By Marc Jampole
Another transparently deceptive article on wealth inequality
by George Mason economics professor Tyler Cowen has me wondering if Cowen has
decided to play Washington Generals to Thomas Piketty’s Harlem Globetrotters.
The Harlem Globetrotters is an exhibition basketball team
known for its entertaining feats of dribbling, passing and scoring, often to a
catchy version of the 1920’s jazz standard “Sweet Georgia Brown.” The
Globetrotters have rarely lost, thanks to the fact that they usually play the
Washington Generals, an exhibition team put together for the sole purpose of serving
the Globetrotters’ on-court foil.
Over the past several months, Cowen has published a number
of articles that have tried to refute the main premise of Piketty’s Capital in the 21st Century, which is
that inequality of wealth and income is growing in the world. His obviously
fallacious reasoning makes me wonder if Cowen decided to play Washington
General as his contribution to disseminating Piketty’s important theories. Just
as the Generals’ weak defense have allowed such stars as Wilt Chamberlain,
Connie Hawkins, Meadowlark Lemon and Curly Neal to wow spectators, so Cowen’s
weak and typically devious arguments have made Piketty look good (as if the
spot-on and factually-scrupulous Piketty needed any help!)
First Cowen made a feeble attempt in Foreign Affairs to prove that wealth doesn’t tend to concentrate. Instead of looking at the class of the
wealthy, Cowen zeroed in on wealthy individuals, pointing out that old fortunes
like the Rockefellers and the Astors get diluted over time. If he had instead
looked at the wealthy as a class, Cowen would see that Piketty is right to
conclude that inequality has increased because the numbers say it. Call this flaw in reasoning a failure to
think in terms of class.
Cowen is at it again in a Sunday New York Times business article in which he claims that even though
inequality is rising in many countries, it is easing globally. Cowen presents
no statistics to prove the point, but gives a bunch of reasons why it must be
true. Most of his reasons turn out to be trends that do act against greater
inequality, but do not change the overall flow of wealth away from the poor and
middle class and to the wealthy. Yes,
Cowen is right to say that international trade has improved the standard of
living in developing countries, but the fact that there are more middle class
people in China and fewer in the United States does not address the question of
whether inequality is growing or not.
In Capital in the 21st
Century, Piketty provides statistics that demonstrate that the wealthiest
are grabbing a greater share of the wealth and income pie than they used to in
every single country of the world. The
most extreme difference in wealth and income between the top one percent and
everyone else is currently in the United States. So the fact that there has
been some movement up the economic ladder for some people in some non-western
countries does not mitigate the overall picture of growing inequality in the
world.
Cowen makes the same logical flaw in his New York Times piece as he does in the Foreign Affairs article: instead of
looking at the totality of the statistics he looks at individual subsets from
which he draws a generalized conclusion. In a metaphorical sense, Cowen’s
reasoning is similar to a 2-3 zone defense with slow guards, which makes a
basketball team vulnerable to both the three-point shot and drives to the
basket. In other words, the careful reader or anyone who has read Piketty’s
book observes Cowen trip himself up with his own words.
But the mainstream media loves deceptive arguments and
outrageous statements if they support the free market or advocate against
higher taxes. That explains why his mostly nonsense articles have found favor
in The New Republic, Wall Street Journal, Forbes, Newsweek,
Wilson
Quarterly, Foreign Affairs
and New York Times. In fact, three
years ago Business Week declared
Cowen to be “America’s hottest economist.” That’s kind of like the newsletter
of the corporation that owns the Washington Generals declaring the team the
“best professional basketball team” of the century.
Except, of course, for all the others.
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