Is economics a science? Not according to the founder of the Nobel prizes
A Princeton economist won a 'Nobel Prize' in 'Economic Sciences.' But it's not really a Nobel, and economics isn't really a science.
Princeton economist Angus Deaton on Monday won an economic sciences prize from the Nobel granting organization, for creating tools to study how individual choices impact economies.
"To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices," wrote The Royal Swedish Academy of Sciences, also granter of the physics and chemistry Nobel prizes, in an announcement.
Prof. Deaton unquestionably deserves a prize for his work to better understand consumption, poverty, and welfare in developing countries, particularly when economic inequality is under the microscope.
But whether economics is a science, or worthy of the Nobel name, is a matter of ongoing contention.
"Calling this 'Nobel in Economics' perpetuates the fraud begun in 1969," wrote Christopher L. Simpson in a comment in The New York Times.
"Feeling that the 'science' of economics lacked legitimacy, some Swedish bankers founded this prize and in wholesale commission of fraud named it after Alfred Nobel (who has no connection with economics whatsoever) in order to gain for it the prestige that Nobel in his will, chose to reserve for physics, chemistry, literature, peace, etc.," he wrote
Mr. Simpson is right about the prize's origins. It was first awarded to Ragnar Frisch and Jan Tinbergen in 1969 and funded by a donation from Sweden’s Central Bank, Sveriges Riksbank, to the Swedish Academy of Sciences in memory of Alfred Nobel, founder of the Nobel prizes. The bank’s donation established the economic sciences prize 74 years after the Nobels were founded.
Mr. Nobel, inventor of dynamite, left his fortune to the establishment of the Nobel prizes in his 1895 will, tasking the academy with stewarding the science prizes in chemistry and physics. (Prizes in medicine, literature, and peace are distributed by other organizations.)
The economics prize does include the Nobel name – it's officially "The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel" – so it’s often referred to as a "Nobel Prize" and carries the full weight of that distinction, to the dismay of some scientists.
According to the Financial Times, former Swedish finance minister, Kjell Olof Feldt, who was also head of Sweden’s central bank, advocated abolishing the economics prize. Nobel’s descendants have done the same.
"The economics prize has nestled itself in and is awarded as if it were a Nobel Prize," said Peter Nobel, Alfred's great-great-nephew, to a Swedish newspaper a decade ago. "But it's a PR coup by economists to improve their reputation.… There is nothing to indicate that he would have wanted such a prize," Mr. Nobel said.
Many also bristle at the idea of calling economics a science, as it is dependent on politics, statistical analyses, and mathematical modeling based on the capricious behavior of people. The hard sciences, say critics, rely on observations of the natural world and on testable theories.
"The problem is not so much that there is a Nobel prize in economics," wrote Joris Luyendijk in the Guardian, "but that there are no equivalent prizes in psychology, sociology, anthropology."
He added, "It creates the impression that economists are not in the business of constructing inherently imperfect theories, but of discovering timeless truths."
As proof of the discipline's fallibility, he points to the financial crisis of 2008 – which "practically the entire mainstream economics profession" failed to predict.