The Nobel Factor represents an ambitious exploration of recent economic history, and in many ways a successful one. Basically it undertakes a broad assessment of the state of the economics “science” as documented by the main contributions of the 76 Prize winners from 1969 to 2015. The authors acknowledge the theoretical beauty and internal validity of many of the contributions, but come down hard on the lack of external relevance of the practical results. It argues that the economic policy prescriptions have been few, and those that have been applied have proven mistaken. The book disputes the standing of economics as a science, and the authors are skeptical whether the Nobel imprimatur is warranted
The book’s analytical strategy is to contrast the economics professions love of mathematical modeling against the practical work of economics in each nation. The “market turn” associated with the so-called Chicago-school’s ascendance in 1980s and 90s (and the ensuing Nobel Prizes awarded) have led to a decline in the kind welfare economics emphasized in more social democratic nations. The authors demonstrate how the strictures imposed on debtor nations by IMF and other international banking institutions have not only failed to work but have also led to much unnecessary suffering. The books chapter on the “Washington Consensus” is a devastating indictment of the Chicago school’s disastrous international influence.
The book also argues social democracy leads not only to a more humane society but also to better economic performance. The expensive health care system in the United States is repeatedly used to contrast the American thrust towards deregulation and privatization with the balanced social democratic Scandinavian countries whose economic performance has been better than the American.
The Nobel committee awarding the prize was long led by adherents of the pro-market thinking. This seems to be one reason why the Nobel Prize awards have not favored economists with social democratic leanings, despite the Swedish connection. Two such well-known economists who could have been strong candidates in the past, John Kenneth Galbraith and Joan Robinson, were apparently not taken seriously, lacking in mathematical modeling skills.
It is easy to see how the book’s dismissal of theoretical contributions such as Robert Lucas’ “rational expectations hypothesis” or even Milton Friedman’s “quantity theory of money” for their lack of realism or lack of policy success might infuriate market puritans. The authors’ personal biases in favor of social democratic solutions also shine through much of the analysis and discussion.
Nevertheless, the book is an invaluable addition to the economics literature and the Nobel Prize history. It becomes clear why Alfred Nobel himself, if alive in 1969, likely would not have approved a Nobel Prize for economics, and why Nobel Prize winners in the more scientific fields might feel the prestige of their Nobel Prize devalued by the prize in economics.
Download the free Kindle app and start reading Kindle books instantly on your smartphone, tablet, or computer - no Kindle device required.
Read instantly on your browser with Kindle for Web.
Using your mobile phone camera - scan the code below and download the Kindle app.
Customers who bought this item also bought
Page 1 of 1 Start overPage 1 of 1
Top reviews from the United States
There was a problem filtering reviews right now. Please try again later.
Reviewed in the United States on November 6, 2016
Reviewed in the United States on February 23, 2017
Reviewed in the United States on December 10, 2016
Reviewed in the United States on November 28, 2016
