[rguzman]

it seems odd to dismiss papers that challenges Piketty's and Saez's conclusions as nitpicky. in complex systems the devil is most often in the details. and not only that, but the sort of project that Piketty took on has many potential methodological pitfalls. so, small details could actually mean a given premise or conclusion is invalid. how would you suggest someone go about assessing whether a paper is nitpicky vs something that should be taken seriously?

note that i'm not taking a position on the conclusions of Piketty and Saez, just pointing out that re-stating their claims does not say anything about the papers that argue against them and calling such papers nitpicky seems like a particularly weak critique in this instance.

[CharlesColeman]

> note that i'm not taking a position on the conclusions of Piketty and Saez, just pointing out that re-stating their claims does not say anything about the papers that argue against them and calling such papers nitpicky seems like a particularly weak critique in this instance.

There's another angle: in a general-interest publication like the Economist, over-emphasizing nit-picky flaws that fail to effect the core arguments of a work can have the effect of giving general-interest readers the impression the work has more serious flaws than it actually has.

[Matticus_Rex]

I'm fairly well acquainted with the literature on this topic, and I think the opposite; the fact that most people don't understand why these "nitpicks" actually seriously undermine the premise and totally butcher the prescriptive suggestions makes it easy for readers to dismiss the criticism, especially in a general-interest publication. While there's a contrary effect for the skimming reader who just accepts that P&S' work is flawed without understanding it, I think that tends to be a much lower risk with the Economist audience.

[CharlesColeman]

> I'm fairly well acquainted with the literature on this topic

How so, exactly?

> and I think the opposite; the fact that most people don't understand why these "nitpicks" actually seriously undermine the premise and totally butcher the prescriptive suggestions

Personally, I'm inclined to withhold judgement until the dust settles, yay or nay. The topic is technically difficult, and there are a lot of actors with political interests in the outcome of the discussion that muddy the waters.

[rayiner]

My biggest problem with Piketty & Saez's work is that it made pretty major economic policy prescriptions based on a model that was so simplistic that the result was borderline click-bait. And the end-result is that assertions have entered the political discourse ("the middle class's standard of living has been stagnant since the 1970s") that just aren't true.

Let's unpack that. If you want to quantify the middle class's standard of living, you have to look at:

1) Post-tax income. 2) Prices/product quality/ 3) Benefits/services. 4) The characteristics of the middle class (age, race, immigration status, household size, etc).

Piketty & Saez look at pre-tax income, apparently only because it's easy to assess via tax receipts. That overlooks data that's highly relevant to addressing deep and substantial policy questions. For example, consider what would happen if the U.S. and Mexico merged. Immediately afterward, median income in the U.S. would drop significantly. But nobody's standard of living would change. I.e. looking at the "median" fails to account for changes in who comprises the median. In the U.S. the immigrant share of the population has almost tripled from 1970 to 2017. Even if you've got a great economy that's good at integrating people and equalizing their incomes over time, it's probably not realistic to expect first generation immigrants as a group to have the same income as native born people. Looking at just pre-tax incomes completely masks that effect.

Similarly, marriage rates and household sizes are down significantly since 1970. Married couples make significantly more money than non-married individuals. The median marired couple in Michigan has an income of $80,000, which is 45% higher than the combined income of the median single woman and median single man: https://www.mlive.com/news/2017/09/michigans_median_income_i.... Looking at pre-tax household income overlooks that effect entirely.

There's a story in here somewhere. But Piketty and Saez's analysis doesn't actually tell us anything.

[mensetmanusman]

Okay, but it’s not quite true that ‘nobody’s standard of living would change.’

Cartels would be free to cross the border and operate in the U.S. (no way the U.S. could handle a sudden spike in 100,000+ Member sophisticated criminal operations), so their quality of life would increase.

The lower class in the U.S. would have even more wage competition, so theirs might decrease, etc.

[dangerlibrary]

You are mixing up correlation and causation re: married couples.

[TheOtherHobbes]

Over the time period, married couples often had a single income.

Now working class married couples are just as likely to have a total of two to six jobs between them, but their real median income is still lower than it was when only one person was working.

There are no "nit picks" to debate. Refusing to acknowledge the destruction of financial stability for the working class and lower middle class in the US and certain other Western countries is simple denialism.

[darawk]

The relationship is causal. Married couples are a household. Married couples consist of two people. Two people is more than one person. Two incomes is more than one income, etc. Even though all married households are not dual income, those that are shift up the mean for the rest. This is an artifact of measurement via 'household'.

[sooheon]

Notice how your response is even less than a restatement of Piketty's thesis, just the observation that theoretically, it is possible that some papers have valid criticisms. Well yes, but which ones?

The article cites Smith, Zidar and Zwick who have tweaked Saez and Zucman's equations regarding top income growth. Assuming different weights and biases results in--surprise, slightly different outputs. But it's a matter of degree, not a reversal of direction. After a couple paragraphs of quibbling, the Economist admits as much with the conclusion: "Few dispute that wealth shares at the top have risen in America, nor that the increase is driven by fortunes at the very top, among people who really can be considered an elite. The question, instead, is by just how much."

[cannabis_sam]

Do you have any actual arguments or are you just trying to sow FUD? Cause you sound exactly like a concern troll. Not providing any substantial arguments against Piketty, just vaguely suggesting that there are problems with his argument, then changing the subject to what’s nitpicky or not..

Give us a concrete argument, and we can discuss if it’s nitpicky or not. What you are doing is leading people into the weeds, which only helps the people making a profit of the positive feedback loop you do not seem to want to discuss. I don’t think that’s your intention, but it is the result..

[simonh]

Aren’t we discussing an article which actually lays out these arguments, and references the papers with more detail? At least, I thought that’s what we were doing. Under those circumstances it seems odd to complain about a lack of such arguments having been presented.

[coldtea]

>in complex systems the devil is most often in the details.

In economics the devil often uses the details to bury larger issues (losing the forrest for the trees).

[solipsism]

in complex systems the devil is most often in the details

The devil is sometimes in the details, but it's not in all the details. The sun is an incredibly complex system. But you could tweak an incredibly number of small variables and yield very little noticable change. An oncoming tsunami is an incredibly complex system, but the devil is in the overall brunt of the phenomenon.

It's a valid criticism to say an argument doesn't get at the meat but merely picks at the scraps. It's easy to frame such nitpicking in a misleading way -- by pointing out so many details that are not quite right you can sow doubt in the overall conclusion. And that's the accusation that's being made about this Economist article.