Erik Angner, Stockholm University
“Professor Claudia Goldin demonstrates the point of the Prize in Economic Sciences”
Privately, Alfred Nobel was depressive: unlucky in love, he was prone to feelings of loneliness, melancholia, and isolation. He was crazy enough to perform experiments with the highly explosive compound nitroglycerine, bringing devastation to entire laboratories and factories in the process of inventing dynamite. And he was generous enough to donate a large part of his estate to endow “prizes to those who, during the preceding year, have conferred the greatest benefit to humankind.”
The inventor, industrialist, and benefactor described himself in this way: “I am a misanthrope and yet utterly benevolent, have more than one screw loose yet am a super-idealist who digests philosophy more efficiently than food.”
In 1968, the Central Bank of Sweden established the Prize in Economic Sciences in Memory of Alfred Nobel. The prize is based on a donation from the bank on its tercentenary. It’s awarded in much the same way as the other prizes are.
The inclusion of economics continues to generate intense protest.
Every year around Nobel season, you can expect op-eds arguing that economics is not a real science, that the “Economics Nobel” is not a real Nobel, and that economists are more like priests than scientists.
The mere existence of the Prize in Economic Sciences evidently strikes a nerve.
“Don’t let the Nobel prize fool you. Economics is not a science,” by Joris Luyendijk is a case in point. The made-up economics prize is not only a distraction, in Luyendijk’s view, but actively harmful. “The award glorifies economists as tellers of timeless truths, fostering hubris and leading to disaster,” he writes.
There’s something funny about the contrast between real and made-up Nobels. Awards and prizes of all kinds are social constructions, which are both made up and real at the same time – in much the manner that tables and chairs are, in fact.
But more to the point, does the economics prize trick economists into thinking economics is an “exact [science] like physics or chemistry?” It would be weird if it did. There are, famously, Nobel awards in literature and peace. And there is no presumption that a literary “work in an idealistic direction” or efforts to “advance fellowship among nations,” as Nobel put it in his will, are exact sciences.
To my mind, economics is in fact the most suitable scientific discipline for a Nobel prize. The whole point of the awards is to reward, and therefore encourage, efforts to improve the lot of humankind. It so happens that this is the point of economics too.
As articulated by towering figures like Alfred Marshall, A. C. Pigou, and Lionel Robbins, economics is a deeply moral enterprise, focused on building a world more fit for human flourishing.
Pigou put it best:
“It is not wonder, but rather the social enthusiasm which revolts from the sordidness of mean streets and the joylessness of withered lives, that is the beginning of economic science.”
Economists from Karl Marx to Friedrich A. Hayek have agreed that the point of economics is not just to understand, but to change the world. Far from a technocratic, scientistic, cool, and calculating project, then, economics is fundamentally about helping people live satisfying, rewarding, fulfilling lives – lives worth living.
Nobody illustrates the point better than this year’s laureate, Harvard Professor Claudia Goldin. She was awarded the prize for having “provided the first comprehensive account of women’s earnings and labor market participation through the centuries.” Her research, according to the Prize Committee, tracks women’s labor over two centuries and explains why things turned out the way they did. Her research, which depends on vast quantities of data, provides the tools we need to understand, and fix, problems of labor market discrimination, exclusion, and inequality. Goldin’s work demonstrates everything that’s right and just about economics research.
Not every economist is equally useful – far from it. And not every choice of laureate has been equally inspired. But awarding a prize for efforts to benefit humankind rewards, incentivizes, and reminds us economists to do our very best work in service of the discipline and our fellow human beings, communities, and the environment.
After winning the Prize, Goldin received “hundreds of notes of gee and jubilation, tearful notes of joy, others with personal stories, and hundreds more about how meaningful the award was for all women.” She continued:
“The award gave people pride in their work and in who they are, it emboldened those doing research on women and on gender, and it gave recognition to economic historians everywhere.”
By the way, the Economics Prize is the only Nobel award that does not owe its existence to the military–industrial complex. Alfred’s high-society childhood and classical education were funded by his father’s landmine business in Russia during the Crimean War. And the explosives Alfred invented proved useful for purposes other than benefiting humankind.
In this respect, the Economics Nobel is, well, more noble than the original awards.
This Nobel season, let us celebrate not just Prof. Goldin, but the discipline to which she belongs – and the wisdom of the Economics Prize Committee for a terrific choice in the interest of the benefit to humankind.
Erik Angner is a philosopher and an economist at Stockholm University and the author of How Economics Can Save the World (London: Penguin, 2023).
In an earlier blog Maya Bar-Hillel and Cass Sunstein reflect on their stay at the Grand Hotel Stockholm for the presentation of the 2017 Nobel Prize to Professor Richard Thaler, and lessons on navigability in choice architecture