Home > Uncategorized > I don’t care about the You-Know-What Prize

I don’t care about the You-Know-What Prize

from Peter Radford

Every year around this time many of you get seriously vexed over the award of something the we know as the sort-of-Nobel prize in economics. And every year I get swept up in the hubbub.

Not this year.

I have decided to ignore the entire thing. Who cares? I don’t. Nor should you.

Nor do I care any more whether economics is a science of not. Who cares? I don’t. Nor should you.

We have wasted a whole lot of time arguing, discussing, and otherwise pondering whether economics deserves its singular status within the social sciences. It doesn’t. So let’s move on.

Now I realize I am not giving you all a lot of evidence to support my case here. I ought, to be truly rigorous about this, to present a series of examples and reality checks upon which to base my case. But am not going to that. No. Not at all. I am simply going to assert that economics is basically libertarian ideology wrapped up in mathematics to disguise its lack of content and its right wing intent. It can’t hold a proverbial candle to sociology or psychology when it comes to explaining real people’s behavior. So there. I said it.

And I can do this proudly.


Because I learned a thing or two from economics!

Who needs evidence? Not when you can just assert stuff. People are rational. Economists say so. And if you complain about it, they just say that people behave as if they’re rational so that’s as good as being rational. So there. Take that psychology! All you need are incentives. Really. That’s it. You can motivate anyone by holding cash or starvation in front of them. Understanding humans is so easy. I don’t understand why we even need psychologists. Economists figured out how people behave decades ago. Did I mention they’re rational?

Really rational. Honest. Well not honest, because honesty is suspect. It isn’t incentive based enough. Always. Enough.

Oh. And markets fix absolutely everything. I mean that. And governments just muck things up.

I don’t mean to patronize you all, but anyone who thinks that programs to help the poor actually help anyone is being foolish. You need incentives. Lots of incentives. Like starvation. All this welfare stuff is just going to diminish efficiency. And efficiency is absolutely the only goal humans have ever had. Ever. Pareto said so. Well sort of. He denied it later, but that’s when he’d gone soft.

My hero Tom Sargent – he’s just one of my heroes – said it back in 2007:

 “Everyone responds to incentives, including people you want to help. That is why social safety nets don’t always end up working as intended.”

Now that’s patronizing grandeur I can admire. All you silly liberal people ought stop helping people and get a few more incentives out there. Like starvation. Or cash.

Anyway, back the sort-of-Nobel prize. Angus Deaton clearly deserves a big prize. He comes from Scotland, which had an enlightenment, and works in America where all the economists live. So we know he’s clever, and he needs a prize to keep up with his neighbors. All American economists get the Nobel prize. I think. It looks that way. If they live in Chicago. Or know where Chicago is. It’s in America. All economists know that.

Angus gets the prize because:

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.”

To better understand consumption, poverty, and welfare …

It would be churlish to mention the split infinitive. So don’t. The key is that economists are giving themselves prizes for better understanding consumption, poverty, and welfare. These are things we need to know a lot more about. After all economists have been talking about them for the best part of two hundred and fifty years. So it would be good to better understand them. Just in case all that time they’ve been talking drivel. It helps to better understand the central topics of your subject.

Except for people. We don’t need to better understand them at all. Economists have them figured out completely.

No. Really.

  1. IvoKainKrieg
    October 14, 2015 at 5:58 pm

    nice useless sarcasm, IMHO

    • October 14, 2015 at 7:13 pm

      IMHO, it is a very useful sarcasm; I laughed a lot. Who can do that knows better what is going on in a situation plenty of contradictions to reality.

  2. October 14, 2015 at 6:26 pm

    With all this rationality it is good to have a wee bit of jocularity.

  3. October 14, 2015 at 7:52 pm

    Everyone does respond to incentives. Just not the “rational” incentives economists have invented. Economic man (Homo economicus) was invented by economists. But rather than basing that invention on how actual people built economic actions and theories, economics wanted to be a science of the “cool, objective, rational” kind that they believe physicists are. The difference between their work and the work of physicists, which they could not recognize then or now is that physicists do build their science to investigate their objects of study (the physical universe) while economists build their “science” to celebrate their own egos and enhance the political reach of economics and economists.

  4. October 14, 2015 at 9:20 pm

    Those of you who believe in incentives should google Can You Ride A Bicycle Smarter every day. Ken Zimmerman is sort of right that “everyone does respond to incentives.” That does not mean that they can actually overcome their innate inability to do something although they may give it a try. That is the fallacy of the motivational approach. That is psychology! If you watch the video you will see that those offered an incentive to ride the bicycle were unable to do so when offered $200 and would not have been able to do so if offered $1 billion.

    But Peter I really appreciated your NOT caring enough to write several hundred words on the subject. Delicious irony!

  5. Thomas Mayer
    October 15, 2015 at 9:22 pm

    i think it is very important to have a framework of it’s own to describe economic activities. Are there efforts to do so? Economics as-it-is is not so much a descriptive science but more a prescriptive science.

    I would start with how people behave in different situations (as in behavioral economics) and I would work with empirical data and build models based on that data (not the other way around). I think this is not too difficult.

    Ultimately, economics seems to deal with power, it may be necessary to develop andand establish a distinct alternative to “free-market” capitalism in the west.

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