Parsing Piketty: Is Wealth Inequality Rising in the U.S.?

As you may have seen over the weekend, Thomas Piketty’s “Capital in the Twenty-First Century” has been subjected to another attack—a detailed and critical examination of some of the data it presents, by Chris Giles, the economics editor of the Financial Times.

Since its emergence as a surprise best-seller, Piketty’s book has been challenged on theoretical grounds from the left and the right. (I’ll get into that academic debate in a future post.) But what has given Piketty’s critique of modern capitalism heft is the trove of data on which it relies. Now comes Giles, who accuses him of cherry-picking among the various sources he used for his charts, altering some figures, and making others up “out of thin air.” After parsing and redoing some of Piketty’s numbers, Giles says, “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 few.” In the case of the United Kingdom, Giles claims, the corrected data indicate that the concentration of wealth has actually fallen over the past few decades. In the United States, he suggests, inequality of wealth has stayed more or less constant.

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