It's a Fraud???

A while ago, I wrote a series of posts about the work of Thomas Picketty, the economist whose recent work claimed that rising inequality of wealth is an inevitable consequence of capitalism.  Picketty's solution was a heavy tax on wealth to promote equality.  My take on what Picketty had written was that it was best described as faulty.  The data cited by Picketty did not actually show the increasing concentration of wealth, a phenomenon that Picketty blamed on the two world wars and the Great Depression.  Now, however, work has been done that totally explodes all of Picketty's points.  Simply put, it turns out that much of the data on which Picketty relies is created out of thin air or "adjusted" to use a less confrontational phrase.  There are multiple decades for which there simply is no record of the concentration of wealth.  For example, in the USA in the 19th and first half of the 20th centuries, there is no data on this point, the central point of Picketty's argument.  Picketty just "estimates" those numbers to support his arguments.

The work of uncovering Picketty's "adjustments" was done by reporters at the Financial Times.  Here is a tiny excerpt from their report:

"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."

The most recent article by the Financial Times on the subject is here.  It is a good way to get into this entire subject and worth reading.