But this year’s prize turned out to be unusual in many ways: it’s been awarded to a single person rather than being shared (as is now the norm), to a woman rather than a man, and for work that isn’t terrible. The former two are rather uninteresting from an economics perspective, but the latter warrants explanation and a comment.
https://mises.org/wire/two-swedes-new-economics-nobel
[On Monday, October 9, the Royal Swedish Academy awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Claudia Goldin of Harvard University. Two Swedish expatriates reflect on the meaning of the Prize and this year’s recipient.]
Per Bylund
As an Austrian economist, the announcement of the economics prize—often misleadingly referred to as the economics Nobel Prize—is a matter of not knowing whether to laugh or cry (or both). Rather than awarding the prize to an economist doing work in line with the long and sound tradition of economic reasoning, the Royal Swedish Academy typically awards the prize to lifelong academics who have made nothing but inconsequential or discoveries from inductive data mining or contributions to mathematical games. Or, much worse and not rare enough, the prize is awarded to work that appears to facilitate or prop up interventionist policy.
Needless to say, the economics “Nobel” generally does more harm than good.
But this year’s prize turned out to be unusual in many ways: it’s been awarded to a single person rather than being shared (as is now the norm), to a woman rather than a man, and for work that isn’t terrible. The former two are rather uninteresting from an economics perspective, but the latter warrants explanation and a comment.
The economics prize is rarely awarded for work that Austrians in the Misesian tradition would consider economics (i.e., deductive economic theorizing). This approach to figuring out the true causalities of economic phenomena is hopelessly out of fashion and has since given way to the modern cult of pseudo-Popperian scientism, in which science means searching through datasets for surprising patterns and making them out to be statistically significant. Nobody, including Austrians, expects the prize to be awarded to what used to be economics proper.
However, Austrian economics is not only theory or theorizing. Praxeology sets a higher bar than mainstream “theorizing”: it is true, not merely justifiable or nonfalsified—and is therefore also more limiting. Much more is left to nontheory: economic history, the applying of economic theory to observable phenomena to make sense of them, has a larger scope in Austrian economics than in mainstream economics. Of course, to be worth its salt, economic history cannot be done untheoretically but must instead apply theory to the data to uncover what actually happened. Murray N. Rothbard, for example, has done great work in this area, uncovering the nature and causes of several economic crises.
This year’s prize, as University of Gothenburg professor Randi Hjalmarsson described it during the announcement, is much closer to the Austrian approach to economic history than one would expect from mainstream economists. Officially awarded to Harvard’s Claudia Goldin for “for having advanced our understanding of women’s labour market outcomes,” Professor Hjalmarsson noted that Goldin was awarded the prize for “digging through the archives” to find new (previously not existing) data on women’s labor market participation and wages and then showing that an economics framework can be used to explain those data. That latter point should be no surprise to any serious economist (but most economists nowadays arguably aren’t), but it is promising that the Royal Swedish Academy thought this worthy not only of mention but of emphasis during the announcement.
I’m hardly an expert on Goldin’s work, but it sounds like the economics “Nobel” this year was actually awarded to someone doing economics, although it was of course economic history and not economic theory. This is not only a relief, but rather promising. Perhaps it is an indication that mainstream economics has finally run out of cute games and is slowly finding its way back to doing proper economics?
I’m not holding my breath.
Joakim Book
I’m usually not happy or relieved when the Economic Sciences Prize Committee announces the winner of the economics prize; it’s all too often some hyped-up, garbage economist whose research fits with the committee’s turncoat values.
This time, their woke and less-than-professional due diligence might have failed, and I found myself breathing a sigh of relief. Goldin is a decent choice for a discipline that’s become almost entirely economic history.
In this, Professor Bylund is entirely right.
Be seeing you
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