What Thomas Piketty found out about Russia’s plunder
Reaching back to 1905 and using some data that cannot be trusted, are the famed economist’s findings reliable?
After alerting the western world to the alarming rise of inequality, Thomas Piketty has turned his attention to Russia. To someone who has lived through Russia’s transition from communism to crony capitalism, his take on that transition reveals deep flaws in his overall methodology — but some of his conclusions should have important implications for western policy towards Russia. In a fresh working paper, Piketty, his Paris School of Economics colleague Filip Novokmet and Gabriel Zucman of the University of California at Berkeley set out to show that official measures vastly underestimate inequality in Russia and the extent to which it has been robbed by its oligarchy. Unfortunately, some of the analysis is based on data so unreliable that the researchers should have heeded the old computing principle: garbage in, garbage out. Piketty works with data sets that go back centuries. His Russian one starts with 1905. But the Bolshevik revolution in 1917 made a mockery of official statist...
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