So far, Piketty’s critics have offered only technical objections to his number crunching without contesting his apocalyptic political thesis, which is clearly wrong. I know this because over the last years my teams conducted research in the field exploring countries where misery, violence and wars are rampant in the 21st century. What we discovered was that most people actually want more rather than less capital, and they want their capital to be real and not fictitious.
Tahrir Square, Cairo: The City of Dead Capital
Thomas Piketty like many western academics on a tight budget when faced with poor and nonsensical statistics outside Western nations instead of going to the field to do his own sampling, he takes European class categories and statistical indicators and extrapolates them onto such countries and uses them to draw global conclusions and a universal law ignoring the fact that 90% of the world population lives in developing countries and former Soviet states, whose inhabitants produce and hold their capital in the informal sector, that is to say, outside of official statistics.
This flaw has implications that go far beyond mere accounting: It turns out that the kinds of violence that erupted in places like Tahrir Square, Egypt, in 2011 occur where according to our field studies capital plays a decisive if hidden role that Eurocentric analysis cannot perceive.
At the request of the Egyptian Minister of the Treasury, my team along with 120 mostly Egyptian researchers not only studied official documents but also acquired local information on the ground, going door to door, to get data that allows government to test its conventional statistics for truth and completeness. We discovered that 47% of so-called “labor’s” yearly income is “capital”: Almost 22.5 million workers of Egypt earned not only a total of US $20 billion in salaries, but additionally $18 billion more through returns on their unrecorded capital. Our study showed that Egyptian “workers” own an estimated US$360 billion in real estate, 8 times more than all the foreign direct investment in Egypt since Napoleon’s invasion. It is no wonder that Piketty, looking only at official statistics, missed all those facts.
To read the complete article, please visit VenturesAfrica