‘No Empirical Evidence’ for Thomas Piketty’s Inequality Theory
blogs.wsj.com
blogs.wsj.com
No worries. Economics content in Piketty's arguments is zero.
It's 80% ideology + 20% math used to prove their point based on ideological assumptions.
Which is also why economics and economists managed to ever make 0 predictions for anything more complicated than the most basic of models, and have failed time and again to predict real world outcomes.
And then they get in bed with power, as advisors, ministers, etc -- talk about the worse case of "conflict of interest" compared to any other scientific field.
Well, maybe except doctors in the 70s working for the tobacco industry.
outside of hard sciences its difficult for even some in the field to know what is and and what isn't at times, the chance for the layman is near zero. hence when I tend to dismiss anything backed with politician ranting
(That is, your statement presupposes most people of the field are either idiots, fanatics or crooks.)
I'd be interested if you can back that up? (With non ideological sources, of course.)
Edit: Considering the numbers, there are going to be some true conspiracy theories... and mass hypnosis from unverifiable things like psychology (Freud, Jung, etc). The burden of proof is still on the one presenting the conspiracy theories.
Edit 2: And of course, some sciences are experimental and use the scientific method. Some are largely historical (palaeontology, economics, etc). That doesn't counter my point either.
Kind of like there have been hundreds of thousands of Freudian psychoanalysts (considered scientists) in the 20th century until now?
Or how people consider (and increasingly clinics embrace) homeopathists as doctors and scientists? With their own educational programs, journals and everything too.
In any case there's nothing special about many people working in a field that makes them automatically proper scientists.
To begin with, the term "science" is ambiguous.
It can refer to empirically or axiomatically verifiable, experimental, scientific-method following fields, which is what is actually "science" (e.g. physics, chemistry, mathematics, biology, etc.) and whatever ad-hoc field of study one can come up with.
The first is sometimes called "hard sciences" to differentiate them from the more "lax" and "anything goes" ones.
Now, the second type could still be a productive (if informal) field of inquiry and argumentation and insight. I'm all for continental philosophy for example.
But it's not scientific in the way engineering or physics is. Not even close.
The "Academy of Science" in most countries includes philosophers for example. And they do get Ph.D degrees and everything. They never verify anything, and they can hold totally conflicting views and still be "valid" and well established. Would you consider them "scientists"?
If not, are you a conspiracy theorist?
It's naive to believe that the way a society names some practices is also revealing about the essence of those practices.
That some sciences can't use the scientific method (do experiments etc) like some parts of geology, don't counter my point. [Edit: Unless your point really is that you dismiss palaeontology et al in an equal way, too?]
(Or are you arguing that 80% of most everything which aren't based on mathematical proofs are bad?)
Edit: This is an innocent question about getting references to strong claims that a science has 0 "scientific content". I know some people whose integrity and intelligence I trust, which later went the academic track in economics. That gave in total 4 down votes -- but still without a reference?
Now, maybe the most fundamental assumtion of economics is that people are utility maximizers. I see no way how this can be falsified. How can I make a choice that proves I was not maximizing my utility?
This, in itself, is enough for me to be confident that economics is not (yet) a proper science, but a bastard of ideology and mathematics.
This is an honest question.
(And I am no economist, but afaik, the economists note that "homo economicus" is a simplification. Most every science use simplified models, especially in the first university courses.)
Yes, classical physics is a simplification, but it is a _falsifiable_ simplification, unlike the utility maximizer.
Note that falsifiability has nothing to do with making experiments.
Palaeontology, economics and many other sciences can't do either. Why can you dismiss one out of hand, but not the others?
(I have written this quite obvious point 3-4 times now.)
Edit: Your own wikipedia reference have a link to the "scientific method". You should read it. Well worth the trouble. It is arguable the basis for most everything we know about the world.
You have written your "obvious" point now a few times, but you have not written a single unfalsifiable claim of palaeontology or any of the many other sciences you claim that exists.
My hypothesis is simple, _anything_ that claims being a science but makes unfalsifiable claims, is quackery. You see, this hypothesis itself is falsifiable, all you need to make is give a single unfalsifiable claim of a respectful science to prove this hypothesis false. So can you give _one_ example of palaeontology that is unfalsifiable?
(Mathematics does not claim to be a science in popperian sense.)
(Hint: It is in the first sentence of the second paragraph on Popper's wikipedia page. Also, your own link had the term as a related link.)
Enough for me, bye.
Edit: Another hint, Popper was amongst others professor of "logic and scientific method" at the University of London. It is also noted on his Wikipedia page. In short, you argue Popper without understanding what Popper argued about.
This discussion is _extremely_ easy to bring forward. All you need to do is to tell _one_ properly scientific theory outside economics that is not falsifiable. If you can't do that, we can hopefully agree that economics is one of the rare species that seem to have some (questionable) scientific credibility without too strong foundation on falsifiable thinking.
How can you have an opinion on that, after writing that you don't know what it is -- despite talking about Popper...?
I told you I didn't need that for my argument.
Bye.
Paleontology as a whole could not possibly be falsified but a paleontological theory could. E.g. if a paleontologist claimed that certain species lived in a certain period then discovery of a fossil for these species but dated outside this period would falsify such a claim.
(The rest isn't relevant for my point and I am not really an expert. So just post a reference if I'm totally wrong. Popper isn't the last word in the philosophy of science anymore, either.)
"Scientific method" only discussed in US and not relevant to Popper? :-) As I wrote to Beefield, in the end:
Hint: [The scientific method] is in the first sentence of the second paragraph on Popper's wikipedia page.
...
Another hint, Popper was amongst others professor of "logic and scientific method" at the University of London. It is also noted on his Wikipedia page. In short, you argue Popper without understanding what Popper argued about.
The scientific method is what is used by the experimental ("hard") sciences. Do you really not know this?
This is the start of the second paragraph of Popper's wikipedia page, defining what he wrote about:
"Popper is known for his rejection of the classical inductivist views on the scientific method, in favour of empirical falsification: A theory in the empirical sciences can never be proven, but it can be falsified, meaning that it can and should be scrutinized by decisive experiments. ..."
Popper even was a professor of logic and the scientific method...
I am sorry, I have to soon assume I'm being trolled here.
Edit: You can e.g. also see the discussion of Popper's work here, where it is also discussed explicitly that he argues about how the scientific method works: http://plato.stanford.edu/entries/popper/#GroHumKno
Enough.
I asked for references to disqualify economics (which aren't from obvious idealogical sources) -- none are presented. That tells me all I need to know.
I don't need the epistemology of Popper or the more modern philosophers of science for my argument -- there is a difference between experimental sciences and the rest. The point is: To disqualify one of these sciences because it isn't hard, you need to explain why don't also disqualify the rest of them.
If arguing about Popper and the scientific method is really your interest and not trolling, go ask an expert instead of asking me for what you can find here: https://en.wikipedia.org/wiki/Scientific_method
All of them should be disqualified as well, with the exception of astrophysics which IS a hard science. Who said it isn't? Just because you can't directly observe from nearby a remote star to falsify your hypothesis etc doesn't mean you can't look at its energy emissions, radiation shifts due to speed, gravity effects to nearby bodies from its mass and volume etc. And a lot of astrophysics stuff related to composition of matter, nuclear reactions in a star, etc. are just plain physics. Not to mention when it cames to planets in the solar system, astrophysics very much can go (send probes etc) and gather empirical evidence directly.
History is no more "scientific" than economics -- both are ideological battlefields, where each thing is seen through the prism of the current preferences in each practitioner's era and circles.
Regarding palaeontology and archaeology both are full of BS too, but in the spectrum of hard vs soft sciences are closer to hard sciences than economics or history are, mostly the parts dealing with description and taxonomy of findings rather than their wild theorizing.
Regarding your judgements on the rest of the fields, I'd really see better support for your claims. They will all look different with time, that is what research is, but dismissals of thousands of really smart people's work just need better motivation.
Some people just don't have much of an ideological connection to religion, sports or politics. At a minimum, I doubt that the departments in a majority of the world's economy departments have the same agenda. :-)
My issue with economics is that some of the deep core assumptions (utility maximization, strong form of efficient markets etc.) violate so egregiously the falsifiability test.
That's the best you could deduce from my comment?
For starters, given the main claim I made (that economics is not a science), and considering that whether is true or false is under question, the last thing one could logically ask for, regarding that, would be citations.
For who would make those?
Surely not physicists or mathematicians, etc. (since it's not their job). And surely not economists for it IS their job.
If my claim was true, economists admitting it would be like homeopathists or freudian psychoanalysts saying their fields are non-scientific. It just ain't gonna happen, or it will be marginal at best.
Ever more profoundly though, should we actually evaluate arguments, or only think pre-made thoughts coming to us by way of citations?
Because the latter is not scientific either -- one needs to evaluate citations too. And no, peer review is not infallible in that either (in case one thinks citations are some golden truth they can always accept because they're peer reviewed. In fact a good majority of papers even in hard sciences have been found in meta-studies to be reproducible and others plain wrong (the so-called reproducability crisis).
Assuming it it the same and worse in economics, which is not a hard science, already makes most of my point.
That said, here are some sources:
https://www.amazon.com/Dismal-Science-Economist-Undermines-C... https://www.amazon.com/Economics-Rules-Rights-Wrongs-Science... https://www.amazon.com/Puzzle-Modern-Economics-Science-Ideol... https://www.amazon.com/Economics-Mathematical-Politics-Dimin...
You do realize that is how the creationists argue about the biology academics? :-(
The problem is that to show something completely wrong (a year or two ago, you'd probably have linked to Picketty?) is a good way to make a career.
If you want to make a better argument for your position, go to post modernists or some other of the political sciences which generally have disappeared ten years later.
You could make a point, which I'd agree with, that your position is stronger than a conspiracy theory, there are too many precedents. But to dismiss a field of research, you really need better support.
>> should we actually evaluate arguments, or only think pre-made thoughts coming to us by way of citations?
Far outside our areas, that is a good heuristic...
About your references:
* Stephen A. Marglin seems to argue that the small society might be better. It is an interesting and important point. E.g. communism works OK in a village, but not for larger areas. Afaik, he don't present an alternative? (No one thinks the present democracy or capitalism is perfect, we just haven't found anything better.)
* "The Puzzle of Modern Economics: Science or Ideology?" got good reviews, but only by five readers. This seems to be a good overview:
"Is [economy] a.) dangerous mathematical formalism, b.) free market ideology, or c.) a vital guide to practical action? The correct answer, he concludes, is d.) all of the above"
Well, that isn't exactly controversial, is it? :-)
* Dani Rodrik seems to argue about when economy is a useful tool? It don't support that zero scientific content claim, either.
You do realize that I don't care who else argues something in a particular way in another domain, as long as an argument is correct in another domain!
>The problem is that to show something completely wrong (a year or two ago, you'd probably have linked to Picketty?) is a good way to make a career.
Not really. To piss on your own field, is a good way to be considered a pariah, a conspiracy theorist, a nut job etc. Not many grants coming to the self-doubting economist, and policy advisor positions either.
>But to dismiss a field of research, you really need better support.
Like self-deprecating citations from practitioners in the field?
(Even if expecting that is illogical to begin with -- since economics is what puts food on their table --, you'd be surprised how many economists have written self-deprecating critiques about economics)
You can say the same for any research area.
>> Like self-deprecating citations from practitioners in the field?
You know yourself that you can find that for most fields. I know I've heard it for biochemistry (regarding over relying on computer modelling for evaluating molecules, a long time ago; I have no idea what people to do now).
It is normal and necessary introspection about what you are doing -- "Do we do the right things? Are we going in a good direction?"
His statement, when you refine it appropriately (which is not always done in an online forum), only presupposes that most people of the field who are visible to the public are "either idiots, fanatics or crooks".
I wouldn't phrase it quite so strongly (and for what it's worth, the grandparent didn't either), but it's easy to see why that would happen. Since economics is mostly about money, even slightly bending the public's perception on what scientific economic consensus is can have an extreme payoff via influencing public policy. So a lot of money is spent on trying to do so (virtually all of the so-called "think tanks"), much more and on a much more consistent basis than in any other science. So even from first principles, without any evidence, you have to logically expect economics to be worse than other sciences at delivering a rational truth.
As for evidence, I wonder what you would even accept as a "non-ideological source"?
All that said, it's not like the economics profession is an entirely lost cause. There are people like Dean Baker and James Galbraith who manage to occasionally bring alternative voices to the public.
Since no references, which I asked for, have been presented at all, that is not an interesting problem...
>> the grandparent didn't [phrase it strongly] either
Uh, "scientific content in most economists is zero." is not strong?
>> All that said, it's not like the economics profession is an entirely lost cause. There are people like Dean Baker and James Galbraith who manage to occasionally bring alternative voices to the public.
Why do you assume that "alternative voices" are better than the research consensus of a field?
(Yes, I make myself intentionally stupid here. I realize the answer probably is because you like the alternative voices better...? :-) )
>> Since economics is mostly about money, even slightly bending the public's perception on what scientific economic consensus is can have an extreme payoff via influencing public policy.
Certainly you'll find paid research in any field with policy influences. Smoking comes to mind. Please make it likely that most of the [economy] field is corrupt, as the GP argued?
> Why do you assume that "alternative voices" are better than the research consensus of a field?
It's not an assumption, it's a conclusion from my period of digging into that stuff ;-)
(And it's also not that all alternative voices are always better. It's that there are flaws in the economic research consensus that are clearly visible to an interested outsider who sees the alternative voices and listens to them equally.)
The clearest and most painful example of this is that in the face of close to a decade of extremely clear evidence (in the form of comparing the Eurozone to other advanced economies, mostly), most economists discussing fiscal matters still make no distinction between governments that are monetarily sovereign and those that aren't.
It should be natural to assume that there's likely a qualitative distinction to be made between governments that can go bankrupt and those that cannot - there might be reasons why that isn't so, but then one needs to make an argument.
So you get things like the once famous Reinhart & Rogoff paper about government debt ratios - which has been thoroughly discredited, but even the people doing the discrediting typically didn't point out the problem of ignoring monetary sovereignty.
> Certainly you'll find paid research in any field with policy influences. Smoking comes to mind. Please make it likely that most of the [economy] field is corrupt, as the GP argued?
I assume you would assign the "smoking" issue to the field of medicine. Which percentage of research in medicine would you expect to be closely related to public policy? Which percentage in economics?
Coming from Sweden, we have a consensus culture. That makes it possible for the media and the politicians to whip up a frenzy and change the acceptable opinions. The point is, you don't have to dig so deep to find official lies. Quite a few of the whistle blowers are economists. I do believe a large subset in the profession have integrity.
>> I assume you would assign the "smoking" issue to the field of medicine. Which percentage of research in medicine would you expect to be closely related to public policy? Which percentage in economics?
Let me put it like this -- Sweden recently got a professor (instated by the government) in the state defence research arm, specialized in gender. He tends to write articles supporting whatever the government likes... :-)
Regarding research -- smoking was not public policy, but purely company interests. All of health questions regarding choices of medicine, treatments and diet are interesting to lots of interest groups. (And age verification of young people was a big thing in Sweden regarding the immigration -- the international research consensus was thrown out...)
The national economy researchers are much fewer. But there are also quite a variation internationally on how politically influenced academics are. Also, what is sensitive in some countries can be researched in others with e.g. a different infrastructure.
In my native Sweden, the health research is probably more interesting to influence than the economic departments at universities. The political parties are interested in the economists. The big corporations don't really care, they talk to the parties directly. (Corporatism, yes..)
>> There was no talk of "idiots and fanatics" in the comment you replied to, hence the "not phrase it so strongly" part.
The statement "scientific content in most economists is zero" needs that the practitioners are either idiots, crooks or fanatics.
But sure, I'll back down here. A group of people studying a subject without any feedback and internal tests can go crazy, obviously. coldtea used the example Freudians. You might use post modernists too -- any group with a common preconceived opinion about how the world works might become a cult.
There is just to much precedent in the crazier part of academia for my argument.
Still, to dismiss an old field of research needs damn good support.
I think present-day economics is at the point where the science of history was at the end of the 19th - the beginning of the 20th century, i.e. most of them still believe that they somehow can predict the future based on past economic events, the same as some historians believed they they could predict our future based on past events from our history. Popper (among others) proved in his "The Poverty of Historicism" (https://en.wikipedia.org/wiki/The_Poverty_of_Historicism) why "scientific prediction" is a futile thing.
What economics tries to bring new to the table is math (or what they consider as math), apparently that should make us laymen believe that what they're doing is more than crystal-ball guessing.
So the book itself might not be peer-reviewed, but many of the findings within are
Curious, what is exactly a peer-reviewed book? Could you give me some examples of one?
Here's an article that describes the problems of the lack of fact-checking in books compared to the fact checking that some US newspapers do.
http://www.theatlantic.com/entertainment/archive/2014/09/why...
> Readers might think nonfiction books are the most reliable media sources there are. But accuracy scandals haven't reformed an industry that faces no big repercussions for errors.
I was just wondering what a peer-reviewed book is.
Incidentally, I think even though (as Piketty claims) inequality may be increasing, the average person (certainly in developed nations, but also in developing ones) has also been unimaginably enriched over the past 200 years. By any ethically relevant standard (access to food, shelter, heating, technology, entertainment), we live unbelievably fortunate lives. This when our ancestors a mere 3-4 generations ago were unspeakably poor.
FWIW, Benjamin Friedman ('The Moral Consequences of Economic Growth') has great research that shows that when people stop feeling like they're advancing and participating in economic growth, moral and ethical ideals like open-mindedness, acceptance, tolerance, and democracy deteriorate, which is concerning.
Yes, the poorest and the average now are doing better than they were. That doesn't make defensible the disparity in gains between the richest and the rest.
Again, I'm not saying we've done all we can do. I'm not saying that many of the rich don't behave reprehensibly. I'm not saying we can't do better. But the question is: How? How can we do better most effectively? I don't think the answer is 'tax global wealth and redistribute' a la Piketty--because that's not what enriched us so over the past 200 years.
So yes, it has gone up and to the right, especially in most recent history--though, because of human folly, there is no guarantee that it will continue to do so.
Humans are inherently equalist, unless they learn to not be equal.
Peasant wars, uprisings etc show that it wasn't unimaginable, just mostly not realistic.
This is a misconception and not what the alluded revolutionary idea is quoted by in the declaration of human rights. All humans are created equal, and I'm sure that modifier was put in not by accident, even though I couldn't explain the difference.
Point in case, one conclusion seems to be that humans are precisely not equal to each other, everybody's worth is equally indeterminate. Edit: I am biased to say this because human worth is specifically mentioned in this context in the German Grundgesetz (foundation of the law) where it's called Wuerde (dignity) and encompasses more than the capitalist idea of material value.
But in practice these things are to some extent dependent on equality (or at least less disparity) in material outcomes.
"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread." -- Anatole France.
There are of course limitations to how accurate his theory is, not least because much of public policy has been designed to avoid it happening.
There is a huge difference between the liquidity of each one.
> ... or by putting idea upon idea and creating something new?
A very tiny fraction of new creations make someone rich. Most fail or are insignificant in terms of capital.
Yes, r > g is only an aspect for (a), but the Piketty argument also has to be understood as a warning bell. After all, wealth and the resulting political influence make it easier to ensure that mostly (a)-types ever get into (b)- and (c)-positions in the first place. (And the tendency for this has always existed and exists today, just look at the university system in most countries for evidence.)
Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations
https://en.m.wikisource.org/wiki/The_Wealth_of_Nations/Book_...
A significant nature, and cause, of wealth is power. Smith wrote at length on both elements.
One might surmise this is a strong reason it matters.
How can you morally justify that some people have to work more than 40 hours per week to be able to barely scrape by, while others can just enjoy their lives luxuriously without working at all.
Oh and in fact, poor people in western societies today have it worse than 20, 30 years ago.
http://www.politifact.com/wisconsin/statements/2013/dec/08/o...
> 1. Having no matter or substance.
EDIT: Joking aside, the knowledge how to work a job is valuable, but immaterial. Undernourishment is often a matter of lack of the knowledge how to extract resources from the environment. Of course a lot of wealth is attained by theft. But what's theft of ideas, are ideas material wealth? Sure I'm talking semantics, I try to understand you. I don't assume you are totally wrong, I just tend to assume that my language faculty is sufficient to follow involved arguments. Often erroneously, but therefor I'm skeptic of others as well. I suppose the distinction between material and immaterial is largely immaterial, and the difference between abstract and concrete best hidden from conversation.
Spoiler alert - it's not. You didn't even use the right form of skeptic; you should have written 'skeptical.' Besides being a non-sequitur, your analogy is fatally flawed. It presupposes that it is possible to steal ideas, when in fact it is only possible to copy them. Furthermore, every homeless person knows how to extract resources from the environment: throw a brick in somebody's window and steal their stuff. Resources extracted. If by 'extract resources' you mean 'get a job and be a law-abiding citizen' then I question whether you have ever tried to rebuild a life from absolutely nothing while staying inside the confines of the law. It might be harder than you think.
On skeptical, German has different grammar, but we share a large part of the vocabulary. Sometimes I have problems learning Idioms, other times I am unwilling to accept them because I think they are corrupt. I like talking semantics. Of course, the grammar has to be fit for that, so thank you. And please stop insulting other people on here. Don't take anything I say too serious, I am just bored and trying to get into a conversation, which is sad enough.
You should not forget that inequality is not only about material outcomes. It is also about power to decide economic matters, such as how capital is invested. Shouldn't these matters be decided more equally by all members in society?
[1]: http://www.hudson.org/events/1356-are-plutocrats-drowning-ou...
Maybe not directly, but...
> The real equality that matters is equality in dignity as human beings, equality before the law, equality in our respect to each other.
Material outcomes demonstrably affect all of those things, and cannot avoid doing so, generally, because "material outcomes" are power, and power is fungible, and those are all important areas to which power is applied.
This isn't to say that Mr. Goes' analysis is flawed, I've yet to look at it. But the glee with which it's being picked up by the Murdoch/Newscorp WSJ, and from a quick bit of DDGing, numerous bloggers and commentators, suggests a wee bit of bias could be present. The lack of substantive description of the study by Talley doesn't suggest much of strength either.
Certainly other IMF and World Bank economists have found Piketty credible.
https://www.atlasnetwork.org/partners/global-directory
https://www.atlasnetwork.org/partners/global-directory/cato-...
https://www.atlasnetwork.org/partners/global-directory/mont-...
https://www.worldcat.org/title/road-from-mont-pelerin-the-ma...
But I have to admit I don't really understand theory behind the opposite view. In particular, the article says "the data shows changes in the savings rate are likely to offset most of the effects of an increase in capital share of national income".
Is this saying that poor people will save more as capital returns grow, and this mostly compensates poor people for the relatively slow growth in wages?
A big part of modern, first world ideology is that we think the problem is caring. That if only we understood, or cared, the world would be better. People need to care and understand transgender people, or people who have lacked education, or poor people. That if only they cared, we could fix the problem.
Dr Martin Luther King jr gave one of the most needed, most important speeches of all time. He had an emotional desire for humanity, a dream. A dream that, in many ways, changed the world. Unfortunately, ever since that time every issue has been approached with the same emotional bedrock, a dream. Very little has involved a real PLAN, or real measurement.
Thing is, caring, empathy and understanding don't fix problems, they highlight them certainly, but they don't provide fixes. People seem to confuse those two ideas - highlighting and solving - and we keep highlighting, when solutions seem the more important need.
caring creates problems that hinder performance - that's why we don't have people that care about us perform surgeries on us, because their emotions don't help.
The problems the world faces don't need more emotion, they need a more objective, result driven, rational response that we measure and change in response to results. This video I think introduces a lot of these ideas well. http://www.theatlantic.com/video/index/474588/why-empathy-is...
And yes, sometimes empathy is needed to motivate people to take action. For example: http://www.aljazeera.com/indepth/features/2016/08/greece-fis...
It's true that there are people who have an "if only people were nice" type of outlook on life, and that is indeed naive. The problem isn't that individual people are nasty, it's that the system is set up in a way that favours negative outcomes for many.
The only way to fix the system is politics, and a necessary condition for getting anything done in politics is for people to care.
That said, I agree with you that less complaining and more actual plans would be great. (And especially if the people who complain would then start supporting plans, even if it means that others call them "bad" words like "commie"...)
Yes there is a sea of data, but none of it is complete.