You mean they sat on the platform with you?
October 26, 2012 9:31 PM   Subscribe

In the spirit of the Nobel season, Yasha Levine discusses the history of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel as a PR gimmick for laissez-faire economics, and how its existence is an affront to the Nobel legacy.
posted by clarknova (26 comments total) 7 users marked this as a favorite

So what's their advice for Mr. Krugman? Send the 2008 prize back?
posted by gimonca at 10:16 PM on October 26, 2012 [1 favorite]

Advice for Krugman, "It will take a brave act to bring this sham to the attention of the public. One year, one of the prize winners will have to speak out, and explain this ruse to the public as he wins the award."

He could still do that, although not on stage, but I doubt he wants to undermine what I'm sure has been a valuable award.
posted by PJLandis at 10:20 PM on October 26, 2012

Maybe it's game theory, where the value of the prize to a prospective winner is tweaked to be greater than the value of calling it out in a public forum.
posted by Blazecock Pileon at 10:40 PM on October 26, 2012 [2 favorites]

Wow. Fantastic post. This single link is one of the best posts I've seen on Metafilter. Thank you. It's constantly amazing to me that no matter how much effort I put in understanding the world around me how much more I need to know. Thanks again.

For those skimming the article; the embedded video is well worth the 10 minutes.
posted by bswinburn at 10:47 PM on October 26, 2012 [1 favorite]

On the page they have with Hayek it is also listed that Gunnar Myrdal won the prize at the same time. Myrdal stood as a Social Democrat in Sweden and did deals with the Soviets.

Here is a quote from the wikipedia page on him:

He coauthored with his wife, Alva Myrdal, the Crisis in the Population Question (Swedish: Kris i befolkningsfrågan, 1934). The work of Gunnar and Alva inspired policies adopted by the Minister of Social Affairs, Gustav Möller, to provide social support to families.
posted by sien at 10:48 PM on October 26, 2012 [1 favorite]

Maybe it's game theory, where the value of the prize to a prospective winner is tweaked to be greater than the value of calling it out in a public forum.

It's not game theory. It's comparative advantage.
posted by dhartung at 11:32 PM on October 26, 2012

The unbelievably right-wing politics of Akerlof, Stiglitz, Ostrom, Arrow, Krugman, and Sen obviously totally confirm Levine's breathless pearl-clutching argument.
posted by vitia at 1:08 AM on October 27, 2012 [10 favorites]

Whle neither Krugman nor Stiglitz are proper rightwingers (and I assume the same goes for the rest of your examples, as I'm too lazy to google atm) you can't really say they're on the left either; Krugman is a neoliberal mugged by reality enough that he has tempered some of his worst instincts, while Stiglitz road to Damascus moment was the War on Iraq and he's more of a principled centrist conservative. They're on the left side of rightwing politics, not leftwing themselves.

No Marxists they.
posted by MartinWisse at 1:54 AM on October 27, 2012 [3 favorites]

Economics, especially the way it's done by the main stream, doesn't really seem all that scientific to begin with.

It seems like they like to make up rules for how people behave, then come up with models based on those rules, then insist the rules they came up with earlier are actually true, not just something they made up to make their modeling easier.
posted by delmoi at 2:15 AM on October 27, 2012 [1 favorite]

I was surprised to hear that the prize money was reduced this year because the Nobel Foundation's capital diminished in the economic crisis. Up to that, I thought the economists were first allowed in the ceremonies at a time of economic hardship for the Foundation, to guarantee the future price sums in all disciplines. Trading away some reputation for money and longevity would maybe have made sense if the prizes were in economic danger. If they didn't get anything in the trade though, then I don't understand why it was done.
posted by springload at 2:33 AM on October 27, 2012

It seems like they like to make up rules for how people behave, then come up with models based on those rules, then insist the rules they came up with earlier are actually true, not just something they made up to make their modeling easier.

I like to call this the platonic backhand; Whitehead had a clumsier name for it, "the fallacy of misplaced concreteness." It goes something like this (and is by no means limited to economics):

1. The world is darn complicated and incomprehensible;
2. Time to simplify it by abstractions, models, and/or simple descriptions;
3. The backhand: let's declare that our simplifications of the original complexity of life are actually the source and root cause of that very complexity!
4. Voila! Description has become explanation; abstraction has become causation.

Nietzsche has a nice poetic description of the same thing, too:

"The other idiosyncrasy of the philosophers is just as dangerous: they confuse what comes first with what comes last. They take what comes at the end (unfortunately! since it should not come at all!), the 'highest ideas', which means the emptiest, most universal ideas, the last wisps of smoke from the evaporating end of reality - and they put it at the beginning, as beginning." (From Twilight of the Idols)
posted by Pyrogenesis at 3:00 AM on October 27, 2012 [11 favorites]

Yeah, this bugs me every year around this time. Oh look, the annoying economists are back with their fake Nobel prize.
posted by medusa at 4:15 AM on October 27, 2012 [1 favorite]

"The Cure for inflation is continued high-unemployment".

Thatch must have stopped reading there as the light bulb above her head came on with a "ding". Awesome link, thanks.
posted by marienbad at 5:13 AM on October 27, 2012

The stuff about central banking is utterly incoherent. Debates about central bank independence are about how a government monopoly should be required behave - to equate that with "let the free-market do its thing" is just nonsense.
posted by hawthorne at 5:33 AM on October 27, 2012 [1 favorite]

the Nobel committee has biases, but they aren't ideological, but rather then tend to favor economists who have contributed math focused models to explain behavior. Many of the left leaning economist (and especially Marxists) tend to approach their work for a more qualitative perspective.

Lots of good arguments for and against the degree to which Economics tries to portray itself as a true science and math is at the center of that. Clearly the Nobel committee has an interest in making it seem as "hard" a discipline as possible, and that favors quantitative work.

The only howler on the list to me is really Hayek. Friedman became an ideologue but there is actually a lot of value to his work. There are other folks whose work now appears to be less important than was thought at the time, but they weren't ideologues.

I'm not sure what's libertarian/laissez-faire about an independent central bank. I'd imagine the most hard core in that crowd don't think we should have central banks at all.
posted by JPD at 6:27 AM on October 27, 2012 [2 favorites]

I don't get the "fake Nobel" meme. The economics prize wasn't endowed by Nobel but, regardless of where the money came from, it's awarded now by the same body that awards the Physics and Chemistry prizes.
posted by anifinder at 6:31 AM on October 27, 2012

The Author just posted a new article an hour ago: Recovered History: How Wall Street-Funded Self Help Propaganda Greased the Real Estate Bubble

Levine is great for reporting on these connections between corporate money and propaganda. He and Mark Ames broke the story on Koch Industries being the financier of Tea Party astropturfing.
posted by clarknova at 6:47 AM on October 27, 2012

Of course that article leaves out that Hayek disagreed with the prize:

In his speech at the 1974 Nobel Banquet 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."
posted by jasonmc at 7:23 AM on October 27, 2012 [4 favorites]

I've noted this in some other thread about econ or Nobels, but here's a nice comparison:

Economics prize: awarded more or less by the Swedish government, with money from the Swedish government, because they thought economics was important.

The rest: awarded by the same body, with money from blowing up or otherwise murdering millions of adolescents and children, because Nobel didn't want to be remembered for inventing really world-class tools for murder.

I know which I'd rather receive. And that I don't take the protestations of the family terribly seriously.

Whle neither Krugman nor Stiglitz are proper rightwingers (and I assume the same goes for the rest of your examples, as I'm too lazy to google atm) you can't really say they're on the left either

You assume incorrectly. Read more about Sen in particular. Ostrom too, more or less.
posted by ROU_Xenophobe at 7:58 AM on October 27, 2012 [3 favorites]

I don't doubt that Levine is right when he says that "Scientists never had much respect for the new economic Nobel prize." Then again I suspect they have even less respect for the literature prize, and probably look askance on at least half of the winners of the peace prize, so defining the worth of a real Nobel prize by the opinions of scientists (assuming that anyone can speak for all scientists) may or may not tell you much either.
posted by Quinbus Flestrin at 10:58 AM on October 27, 2012 [1 favorite]

I find the idea that Hayek was some sort of Tea Party extremist (see also here) deeply misinformed and a little bit baffling. Hayek considered himself a liberal in the European tradition and wrote a wonderful essay on how conservatism impedes social progress and the growth of knowledge. He unambiguously supported a universal basic income, social insurance, and public goods provided by government. Unfortunately, his worst book became his most famous, and the right-wing politicians and pundits flogging Road to Serfdom over the years have turned it into a cartoon slippery-slope argument. (Really: a cartoon.)

Hayek was way more than some defunct economist: he began his academic career studying psychology and philosophy of mind, moved into economics, and quickly moved beyond into law, political philosophy, epistemology and philosophy of science, and cultural evolution. Underneath all his work is the idea that social systems are complex, evolved, emergent orders and our attempts to understand and intervene in them will always be incomplete. He does deserve some flak for the Pinochet stuff, though.

Reducing Vernon Smith's research to "setting up theoretical 'wind tunnels'…in a way that has nothing to do with reality" is a complete inversion of the truth. Smith pioneered experimental economics: the idea that perhaps instead of just writing equations and drawing graphs, economists should observe real human behavior under controlled conditions. He holds the sort of complex view of self-interest and rationality that is so often offered on the internet as a one-line rebuttal of the entire field. If economists are to become scientists (they will—they are!) it will be through experiments.

Their Nobel prizes might be fake, but Hayek and Smith developed very real theories for a science of human behavior and emergent social orders that accounts not just for rational self-interest but for coordination, cooperation, trust, and altruism. They share a deep skepticism about reducing the messy complexities of reality to a set of equations. It is extremely frustrating to see their views reduced and caricatured as blind faith in market rationality.
posted by ecmendenhall at 2:36 PM on October 27, 2012 [3 favorites]

Here is a pretty good takedown of Hayek as an economist.
posted by JPD at 3:35 PM on October 27, 2012 [2 favorites]

and I assume the same goes for the rest of your examples, as I'm too lazy to google atm

How does this in any way add to the conversation? Here's a translation of that comment: "I'm completely uninformed on the topic in question but will nevertheless express an opinion, and then endorse my own habit of expressing uninformed opinions. I'm as stupid as I want to be, and I think it's important for me to continue being as stupid as I want to be, and it's actually important for everybody to publicly express their resolute and dedicated intent to be ignorant."

Or, as ROU_Xenophobe pointed out, "You assume incorrectly."

Other people have noted that the Nobel tends to go back and forth between right-wing and left-wing economists. Yes, it is somewhat centrist, which probably ought to be taken as a symptom of different people in the world having different opinions, and protesting that an economist like Stiglitz or Krugman or Sen or Ostrom disagrees with one's personal politics ignores what that economist received the Nobel for. Being too lazy to Google indicates that one will be unlikely to investigate the remarkable work Stiglitz has done on information inequality, or that Ostrom did on successful and unsuccessful public strategies for managing common-pool resources, or that Sen has done on how the sequencing of economics and human rights decisions affects the poorest members of society.

In sum: MartinWisse's comment is as thoroughly uninformed as Yasha Levine's original article, and both indicate a desire to be uninformed; a fingers-in-the-ears complaint that some people don't agree with my God-given political beliefs which of course are beyond question and I don't want to see any evidence to the contrary.
posted by vitia at 4:49 PM on October 27, 2012 [4 favorites]

So we have a solid patronage connection between Hayek and the Kochs, who also funded the Tea Party and founded the Cato Institute. We have an addendum to the Nobel roster, shoehorned in by a bank that was seeking deregulation and libertarian finance models like those favored by the Kochs. We have Hayek winning that prize. We have someone upthread playing up Hayek's self-deprecating acceptance speech; as if that somehow negates his acceptance of its largess and the fame and fortune it brought him. And we have another insisting anyone who doesn't ignore these historical facts, who doesn't accept that minutiae found in Hayek's voluminous output absolve him of all complicity in disastrous economic policies favored by robber barons... why those folks are just ig'nunt. And by golly they want to be!

Sure is Austrian apologist up in here.
posted by clarknova at 6:50 PM on October 27, 2012 [1 favorite]

Isn't it sort of weird for a central bank to be promoting Austrian economics?
posted by JPD at 7:13 PM on October 27, 2012

I don't study Austrian economics but my impression is that Von Mises is where the hard money anti-central-bank stuff comes from.
posted by dismas at 9:10 PM on October 27, 2012

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