In which we refute Piketty - thusly

All too few of us really understand the scientific method. Certainly, whenever it comes to the social sciences the truth of the technique rather goes by the wayside. So, to repeat, we come up with an idea, this becomes the hypothesis. We then look around for facts which will refute this idea. For as long as we find no facts that do disprove our idea then it stands as a possibly useful description of our world.

But note the truly important part. When we find a fact which cannot be true if the hypothesis also is then it is the hypothesis, that idea about how the world works, which is rejected, not the fact.

That's the bit the social sciences have such difficulty with, the rejection by fact-finding. Clearly, if this were not so then we'd not have as many as we do insisting that socialism and planning will make us richer given our evidence of 1989.

Thomas Piketty made waves with his insistence that inheritance of wealth is leading to a division in society., one where place in that society is solely determined by membership of the lucky sperm club. We also have certain facts about wealth and who has it and why:

The number of people who inherited their wealth has gone down, with 94 per cent of the rich list being comprised of self-made entrepreneurs. 

Yes, that's a strong enough fact to refute the hypothesis. The idea is wrong and we not just should but must discard it.

Those concentrations of wealth are not being inherited, they're being newly created. Which is great of course, we like new wealth being created, given that we know how much of - some 97% or so in fact - entreprenurial wealth flows to us, the consumers, only that fraction sticking with the entrepreneur.