‘No Empirical Evidence’ for Thomas Piketty’s Inequality Theory (opens in new tab)

The danger is where inequality in rates of improvement in material outcomes leads to inequality in moral outcomes. To borrow some rather loaded language, the more the 1% can buy themselves legal advantage, the more unjust the world becomes. If the rate of legal advantage is affected by the absolute difference between the 1% and the 99% (which I'd argue is demonstrably true - beyond a certain point you've got regulatory capture, but even before then, paid legal representation is the lever that matters here), then it's trivially true that a more materially unequal world is more morally imbalanced in the absence of a somewhat socialist government.

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.

Extreme material inequality can't be explained by some people performing better, so it's pretty obvious that it is unjust. How can unjust distribution of the material wealth be moral?

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.

Piketty isn't really talking about "inequality in material incomes" so much as a theory that a small proportion of dynasties tends to accuulate such a large proportion of national resources that the economy ceases to operate like a competitive market and becomes a means for those holding the majority of the wealth to extract rent from those holding the diminishing remainder. That can be a problem even if you find some inequality unproblematic or even regard some level of inequality as morally necessary to reward endeavour and ingenuity and encourage economic growth, and is a problem for progress in the future even if the baseline standard of living in developed countries is very acceptable by historical standards.

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.

If you look at things over 200 years we are doing much better but I think it's more important to look at it generation by generation. For example, growing up I will have had a comfortable life - going into adulthood supposedly my generation will be the first (no idea when that data goes back to) to do worse than it's parents. So throughout my life I will become less comfortable. It seems like we've now reached a point where the poor ACTUALLY become poorer and the rich become richer,

"Money, as Mr Hobbes says, is power."

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.

> The real equality that matters is equality in dignity as human beings, equality before the law, equality in our respect to each other.

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.

> I'm curious - does anyone else think that the equality that matters is equality in material outcomes?

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.

Tyler Cowen addressed this in an interview, saying that the inequality that "really matters" is the difference in your living standard versus your sister's husband[1].

[1]: http://www.hudson.org/events/1356-are-plutocrats-drowning-ou...

> I'm curious - does anyone else think that the equality that matters is equality in material outcomes?

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?

What people seem to care about is not net improvement, but relative improvement. It really comes down to if you feel like things aren't better because you are comparing them to other people. It's not right or wrong, it's just an impossibly moving target.

When I talked about these things, I make the distinction between "equality" and "equality of opportunities".

The WSJ didn't present the paper as peer-reviewed fact. It's also not like Piketty's book was peer-reviewed either...

> I only did mathematical modeling for HPC systems, not economies.

No worries. Economics content in Piketty's arguments is zero.

Why did they select 1980 - 2012. This is narrow. I'm not an economist but I can see an attempt to compare 12 years of selective data against 200 years of data is suspicious.

What would that fix?

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...