t. 50% of the households in the world make less than $1 per day.

    The problem is that there are too many potential workers in the world and not enough customers. The world market is saturated with goods and therefore the economy is in a sour patch.

    Let’s take the refrigerator idea. Most Americans have a refrigerator, but most of the world population does not. If you want to sell a refrigerator in the U.S. you are facing a saturated market and probably won’t do well. If you try to sell a refrigerator to the 75% of the world population that does not have a working refrigerator, you will find people living in areas that don’t have electricity and or can’t afford one. Once those people can afford to buy stuff from American businesses, I think then the U.S. economy will go back to prosperity.

  10. 10

    Nanny G

    @Gregory_Dittman: your refrigerator analogy sounds like you took a good hard look at this:
    http://www.zerohedge.com/news/2014-05-16/where-worlds-unsold-cars-go-die
    How much good did it do to hire people to work on all those thousands of cars?
    Yet, instead of letting charities or the needy have some of them, they sit and rust.
    Instead of even tearing them up for parts and recycling their metals and other stuff, they sit and rust.
    Workers would better serve mankind if the created product that people were allowed to use to the full.
    If cars or refrigerators are out of the question, how about those clean stoves Hillary once touted?
    How about clothing?
    Emergency housing for those in disaster areas?
    Ready to eat meals?
    How about shoes?

  11. 11

    Nanny G

    @john: JOBS ??? capitalists real capitalists care only about shareholder value the DOW and how high profits can go. JOBS/LABOR are costs that they feel should be driven down as low as possible. SOCIALISTS a re the ones that care about jobs

    So, john, how many long-term unemployed found work once their 99 weeks or 73 extra weeks worth of unemployment payments ended in January?
    It was the Left, the Dems or socialists, as you call them, who wanted to simply keep paying people for doing nothing.
    It was the Republicans who studied past behaviors and knew that stopping rewarding bad behavior was the best way to stop the bad behavior.
    So, in Jan 1.3 million Americans stopped getting their checks for doing NO JOB.
    By March, or within just 3 months, over 1/3rd of these people had JOBS.
    Another 3rd simply stopped looking meaning that they could get by without a JOB and no extended amount of cash in their pockets would change that.
    Then there are the 3rd who are still looking.
    We are nearly 5 years into our ”recovery.”
    Obama has ”pivoted” to JOBS at least 17 times as president.
    So, where are they?
    And why would he rather we subsidize the bad behavior of not working?

  12. 12

    Pete

    @john:

    Your brainwashed lack of understanding of basic economics is showing.

    Private companies do not exist for the primary purpose of creating jobs. They exist to make a profit. Jobs are created when the private company is successful enough making profits that the workload increases, which is what actually creates jobs. The reason to blame Obama – and leftist ideology in general – is due to the parasitic act of government regulations and taxation making it too expensive to hire additional people for a workload. People who invest money they have saved are doing so to increase their wealth, generally to prepare for retirement. So a company needs to make sufficient profit to pay for the cost of doing business AND pay shareholders.

    So when collectivist morons enact laws that increase the cost of doing business via excessive taxation and overregulation, it is perfectly legal and legitimate for a private company to take action to protect their profits as much as possible. The obvious outcome is lower employment, but leftists either don’t want to see the impact of their economic stupidity, or they are purposefully counting on it to create increasing government dependency and a strengthening of their class warfare supporters.

    You do realize you are in essence arguing for the government to decide what people are allowed to make with your position, don’t you? Why don’t you open a business yourself, so you can show us all how having ggovernent bureaucrats decide for you what wages to pay people who you hire, as well as how much profit is “fair” for you to make?

  13. 13

    ilovebeeswarzone

    PETE
    that’s what they ruin as they where visiting the RANCHERS AND DEMANDING THEIR BREAD AND BUTTER,
    HARASSING THEM SO MUCH AS TO GET THEM GIVING UP THEIR HARD WORKING RANCHS,
    they tryed it at CLIVEN BUNDY WHO HAD THE HELP TO GET THEM OUT,
    he is the only one left in that corner, he is bigger than the other,
    TO BAD THE OTHER HAD TO LEAVE, ONE WHO CAME AT FOX TALKING HE HAD TEARS IN HIS EYES SAYING HIS FATHER DIED FIGHTING THEM, HIS MOTHER FOLLOWED, JUST TO SAY THEY
    WORKED ON THEIR PEACE OF MIND, DISTURBING THEM MENTALY UNTIL THEY GIVE UP,
    THOSE BASTARDS,
    I ALSO RECALL THE RANCHER LETTING GO HIS RANCH THE SAME WAY,
    WHEN I FIRST CAME IN AT FLOPPING ACES, HIS SON TOLD US ABOUT THE IRS GOING AFTER HIM,
    I WAS ANGRY TO HEAR THAT AND THE OTHER ONE SELLING NEWS PAPERS ON A CORNER BOOT,
    HAVING THE IRS EMPTY HIS HOME WITH HIS WIFE AND 3 CHILDRENS INSIDE HAVING TO WAIT
    OUTSIDE FOR HIM, HE CAME AND HIS WIFE SEPARATED FROM HIM, SHE WAS SO HUMILIATED,
    SHE LEFT HIM , HE ALSO LEFT HIS BOOT, AND HIS FRIEND COULD NEVER FIND HIM AGAIN,
    HE SAID HE WAS A YOUNG MAN VERY KIND AND POOR, THOSE IRS BASTARDS SHOULD HAVE NOT GIVE THAT KIND OF HUMILIATION, THEY DESTROYED HIS FAMILY,
    HOW MANY MORE DID THEY DESTROYED ? HOW MANY? THAT WAS IN 2009,
    SO I WISH THAT LERNER GO TO HELL FOR THE REST OF HER LIFE, AND ALL OF THOSE WHO DID THAT CRIME,

  14. 14

    ilovebeeswarzone

    THE VA HOSPITAL, HEAD ADMINISTRATOR, SHOULD FALL, EVEN THAT HE IS A VETERAN,
    GIVE HIM A JOB LESS RESPONSIBILITY, AND PUT A REAL ADMINISTRATOR,
    THAT MEAN TAKE ONE HEAD OUT,TO SAVE THOUSANDS VETS,
    HE CLEARLY WAS INCOMPETANT AND WAITED FOR 4O DEATHS TO BE CAUGHT,
    IT’S MADENING, AND A SHAME FOR AMERICA,
    STOP BRINGING THE SHAME IN AMERICA, I LOVE AMERICA, I CRY WHEN THIS HUMILIATE HER,
    DO SOMETHING RIGHT, DON’T JUST TALK ABOUT IT, LET THE LEADER MOVE THEIR ASS FOR A CHANGE ,
    AND STOP RUNNING AWAY FROM THE SHAME THEY ALLOWED TO HAPPEN, OR CLEAR THE WAY,

  15. 15

    Gregory_Dittman

    @Nanny G
    The world produces too much clothes for the U.S. market, so much so that it’s actually hurting third world areas such as Africa. Some clothes don’t sell such as the shirts made for the losing Super Bowl team and some do sell and eventually given away to charity. So where does all these clothes go? First they swamp clothes for the poor, but most of it gets sent to places in Africa. There is so much spare clothes going to Africa that the local clothing businesses in Africa have been wiped out.

    To keep people working in China, the people continue to build solar panels nobody wants right now. One third of all the solar panels China has made are in storage, waiting for the day that countries go “green.”

    Until the world can create more customers, the world is running at maximum efficiency.

  16. 16

    Nanny G

    @Gregory_Dittman: Thanks for those details, GD.
    I recall a few years back that African cotton growers were also undercut by cheap cotton imported into Africa by Chinese clothing makers who created the thread from foreign-grown cotton then hired workers cheap to weave that thread and sew the clothing.
    The Chinese treat Africa like their source of cheap labor (even slave labor) as well as a place for aspiring Chinese to try to get rich quick.

  17. 18

    ilovebeeswarzone

    Gregory_Dittman
    at the BUNDY RANCH,
    HARRY REID HAD A DEAL OF SOLAR AND TOWER WITH CHINEESE FOR THE PUBLIC LAND HE WANTED TO TAKE IT OUT OF CLIFEN BUNDY,
    i sure hope he change his mind on that deal,
    HAVING THE CHINESES TAKE OVER THE USA PUBLIC LAND,
    which HARRY REID think he can sell it as he wish,
    that public land belong to the people not the federals,
    he is ready to screw the last RANCHER LEFT in that NEVADA PLACE
    the OBAMA REID HAVE TRAUMATIZE THE OTHER WHO LEFT THEIR RANCHS, 52 OF THEM GONE
    GOOD RANCHERS FAMILY BEING THERE FROM THEIR ELDER GENERATION,
    now only BUNDY IS LEFT, and he”s not going anywhere, i hope
    BYE

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