Analysis by the economic consultant Howard Reed published on the Guardian’s datablog supported Piketty’s view that inequality of wealth has been rising in recent years and dismissed the attack on some of the book’s findings by the Financial Times journalist Chris Giles.
Rightwing opponents of Piketty seized on the FT critique after Giles accused the Paris-based economist of cherry-picking data and pointed to unexplained entries on spreadsheets and big discrepancies between Piketty’s estimates of wealth trends in Britain and the picture portrayed by official figures.
Reed said the discrepancies were caused by Piketty making allowances for the different estimates of wealth in six data sources used to calculate the trend since the early 19th century. Giles, he added, had failed to adjust for these “discontinuities” in the data.
“Taken as a whole, these discontinuities imply that the estimate of the top 10% share of wealth is 22.5 percentage points lower by 2010 than it would have been if the wealth statistics had been collected on a consistent basis after 1974, as they were before 1974. As I show, the main difference between the Piketty time series for UK inequality and the Giles time series for UK inequality is that Piketty corrects his data series to allow for this 23 percentage point drop (caused by changes in the methodology used to measure the wealth distribution) whereas Giles does not.”
Reed said in his blog: “To believe that the Giles series represents an accurate picture of the evolution of wealth inequality in the UK over the last 50 years, one would have to believe that the wealth share of the top 10% really did fall by 12 percentage points during the 1970s, and by another 11 percentage points between 2005 and 2006. Does anyone really believe this? Of course not.
“The FT has been surprised by the furore caused by its attack on Piketty and is now keen to take the heat out of the row. Giles declined to respond to Reed’s analysis.
Vir: Larry Elliott, The Guardian