12 Jan 2015

My Response to Piketty’s Response to My Paper With Magness

Inequality, Piketty, Shameless Self-Promotion 26 Comments

At Mises CA. An excerpt:

OK that is pretty astounding. I encourage readers who haven’t done so, to click on our paper and just read the short sections on the Hoover/FDR tax rates and the minimum wage discussion. If those were “typos,” then when Bill Clinton said he didn’t have sexual relations with Monica Lewinski, it was a “slip of the tongue.”

But here’s the real kicker. To show that his conclusions are in line with the other literature–and hence that the concerns raised by Magness and me, as well as Auerbach and Hassett, must be petty whining over trivial details–Piketty went on to tell FoxNews:

But Piketty counters that a recent study found that wealth inequality actually rose even faster than he had reported in his book.

“Everybody recognizes that the Saez-Zucman series are indeed the best series on US wealth inequality we have so far, and that they show an even bigger increase than what I report in my book,” he told FoxNews.com.

No, this is simply not true, and is yet more evidence (as if it were needed) that Piketty is a slippery fellow who under no circumstances can be trusted to honestly report facts.

26 Responses to “My Response to Piketty’s Response to My Paper With Magness”

  1. Tel says:


    A man with remarkable foresight.

  2. Steve Horwitz says:


    Given what we know about Bill and Monica, I’m not so sure that “a slip of the tongue” is the best choice of words here. Just sayin’.

  3. Harold says:

    “No, this is simply not true” Is it not true that everyone recognises Saez-Zucman as the best series, or that it shows an even bigger increase, or both?

    • Harold says:

      Off topic – but I seem to be having problems posting replies in the correct place. Sometimes it will only put the comment at the bottom, not as a reply to another post. This one is supposed to be a reply to myself.

      • Bob Murphy says:

        That threw me too at first, but everything appears at the bottom of the screen now. (Why, I have no idea.) But it will say, “In reply to…” so you know it’s not a generic new comment.

    • Andrew says:

      If you click through, Bob answers your question in the article.

      In short:
      Not True: “everyone recognises Saez-Zucman as the best series”
      True: “it shows an even bigger increase”

    • Bob Murphy says:

      As the best series. They clearly show a bigger increase, but that’s the problem: The new S-Z series tracks the (2004) K-S series quite well up until the mid-1980s, at which point they radically diverge. K’s 2014 paper is the best I’ve seen to document the possible reasons, though I still personally like my theory that the income inequality measures got skewed because of the 1980s tax code changes which would affect capitalization method but not estate tax method.

      • Keshav Srinivasan says:

        Bob, if Piketty had written “the vast majority of people recognize” rather than “everybody recgnizes”, would you still say that that’s simply not true.

        • Bob Murphy says:

          I would have said, “This is very misleading because the experts in this literature–indeed Saez’s co-author on what was the standard work in the field–very much dispute the superiority of this series.”

          You guys are really amazing. By the same token, if Piketty had said, “Hoover raised taxes to 63%,” then I wouldn’t have objected. It’s the whole, saying things that are demonstrably false, that bothers me. I don’t think I’m out of line to complain when Piketty does this.

          • Keshav Srinivasan says:

            Bob, I don’t think Piketty meant to say that there is literally unanimous agreement on Saez-Zucman being the best. I think he was just trying to say that Saez-Zucman is widely acknowledgment to be the best.

            By the way, concerning the FDR and Hoover stuff, I think you’re too quick to assume malice when carelessness is more likely. It’s more plausible that Piketty simply assumed that Hoover must have been the one who cut taxes because he was a Republican, rather than Piketty deliberately falsifying the history in order to make Republicans look bad. (That’s why he called them “typos”, because they were unintentional errors.) Isn’t it best to be charitable to your opponents’ motives?

            • Keshav Srinivasan says:

              widely acknowledged*

              • Cosmo Kramer says:

                “It’s more plausible that Piketty simply assumed that Hoover must have been the one who cut taxes because he was a Republican”

                That is lousy justification for work by a professional economist.

            • Bob Murphy says:

              Keshav, are you OK if I do a separate blog post on what you just wrote? Or do you want to retract it?

              • Keshav Srinivasan says:

                Yeah, it’s fine. I don’t think I said anything too objectionable. But if I offended you when I said you’re too quick to assume malice, let me just apologize and clarify that I meant “in this instance”. I didn’t meant to suggest that you’re unfair to your opponents in general.

              • Bob Murphy says:

                You didn’t offend me, Keshav, you astounded me.

                If you don’t mind, can you clarify what your alternative hypothesis is? You think, for example, he looked up the tax code, saw that it jumped in 1932, knew that was when FDR was elected, and assumed he was responsible?

                That would be OK. I wouldn’t make a big deal if Piketty got 1932 mixed up with 1933.

                But how does he generate the description of what happened to the minimum wage? Where did he get the numbers from, without looking it up? How could he have been off by several years, both ways, for the two Bushes?

              • Keshav Srinivasan says:

                didn’t mean*

            • Phil Magness says:

              Keshav – There are still many problems with stating Saez-Zucman (2014) is “widely acknowledged” as the best estimate.

              1st – It’s still a working paper that has only been accessible since October. That means – at minimum – it hasn’t even had enough time to settle into an already established and deep literature.

              2nd – It hasn’t even passed basic peer review yet. Zucman’s website currently says that it’s under R&R with the journal they originally submitted it to, which means that at least a couple other specialists in this subject read it and found something deficient about it in its current form that needs to be addressed or corrected before passing on to publication.

              3rd – Multiple other scholars have pointed out potential problems in Saez-Zucman since the working paper was released. This includes Kopczuk – one of the leading experts in this field – in a paper that has been accepted. Bob and I raise similar issues in our paper (also accepted). And similar issues are echoed in the Auerbach-Hassett paper + another on SCF that just came out around the time of the AEA.

              While there is obviously much more that will be said about Saez-Zucman in coming months, it is entirely off-base to suggest (as Piketty did) that it it’s now the leading authority on the subject or anything even close. In fact, the only academics who seem to accept it are those who had already bought in to Piketty before Saez-Zucman came out. Also keep in mind that many of these same people heartily endorsed Saez-Zucman when it was still nothing more than a PowerPoint slideshow back in June – an assessment that they were wholly unequipped to make seeing as they had no means of vetting its contents at the time. But that’s not a scholarly consensus of any sort – it’s an indulgence in confirmation bias towards unproven numbers that told them the story they wanted to hear.

            • Dan says:

              I’m not really sure how that is more charitable. You’re basically saying that because of his bias against republicans he just assumed it was Hoover, and took zero time to verify those facts while writing his book. You’re excuse makes him sound like a moron.

              • Keshav Srinivasan says:

                Dan, it doesn’t need to be because of bias against Republicans. It could just be that Piketty assumed Republicans are the party of tax cuts and Democrats are the party of tax increases. You don’t need to be a complete moron to fail to check a fact because you assume it’s correct.

              • Tel says:

                So Keshav, where did Piketty get those actual numbers and dates from?

                How did he get from having a general idea that Republicans are the party of tax cuts, to specific numbers?

              • Dan says:

                If you’re writing a book, and you just assume facts like that without taking the time to verify it, then you’re a moron, IMO. I’d let it slide if it was a blog post, but not a book like that one.

                Personally, I don’t think he is a moron that doesn’t need to verify his facts when writing about a foreign countries tax policies. I think he purposely twisted facts to spin a narrative, knowing full well that politicians would use his false narrative to push for his agenda. I think he is simply a court historian. A phony intellectual giving politicians the cover they need to implement the policies they want.

              • Keshav Srinivasan says:

                Dan, do you really think if we put Piketty under truth serum, he would say “I intentionally lied in order to advance my agenda?” I think intentionally putting false information in an academic work with the conscious intention of advancing your agenda is something the vast majority of academics simply would not do, but perhaps I’m just naive.

              • Dan says:

                Yes, I think he intentionally lied. And I don’t know what the vast majority of academics would do, but I think it is clear as day that Piketty is a con artist.

              • Major.Freedom says:


                It is not necessary to assume Piketty is consciously lying.

                He could be honest in his own mind about his devotion to his neoMarxist ideology, and it colors and shapes the way he interprets historical data such that he unintentionally and severely misrepresents history.

                Although I am not sure about whether or not he is consciously lying to his most vocal and harshest critics, given his responses versus what he wrote.

              • Harold says:

                It is not necessary to assume he was intentionally lying. However, in a publication like this stating assumption as fact is also very bad. We convince ourselves that all sorts of things are true, but when we are acting in a way that affects others we should not just assume we are right. The Iraq invasion was based on similar confirmation biased assessments of WMD. I also think those that allowed themselves to be so easily persuaded of what they wanted to hear were guilty of a form of dishonesty.

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