Hydralisk Den: 2015/10

Deaton vs Piketty

In 2014, Hankyung BP, a subsidiary of the Korea Economic Daily(Hankook Kyungje, abbr. Hankyung) published Angus Deaton's book, <The Great Escape>. After its publication, Hankyung promoted the book as a rebuttal to Thomas Piketty's <Capital in the twenty-first century> with articles such as "Which one is right, Piketty's <Capital in the twenty-first century> or Deaton's <The Great Escape>?", "'Inequality is an incentive for economic growth', Prof. Deaton, author of <The Great Escape> says.", ignoring Deaton's appreciation on work of Piketty and Saez, focusing merely on his opinions about economic growth, ignoring health. About a year later, after Prof. Deaton won Nobel Economic Prize, Hankyung hits it again, saying "'Inequality in the foundation of growth'...<The Great Escape> is a masterpiece revealing the void in Piketty's opinion"

Concerns raised

At Oct. 18, 2015, Gong-hoe Kim, researcher at Hankyoreh institute for Economy and Society, came forward and argued that this book's translation is founded on hoax and prejudice, altered Deaton's text, distorting his arguments about inequality, growth, and shrinking arguments on health. His criticism is as follows.

Subtitle of the book is changed from "health, wealth, and the origins of inequality" to "how inequality fires up economic growth", which is not Deaton's key argument.
Preface was omitted, and only one thirds of Introduction was translated.
Titles of the parts, chapters, sections are changed.
Several omissions in text were found.
Parts of the text was truncated and placed in other position.
Sentences which were not in original text were inserted.
This problem is not limited to Preface and Introduction. Whole text of the book has undergone more serious manipulation.

He explains the result of this manipulation is as follows

Discussion on health is largely omitted, narrowing the focus of the book into economic growth.
Deaton's view on inequality is significantly distorted.

Hankyung BP strikes back

As criticism grows fiercer, Hankyong BP released a public statement on their blog, and facebook page in Oct. 20. It is as follows.

Preface and Introduction seemed too redundunt and lengthy, bore a risk that readers of the book could be bored, neglect this entire book. For this reason, "editorial changes" were made. For complaints were raised, this changes will be reverted in next edition.
Kim's criticism on altering Deaton's intention was caused by this "editorial changes", and Cases in original text were correctly and precisely translated throughout the book.
Although there are some arguments, these editorial changes were made to gain more readibility, while minimizing the alteration on text.
For there may be misunderstandings in subtitle of the book, it will be restored in next edition.
Inserting some copies in book cover which put Deaton against Piketty is solely marketting decision, to show that there are many opinions regarding inequality.
Although there are suspicions on altering the main text, hereby we clearely declare here, that no other part of the text is manipulated, or changed.
Hankyung BP explained about this debate to Prof. Deaton through agency, and promised these will be corrected in next edition.

Kim presents evidence on distortion

Kim had to come forward, again in Oct. 22, to show Hankyung BP statement was a total lie, and to present the evidence of how Hankyung BP severed Deaton's discussion, line by line.

on how Hankyung BP's alterations in table of contents twist the author's opinion.

From the table of contents, one can easily see that Deaton focuses equally on progress and regress, and states that progress in wealth and health domain is also the reason of inequality, and inequality became most serious nowadays.
But Hankyung BP's alteration on table of contents omits this view, and presents his view on history as humanity's success on escaping from disease to health, and from poverty to prosperity. Of course there are some left, and they are not to be treated lightly.
Kim compares the table of contents as below. Left is original title Deaton provided, and right is the altered version.

a) The Wellbeing of the World → Are lives of world population satisfactory?
-- Deaton stated in Introduction that this chapter is an "introductory overview", but it was moved under Part 1 by Hankyung BP.

Part I. LIFE AND DEATH → a Great escape from life and death

b) From Prehistory to 1945 → How lives has undergone changes
c) Escaping Death in the Tropics → What makes inequality linger on?
d) Health in the Modern World → How to solve the health inequality

Part II. MONEY → a Great escape from Poverty
e) Material Wellbeing in the United States → Revolution in material well-being
f) Globalization and the Greatest Escape → Great escape gives birth to new inequality

PART III HELP → How to help?
g) How to Help Those Left Behind → Those who have failed to escape

Postscript: What Comes Next? → Epilogue: the Great escape continues

Table of contents, Chapter e)

After that, he moves on to scrutiny chapter e, and goes on to show how omission and insertion distorted Deaton's view on human history. It may be too lengthy to present all his criticism here, so I will briefly introduce his view on Hankyung BP's "editorial changes" (all page number refers to Korean version of this book)

Chapter e. Revolution in material well-being
i. Economic Growth in the United States → Golden apple called progress in material condition
ii. Poverty in the United States → Can't growth reduce poverty rates?
iii. The distribution of incomes in the United States → Redistributing income
(following three sections were merged into one, reducing their importance)
iv. Inequality at work → Inequality in work, politics, labor market
v. Politics and Inequality
vi. Earnings and families
vii. Top incomes in the United States → Changes in top incomes rate
viii. What happened and why does it matter? → Equal chances

Deaton's view on wellbeing seems ambivalent. Although it seems that United States has gained certain benefits from growth, there is dark sides, and he will present these two views within his writings. Like Piketty, he analyzes 'Top Incomes' in Unites States, and applauds works of Pikkety and Saez -- the book <Capital in the twenty-first century> was not published back then. Question is raised. Do the titles Hankyung BP altered present this view of Deaton?

Omission 1 : remarks on considering inequlity (in Chapter e), p.196)

Deaton's lengthy remark on importance in contemplating inequality was omitted. In this deleted sentences, Deaton emphasizes that role which inequality plays must be considered heavily.

Omission 2 : remarks on what role inequality played (in Section i. p.203)

Deaton's view can be summarized as a) economic growth is good b) happiness is, in some degree, independent from economic growth. c) fair distribution is crucial ingredient in happiness. Hankyung BP removed whole arguments about c).

Omission 3 : End of the section "Poverty in the United States" (in Section ii. p.214)

Deaton states that we may be winning the war on poverty, but it must not be ignored that the distribution of wealth lagged behind growth after 1970's, and wealth was not distributed to those who earns bottom income, arguing that United States is in second phase where inequality grows, while progress slows down. Hankyung BP erased whole 'But' paragraph, Presenting Deaton's view on inequality as his opposite.

Omission 4. Two whole paragraphs of Deaton's detailed explanation (in Section iii. ~ iv., p.222)

Deaton explains about inequality regarding inequality in expertise, and inequality itself is a part of a system that raises the living conditions of everyone. Then the author comes up with example about allowance based on cleanliness, claiming that incentive can raise inequality, and incentive and inequality have stark conflict between them. Deaton paid much attention in explaning this conflict, stating them in lenghty-two-paragrphed explanation. Of course, these two 'Then' paragraphs were removed, leaving his view as 'inequality is inevitable'.

Omission 5. Ratio between minimum income and average income (in Section v., p.233~34)

Deaton reviews how politics affected low-salaried workers, and even parliament sometimes intervenes to increse it, real value of minimum income has a downward tendency, and the fall is accelerated when real wage rises.
Hankyung BP deleted the acceleration part, and changed the prior sentences as minimum wages' value has downward tendency but politics can increase it (so it can be controlled).

Omissions 6~8 (in Sections vi.,vii,viii)

In pages 235~36, Deaton deals with jealousy towards rich people and Pareto's law, criticizing Martin Feldstein, who was one of the most furious in criticizing Piketty. Hankyung BP splitted the paragraph and omitted some sentences and mistranslated some to obscure Deaton's standpoint regarding Feldstein.
In page 236, Deaton raises the question about bankers, whether their high income can be justified. He then gives the answer, that those inequality is impossible to defend. Hankyung BP omitted the question and answer, and just leaves his statement that there are some debates around it.
In pages 243~44, Deaton criticizes the power elites who once have suffocated the economic growth. Whole criticism was removed by Hankyung BP, concluding the section with altered Deaton's standpoint.

Deaton steps in: public statement from U.S. publisher

In Oct. 25, Angus Deaton sent an e-mail to Kim, appreciated his effort on criticizing Hankyung BP, and notified him about press statement from Princeton University Press in Oct.22 regarding Korean version of the book. Princeton University Press said in this statement that a) Korean version does not reflect the original work, b) Added preface by Korean economist, which wrongly places author's view as opposed to Piketty c) all these changes were not vetted or approved by either the author or Princeton University Press. They demanded Hankyung BP, and agreed to the terms a) Sales of this edition be ceased b) new edition be published, this time under independent review to accurately reflect Deaton's book c) Added introduction that presents this book as Piketty's counterpoint be removed.

Hankyung's resilience

But, four days later, Hankyung releases an interview with Hankyung BP -- neither its spokesperson nor executive, but Hankyung BP itself. I translate the whole article, for it is worth a reading.

"There were no distortion" ... the publisher states.
Abbreviation on Preface and Introduction was sole editorial changes to improve readability.
Under agreement, renewed edition will be published.

In Oct. 26, Hankyung BP, publisher of <The Great Escape>, work of Princeton Univ. professor Angus Deaton, this year's Nobel laurate, stated that "There were no distortion on original text", regarding the debate about alterations on text.

Some fraction claimed that Preface and Introduction were merged and abbreviated, and subtitle "How inequality fires up growth" was different from original subtitle "Health, Wealth, and the Origins of Inequality". They also claimed that Hankyung BP added introduction by Jin-kwon Hyun, chairman of Free economy institute, distorting Deaton's view as opposite to French economist Thomas Piketty on inequality.

Hankyung BP explained that "abbreviation on Preface and Introduction was editorial changes for readers' comfort, and subtitle was merely marketing's executive decision, and this was not to distort Prof. Deaton's points.", and added that "Putting Chairman Hyun's introduction was to introduce various views on growth and inequality, aiding readers' comprehension" BP also stated that "Although there were no distortion, if there are some parts omitted during adjusting pages, it will be restored."

Princeton University Press' statement in Oct. 22, also says that "There were changes, omissions and added Introduction which argues that this book opposes Piketty's <Capital in the twenty-first century>" but the statement did not argue that author's views are "Distorted". Princeton University Press also stated that "new edition which reflect Deaton's original work accurately, and undergone independent review will be published." They also added that "For any other concerens, contact Hankyung BP".

Hankyung BP also said that new edition would be published, under deep mutual cooperation with Princeton University Press, in which some parts that raised the debate will be modified. a Hankyung BP person said that "some parts that raised the debate will be corrected under Princeton University Press' consult" and "sales of current edition is ceased". He explained that "We don't want Deaton's arguments be delivered incorrectly" and "His key messages are, millions were saved from death and poverty, and, in spite of lingering poverty and millions left behind, poverty and inequaility is driving force of progress that made this world the best dwellable one in history.

In academic circles local and abroad, the view that Deaton's approach in growth and inequality are significantly different from Thomas Piketty's one which argues that heavy taxation on capital and income as solution to inequality, is dominant one.

Jong-tae Chung, jtchung@hankyung.com

Last two paragraphs accurately reflect Hankyung and Hankyung BP's standpoint. They hate Piketty, for he demands heavy taxations on rich people, so much that anyone who shows difference with Piketty is, to them, enemy of Piketty. Last sentence nails it as it says that "vast majority of economists opposed Piketty's solution, and backs Deaton".
Yes. <The Great Escape> is really such a book to them. So it is just to add free-market ideologue Hyun's preface, to clarify Deaton's opinion. For this book is to attack Piketty, Deaton's clear opposition on Feldstein, can be blurred to ensure readability. Oh Gosh, they really want Deaton's position be rightfully delivered, as long as their view is aligned with Deaton's. Wrong and boring sentences can be "editorially changed", to correctly deliver Deaton's views to public.

Free market fantasy: Things behind the resilience

To understand this insanity, one might want to look at Hankyung BP's current condition. Hankyung owns Hankyung BP. Hankyung is owned mainly by conglamerates, namely "chaebol"s. Stocks of Hankyung is distributed among chaebols, by their voting right in Federation of Korean Industries(FKI).
FKI is an organization formed by companies in Korea, and champions free enterprise's principles, and commits to maintain pro-chaebol environment to ensure prosperity of country. Each company's voting right in FKI is decided by their amount of invest, and is equal to voting right in Hankyung board of directors.
This explains Hankyung's editorial policy which resembles Austrian school, which demands loosened regulation and crackdown on labor unions, making them be called "FKI bulletin", even though the board of directors does not explicitly intervenes editorial process.

Not to be forgotten: ethics in publication

But even if one can understand their surroundings and their aspiration towards free-from-regulation-and-redistribution-environment, and, as we are living in a 'free' world where freedom of publication must be guaranteed, there is one line that cannot be crossed -- a publisher must not alter or distort author's intent, or let it be wrongfully received, without author's explicit approval, let them wrongly champion the publisher, or ideology behind it. This is a line Hankyung BP crossed, way too much indeed. This incident proves two things -- Their firm belief in free-market ideology and absence of respect to author. Once the line is crossed, norms are violated, second crossing becomes much easier.
This is one fact that the economists and academics around world must be aware of. This incident shall not fall into oblivion, and true identity of Hankyung BP shall be remembered, until they explictly state and apologize their vices against authors, even if they publicly ensure that incidents like this will never happen again.

Hydralisk Den

29 October 2015

How Hankyung's commitment to "Free economy" distorted Deaton's <The Great Escape>