Winner of the New Statesman SPERI Prize in Political Economy 2016

Friday, 30 May 2014

What the Financial Times got (very) wrong

When an academic, or student, thinks they have found a mistake in an academic paper or book, what do they do? Check their calculations again and again, or course. Ask someone else to do the same, maybe. But then they will write to the authors of the original work, and ask them to comment. What they will not do, in that letter or email, is to give the original author a deadline of one day to respond. That was how much time Chris Giles of the Financial Times gave Thomas Piketty to respond to his long list of alleged errors and unexplained adjustments.

I think it might have been very different if Chris Giles had written a piece about the difficulty of interpreting wealth inequality data, and had wanted to get clarification of what Piketty had done and why. I suspect in that case the paper would have given Piketty more time to respond (what was the urgency?), and the article would have benefited greatly from that dialog.

But that was not the article that Chris Giles chose to write and the Financial Times chose to publish. Instead they wrote an exposé, in much the same way as you would expose some wrongdoing by a politician. (Is an academic making a spreadsheet error the equivalent of a politician having an illicit affair?) The phrase they use in football is playing the man and not the ball.

Now, in the unlikely event that I ever warranted a headline story, I know I would not want to be treated in the way Giles treated Piketty. There were only two possible justifications for writing a story of that kind. One was if the paper had clear evidence that Piketty had fiddled the numbers to get the results he wanted, and it is obvious they did not have that evidence. The other is that they had found so many simple mistakes that this discredited Piketty as an academic. Again this was not the case. [2]

I also get very cross with academics who suggest that, because his book had become a bestseller and he had accepted invitations to talk to White House staff, he somehow deserved this kind of treatment. This seems to me like hypocrisy at its worst. Given this treatment, both Thomas Piketty’s initial response and his more detailed response issued yesterday are remarkable and impressive in their restraint.

So the mistake the Financial Times made was not that they allowed one of their best investigative journalists to look at Piketty’s spreadsheets (which Piketty had, to his great credit, made publicly available). As I said in my earlier post, a FT article that looked at the alternative sources for UK wealth inequality data, and questioned the idea that wealth inequality was inevitably rising in most countries, would have been an interesting piece. [1] The paper’s mistake was to write the story as an exposé.   

Why did the Financial Times want to run a ‘gotcha’ piece in the first place? Of course Piketty has become something of a celebrity, and tabloids love to knock celebrities down. But the FT is no tabloid, and to think it was just about celebrity may be politically naive. As Henry Farrell and Mike Konczal noted in a typically acute pair of posts, a focus on inequality as a central issue in economics is very threatening to some, and many of those who feel threatened will read the Financial Times. 


[1] It is worth noting that if we look at the Atkinson and Morelli database, among the six European countries where there was recent data for the top 1% wealth share, I counted three where there seemed to be an upturn in wealth inequality over the last few decades, and three where data showed no clear trend over the same period.

[2] Chris, in a first response to his critics, says that “Academic economists have got themselves into a bad spot if undocumented data, errors and tweaks are considered by some acceptable research practice.” As my original post pointed out, the best academics make mistakes, although in this case it is not clear any were made. So do the best journalists, and at the end of that post Chris acknowledges one of his own. If you want academic research in economics to scrupulously document every detail, you will either get a discipline that is so narrow as to be useless, or you will have to give academics a lot more resources!


24 comments:

  1. I believe the FT, alongside the Independent and the Guardian, has not joined that PCC-in-sheep's-clothing, and is still trying to come up with some accommodation with the Privy Council on press regulation.

    So the size and the manner of the apology in this case will be noteworthy.

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  2. Thanks, Simon. Clear and insightful, as always. Appreciate the links as well.

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  3. The attack on Piketty by the FT was cynical. However, something good has come out of this. And that is the way this book has engaged the wider public, including journalists and general public. This is in big contrast to the Lucas/Sargent led type of economics which seemed to be inaccessible to other members of the non-economics academic community, let alone the public at large. Perhaps this is because unlike that type of economics, this book may very well act to put existing power hierarchies under scrutiny, not act, intentionally or otherwise, as an intellectual framework that consolidates existing power arrangements. This engagement and openness is both good for democracy, which now badly needs it given widespread mistrust in what is seen as a detached governing and intellectual elite, and for the discipline.

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  4. James Hamilton over on Econbrowser had a more considered criticism of Piketty's "Second law of Capitalism". I wonder if Professor Wren-Lewis could tell us something about his take on it?

    http://econbrowser.com/archives/2014/05/criticisms-of-piketty

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    1. Still thinking about it, as I slowly make my way through 100 scripts to mark!

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    2. Costas Milas, Liverpool30 May 2014 at 11:21

      Hi Simon,
      Be extra cautious with typing the 100 marks in the spreadsheet (given what is happening with the story you just blogged). I am also triple cautious myself!
      Costas Milas
      Costas Milas

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  5. Difficult not to think that the FT had an agenda - it exisits to sell its copies. Thank you for the links - a very modest but effective putdown from Prof Piketty and all the more effective for that.

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  6. I really do wonder why the FT act is called cynical or even criticized. Giles was asked to write about the data collection he used to compare Piketty's numbers with. FT is the spokespaper for the Rolex guys and gals, so they could only be on the side of those who were out to get to Piketty and hurt him, his data, conclusions or solutions.

    Chris Giles is a brave but delusional financial soldier who got kicked in the face by the professor, but there is no reason for apology this is part of politics and getting what they really think they deserve

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    1. I think the FT should be frightened of your type of thinking. You are saying, since they act like the daily mail of the rolex type, we should not be surprised at their blatant bias and lies. Next step, don't even bother reading the FT.....circulation falls

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    2. What are you two talking about? Politically, the FT is politically left of centre on most issues. Sure, the Giles article wasn't a great moment for them but they do employ many journalists that are very good at their job.

      Honestly, I don't even think the article was critical because Piketty's book is left-wing or because it suggests action against inequality. A more likely explanation is that a lot of journalists (and not just journalists) want to make their name as the one who showed the flaws in this very popular and famous book.

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    3. "I really do wonder why the FT act is called cynical or even criticized. "

      Please reread the part in the original post about 'one day to respond'.

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  7. Superb dissection Simon. It appears that the right-wing are becoming increasingly frustrated as the neo-liberal economic model is crumbling. Rising inequality is an obstacle in the path of the austerity agenda, as addressing inequality would mean a softening of the austerity policies which is their worst nightmare. Austerity is the means by which they achieve their wet dream - the shrinking of the state. So I expect to see more desperate inequality denials.

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  8. I have found that the FT example is very endemic in the City. I would warn academic economists and others who have arguments that contain a lot of research, data and depth and require a bit of thought be careful and not allow themselves to fall into their traps and watch substantial work undermined. A lot of these people are not interested in seeing the merits of various arguments and have a lot to gain with their immediate trashing. I have seen this happen a number of times before.

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  9. Piketty's has got through Round 1. But his book puts the spotlight on a powerful economic orthodoxy, not to mention the obviously well resourced and institutionally well fortified 0.01 per cent. He is not out the shark pool yet.

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  10. The strategy of the neo-liberal orthodoxy is like a monopolistic firm that simply buys in a potential rival or threat. Hopefully Piketty does not embrace the application of rational choice theory to his work or accept keynote speaking engagements at Swiss ski resorts. If he does the potency and effect of his work will be greatly diluted.

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  11. "But the FT is no tabloid"
    Or maybe it is, a tabloid for the rich and powerful. Rumor has it FT will display Greg Mankiw topless on page 3 of the next issue...

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  12. You underestimate the competitive nature of journalism (or business in general). FT felt they had a scoop and that they had to publish it ASAP. It's that simple.

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  13. Exactly right, Mr. Wren-Lewis. I am not an economist, but in no field does it make sense to call out supposed mistakes in another's work when you are not sure yourself that you understand the argument and the calculations. There is no substitute for getting the original author's direct response. The story here was much to complicated to have been amenable to the very brief period for comment the FT allowed before publication, and it's very unimpressive that neither Mr. Giles nor his editors appeared to recognize this. Mr. Giles' approach is not the way to true understanding the issues in question.

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  14. Giles is lucky that Piketty's response was restrained. If it was Pual Krugman rebutting, Giles could have been used as a floor mob!

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  15. If you move into the world of finance and/or politics you simply have to be happy you have any time at all. The world is not adjusting itself to academics. Simply step up or take it on the chin.

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  16. The Piketty v FT spat just seems to demonstrate how both left and right use data and interpretations of data to reinforce their own political and economic prejudices.

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    1. This false equivalence is exactly what the right wing is aiming for. Same old same old. Plant doubt about facts to shift the public debate from the real issues at hand.
      Exactly the same strategy the american right employs in every single debate.
      They even founded think tanks to have "scientists" that cast doubt on global warming.

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    2. Someone could say that these debate, or more specifically, the fact that it caught the public attention and brought people without a background into social sciences into the discussion, illustrates a fundamental divide between the left and the right. It's a sort of opportunity for people to jump on their favorite piece and use it as a way to justify their position on the grounds of an authority argument. And, yes, it's a silly behavior.

      However illustrative these debate might have been, Piketty still produced a scientific work. He made every building block of his work available to the public, he rendered his reasoning and models explicit, etc. To paraphrase the anonymous comment, that's asymmetric in this debate: the left and the right both try to seize on their favorite piece, but Piketty is not projecting his own prejudices on his work and there's no right-wing equivalent of Piketty.

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  17. Lets call a spade a spade. It was an attempt at a hatchet job of Piketty. Everything to do with politics. Unfortunately for FT, a journalist (even with an econometric award) is a tough match versus a very good economist and his years of through work with many others.

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