Bonus Monday Smackdown Watch: Ryan Avent vs. Clive Crook on Thomas Piketty's "Capital in the Twenty-First Century"
Principles * Macroeconomics * Long-Run Economic Growth

Morning Must-Read: Ryan Avent Is Very Unhappy with Clive Crook's Review of Piketty's "Capital in the Twenty-First Century"

Ryan Avent: Inequality: "Capital" and its discontents: "Piketty's magnum opus is certainly not without its weaknesses...

but the quality of the criticism it has attracted provides a sense of the strength of the argument he makes. Consider Clive Crook.... He writes:

There's a persistent tension between the limits of the data he presents and the grandiosity of the conclusions he draws.

The line doubles as a pleasingly apt description of Mr Crook's review. He is unhappy.... Why... doesn't Mr Piketty say that r must be significantly above g to generate the expected divergence, Mr Crook complains.... You don't even have to read hundreds of pages to get the qualification Mr Crook wants; you can start with the page on which r>g is first mentioned.... Mr Crook then goes on to present his evidence: "The trouble is... capital-to-output ratios in Britain and France in the 18th and 19th centuries... were stable".... Piketty is not arguing that r>g means that rising inequality is inevitable. Indeed, that is close to the precise opposite of his argument, which is that r>g is a force for divergence... which has at times been countered... and which can and should be similarly countered in future. Presumably, if charts of stable capital-income ratios in the 19th century provided a devastating rebuttal to his story, Mr Piketty would not have included them so prominently in the book. I think he must have imagined that readers would look at the text around them as well...