Piketty has largely been “taken down” already. That the economist does not acknowledge that the current fiat money system and the financialization of the world economy generally is what is driving inequality, not “capitalism,” is a huge problem. To say the least.
But others have come after Picketty from other angles.
Piketty’s success has motivated dozens of enterprising economists and journalists to challenge various aspects of the book. The latest challenge comes from a 26-year-old graduate student at M.I.T., Matthew Rognlie,who published a paper last month with the Brookings Institution that argues that Piketty did not take the effects of depreciation into account enough in his analysis of the growing importance of capital. Rognlie also showed that when you do properly take depreciation into account, the decline in the share of income going to workers versus capital owners can be explained completely by the rise in the value of real estate.
The business media has covered Rognlie’s paper widely. It makes for good copy when an economist who hasn’t even gotten his PhD writes a paper that, according to The Economist, “several reputable economists regard . . . as the most serious and substantive critique that Mr Piketty’s work has yet faced.”