It's Nobel season, and on Monday the prize in economics was awarded to three economists, including Boston native Eugene Fama, and Robert Shiller of Yale University, who've spent their careers studying how markets work. The announcement was only hours old when Australian economist John Quiggin posed a killjoy question on the website Crooked Timber: "Why do we *still* have a Nobel Prize in economics?"
There's more to the question than you might think. Among the Nobel categories, economics stands out. It's not a science like medicine, physics, or chemistry, and it's not like peace or literature, either, which have no scientific pretensions. It's the only social science acknowledged by the most prestigious prize commission in the world, which makes you wonder, if there's an economics prize, why not also one for sociology or anthropology?
It's not well known, but the Nobel Prize in economics is not really a Nobel Prize at all. It was established in 1968, 73 years after the real Nobel prizes were created in the will of Alfred Nobel, endowed out of a separate pool of money over the objections of Alfred Nobel's heirs, and given a Nobel-sounding name, the "Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel."
Quiggin links to an interview with Notre Dame economist Philip Mirowski in which Mirowski explains how political gamesmanship led to the creation of the economics pseudo-Nobel. In the late 1960s, he says, the central bank of Sweden (the "Sveriges Riksbank" you see in the prize's name) wanted to gain political independence from the Swedish government. To do that, its boosters had to claim that economics was an entirely apolitical, scientific discipline, on par with physics or chemistry. And in the 1960s, Quiggin explains, that was a feasible claim to make, because the young field was still dominated by a single perspective (the Keynesian-neoclassical synthesis) just the way inquiry in more obviously "real" sciences begins from a single perspective.
Today, though, no one would claim economics is a science. Successive generations of economists have made names for themselves knocking down each other's temples, and now, Quiggin writes, "there is no agreement on fundamental issues. The result is that prizes are awarded both for 'discoveries' and for the refutation of those discoveries." If the Nobel slate were being recast today, economics might not make the cut, but no matter. Prestigious prizes are like Mafia marriages: once you're in, you're in.
You can see Philip Mirowski explaining the history of the economics prize in this video, beginning at 2:29.
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