Capital in the Twenty-first Century by the economist Thomas Piketty has been acclaimed as one of the most influential books of this decade. Its thesis that wealth inequality in the rich world is going back to levels last reached 100 years ago has prompted a fierce debate among academics and policy makers. While commentators have disagreed over the implications of the findings, even critics have hailed the data work underpinning the book’s conclusions.
A Financial Times investigation, however, has found data problems and errors in Prof Piketty’s work. These include unexplained entries in his spreadsheets, cherry picking data sources and transcription errors. Taken together, these problems undermine his conclusion that wealth inequality is rising both in the US and in Europe.
The FT’s replication of Prof Piketty’s results was only possible because he published all his sources and spreadsheets online. Open data are a welcome fashion in economics and Prof Piketty should be lauded for embracing it. Capital in the Twenty-First Century calls for important policy changes, including an international wealth tax. It is essential that the data on which Prof Piketty draws his conclusion are subject to public scrutiny.