Piketty contradicts Noah Smith on China, Noah cites him anyway
Piketty's new comparison of India and China arrives at the exact opposite conclusion that Noah does.
I’d prefer that this blog not devolve into endlessly fact-checking liberals about scholarship, but this one is such a howler that it’s hard to ignore. Noah Smith is back on his compulsive anti-China campaign in a post today which argues that
India has accomplished something China never managed to do: reducing poverty by huge amounts, while also decreasing inequality. Maybe democracy isn’t so bad for development after all.
One of many things that make this such a bizarre analysis is that the conclusion doesn’t even fit the argument of his post. Noah’s read on this is that “India managed to decrease poverty this much while also decreasing inequality…due to the government’s focus on redistribution”; meanwhile in China “the economy was liberalized, the rich got much richer much faster, the poor were uplifted but more slowly than the rich, and inequality soared.” The relevant difference here seems to be a difference between redistribution and market liberalization; why Noah concludes that “democracy is useful for development after all” is anyone’s guess.
That last link, meanwhile, seem to be where Noah shifts from goofy polemic to (being generous) some serious ignorance about his sources. Inequality measures remain unusually sensitive to methodology, a point Noah gestures to himself by acknowledging differing measures of inequality in India. This is why if you want to refer us to Piketty’s measure of inequality in China you should also refer us to Piketty’s measure when you’re talking about India. That way, we can do an apples-to-apples comparison.
And here we are in luck: on Monday, Piketty released a brand new paper, Income and Inequality in India, 1922-2023. Even better, this paper repeatedly compares India’s economy to China; it even has a dedicated section for this. Some choice quotes:
“Nevertheless, despite the absence of democracy, incomes in both China and Vietnam have grown faster than in India over the 1960-2022 period.” (2)
“…when placed in comparative perspective, bottom 50% shares in India are comparable to those in China…” (22)
“By 2022, top 1% income shares in India were nearly 50% larger than those in China…and top 10% shares were nearly 35% larger…While these are a worrying sign for India, the flip-side is that China shows it is possible for low- and middle-income economies to achieve high growth without generating the obscene income inequality levels observed in India’s today.” (26)
Noah is citing Piketty as the source for a conclusion that is directly at odds with what Piketty actually says. I’ll leave it to the reader to decide whether he knew about this paper or not.