Unsurprisingly, she's enamoured of McCloskey's critique of the book, which she explains as follows:
Her central criticism of the book is that Picketty does not include human capital when he discusses (and measures) the accumulation of capital over the several hundred years.Now, I had read McCloshey's lengthy (and passive aggressive) review of the book at Catallaxy, and didn't understand that point at the time.
“The only reason to exclude human capital from capital appears to be to force the conclusion Piketty wants to achieve, that inequality has increased, or will, or might, or is to be feared”, she writes. “If human capital is included, the workers themselves now in the correct accounting own most of the nation’s capital and Piketty’s drama from 1848 falls to the ground”.
I still don't understand it.
OK, so let's Google what "human capital" means, and I take it that it means human education and skills.
So what? Going back a century or two, and by comparison, I'm sure the total world "human capital" has increased massively. Widespread literacy would surely account for a huge slab of it.
But how the hell does some attempt at accounting for that supposed to offset the increasing disparity in actual wealth that Piketty argues is happening and likely to continue to intensify if corrective measures aren't put in place?
Are we supposed to feel consoled that the poor at the start of the 21st century may well have a high school diploma, whereas 100 years ago they may have only had finished primary school? Does an unemployed person with a degree somehow experience poverty less because of their degree? [In fact, they will likely have an un-serviced debt that the unemployed high school graduate won't - no?]
Now, I can understand the argument that poverty today being not what it used to be - all but the poorest of the poor in the West at least have a refrigerator and TV now, for example - is a reason not to fret so much about rising inequality, but that is nothing to do with "human capital" as far as I can tell. And I don't agree with the argument anyway - just in case you were wondering.
If someone can explain the logic or common sense in what Sloan finds convincing, please let me know.