Did Piketty get it wrong? Analysis questions author's data

Thomas Piketty on his book 'Capital'
Thomas Piketty on his book 'Capital'

This is how they argue in economics: over spreadsheets.

On one side is Thomas Piketty, author of the best-selling tome "Capital in the Twenty-First Century." He argues that wealth inequality is growing and "threatens to generate extreme inequalities that stir discontent and undermine democratic values," and published the data behind his conclusions online.

capital book
Piketty's book became a best-seller.

His adversary is Chris Giles, economics editor of the Financial Times.

Giles claimed his analysis of Piketty's spreadsheets contain serious factual inaccuracies that undercut Piketty's conclusions in "Capital."

He gets numbers wrong, inexplicably changes others, employs "seemingly arbitrary adjustments" to formulas, mixes results from different years and commits a series of other data faux pas, Giles wrote in a lengthy post on Friday.

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"When I have tried to correct for these apparent errors, a rather different picture of wealth inequality appeared," the post reads.

"The combined result of all these problems is to make wealth concentration among the richest in the past 50 years rise artificially," Giles explained. "The conclusions of Capital in the 21st [C]entury do not appear to be backed by the book's own sources."

Piketty fired back in a letter posted by the Financial Times.

"If there was anything to hide, any 'fat finger problem', why would I put everything on line?" he wrote.

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His data comes from 20 different countries and stretches back as far as the 1700s. That means it is imperfect and varies, he explained, requiring "a number of adjustments to the raw data sources" for consistency.

"I have tried in the context of this book to make the most justified choices and arbitrages about data sources and adjustments," Piketty wrote. "I have no doubt that my historical data series can be improved and will be improved in the future."

The book has been described as an unlikely best seller -- a 700 page analysis originally written in French and put in print by an academic publisher.

But the book hit shelves at just the right time: as a dispute over wealth distribution and wages has sparked political debate and protests in the U.S. and other countries.

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