Tilting at Nobel windmills
Published by Yazad Jal October 15th, 2003 in EconomicsJeffrey C. Cleveland at the Mises blog questions the concept of a Nobel prize in Economics. (For the nitpickers, it’s the “The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”)
When this year’s physics winners are recognized for studying the strange behaviour of really cold particles, people may question whether superconductivity is such a big benefit to mankind, but we do at least now know something about the universe that we didn’t know before. That’s something white-coated scientists always harp on when explaining to us social scientists why we aren’t real scientists: The things they discover stay discovered. But we economists keep changing our minds. You know: If you laid all the economists in the world end to end, they still wouldn’t reach a conclusion.For instance, how in the space of five years could the Nobel Committee give prizes to both Milton Friedman (1976) and James Tobin (1981), monetary theorists with diametrically different views of how the U.S. Fed should conduct monetary policy? You wouldn’t see that in physics or medicine, would you?”
Well, the Nobel committee in 1974 did even better by giving the prize to Friedrich Hayek and Gunnar Myrdal, who both in theory and practice were opposite ends of the spectrum. Hayek was a classical liberal (and an Austrian economist in the Menger-Mises tradition). Myrdal was a socialist.
Hayek gave two very good reasons why he himself would have “decidedly advised against it if I had been consulted whether to establish a Nobel Prize in economics” in his banquet speech.
One reason was that I feared that such a prize, as I believe is true of the activities of some of the great scientific foundations, would tend to accentuate the swings of scientific fashion. This apprehension the selection committee has brilliantly refuted by awarding the prize to one whose views are as unfashionable as mine are.I do not yet feel equally reassured concerning my second cause of apprehension. It is that 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 seize 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.
There is no reason why a man who has made a distinctive contribution to economic science should be omnicompetent on all problems of society - as the press tends to treat him till in the end he may himself be persuaded to believe. One is even made to feel it a public duty to pronounce on problems to which one may not have devoted special attention.
I am not sure that it is desirable to strengthen the influence of a few individual economists by such a ceremonial and eye-catching recognition of achievements, perhaps of the distant past.
His recommendations are worth following:
I am therefore almost inclined to suggest that you require from your laureates an oath of humility, a sort of hippocratic oath, never to exceed in public pronouncements the limits of their competence.Or you ought at least, on conferring the prize, remind the recipient of the sage counsel of one of the great men in our subject, Alfred Marshall, who wrote: “Students of social science must fear popular approval: Evil is with them when all men speak well of them”.
From a Novice
Well since you asked for a comment here it is. Hayek and the rest of the guys of the libertarian branch seem to have made atleast a little bit of sense. Unfortunately many people i have been talking to seem to believe that concentration of power is an inevitable consequence of any free association of human beings. Now if people at large believe that there individual interests are served solely or largely by undermining those of others, then there is a rather anihilistic breakdown in the offing for any Market Anarchy.
Again i agree to Hayek’s humility ideas and i think intellectual humility is critical for any degree of clarity of thought. but often when stressing that humanity is unequal intellectuals of that shade of purple will at some point accede a degree of arrogance, a la Friedman or Yazad Jal ;-).
Contrary to Misesian methodology, i think Hayek’s sympathy for Falsificationism has better chances of a response from the statistically charged public at large. Yes econometrics is inimical to the Austrian approach, and the Austrian approach maybe better and more efficient, but as in some other place VHS vs. Betacam (or Linux vs. Win) was mentioned, i think as part of the market process we have to admit that thus far the Econometric School is winning, even if the Austrian is better technique. An irony of the market place :-). what say good Jal.
oops i did not comment exactly on the topic at hand.
The Nobel well i think many Austrian’s are sore that they waited for Mises to die before they gave Hayek the Noble. Despite the fact that it was the Mises-Hayek ABCT.
But yes giving economics a pedestal on par with that of other sciences is not correct, neither is it in good company with the almost Orwellian Noble Peace Prize.
I think is was Shaw who said that he could forgive Noble for inventing dynamite but that it was a sick mind that must have thought up the Noble Prize.
Hello - reached here from Sukanya’s LJ.
I find it really strange that Physicists and Biomedical scientists are ridiculed thus by economists. Look around you, I wish to tell them, and tell me about one gadget that was not made possible by Physicists, from cars (operating on Internal Combustion Engines, thermodynamics) to computers (semiconductors etc.).
As far as these ‘exotic’ cold particles are concerned, they may not remain that exotic. In our experimental Cosmology lab (we study the very early universe) we are developing efficient ways to transmit radio waves through thin superconducting striplines, which may be used in devices a few decades from now. This is not a boast, just the way things normally are in Physics - every gadget you see around you was developed as a matter of chance because some Physicist had explored an ‘exotic’ idea.
Of course, I understand that this is a quote and you do not necessarily have the same view.
I’m awfully sorry, I did not read your post carefully before posting my comment!
Hi Sidharth,
Welcome to my blog. And yes, reading the whole piece does help as I kind of *agree* with you. But never mind, we’ve all “been there, done that.”