Noah Smith on Tyler Cowen on Thomas Piketty

Tyler Cowen's anti-Piketty crusade
"So why has Tyler turned into an anti-Piketty crusader? Well, Piketty is a popular topic, and his thesis is encountering a huge amount of skepticism, so there is demand out there for a one-stop anti-Piketty shop.

But it also seems possible that Piketty has deeply worried economists and pundits who thought that concern over inequality was a thing of the past, and that laissez-faire had basically won the battle of ideas. Piketty's immense popularity might seem, to these folks, to threaten to drag us back into a dark age when radical wealth redistribution was taken seriously, not only by large segments of the public, but by a number of prominent economists as well. Piketty might seem like the vanguard of an onrushing wave of socialist thought that could succeed in turning back the tide of neoliberalism that had been advancing for at least 40 years. So Cowen - and the numerous anti-Piketty writers he links to - may simply be worried about Piketty and what he represents."

As I mentioned before quoting a passage from Piketty, some of the reviewers have not read Piketty's book completely. For a layman like me more substantial discussions discussing the terms with various omissions and commissions by Pikettey would be useful. It seems that Piketty is usin terms somewhat differently from others and also lookin at different thins. First, his use of the term capital itself seems different and drew the wrath of James Galbraith "Piketty had to reverse more than two centuries of abuse by economists and sociologists of the notion of capital to make his powerful empirical and theoretical case. His data are based on a commendable redefinition of the concept that ends an age of obscurantism." Then there seems to be different versions of the rate of return on capital. It is not clear to me how this is measured even in Piketty's version. Thirdly, Piketty's estimates for future capital to income ratio are based on some models which seem unrealistic to me. Whether this can be done in other ways, whether it is just what the data are indicating need some discussion. There are more points of that type. May be it is time for a second reading of Piketty.

Another discussion here where Dean Baker who was initially critical takes part. Here is an article by David Leonhardt "For all of the clarity of Piketty’s historical analysis, I emerged from the book not quite grasping the mechanics of rising inequality. What is it about market economies that typically cause the assets and incomes of the rich to rise more rapidly than those of everyone else? So I called Piketty at his office in Paris, and he agreed to walk me through it."
P.S. I did not know that Tyler Cowen is the Chairman and general director of Mercatus Center associated with Koch brothers.