The mismeasure of Capital: a response to McCloskey
This paper is a response to Deirdre McCloskey's review essay, published recently in this journal, of Thomas Piketty's Capital in the twenty-first century. It argues that McCloskey has set up a number of straw men to attack. Furthermore, her three main arguments against Piketty are flawed. McCloskey wants human capital to be added to Piketty's measure of wealth; she contends that Piketty does not understand the supply-response mechanism; and she accuses Piketty of focusing on the wrong problem—inequality rather than poverty. This paper explains why these are all bad arguments.