Source: The Spectator, 24 May (a story by Fraser Nelson)
(This is an edited version)
While Americans swooned over Thomas Piketty and his thesis about ever-rising inequality, it has taken a Brit, the FT’s Chris Giles, to expose the corruptions in his data. What he has found – on the cover of today’s FT and in detail on a blog – is shocking because the errors are so basic. And yet on this, Piketty has built a manifesto for all kinds of tax rises. It makes you wonder how his publisher, Harvard University Press, allowed such flaws to enter print.
Chris Giles’ report is worth reading in full, but here are a couple of examples that should give you a flavour of what he has found. It started when he came across a fairly major mistake. As he says in his blog:
Piketty cited a figure showing the top 10 per cent of British people held 71 per cent of total national wealth. The Office for National Statistics latest Wealth and Assets Survey put the figure at only 44 per cent. This is a material difference and it prompted me to go back through Piketty’s sources.
As he started to go through the data, he spotted a number of striking anomalies….
The points Chris Giles so powerfully makes ought to have been picked up by any serious peer review process. BBC Newsnight picked up on this…. This story ought to run. I didn’t think Paul Krugman would respond to the FT, but he has done so here.
Why has it taken so long to Fisk? Perhaps the idea of one’s instincts being proved empirically correct is rather intoxicating, which partly explains the success of his book. Perhaps Piketty gave the left intelligentsia a story which (as tabloid hacks say) was “too good to check”.
But what about Harvard University Press? Piketty’s publisher there, Ian Malcolm, is interviewed here. From the sounds of it, he just reprinted the French version without applying the checks and balances that you’d hope would be applied to a Harvard economics book. He says how much money Piketty has made Harvard, and concluded by saying, “As long as there is bullshit and inequality, we won’t go out of business.”
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On Sunday, May 19, Paul Krugman refers to this story in his column in The New York Times. His point is that mistakes were admittedly made but that they do not invalidate Piketty’s basic contention.
Eric Koch’s new book, New Beginnings, was launched on September 20. The book is available from 
Is it not at the same time quite hilarious and gravely telling to hear Ian Malcolm declare on behalf of Picketty’s publisher Harvard University Press that “As long as there is bullshit and inequality, we won’t go out of business.”? Does he mean to suggest that the former two are somehow related?
It depends a lot at what figures are used. In several European countries, like Germany and Austria, there is a great disparity of “wealth” because the average person in a city would rent and not own a house. They also would not have a great deal of saving because they have a great pension. In Austria education is free and they get payed for fourteen month. This is an automatic saving for vacation and Christmas. Statistically, they would not have any debt and not own much, but they have high wages and a great life style. Instead of arguing about the pro and cons of capitalism we might look at countries which have evolved a successful system of capitalism, free enterprise and socialism to the benefit of the largest number of the population.