Challenging the Empirical Contribution of Thomas Piketty's Capital in the 21st Century

Journal of Private Enterprise, Spring 2015

GMU School of Public Policy Research Paper No. 15-2

43 Pages Posted: 28 Dec 2014 Last revised: 13 Feb 2015

Phillip W. Magness

George Mason University - Institute for Humane Studies; George Mason University - School of Policy, Government, and International Affairs

Robert P. Murphy

Institute for Energy Research

Date Written: December 26, 2014

Abstract

Thomas Piketty's Capital in the 21st Century has been widely debated on theoretical grounds, yet continues to attract acclaim for its historically-infused data analysis. In this study we conduct a closer scrutiny of Piketty's empirics than has appeared thus far, focusing upon his treatment of the United States. We find evidence of pervasive errors of historical fact, opaque methodological choices, and the cherry-picking of sources to construct favorable patterns from ambiguous data. Additional evidence suggests that Piketty used a highly distortive data assumption from the Soviet Union to accentuate one of his main historical claims about global “capitalism” in the 20th century. Taken together, these problems suggest that Piketty’s highly praised and historically-driven empirical work may actually be one of the book’s greatest weaknesses.

Keywords: Thomas Piketty, Capital in the 21st Century, Inequality

JEL Classification: N01, N10, D31, D63

Suggested Citation

Magness, Phillip W. and Murphy, Robert P., Challenging the Empirical Contribution of Thomas Piketty's Capital in the 21st Century (December 26, 2014). Journal of Private Enterprise, Spring 2015; GMU School of Public Policy Research Paper No. 15-2. Available at SSRN: https://ssrn.com/abstract=2543012

Phillip W. Magness (Contact Author)

George Mason University - Institute for Humane Studies ( email )

3401 N. Fairfax Drive
Arlington, VA 22201-4432
United States

HOME PAGE: http://www.philmagness.com

George Mason University - School of Policy, Government, and International Affairs ( email )

Founders Hall
3351 Fairfax Dr.
Arlington, VA 22201
United States

Robert P. Murphy

Institute for Energy Research ( email )

6219 Olympia Drive
Houston, TX 77057
United States

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