Dani Rodrik
Foreign Affairs
June 11, 2019
Since the first annual award was given in 1969, 49 Nobel Prizes in Economics have been awarded to 81 individuals. (Up to three awards may be given each year. The prizes for 2019 have not yet been announced.) The official name of the prize is the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
The Nobel Prize for economics is not one of the Nobel Prizes endowed in Alfred Nobel’s will. It was established in 1968 by a donation from Sweden’s central bank, the Sveriges Riksbank, to the Nobel Foundation to commemorate the bank’s 300th anniversary. Therefore, not being one of the prizes in Alfred Nobel’s will of 1895, it is not a Nobel Prize in the sense of those given in the natural sciences. In establishing the Nobel Prize in Economics, the Nobel Committee was not claiming that economics had attained the same level of explanation, prediction and techno-economic application that the natural sciences have.
Nevertheless, the nomination process, selection process and awards presentation are similar to those of the Nobel Prizes. Economic Nobel laureates receive the same monetary award as Nobel Prize winners, $864,240. Economic Laureates are announced with the natural science Nobel Prize laureates and receive the award at the same annual ceremony. The Royal Swedish Academy of Sciences awards the prize “in accordance with the rules governing the award of the Nobel Prizes instituted through Alfred Nobel’s will.” That is, the prize is awarded annually to “those who … shall have conferred the greatest benefit on mankind.” Source: (Wikipedia)
Economists' Greatest Benefit to Humankind
Economics has gained stature in the latter half of the 20th Century as a science akin to the natural sciences based in large part on its connection to the Nobel Prize. However, the status of economics as a science, even among the social sciences, cannot be established based on economics having achieved the same explanatory and predictive power of the natural sciences. If it had risen to such power, and the amount of human energy and resources the world’s public and private sectors have devoted to the natural sciences and their spinoffs in health care and technology had been spent on national and international economic development, “economic science” would have made the world of work far more productive, efficient, wealthier, and more equal in terms of wealth distribution.
Or would it? As is the case with the natural sciences, it is the wealthy and politically powerful of the world that control the fruits of science, including economic science. Regrettably, the dismal science of economics, of all the social sciences, reigns supreme in the minds of the powerful and counting rooms of the wealthy. More about this below.
Below is a selection from the list of 81 Economic Nobel laureates since 1969 with excerpts from the rationale for their receiving the award. Note that the award was given to a woman, Elinor Ostrom, once and only in 2009. The only person receiving the award whose nationality was other than European or North American was Indian Amartya Sen in 1998.
My selection of recipients was based on awardee public recognizability and on prize rationales that address social problems. In reading down the Rationale column one, especially an optimist, may become filled with hope that "economic science" might become Humankind’s salvation.
Economics Nobel Laureate
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Rationale
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1970 Paul Samuelson
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“for the scientific work through which he has developed static and dynamic economic theory and actively contributed to raising the level of analysis in economic science"
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1972 John Hicks & Kenneth Arrow
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"for their pioneering contributions to general economic equilibrium theory and welfare theory"
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1974 Gunnar Myrdal & Friedrich Hayek
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"for their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena"
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1976 Milton Friedman
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"for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilisation policy
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1977 Bertil Ohlin & James Meade
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"for their path breaking contribution to the theory of international trade and international capital movements"
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1979 Theodore Shultz & Arthur Lewis
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"for their pioneering research into economic development research with particular consideration of the problems of developing countries"
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1982 George Stigler
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"for his seminal studies of industrial structures, functioning of markets and causes and effects of public regulation"
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1992 Gary Becker
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"for having extended the domain of microeconomic analysis to a wide range of human behaviour and interaction, including non-market behaviour"
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1998 Amartya Sen
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"for his contributions to welfare economics"
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2002 Daniel Kahneman
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"for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty"
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2008 Paul Krugman
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"for his analysis of trade patterns and location of economic activity"
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2009 Elinor Ostrom & Oliver E. Williamson
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"for her analysis of economic governance, especially the commons;" "for his analysis of economic governance, especially the boundaries of the firm"
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2015 Angus Deaton
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"for his analysis of consumption, poverty, and welfare"
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2018 William Nordhaus & Paul Romer
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"for integrating climate change into long-run macroeconomic analysis;” "for integrating technological innovations into long-run macroeconomic analysis"
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What Benefits Has Economic Science Conferred Upon Humankind?
From those of Adam Smith (1723-1790), to John Maynard Keynes (1883-1946), to Economics Nobel Laureate Milton Friedman (1912-2006), to every economic theory contortion in between and since, modern Humankind has tried them all.
All of them, implemented by our various private sector and governing brain trusts from the beginning of the Industrial Revolution in about 1760 to the present, have accomplished three things. None have been to the benefit of the greatest number of Humankind in the long term. This is especially so under the current perilous social, economic, and ecological circumstances that have come about from the persistent income inequality and climate change that virtually unbridled capitalism has brought about.
One, the wealthy have gotten wealthier. Two, politicians of all stripes have more deeply, subserviently and whorishly nestled into bed with the wealthy while placating their constituents with promises of progress and prosperity for all. Three, the wealthy and political classes have proven that they hold absolute power over economics yet are clueless of, or are knowingly and willfully ignoring, the best way to manage economics for the greatest good for the greatest number.
Meanwhile, economic theorists play the role of poet William Butler Yeats’s indignant desert birds in his poem The Second Coming - circling above the Western-created and controlled system of capitalism, cawing this way and that in the ear of the ruling classes who knowingly and willfully see no further than their next dollar and election.
Every time the powerful tweak or radically alter world or domestic economies, only they get richer and more powerful, and only society and the masses make sacrifices supporting their elite's wealth increase through ever more blood and sweat, and less peace and wellbeing.
I’m now convinced that Extinction Rebellion and Green New Deal are our only hope. But in the deafening roar of capitalist ‘civilization’, Yeats’s "falcon," that now very global system of financiers and politicians, cannot (and chooses not to) hear the falconer. Yeats’s best among us now “lack all conviction” while the worst are “full of passionate intensity.”
I wait for and shall embrace and welcome Yeats’s “rough beast,” whatever form that might take, that "comes round" next. It cannot be more inhumane than the current one, consumer crony capitalism, that has Humankind firmly in its grip.
I wait for and shall embrace and welcome Yeats’s “rough beast,” whatever form that might take, that "comes round" next. It cannot be more inhumane than the current one, consumer crony capitalism, that has Humankind firmly in its grip.
Who or what is the “falconer?” The people, the masses, empowered at the lowest levels of social organization by their deeply ancient and simple ‘cultural human nature’ - a basic drive in all of us for survival, reasonable wellbeing, and a modicum of sustainable peace and security - are the falconer, not the economics experts and rulers.
Excerpt from “Globalization’s Wrong Turn”
“As professional, corporate, and financial elites have connected with their peers all over the globe, they have grown more distant from their compatriots at home. Today’s populist backlash is a symptom of that fragmentation.
“The bulk of the work needed to mend domestic economic and political systems has to be done at home. Closing the economic and social gaps widened by hyperglobalization will require restoring primacy to the domestic sphere in the policy hierarchy and demoting the international. The greatest contribution the world economy can make to this project is to enable, rather than encumber, that correction.”
Blah, blah, blah.
~ ~ ~
The Second Coming
By William Butler Yeats (1865-1939)
written in 1919
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?
