And The Fake Nobel Goes To…
… Oliver Williamson and Elinor Ostrom share the Swedish Central Bank Prize for Economics in Honor of Alfred Nobel. Alex Tabarrok explains Ostrom’s work and Paul Krugman tells you about Williamson. Osrtom is the first woman to win the prize and is also noteworthy for being a political scientist rather than an economist. Robert Shiller tells The New York Times that this is “part of the merging of the social sciences.”
Meanwhile, I would note that the Sveriges Riksbank itself deserves some kind of prize for ability to get people to call its economics prize “the Nobel Prize.” Real Nobel Prizes are prizes awarded according to the endowment that Alfred Nobel set up. There are, of course, lots of other prizes in the world set up by other people. One such prize is this economics prize that the Swedish Central Bank decided to give out. But only the Swedish Central Bank prize has succeeded in convincing people that it should be referred to as a “Nobel Prize” despite having no connection to Alfred Nobel or his prizes. Impressive work and yet another example of the impressively high-performing public sector institutions that make the Swedish social model work.
98 Responses to “And The Fake Nobel Goes To…”
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October 12th, 2009 at 9:58 am
and yet the media calls it the “Nobel Economics Prize” – just like they call all of those people in DC “Czars”.
What’s that all about?
October 12th, 2009 at 10:10 am
Tell that to Nobel.org. Seriously, what difference does it make?
October 12th, 2009 at 10:10 am
If it’s a ‘Fake Prize’, how come 42 of the 62 prizewinners since 1969 is holding US citizenship?
October 12th, 2009 at 10:18 am
Right on, because the prestige and value of the award are absolutely dependent upon the extent of its connection to a 19th Century munitions manufacturer. I mean, that’s just self-evident, isn’t it?
October 12th, 2009 at 10:20 am
I think the Nobel in Economics gained the legitimacy it has today because it largely selects deserving recipients and was able to successfully associate itself with the Nobel name. This fed into each other and at some point people started thinking of it as a Nobel. I see nothing wrong with that. I don’t give a damn about Alfred Dynamite Nobel.
October 12th, 2009 at 10:26 am
Matt’s point is correct. The Econ Nobels are a blatant attempt at self-legitimation, which has the effect of increasing prestige (and access to resources) in the academy. It also furthers the myth of the “scientism” of econ, as though it were a akin to physics or chemistry. This, in turn, not only insulates economics from any sort of critical reflexivity, it also reproduces the quantification fetish that passes for analysis in positivistic social science research, and reduces all economic questions to how “rational” people are and how it might be measured, rather than, say, the moral consequences of economic systems. Truly dissident econ academics (marxists, christian socialists, even some Keynesians) are more or less marginalized in the field (and, indirectly, in public discourse) since they are not and cannot be “scientific.” Consequently, we get the sad state of economic discourse that you observe in our citizenry and our government, where idiots like Ayn Rand can be taken seriously as economic thinkers and where even so-called marginal players (Stiglitz, Krugman, Shiller, etc.) still more or less buy into the empirical positivism that leads them to obscure the moral dimensions of their work. That is why the “fake” Nobel matters.
October 12th, 2009 at 10:36 am
It also furthers the myth of the “scientism” of econ, as though it were a akin to physics or chemistry.
Does the Nobel prize in Literature also further the myth of the “scientism” of literature?
October 12th, 2009 at 10:37 am
If someone started handing out a yearly award and called it an Oscar, the lawyers would be all over them. There’s obviously a difference in attitude here, although what causes that difference isn’t obvious to me.
October 12th, 2009 at 10:39 am
@6, you may be right, but take it up with the Nobel Foundation.
October 12th, 2009 at 10:40 am
Matt is wrong. Yes, it is true that the Economics Prize is neither a Nobel Prize nor a prize from Nobel’s will. But it is false that the Economics Prize has zero connection to the Nobel foundation. The connection was made in 1968, and it persists. Soon after the Nobel foundation’s board decided to allow for no further connections. If there were zero connections to the Nobel foundation, then the Economics Prize would not continue to be announced on the foundation’s web site.
October 12th, 2009 at 10:46 am
I think the Nobel in Economics gained the legitimacy it has today because it largely selects deserving recipients and was able to successfully associate itself with the Nobel name.
Yeah, giving the award to Robert C. Merton removed all residual doubt about it’s legitimacy.
October 12th, 2009 at 10:47 am
Um, Myrdal was technically an economist, but his greatest, most influential work was “An American Dilemma”, which the Warren Court actually used as a reference during the Fifties when they were deciding how to begin ending segregation.
I’d say American Dilemma is one of the classic works of sociology and political science, not economics.
October 12th, 2009 at 10:49 am
Re: Matt is wrong. Yes, it is true that the Economics Prize is neither a Nobel Prize nor a prize from Nobel’s will. But it is false that the Economics Prize has zero connection to the Nobel foundation. The connection was made in 1968, and it persists. Soon after the Nobel foundation’s board decided to allow for no further connections
DRDR,
Beside the point. The real reason this is a “Fake Nobel” is because economics isn’t a science. The hard sciences are value neutral (though values enter in to how you choose to apply them). Economics is not value-neutral by definition, and what it chooses as social or moral priorities affect the predictions it makes. It deals with thinking beings with free will whose behavior can’t be predicted with anywhere near the same degree of precision as the things studied by physics, chemistry, or most branches of biology.
On reflection, I’d like to agree completely with aabbcc@ 6.
October 12th, 2009 at 10:51 am
Hector, that’s true of economics, but “peace” isn’t value neutral either. Why is value-neutrality the sine qua non of a nobel prize?
October 12th, 2009 at 10:53 am
Wow, so the fact that the Econ prize is called a Nobel is directly responsible for Ayn Rand being taken seriously (by an admittedly small number of libertarian crackpots ) as an economic thinker? Man, aabbccd, with that kind of deduction, I’d say you deserve some kind of Fake Nobel!
October 12th, 2009 at 10:57 am
Hector, that’s true of economics, but “peace” isn’t value neutral either. Why is value-neutrality the sine qua non of a nobel prize?
Because Economics, unlike Literature – which ain’t exactly value-neutral – or Peace, is a science prize.
Economics could be content on the level of Literature or Peace, but instead it attempts to put itself on the same level as Physics, Chemistry, and Medicine/Physiology/Biology.
Which, as Hector rightly points out, it is not at all.
October 12th, 2009 at 10:58 am
It helps to 1) read Hector’s entire post, and, 2) posits comments in context.
Hector clearly states, regarding the Nobel Prize for scientific work, “The hard sciences are value neutral…” and makes no reference to the Peace Prize.
Slow down, read, and think before typing a response — both herein, and in general.
October 12th, 2009 at 10:58 am
It helps to 1) read Hector’s entire post, and, 2) posit comments in context.
Hector clearly states, regarding the Nobel Prize for scientific work, “The hard sciences are value neutral…” and makes no reference to the Peace Prize.
Slow down, read, and think before typing a response — both herein, and in general.
October 12th, 2009 at 11:00 am
You realize, mate, that these two responses right next to each other are made out of hilarious WIN.
October 12th, 2009 at 11:01 am
You have to be a wanker to go around waving your prizes as evidence of your credibility. Most of Paul Krugman’s most vocal defenders don’t know what he won the prize for, only the name of the prize. When that’s your level of knowledge, you can very easily lose arguments, which leads to losing elections.
Paul Krugman is good to cite because he’s right about things…in advance. That’s called being wise. Not knowing the things Krugman is right about and citing him anyways is called being a wanker.
October 12th, 2009 at 11:03 am
Why is the conversation restricted to science prizes? I agree that econ is not a science. But there are other Nobel prizes, such as peace and literature. So saying that X isn’t a real science doesn’t necessarily imply that X shouldn’t be a Nobel prize.
October 12th, 2009 at 11:05 am
I’m not defending economics. I think my sarcastic reference to Merton should show that.
October 12th, 2009 at 11:07 am
Why is the conversation restricted to science prizes? I agree that econ is not a science. But there are other Nobel prizes, such as peace and literature. So saying that X isn’t a real science doesn’t necessarily imply that X shouldn’t be a Nobel prize.
Are you being deliberately obtuse?
Hector is saying it is a fake prize because the Econ prize claims to be a science prize, even though economics is absolutely not a hard science in any way.
If X isn’t a real science, and X’s prize is for a science then X’s prize can be described as fake.
October 12th, 2009 at 11:09 am
I’m not defending economics. I think my sarcastic reference to Merton should show that.
Didn’t think you were, mate. Anybody who goes after that asshole is alright by me. Just don’t forget to lay into his co-winner.
October 12th, 2009 at 11:10 am
Of course the “scientism” of economics was exagerated to help poor mathematicians transform into great economists resulting in Americans loving numbers and lacking creative philosophical thinking.I remember a time when these weak mathematicians invaded all of social science, especially poltical science. I entered grad school for pol.science with a degree in history with a good background in pol.science, but among my classmates there were maybe 50% of students with degrees in chemistry and other natural sciences. This allowed them to play the game of building mathematical models better with professors of the same orientation.
October 12th, 2009 at 11:11 am
@Glenn – That’s not my deduction. That’s your illiteracy. My point is that econ-cum-science is deeply embedded in a discourse about economic principles that creates the permissive conditions for Ayn Rand to be taken seriously (and not just by crackpot libertarians, unless Greenspan counts). This is because the prevailing discourse – incarnate in a Nobel prize awarded for scientific research – allows us to conceive of economic relationships as solely about individual resource and decision-making in equilibrium conditions (rendering them susceptible to mathematical analysis), which truncates sociological views of economic exchange and interaction. Not to say that this kind of analysis doesn’t occur. It’s just relegated to “lesser” fields like Sociology and Political Science. That’s my point.
October 12th, 2009 at 11:12 am
Greg, that may very well be a cogent point, but it is nowhere to be found in what Hector said, ok? He said
The real reason this is a “Fake Nobel” is because economics isn’t a science. The hard sciences are value neutral…
Not: It’s “Fake” because it claims falsely to be a science. Paulie read Hector’s comment carefully. You didn’t.
Sorry for the meta-discussion.
October 12th, 2009 at 11:14 am
finally we know that milton friedman and all chicago free market crap is of no consequence. thanks for illuminating
October 12th, 2009 at 11:14 am
So just remove the word “science.” Why does it have to be a prize for science? If the answer is that, unlike other non-scientific things for which Nobels are given, economics has no redeeming value, ok. But there’s another half to the argument there. Hector’s point applies just as well to literature.
October 12th, 2009 at 11:20 am
I’m not sure any lawyers would get involved if this Fake Oscar were actually administered by the Academy of Motion Picture Arts and Sciences and awarded at the Oscars awards show.
For what it’s worth, the Nobel Foundation website refers to the “Prize in Economics” while all the other prizes are referred to as the “Nobel Prize in X”. I am pretty sure that they use the full title (Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel) at the award ceremony.
October 12th, 2009 at 11:23 am
Comment (6) really cannot be allowed to stand as fact, though I fear its ideas are ignorantly held by many. Here’s the list of things that the Swedish Central Bank’s prize supposedly does:
1. furthers the myth of the scientism of econ.
2. insulates economics from self-criticism.
3. causes other social sciences to suffer from a quantification fetish.
4. reduces all economics questions to how rational people are and how rationality might be measured.
Point 1 is defensible, though I doubt the prize is responsible. Statements of the kind made in point 2 are almost always self-refuting. When you declare that something is immune from criticism, you’re criticizing it. Second, that statement is just false. Economists and non-economists criticize economics all the time, notwithstanding that every October the Swedish central bank gives out a prize for research in the field.
I can’t possible see how the prize is responsible for point 3. Are you suggesting that other social scientists wish to be considered for the economics prize and so conduct work that you consider excessively quantitative? The winners today are known for work that borders on other social sciences, none of which is especially quantitative of the form “write down a regression equation and then estimate its parameters from data” or anything remotely like that, which is the sort of thing I guess you think is done excessively in the other social sciences. So if there are a bunch of political scientists and sociologists out there gathering data and running regressions in the hope of a Nobel Prize, I’d say they must be disappointed.
It’s even more ridiculous to believe that the prize is responsible for point 4, particularly because the underlying assertion isn’t even close to true. “All economic questions” are a matter of how rational people are? Most economic questions have nothing to do with questioning how rational people are, and importantly, many of the important, basic results in economic theory (ones that are repeatedly tested in a wide variety of contexts and found valid) do not require the rationality of individuals. Aggregate behavior can quite easily and almost always does bear out the predictions consistent with individual rationality even if individuals are not rational. This is the basis of the claim that “markets” are rational.
You then go on to object that a focus on empirical positivism (brought about by the tyranny that the Swedish Central Bank Prize exerts over the field) prompts economists to ignore the moral dimension of their work. First of all, if it were true that economists ignore the moral dimension of their work and focus exclusively on the positive, economics would be more similar to the “hard” sciences and thus more, rather than less, deserving of association with the Nobel Prize according to your logic. Be that as it may, the Nobel Prize was awarded to Amartya Sen, all of whose work is a brilliant exposition on the moral assumptions underlying the results in economic theory. There’s a whole field called welfare economics that is aimed at answering questions deriving from “what is wellbeing?” Kenneth Arrow, one of the most important economists in the history of the field and a Nobel laureate, did most of his work on assessing economic outcomes in light of various notions of the good.
The thing is that economics as a field is certainly deserving of criticism on some grounds. But those would be far different than the ones brought to bear here.
October 12th, 2009 at 11:26 am
So just remove the word “science.”
But but but…then, we wouldn’t have anything to pontificate about.
October 12th, 2009 at 11:27 am
LOLing at the last line.
Cute.
October 12th, 2009 at 11:34 am
There’s also the Nitro Nobel Prize which many Creationists claim allows them to have credit for winning a “Nobel Prize”. It’s given out for people who design new explosives although, actually, it has only been awarded three times.
http://en.wikipedia.org/wiki/Nitro_Nobel_Gold_Medal
October 12th, 2009 at 11:47 am
Re: Not: It’s “Fake” because it claims falsely to be a science. Paulie read Hector’s comment carefully. You didn’t.
Ok, I misspoke. Economics claims, falsely, to be a science, and people give economists and their pronouncements the degree of credence they would give to hard scientists. That is a problem.
Is that better?
October 12th, 2009 at 11:47 am
@Marshall – Economics is hegemonic in social sciences – it doesn’t take more than a cursory glance at the journals in poli sci and soc to understand that. And, more specifically, this influence operates from the standpoint of methodological individualism and individual rational decision-making under constraint. This includes Sen and Arrow, both of whom merely problematize rather than actually move beyond the formalism of ordered preferences and whose discussions of “moral” issues nevertheless assume we are dealing with decision-makers capable of integrating values and making individual choices based on some set of pre-existing beliefs. This is opposed, incidentally, to the homo sociologicus view than individuals are subjects whose very identity as rational decision-makers is shaped by social structures of various kinds and which therefore sees morality as fundamentally a product of sociality rather than simply efficiency or utility maximization based on rational choice, which is the criterion equilibrium-based economics MUST BE predicated upon. If you want to argue, as does Brian Barry, that morality is ultimately a matter of efficiency/individual utility, then go for it, but I would prefer that rather than simply ASSUME this, as do rational choice models, we might consider thinking through the implications of our methodological choices.
Now, as to the Nobel prize, it is, as I have already said, a tool for economists to see themselves as something they are not – namely, natural scientists. And because most people are willing to be swayed by the formal models (which, believe me, are absolutely essential to both Ostrom’s and Williamson’s relatively qualitative approaches, both of which are predicated on the methodological individualism of game theory, again assuming the individual locus for moral life) into believing that econ analysis is a lot like physics (from which it drew its primary inspiration), the prize is complicit in a larger project of creating a myth of scientism. The Nobel prize doesn’t “create” the methodological (and, hence, moral) limits of economic analysis – it celebrates them. And this is my problem.
October 12th, 2009 at 11:50 am
And FWIW, I don’t think that anyone gives the same degree of ‘authority’ to the Nobel Prizes for Literature as we do for the ones in Physics, Chemistry, or Physiology/Medicine. Because it’s obvious up front that the literature prize is a subjective decision influenced by all kinds of value-laden criteria, and no one pretends otherwise. Pearl Buck may have won a Nobel Prize, but that doesn’t mean I’m obliged to believe that she is a great writer in an objective sense.
The Economics prize is different.
October 12th, 2009 at 11:50 am
Why should economics not be considered a hard science? What are the central themes that run through all of these “hard” sciences? The use of mathematics as a universal language to express natural law. The same can be said about economics. If an economist fails to mathematically prove their postulation, then they are taken as seriously as the physicist who does the same. Just like a theory in chemistry, economic theories work when applied to specific situations. If you use trickle down economics in a liquidity trap, you won’t get the results you get in a surplus. The same is true of the false application of theories in other fields. It is time for people to quit looking down on economics as a function of social sciences and respect it as a science. Physics is as closely integrated into mathematics as economics, the mathematical conclusions just yield scientific proofs, while economics impact is seen in the realm of human interaction. This leads me to again ask: Why should one be considered a higher form of mathematics than the other?
October 12th, 2009 at 11:51 am
Nobel.org refers to “the Economic Sciences”.
Much of Economics consists of mathematics in its various forms.
Much of Economic study thus involves hard science.
I doubt that you can find an Economics Sciences winner whose work does not use mathematics in a rather rigorous way.
And so Hector’s claim that the Economics prize is a fake Nobel is completely wrong headed:
Nobel.org is not making the claim that Economics is a science.
See how easy that was?
October 12th, 2009 at 11:51 am
31. You are wrong when you say economics today rarely discusses rational behavior. It is the essence of the dilemma we face today, and it is the most widely discussed aspect of economics that I come across.
For example, an economist of the Chicago school insists that unemployment remains high because “rationally” people can get a better chance at saving their houses from foreclosure. This is ridiculous of course, but he has been backed into this ideological corner because the Chicago school theories are based on the premise that markets (aka individuals) always behave rationally.
I’m no expert, but even as a casual reader of economic theory, I come across this idea as the central debate again and again.
October 12th, 2009 at 11:51 am
I’ll add that it demonstrates a lack of knowledge of what I’ll call the “sociology of economics” to suggest that Krugman, Shiller, and Stiglitz are marginal figures in the field. They are enormously influential. I think non-economists, especially those of the left-wing persuasion, have a tendency to think that the work associated with Chicago is the mainstream with which most economists associate and the aforementioned figures are operating, albeit brilliantly, on the fringes.
The reality is quite different. First of all, the vast majority of economists (basically, everyone in theoretical micro and game theory, empirical micro, econometrics, even most macroeconomists) is not associated with any ideological school. Secondly, the dominant trend among those with a political or policy-making bent has been a pretty synthesis-oriented establishmentarianism aimed at a smooth transition from tenured position at Harvard to Washington to fancy think tank. The Chicago people really were from outside that nexus and enjoyed the fact that their models seemed, for awhile, to be besting those of the more established persuasion. Of course their success was never complete and rather short-lived, and for the last fifteen or twenty years our policy-makers have come from the usual suspects. The ideology of the establishment hasn’t been especially consistent, but it would be wrong to attribute the current economic crisis and recession to the multi-decade tyranny of the Chicago school.
October 12th, 2009 at 11:57 am
“Science (from the Latin scientia, meaning “knowledge”) refers in its broadest sense to any systematic knowledge-base or prescriptive practice that is capable of resulting in a prediction or predictable type of outcome. In this sense, science may refer to a highly skilled technique or practice.”
October 12th, 2009 at 12:07 pm
morality as fundamentally a product of sociality rather than simply efficiency or utility maximization based on rational choice
I have no idea what it would mean for morality to be a product of “sociality,” but the whole point of Arrow and especially Sen’s work is to question whether an outcome that satisfies an efficiency or utility maximization criterion is good. And if you want that done without the formalism of ordered preferences, I highly recommend Sen’s “Development as Freedom.”
What important truths, exactly, do you think that Williamson and Ostrom have missed about the institutions they study due to their reliance on the structural formalism of game theoretic analysis? And more generally, what about economics’ supposed colonization of political science and sociology do you object to? Formal game theory, rigorous empirical work, or both? And “focus on the individual” doesn’t hold water since much game theory, especially in political science, uses non-individuals as its decision-making units, and to great effect.
October 12th, 2009 at 12:10 pm
Marshall – In referring to Stiglitz, Krugman, and Shiller as marginal, I was attempting to be both ironic and punny. And failing on both counts I see.
October 12th, 2009 at 12:12 pm
Not: It’s “Fake” because it claims falsely to be a science. Paulie read Hector’s comment carefully. You didn’t.
I’ve been reading Hector’s comments for a long, long time, Glenn. And I thought I had a pretty damn good idea of what he said, which he confirms himself at 35.
Hell, nothing’s harder than parsing out Matt’s comments; at least Hector doesn’t reject spellcheck as a foul innovation.
October 12th, 2009 at 12:13 pm
Chicago school theories are based on the premise that markets (aka individuals) always behave rationally
Saying “markets (aka individuals)” just shows you don’t know what you’re talking about. If individuals behave rationally and certain other assumptions hold, you can show that the market outcome has certain properties. Interestingly, some of those properties of the market outcome continue to hold even if you take away the assumption of individual rationality.
Finally, the “Chicago school” does indeed tend to believe that the assumptions necessary to support a market outcome that is efficient in the pareto sense hold, whether or not individuals are efficient. But our friend Dr. Stiglitz has kindly given us many instances in which those assumptions do not hold and the market outcome does not satisfy an efficiency criterion. And Sen has offered important reasons why, even if the market outcome did satisfy efficiency, it might well not be “good” in any sense that a decent human being would recognize as welfare-unimprovable.
October 12th, 2009 at 12:16 pm
“whether or not individuals are efficient” should be “whether or not individuals are rational”
Sorry for the Matt-like lack of proofreading.
October 12th, 2009 at 12:19 pm
Marshall – Incidentally, I am referring to both Sen and Arrow’s earlier work – for which they won their prizes – on revealed preferences and social choice. If you want an example of what I am talking about in regard to real sociological thinking check out Harrison White’s Identity and Control. Williamsonian new institutionalism just reproduces the same old microfoundational narrative.
October 12th, 2009 at 12:28 pm
Williamsonian new institutionalism just reproduces the same old microfoundational narrative.
And what does it lose in doing that? You can’t just say “New Institutionalists consider rational individuals and I don’t agree with that approach.” You have to come up with something important about the institutions that the New Institutionalist approach fails to uncover or otherwise gets wrong in an important way. Likewise, you can’t criticize the Efficient Markets Hypothesis by pointing out examples of people behaving irrationally at the micro level. You have to actually show that the Efficient Markets Hypothesis fails (in this case, to predict asset price movements) where some model that does incorporate individual irrationality somehow succeeds.
As it happens, I’m not such a fan of New Institutionalism because I think old institutionalism is pretty successful, not because I have any problem modeling the behavior of rational individuals.
October 12th, 2009 at 12:33 pm
[...] the peace prize to a sitting commander-in-chief was bad? Wait until you hear the winner of the non-Nobel in economics – it’s a Sun Devil! Arizona State University Research Professor Elinor [...]
October 12th, 2009 at 12:37 pm
@Hector — Whether or not economics is a science is a separate argument from the point I was raising. Matt is implying there was no blessing from the Nobel foundation to link the Economics Prize to the Nobel Prizes. That claim is false. You can then proceed to argue the foundation was wrong to make that decision — fine with me. But Matt’s claim is still false.
October 12th, 2009 at 12:53 pm
Is the $1.4 million not “real” either?
October 12th, 2009 at 1:19 pm
Marshall – I’m not sure you are getting what I’m saying. There are several ways of criticizing economics models. One is what you suggest – that I accept the epistemic claims econ claims for itself and engage in Popperesque falsification. The problem with this is, if I criticize econ usung its own standards, I continue to accept constructs (rationality, markets, etc.) that encode the very properties with which I disagree – namely, the atomized decision-maker who is more or less boundedly rational. The second way to challenge econ is discursive – to argue that privileging individuals before social relations is pervasive, tacit, and consequential for how economists are even able to talk about morality and moral choice. Another set of criticisms might be theoretical. New institutionalism, to be specific, more or less is always post facto (and hence tautological) unless we supply actors with some thick rationality – which again must come from somewhere, presumably social norms or something exogenous. But this just again demonstrates the analytic priority of social life against individual beliefs and desires! Why is it that economists hide all of this behind a cloak of scientism? Because of the prestige that society endows (through mechaisms like the Nobel) on science.
October 12th, 2009 at 1:36 pm
I believe that you are all overestimating the hard sciences quite a bit. Physics have enjoyed some spectacular successes in terms of how well the models fit with observations, but in many cases it only because it is possible to control the experiments to limit outside interactions. But the thing is, many of the most beautiful equations become next to useless when applied to the messy real world. Cosmology, evolutionary biology, or medicine for that matter, are not necessarily more scientific in the sense many of you seem to mean. They are messy, incomplete, speculative.
Theories and models are only applicable to the level of detail they were meant to model. That is why we are still talking about medicine, chemistry, and physics as different fields. Sure, there is physics going on somewhere inside of medicine and chemistry, but physics fails to explain them. The same goes for economics, where we have an extra layer of complexity in all the extra interactions that our minds add to the picture.
Another point, do not confuse economic simplification with a moral standpoint. That individuals are modelled as if they are perfectly rational does not mean that they necessarily are, and even less that they should be. That some choose to make that moral argument does not invalidate all such simplification.
October 12th, 2009 at 1:38 pm
And by “all” in the first sentence, I of course mean “some of you”…
October 12th, 2009 at 1:46 pm
The whole point is that econ simplification IS a moral standpoint! There is no way around it. It has real implications on policy, academic research and even on how people understand themselves when we naturalize economics as science. To say otherwise is just plain ignorance.
October 12th, 2009 at 1:49 pm
The whole point is that econ simplification IS a moral standpoint! There is no way around it! It has real implications on policy, academic research and even on how people understand themselves when we naturalize economics as science. To say otherwise is just plain ignorance.
October 12th, 2009 at 1:57 pm
aabbccd@56: Yes, you are right, simplification is a moral standpoint, if you mean that everything that has an implication on policy, academic research, and how people understand themselves is a moral standpoint. In that sense, having a heliocentric world view is also a moral standpoint.
I’m just saying that all modelling involves simplification, it becomes impossible to make sense of the world otherwise. And not trying to understand the world, in order to make as informed decisions about the future as we can would be even worse.
October 12th, 2009 at 1:59 pm
Libtards
October 12th, 2009 at 2:07 pm
There are several ways of criticizing economics models. One is what you suggest – that I accept the epistemic claims econ claims for itself and engage in Popperesque falsification.
Popperesque falsification, I am sorry to inform you, is the ONLY approach that epistemology has thus far offered us for assessing the positive claims of scientific research. That’s how we decide what counts as knowledge. If you don’t want to do Popperesque falsification, then you don’t want to do positive work, which is exactly why it makes sense to give out a Nobel Prize in Economics and not in various other things.
The problem with this is, if I criticize econ usung its own standards, I continue to accept constructs (rationality, markets, etc.) that encode the very properties with which I disagree
No, you can criticize econ by coming up with phenomena that economic theories systematically fail to predict or by false predictions that it has made. You don’t have to accept “constructs” like markets or rationality to do that: you simply have to look at the world and look at economics and see where economics went wrong. Economists have found that markets and rationality are useful to explaining empirical phenomena, but something else might be better.
You seem to be outraged, on the one hand, that the Nobel Prize gives economics a cloak of scientism to which it is not more entitled than the rest of the social sciences, and on the other, that economists at least try to do science. I sense a basic insecurity. If you don’t like the positive, don’t do it! Give yourself a prize for sound morality. That sounds like something the world ought to have, perhaps specifically for making peace.
October 12th, 2009 at 2:12 pm
Oh please. That someone could even think that economics reigns supreme among the social sciences simply because to its commitment to empiricism and positivism is proof of the “scientism” hypothesis above.
October 12th, 2009 at 2:18 pm
That someone could even think that economics reigns supreme among the social sciences simply because to its commitment to empiricism and positivism is proof of the “scientism” hypothesis above.
If you’re addressing me, I DON’T think that economics reigns supreme among the social scientists in its commitment to empiricism, nor do I think that other social sciences become more empirical by adopting the approaches of economics. But aabbccd seems to object to the fact that economics is positive in its orientation and also object to having a Nobel Prize that ostensibly groups economics with other empirical fields.
October 12th, 2009 at 2:18 pm
I think the Nobel Foundation is the one who says this is a Nobel or not. And they _do_ say it’s a Nobel. When Matt Yglesias transcends single existence and becomes the Nobel Foundation Itself, then he may have a leg to stand on, perhaps several. Until then, this is paper-clip archery at its finest.
October 12th, 2009 at 2:21 pm
[...] 2.) Matt Yglesias on whether the Nobel Memorial Prize in Economic Science is fake. [...]
October 12th, 2009 at 2:26 pm
Marhsall, if you think that aabbcd is objecting to the “positive orientation” of economics, you need to read his/her comments more carefully.
October 12th, 2009 at 2:34 pm
if you think that aabbcd is objecting to the “positive orientation” of economics, you need to read his/her comments more carefully.
aabbccd has been saying that econ gets it wrong because it focuses on individuals rather than societies or networks. So I asked what Williamson and Ostrom had missed about institutions with game-theoretic structural models that could be understood through alternative means, and aabbccd refused to assess their work on positive grounds because, supposedly, to do so is to accept the premise that phenomena can be explained by individuals’ acting rationally. I don’t see how that’s true since I asked for an assessment of game-theoretic models as an explanation of outcomes, but whatever. Apparently to even test a hypothesis is to accept it.
aabbccd would rather criticize economics on moral grounds. Fair enough. But that is not empirical work.
October 12th, 2009 at 2:47 pm
Ostrom is a political scientist, so I don’t think she’s exactly representative of the economics profession. Meanwhile aabbcd is failing to criticize economics on empirical grounds in much the same way that you’re failing to defend it on empirical grounds.
October 12th, 2009 at 2:51 pm
@Dylan: What about organic chemistry? Is it a hard science? It isn’t based on math.
October 12th, 2009 at 2:53 pm
Well, assume there was a Nobel Prize for Economics.
October 12th, 2009 at 2:56 pm
Meanwhile aabbcd is failing to criticize economics on empirical grounds in much the same way that you’re failing to defend it on empirical grounds.
What are you talking about? Economics is worth doing because its models and approaches tend to be helpful in explaining observed outcomes. It is aabbccd’s view that notwithstanding this apparent empirical success, “privileging individuals before social relations is pervasive, tacit, and consequential for how economists are even able to talk about morality and moral choice.” Maybe so: we shouldn’t do economics because to do so commits us to a set of morals that are not defensible.
October 12th, 2009 at 2:59 pm
SaintWaldo, technically they don’t; somewhere on the website (I can’t find it right now) they come out and say it’s not a Nobel Prize.
Even so, what makes “Nobel Prize in Economics” a “fake” Nobel? It’s given out by the same people who hand out the Physics and Chemistry prizes, it’s got an official affiliation with the Nobel Foundation to the point where it’s right there at nobelprize.org, it carries a level of prestige comparable to the other prizes, and it’s got “Nobel” right there in the name. The only thing it’s missing is that it was originally created by Sveriges Riksbank rather than by a 19th-century arms merchant, and why we should consider that the most important criterion is wholly beyond me.
October 12th, 2009 at 3:03 pm
Ok so Wall Street flim-flam has it’s own fake Nobel Prize now? It makes sense. Fat-cats would want some scheme to hog their way into the attention awarded those who produce progressive and helpful ideas and outcomes. You can’t do any of that by swindling people out of their homes and retirement funds and then blame some invisible hand! So yes, they have their own Nobel economics prize, except it isn’t from the actual Nobel organization. So, then..it isn’t a Nobel prize, I say we call it the sword Excaluibur, or something else equally fanciful.
October 12th, 2009 at 3:08 pm
Economics is worth doing because its models and approaches tend to be helpful in explaining observed outcomes
Yes, you keep on saying this, and yet I don’t see any citations to any empirical work.
October 12th, 2009 at 3:13 pm
Marshall – I am most emphatically not saying economics “gets it wrong” because it focuses on individuals rather than societies or networks. I am saying that economists lie to us when they tell us they are scientists – and, hence, capable of producing objective knowledge. The fact that their models are more or less hermetic toys abstracting people from their moral contexts (assuming self-interest, for exampe) allows them mask what they aren’t saying. Namely that there are alternative ways of conceptualizing human economic interaction that don’t lie about their scientific status. And incidentally, you need to do a little reading on the philosophy of science if you think Popper is the last word. Like try Lakatos. Or Kuhn. Or Feyraband (sp). Or, better yet, Laudan. Any of these scholars can demonstrate clearly the errors of falsification as a sine qua non measure of knowledge cumulation.
October 12th, 2009 at 3:18 pm
In a less fallible world, I think Marshall would be exactly right. The measure of a scientific theory is how well it predicts observations, not on whether the concepts in the theory map accurately onto real-world entities. Thus, it doesn’t matter whether quarks are just convenient fictions whose existence and supposed properties are accepted because doing so lets you do subatomic physics or whether they are as real as the chair I’m sitting in now. And the measure of a scientific research program is how well it either builds and refines these theories or how well it enhances our ability to study and manipulate the world.
In physics, it happens that whether you believe that quarks are real *things* just like everyday objects or whether they are theoretical constructs that are useful but not necessarily “real” almost never affects the quality of your work. Occasionally, scientists can get to a sticking point caused at least in part by thinking about things the wrong way — I’m not a historian of science but I might guess that thinking about light as a wave in the same way that ripples in water are waves or vibrations in air (or other media) are sound waves might have made it a little harder for the community to discover and accept that light doesn’t need a medium (the ether) to propagate.
But the difference with physicists taking their theoretical models too literally and economists doing so is that when physicists do so, it may (but probably not) retard the development of the field, but it doesn’t have moral implications. Commenters like aabbccd and Paulie Carbone are rightly angry that some economists or policymakers who use their results and theories have forgotten that many of the simplifications or theoretical conceits in economics which have proven to be powerful in explaining a lot about the world are just that: simplifications and theoretical conceits. Thus the simplifications or conceits get applied beyond their original and appropriate domain, or some economists or policymakers start thinking or operating as if they were really true and complete (or complete enough), and that they describe reality in itself. This way of thinking leads to things like the Solow growth model being applied beyond its original scope by the IMF to developing countries in crisis and encouraging governmental austerity which leads to the suffering of hundreds of thousands of people.
Economics also suffers from a “if all you’ve got is a hammer, everything starts looking like a nail” problem. The field, at least as it’s understood by people with political and economic power, talks all the time about increasing economic growth, maximizing efficiency, and getting closer to Pareto optimality and has developed tools for understanding and achieving these things. As Matt has written about before, however, if all you care about are these things rather than distribution, then you end up weighting the utility of rich people much higher than that of poor people. Presumably, a thousand dollars increases the utility of a poor person several times (let’s say, by a factor of twenty) more than it increases the utility of Dick Cheney. If Pareto optimality, efficiency, and growth are indifferent, however, to a thousand dollar surplus going to a poor person with a net worth of a few thousand dollars versus to Dick Cheney, then this implicitly weights the utility of Dick Cheney to be twenty times more valuable than that of the poor person.
Sure, economists like Arrow and Sen have gotten outside the box, and most academic economists don’t actually think that Dick Cheney is twenty times more important than poor nameless people (even if this is an implicit assumption of their research), but since (1) the field has such a direct effect on the lives of humans, (2) a blinkered view can lead to so much suffering and injustice in the way that a blinkered view in physics does not, and (3) many of the assumptions of the field have moral content, the economics community has a special moral responsibility that it has largely chosen to abdicate.
If my analysis is correct, then this means we shouldn’t say things like “economics isn’t a science” or “economics is useless”, but rather that economists need to be aware of and engaged with the moral implications and assumptions of their work and not shy from them as many of them currently do. They, like other scientists, need to do a lot better job in interacting with media and government. They need to call out the Randroids and glibertarians who have no better an understanding of their work than people like Megan McArdle.
October 12th, 2009 at 3:20 pm
You’ll be happy with citations? Okay then. McFadden was very successful at estimating ridership on the BART from surveys he conducted before it was built and using those to calibrate discrete choice models. Friedman and Schwartz nailed the effective monetary tightening during the first several years of the Depression as the reason that an asset price collapse gave rise to a generalized macroeconomic catastrophe.
October 12th, 2009 at 3:23 pm
Giffen @68: @Dylan: What about organic chemistry? Is it a hard science? It isn’t based on math.
Perhaps there wasn’t much math in your have-to-take-it-for-pre-med organic chemistry, but if you said that organic chemistry isn’t based on math to any chemist of any kind, he or she would laugh in your face. Well, probably not, because chemists, like scientists generally, are typically modest, inoffensive people, so on behalf of chemists everywhere, I’m laughing in your face right now.
October 12th, 2009 at 3:28 pm
I realize how long my post was now. Condensed version:
In physics, it doesn’t matter whether you really believe in quarks or whether you think they’re theoretical conceits that allow you to predict and manipulate nature better.
Some economists or policymakers who use their results and theories have forgotten that many of the simplifications or theoretical conceits in economics which have proven to be powerful in explaining a lot about the world are just that: simplifications and theoretical conceits. Thus the simplifications or conceits get applied beyond their original and appropriate domain, or some economists or policymakers start thinking or operating as if they were really true and complete (or complete enough), and that they describe reality in itself. This way of thinking leads to things like the Solow growth model being applied beyond its original scope by the IMF to developing countries in crisis and encouraging governmental austerity which leads to the suffering of hundreds of thousands of people.
Much economics, at least as it’s understood by people with political and economic power, talks all the time about increasing economic growth, maximizing efficiency, and getting closer to Pareto optimality and has developed tools for understanding and achieving these things. As Matt has written about before, however, if all you care about are these things rather than distribution, then you end up weighting the utility of rich people much higher than that of poor people. Presumably, a thousand dollars increases the utility of a poor person several times (let’s say, by a factor of twenty) more than it increases the utility of Dick Cheney. If Pareto optimality, efficiency, and growth are indifferent, however, to a thousand dollar surplus going to a poor person with a net worth of a few thousand dollars versus to Dick Cheney, then this implicitly weights the utility of Dick Cheney to be twenty times more valuable than that of the poor person. So the supposedly amoral content of some assumptions or frameworks does in fact have moral implications.
The above added to the fact that economics has a direct effect on the lives of humanity gives economists a special moral responsibility that they have largely abdicated.
October 12th, 2009 at 3:36 pm
I am saying that economists lie to us when they tell us they are scientists – and, hence, capable of producing objective knowledge.
I don’t understand why you keep saying that economists aren’t scientists and justifying that statement by faulting economists for ignoring the moral judgments inherent in their assumptions. Economists ought not to ignore the moral judgments inherent in their assumptions, but the fact that they do (supposedly) only makes them more like scientists, not less.
October 12th, 2009 at 3:37 pm
And, BTW, Jason is exactly right in characterizing how economics ought to be criticized. The rest of what’s here is incoherent.
October 12th, 2009 at 3:52 pm
You seem a bit overexcited, Marshall. Why not take a deep breath and read things more carefully?
You are jumping all over aabbcd because you interpret him to be saying that “looking at the facts is morally bad.” A more charitable reading suggests that “looking at the facts” is not a black-and-white issue.
The empirical successes of economics are overstated. Any empricial investigation into the causes of poverty, for example, has run into chicken-and-egg problems. This is not to say that no progress has been made or that the empirical investigation of poverty is not a worthwhile endeavour. My point is that calling something a science does not mean that it can produce the equivalent of a man on the moon. And when it comes to empiricism, all the social sciences engage in it: economics distinguishes itself not with its “positivist” approach but with its parsimonious mathematical models.
But by all means, continue your pearl-clutching in defense of empiricism. “Are facts not sacred?” (faint)
October 12th, 2009 at 3:57 pm
And, BTW, Jason is exactly right in characterizing how economics ought to be criticized. The rest of what’s here is incoherent.
I appreciate the vote of confidence. But while the rest of what’s here you and I disagree with on the merits, I think it’s important to have some measure of vocal pitchfork-wielding to remind the rest of us why we’re discussing any of this at all and to pump up the indignation and moral commitment.
October 12th, 2009 at 3:58 pm
Interesting that Krugman didn’t set the record straight right after he won his (Nobel) Prize in economics.
October 12th, 2009 at 3:58 pm
I’m sure there are economists who’ve said this, but what evidence is there that “economists are scientists” is anything like the consensus of the field?
October 12th, 2009 at 4:06 pm
I think Jason L. has summed it up nicely. I’d just add that I’m starting to suspect that I’m missing part of this discussion on account of English not being my first language. aabbcc seems to be putting a lot more weight on the different meanings of ’science’ (as in science, and social science) than I do. Sure, people are sitting in different buildings, studying different things, using different methods, but in the end it is all about making the simplifications you need to do to make sense of whatever it is you are studying. Then again, maybe it is because my background is a mixed bag of both worlds.
October 12th, 2009 at 4:14 pm
[...] because it’s not one of the categories established by Alfred Nobel’s will. Yglesias does the honors this year, implying that this is some sort of strange scam where the Bank of Sweden somehow [...]
October 12th, 2009 at 4:48 pm
So what if it’s not a Peabody? It’s a Polk!
October 12th, 2009 at 5:02 pm
“The only thing it’s missing is that it was originally created by Sveriges Riksbank rather than by a 19th-century arms merchant, and why we should consider that the most important criterion is wholly beyond me.”
This. How odd it is to make a fetish of this man’s will!
October 12th, 2009 at 5:13 pm
RDJonsson @85: I’d just add that I’m starting to suspect that I’m missing part of this discussion on account of English not being my first language. aabbcc seems to be putting a lot more weight on the different meanings of ’science’ (as in science, and social science) than I do.
I don’t think it’s a linguistic issue. In Western culture generally, science is accorded a special respect as a way of getting to descriptions of and facts about the world. I think that aabbccd thinks that economics has gotten wrong results too frequently and with too-dire consequences for it to be accorded this respect.
He/she also complains about how economics’ simplifications and theoretical conceits are not accurate. This is true, but it’s also true often even for the natural sciences, and Marshall and I don’t think that the truth of these simplifications and conceits is important in determining whether a discipline that uses them should be called science.
aabbccd (and Marshall and I, for that matter) also thinks that much of the practice of economics has implicit moral assumptions the implications of which they ignore or deny responsibility for. Part of the respect accorded to science comes from claims made on its behalf to be free of moral or ideological input, and thus objective. Hector thinks that since economics has moral/ideological input, it’s not science (I don’t think aabbccd has said this, or at least not as starkly as Hector). I disagree — it’s impossible for any sufficiently sophisticated human endeavor to be utterly free of moral or ideological input, but I think that the moral or ideological input into economics is far greater than into the natural sciences and of far greater relevance to its results and applications. Economics is thus a less mature and less pure science, but this is a difference of degree rather than of kind.
The refusal to come to terms with the moral components of economics has given the field a skewed set of tools and theories that have resulted in harmful consequences for millions of people. We may be right then to accord less respect to economists or the field generally than we do to physicists, but this is not because the subject matter of economics is less worthy of respect, but rather because its practitioners and those who have applied economics to governmental or business policy decisions have failed in their duty to society.
On the other hand, and understanding of markets and other work of economists has done a great deal of good for the world — I’m thinking stuff like taming the business cycle (clearly we screwed up in the past decade, but things are better than they were in the 19th Century), the decline of a command-and-control approach versus incentivization on things like GHG emissions, microcredit in the developing world, the rise of countries like South Korea from poverty to affluence, etc..
Now, you can argue that the current state of the field at least in some quarters is so rotten that we’d be better of tearing it down and rebuilding it from the ground up. In practice, I don’t think this happens. Elements of economic practice and application should indeed be strongly criticized, but I think it’s more correct and more efficacious to focus the criticism on the blameworthy elements and practitioners rather than to criticize the discipline qua a discipline.
October 12th, 2009 at 5:32 pm
So let me get this straight: Progressive Idols Krugman and Stiglitz win and they are hailed as “Nobel Prize winning economists” (and their words to be taken as gospel… got that, Geithner, Summers and Bernanke?) BUT….
the first WOMAN wins the economics prize and suddenly — GASP!!!!! – it’s a fake! it’s fraud! it’s phony! it’s not really a “Nobel” prize, it’s a No Bell Prize!
Heckuva job, Matty!
October 12th, 2009 at 5:48 pm
Re: Jade,
Oh, Chr*st, the nutjob ultra-feminists are at it again.
Re: JasonL,
Look, I don’t deny that moral judgments _should_ be part of economics. That makes it not a science, of course, but plenty of good things are not sciences. The problem I have is that economists tend to act as if they’re _not_ making moral judgments, and as though their ideas are objective and scientific. But to act as though you can separate economic decisions and choices from morality, is in itself to make a moral judgment. To act as though maximizing choice, comfort, leisure, etc. should motivate our actions, is a moral decision. To act as though individuals are self-interested and rational beings, is also to make a moral decision. _Wrong_ moral decisions, in my view, but they are moral decisions nonetheless, and as such they mean that economics can’t really be a science in the relevant sense.
Re: This, in turn, not only insulates economics from any sort of critical reflexivity, it also reproduces the quantification fetish that passes for analysis in positivistic social science research, and reduces all economic questions to how “rational” people are and how it might be measured, rather than, say, the moral consequences of economic systems. Truly dissident econ academics (marxists, christian socialists, even some Keynesians) are more or less marginalized in the field (and, indirectly, in public discourse) since they are not and cannot be “scientific.”
exactly, this more or less says what i want to say better than I could. Some of those dissident economists have a better understanding of our economic system then a roomful of nobel prize economists put together.
October 12th, 2009 at 6:27 pm
The great thing about high-profile prizes, Nobel or not, is that they bring the winner some money and pump up his CV value by several thousand dollars a year.
October 12th, 2009 at 6:27 pm
Hector,
There are two separate questions here. One is the linguistic one of whether to call economics a science, and the other is whether economics should be as dominated as it is by certain schools.
Your claim that moral judgements enter into economics proves too much. We know a lot about how to treat baldness and erectile dysfunction in older men because there are lots of older men in rich countries who will pay lots of money to avoid going bald or impotent. We know less that we ought to about how to treat or prevent malaria or diarrhea-causing infections or dengue because people who have money and power in the aggregate do not suffer from these diseases. So medicine has developed tools and has acquired knowledge relating to hair loss and the erectile response rather than to malaria and diarrhea and dengue.
Similarly, the moral assumptions of economics has produced tools and theories for maximizing GDP growth or total wealth or getting closer to Pareto optimality, to the detriment of other avenues of research. But it would be silly say that medicine is unscientific, and so it is likewise silly to say that economics is unscientific.
You might counter that economics makes moral judgements in its very axioms, independent of how much resources are devoted to various schools within economics. I refer you to my previous posts that discuss why that has nothing to do with whether something is scientific. I could approach fluid mechanics as physicists and engineers currently do, but add that I believe that turbulent flow is morally bad. This will affect what research I pursue — presumably I would try to understand fluid mechanical phenomena that result in turbulent flow and how turbulent flow can be minimized in a variety of situations — but it wouldn’t make the work I’m doing no longer part of the scientific discipline of fluid mechanics.
On the second question, I agree with you that economics is harmfully blinkered in its view, and that alternative schools should be developed more, or at least that the current dominant schools should incorporate more from alternative schools. But I think that the way to make this happen is not to argue that economics qua economics cannot be a science, but rather that economics could be a better and a more moral science if it were more aware of its moral assumptions and focused relatively more on avenues of research with different moral assumptions.
There’s probably also a bit of physics envy and the path dependency of the current dominant schools being the most quantitatively fleshed-out. This is why, for practical reasons, it may be easier to go sideways from mainstream economics to ecological economics or economic sociology or whatever (or bring these into mainstream economics) than to have a viable development of these fields from the ground up, independently of the neoclassical orthodoxy.
October 12th, 2009 at 7:01 pm
Was it fake last year too? Or is it just fake when the first woman wins it? Just wondering….
October 12th, 2009 at 7:04 pm
“Beware of geeks bearing formulas.” – Warren Buffet
October 12th, 2009 at 7:31 pm
Any Swedes reading? If so, I wonder whether there has ever been any objection to the Sweedish Central bank’s decision four decades ago to endow the arguable Nobel in Economics. After all, aren’t the profits of a central bank in a democracy supposed to be returned to the public treasury? Did the Sweedish parliament have any say in whether the prize should have been endowed?
October 12th, 2009 at 8:51 pm
aabbccd said above (@10:26am if you’d like to read in context) that “The Econ Nobels are a blatant attempt at self-legitimation, which has the effect of increasing prestige (and access to resources) in the academy. It also furthers the myth of the ’scientism’ of econ, as though it were a akin to physics or chemistry.” Being a biologist I understand very well the distinction between what is science and what isn’t. Science, put simply, is the formulation of hypotheses (meaning “coming up with ideas”), then testing them, and if the hypothesis can be refuted it is thrown out whereas if it can’t, it is adopted as a tentative explanation. So, by the criterion I just defined, economics is scientific. If you want to argue over whether tested economic hypotheses are legitimate explanations of reality, whether the tests had “proper” controls, etc., THAT is an altogether different animal. But, aabbccd, to say economists do not attempt to disprove their own ideas by formal testing of them I would say this is false and you are wrong on this.
October 12th, 2009 at 11:04 pm
Matt is wrong, of course. This is some sort of intellectual fetish embraced by some people who are aware of the origin of this prize. This is my 4th encounter with this and it is basically smart ass posturing.
The Nobel organization determines the winner, awards a prize of the same exact amount, and the winner gets to break bread with the other winners at the same exact ceremony. It is on the same web site. The name of the award is slightly different to denote the money was endowed by a bank, not Dynamite Al.
And I highly recommend viewing the Youtube of the ceremony entrance from last year. Krugman is escorted by the absolutely stunning Princess Madeleine. No way its not legit in the eyes of the Swedes given that particular honor. My guess is Matt is just being a provocative smart ass…