Tuesday, November 09, 2010

the Nobel family has dissociated itself from the economics prize

One of the most annoying things is to read or hear an economist's views promoted because they have won the Nobel Prize. Hence, it is refreshing to hear that the Nobel family has dissociated itself from the economics prize

There are some good spoofs on this at Improbable Research:

2010 ECONOMICS PRIZE: The executives and directors of Goldman Sachs, AIG, Lehman Brothers, Bear Stearns, Merrill Lynch, and Magnetar for creating and promoting new ways to invest money — ways that maximize financial gain and minimize financial risk for the world economy, or for a portion thereof

2009 ECONOMICS PRIZE: The directors, executives, and auditors of four Icelandic banks — Kaupthing Bank, Landsbanki, Glitnir Bank, and Central Bank of Iceland — for demonstrating that tiny banks can be rapidly transformed into huge banks, and vice versa — and for demonstrating that similar things can be done to an entire national economy.


Kev said...

Hi Bill,
I've been wondering about the various Nobel prizes too. I just read the novel that ended up winning the Nobel Prize in literature for Knut Hamsun in 1920, and although it is a great novel, the Norwegian author (through the book's narrator) compares the indigenous Sami people of Norway with "maggots and vermin" and cautions about believing what "the Jew and the Yankee" teach. Hamsun went on to become a conspicuous Nazi supporter during the war (actually sent his Nobel to Goebbels as a gift) and eulogized Hitler saying "He was a warrior, a warrior for mankind, and a prophet of the gospel of justice for all nations." So the whole Nobel concept is a bit tarnished for me at the moment. I do respect and admire Krugman and Obama, but their Nobels were a tad political, eh?

Bill Kerr said...

hi Kev,

It would be fun if inappropriate Nobel Prizes could be taken off their receivers, as in the case of the novel you mention. But at least it had some redeeming features, the author could write well.

Obama was flavour of the month for a while because his election was so historically significant and dramatic but is now seen as a very ordinary US President by many. It turns out that Shelby Steele was right, not in the detail, but in his overall opinion (link), that Obama was more of a Rorschach, on which people projected their hopes, than a real leader.

wrt to economics one trouble is that it is not a real science. Actually it is just a dominant school of thought (neo classical). And so the prizes go to the current dominant representative of that school of thought. The fact that there are many other schools of economic thought is not well known and usually not taught in University economics departments.

I just looked up the wikipedia entry about this. I agree with the comment by Hayek, who won the economics Nobel in 1974:

"Friedrich Hayek stated that if he had been consulted whether to establish a Nobel Prize in economics he would "have decidedly advised against it" primarily because "the Nobel Prize confers on an individual an authority which in economics no man ought to possess... This does not matter in the natural sciences. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence. But the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally.""