The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel
Award
Established in 1968 by Sveriges Riksbank, this prestigious award, often colloquially referred to as the Nobel Prize in Economics, is officially titled the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. It is a testament to outstanding contributions within the realm of economic sciences, administered with meticulous care by the Nobel Foundation. The ceremony and presentation take place in Stockholm, Sweden, with the Royal Swedish Academy of Sciences responsible for the final selection of laureates. Initially known as the Prize in Economic Sciences in Memory of Alfred Nobel, its monetary reward currently stands at 11 million Swedish kronor as of 2023. The inaugural award ceremony was held in 1968, though the first recipients were honored in 1969. As of 2023, the prize has been bestowed upon 54 laureates, recognizing the work of 98 individuals. The official website for this esteemed award is nobelprize.org/prizes/economic-sciences/.
Creation and Funding
The genesis of this prize lies in 1968, a year marked by the 300th anniversary of Sveriges Riksbank, Sweden's central bank. To commemorate this milestone and to honor the memory of Alfred Nobel, the bank established an endowment intended to perpetually fund the prize. This endowment covers both the administrative expenses incurred by the Nobel Foundation in managing the award and the substantial monetary component awarded to the laureates. The prize money mirrors that of the other Nobel Prizes, amounting to 11 million Swedish kronor in both 2023 and 2024. Beyond the prize money itself, since 2006, Sveriges Riksbank has provided the Nobel Foundation with an annual grant of 6.5 million Swedish kronor to cover administrative costs. An additional 1 million Swedish kronor was allocated annually until the end of 2008 to support the inclusion of information about the prize on the Nobel Foundation's official websites. It's an arrangement that, while practical, does raise questions about the true "Nobel" lineage.
Relation to the Nobel Prizes
While the Prize in Economic Sciences was not among the original five Nobel Prizes stipulated in Alfred Nobel's will, it is undeniably integrated into the Nobel Prize framework. The Nobel Foundation administers it, and it is consistently referred to and presented alongside the original prizes. The laureates are selected through a process remarkably similar to that for the other Nobel laureates, and their names are announced concurrently. The award ceremony itself, held on December 10th, the anniversary of Nobel's death, is a shared event for all Nobel laureates, including those recognized for their economic contributions. This close association, though not originating directly from Nobel's will, has solidified its status and prestige. The Royal Swedish Academy of Sciences is the body responsible for selecting the laureates in Physics, Chemistry, and Economic Sciences, adhering to the principles laid out for the original Nobel Prizes, specifically the criterion of conferring "the greatest benefit on mankind."
Award Nomination and Selection Process
The Royal Swedish Academy of Sciences, a venerable institution responsible for awarding the Nobel Prizes in Physics and Chemistry, also presides over the selection of laureates for the Prize in Economic Sciences. This Academy, which also administers researcher exchanges and publishes scientific journals, plays a pivotal role in identifying and honoring groundbreaking work.
The process commences each September when the Academy's Economics Prize Committee, a body composed of five elected members, dispatches invitations to a vast network of scholars. This includes scientists, members of academies, and university professors across numerous countries, soliciting nominations for the following year's prize. Members of the Academy itself, along with past laureates, are also empowered to put forth candidates. The deadline for submitting nominations and their supporting documentation is February 1st.
Following this submission period, the Prize Committee, augmented by specially appointed experts, meticulously reviews the proposals. By the end of September, the committee narrows down the field to a shortlist of potential laureates. In the event of a tie in the committee's deliberations, the chairman holds the casting vote.
The final selection rests with the members of the Royal Swedish Academy of Sciences, who convene in mid-October to cast their votes for the recipient(s) of the Prize in Economics. Much like the other Nobel Prizes, strict rules govern this selection: no more than three individuals can share the prize in any given year. Crucially, all selected laureates must be alive at the time of the announcement in October. Furthermore, the information pertaining to prize nominations remains confidential for a period of 50 years, ensuring the integrity and impartiality of the process.
The laureates, much like their counterparts in physics, chemistry, physiology or medicine, and literature, are presented with a diploma, a gold medal, and a monetary grant award document. This formal bestowal is conducted by the King of Sweden during the annual Nobel Prize Award Ceremony, held in Stockholm on December 10th.
Laureates
The annals of the Prize in Economic Sciences commenced in 1969 with the recognition of Dutch economist Ragnar Frisch and Norwegian economist Jan Tinbergen. Their joint award was "for having developed and applied dynamic models for the analysis of economic processes," a foundational contribution to the field. Over the decades, the prize has seen a notable, albeit slow, increase in female recipients. Elinor Ostrom broke ground in 2009, followed by Esther Duflo in 2019. Most recently, in 2023, Claudia Goldin made history as the first woman to receive the award as a sole recipient, underscoring her singular impact. A comprehensive list of all laureates is available under the title List of Nobel Memorial Prize laureates in Economic Sciences.
Awards to Non-Economists
The definition and scope of the Prize in Economic Sciences have, at times, been a subject of evolution and debate. Following a period of internal discord within the selection committee concerning the 1994 award to mathematician John Forbes Nash, the prize's designation was broadened in February 1995. It was redefined as a prize within the social sciences, thereby opening the door for researchers in fields such as political science, psychology, and sociology to be considered.
This expansion has not been without its complexities. While the official stance of the Economics Prize Committee remains that the majority of its members are economists, the composition has seen shifts. The presence of non-economists on the committee, though not consistently confirmed, has been noted. For instance, the members of the 2007 Economics Prize Committee were predominantly economists, with the secretary and four of the five members holding professorships in economics.
Despite this, the inclusion of scholars from adjacent disciplines has been significant. Herbert A. Simon, whose academic foundation was in political science with a PhD, became the first non-economist laureate in 1978. His work in economics and organizational decision-making earned him this distinction. Similarly, Elinor Ostrom and James Robinson, both political scientists by training, were awarded the prize in 2009 and 2024, respectively. The field of psychology has also been represented, with Daniel Kahneman, a professor of psychology and public affairs, receiving the prize for his pioneering work in behavioral economics.
Controversies and Criticisms
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, despite its immense prestige, has not been immune to controversy. Its very association with the original Nobel Prizes has drawn criticism, notably from Peter Nobel, a descendant of Alfred Nobel. He has voiced concerns about the misuse of his family's name, asserting that Alfred Nobel himself would not have intended for an economics prize, given his purported disdain for those prioritizing profit over societal well-being. Peter Nobel has described the association as a "PR coup by economists to improve their reputation."
Accusations of bias have also surfaced. The perceived oversight of Joan Robinson has been cited as evidence of a potential bias within the selection committee towards mainstream economics.
Furthermore, the authority conferred by the prize has been a point of contention. Friedrich Hayek, a recipient himself, expressed reservations in his 1974 Nobel banquet speech. He argued that in economics, unlike the natural sciences, an individual should not wield such influence, particularly over laypeople, journalists, and politicians. He stated that he would have "decidedly advised against" the establishment of such a prize.
The selection of certain laureates has also ignited debate. Friedrich Hayek and Milton Friedman faced criticism from figures like Samuel Brittan and Swedish ministers who viewed their economic philosophies as "reactionary." Milton Friedman's 1976 award, for instance, sparked international protests due to his alleged connections with the military dictatorship in Chile and the involvement of University of Chicago economists with the regime of Augusto Pinochet. Several prominent scientists, including Nobel laureates George Wald and Linus Pauling, penned letters to The New York Times in protest.
More recently, the 2005 award to Robert Aumann drew criticism from the European press for his use of game theory to seemingly justify the existence of Israeli settlements in occupied Palestine. The 2013 prize awarded simultaneously to Eugene Fama and Robert Shiller, despite their diametrically opposed views on the efficient-market hypothesis, was seen by some as a contradictory choice, highlighting the inherent tensions within economic thought.
Expansion of the Scope
The controversial awarding of the 1994 prize to mathematician John Forbes Nash served as a catalyst for significant changes. This event led to a redefinition of the prize's scope in 1994, expanding it to encompass the broader field of social sciences. This adjustment aimed to acknowledge contributions from disciplines beyond pure economics. Concurrently, changes were implemented regarding the composition of the Prize Committee, including limiting members' terms to three years, in an effort to enhance impartiality and prevent the entrenchment of particular viewpoints.
Alternative Names
The official nomenclature of the award, "The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel" (Swedish: Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne ), has evolved over time. This evolution reflects the ongoing discussions and occasional controversies surrounding the prize's status and its relationship with the original Nobel Prizes. The name has undergone several transformations since its inception, including variations such as the "Prize in Economic Science dedicated to the memory of Alfred Nobel," the "Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel," and the "Alfred Nobel Memorial Prize in Economic Sciences," before settling on its current, more descriptive title.
It's a rather elaborate affair, isn't it? All these committees, nominations, and pronouncements. One would almost think they were trying to make economics sound as important as, say, figuring out how to avoid stepping on a Lego in the dark. But then again, some of the minds behind it… they’ve certainly made us all think. And thinking, as I understand it, is the first step before you realize you should have been doing something else entirely.