Self-satisfied cries of ‘‘we told you so’’ are wafting out of France in the wake of the first major backlash against ‘‘rock star economist’’ Thomas Piketty and his theories on rising inequality.
‘‘Piketty caught by The Financial Times’’ screams the headline in Le Point, while Jean-Marie Pottier asks in the French edition of Slate,‘‘Is Thomas Piketty completely mistaken?’”
Even if Pottier cautioned ‘‘not so quick’’ to those tempted to throw out Piketty’s entire œuvre , the sense of deja-vu in Paris is palpable since the FT’s Chris Giles’ declared the findings of his book, Capital in the Twenty-First Century, were ‘‘undercut by errors’’ and ‘‘wrong sums’’ on inequality.
Indeed, French media and economic commentators have been slow to record the phenomenal success of Piketty even as everyone from Nobel Prize-winning economist Paul Krugman to the IMF and the White House have lauded him. That’s partly because they’ve been skeptical all along.
The FT’s investigation argues that Piketty’s central thesis, that inequality of wealth is now at levels not seen since before World War I, is not borne out by the data, at least in Europe. Last year, when the original French edition of Capital (at some several hundred pages longer) debuted, local critics, notably economist and historian Nicolas Baverez, made similar claims.
An obsessive public chronicler of French economic decline, Baverez raised major issues with Piketty’s data collection and especially the ‘‘biased’’ interpretations of his figures, all well before the FT’s carefully researched demolition job.
Writing in centre-right magazine Le Point, Baverez was the first to pin the Paris School of Economics professor for peddling Marxism de sous-préfecture or ‘‘provincial Marxism’’ based on dubious and ideologically-slanted analyses of statistics.
“In Capital in the Twenty-First Century the economist reinvents the class struggle. But the figures that he puts forward contradict his theory !’’ said Baverez. Back then (before the FT), he noted that inequality of wealth in Europe and especially in France has actually reduced since the 1970s to levels well below pre-World War I.
Not only Baverez panned Piketty’s book; in France it has had nowhere near the same impact on public debate as in Britain and the US. Capital was widely viewed by the French as either a poor recycling of Karl Marx or an outright betrayal of left-wing dogma that ignored the complexity of inequality.
The tome did enjoy relatively strong domestic sales, prompting its swift translation into English. But Piketty had to wait until his anointing by US-based economic gurus such as Krugman and Columbia University’s Joseph Stiglitz to really be the “phénomène” he is today.
The number of copies sold in France has more than doubled in a month thanks to the extraordinary interest and bestselling status of the book in the English-speaking world. Still, the intellectual elite remains doubtful—only emboldened by the FT last week.
Long categorized as a classic advocate of higher taxation, the 43-year-old Piketty advised then presidential candidate Ségolène Royal in 2007 and later François Hollande, although the president ignored his ideas about a tax revolution. Economist Guillaume Allegre from Sciences-Po, said that while Piketty’s important thesis could be characterised as ‘‘enlightened catastrophism,” he did not agree with all his interpretations of the data.
Simply taxing capital at the global level would be ‘‘insufficient’’—inequality busters would need to take on new monopolies such as Google’s search engine.
Meanwhile the old attacks on Piketty as a traitor to the left have resurfaced. Piketty’s embrace by certain progressives was evidence of ‘‘the left being against the left,” according to Didier Eribon, professor of philosophy, human and social sciences at the University of Amiens. Instead, the criticism goes, the brains behind Capital in the 21st Century was not a Marxist at all, and had forgotten the social theorist Pierre Bourdieu’s gospel regarding social and cultural capital as a driver of inequality.
And Le Figaro’s Irène Inchauspé et Sylvie Hattemer, who had already written a book refuting the economist’s figures underpinning his French ”taxation revolution” book, tore apart Piketty’s ‘‘truth and lies’’ including his statistical base. Coverage like that prompted Piketty last month to tell Le Monde that “it is amusing to see The Economist or The Financial Times showing themselves as more open than some French newspapers.”
He said: ‘‘I benefit in the United States, and a little bit everywhere except in France, from a reading of the book that is perhaps less strictly political.”
Suddenly that theory, too, might be in need of revision.
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