By akademiotoelektronik, 17/04/2022

Economics does not deserve a Nobel Prize Article pagination

Last month, the Royal Swedish Academy of Sciences awarded the 2021 Nobel Prizes for Medicine, Chemistry, Physics, Literature and Peace. Beyond these five Nobel Prizes, each year the Central Bank of Sweden awards a Prize in memory of Alfred Nobel who, erroneously, is considered a Nobel Prize of the same rank as the others. In fact, Alfred Nobel did not consider economics as a scientific discipline deserving of a Prize among those he instituted by his will of 1895. It was only in 1968 that the Swedish Central Bank decided to institute an annual Prize in memory of 'Alfred Nobel, during the ^300th anniversary of this monetary authority.

If initially several economists of size were rewarded by the Price of the Swedish Central Bank, from the end of the years 1980 one notes a considerable fall of the scientific level of the work rewarded by this so-called Nobel Prize. This year, for example, this Prize was awarded to an economist who discovered hot water (to put it mildly) and to two other researchers who consider economics to be an exact science like physics or math.

It is now an “empirical evidence” equivalent to a truism that the institution of a minimum wage does not reduce the level of employment in the whole of the national economy. On the contrary, the introduction of a minimum wage is very likely to increase the level of employment, since consumers thus have a greater purchasing power and, what is more, could have a greater high propensity to consume, since they know that they receive a higher wage than that which they received before the adoption of a minimum wage.

As regards, on the other hand, the assimilation of economic analysis to a pure and hard science like physics – which has immutable laws in time and space –, this is a methodological error. very serious, because it distorts the approach to be used and leads to fundamentally flawed economic policy choices, which therefore can in no way solve real-world economic problems, far more complex than mathematical models the most sophisticated can represent.

It is certainly not through the collection of data following surveys of a sample (although “representative”) of the population that it is logically possible to arrive at conclusions of a macroeconomic nature, hear who concern all the agents within the economic system under consideration.

However, contemporary “economic science” is established on the basis of data which, following parascientific methodologies, are collected in the field, with the claim that the data never lie. In reality, many academic economists start from the conclusions they want to obtain, in order to define the scope of the data to be collected and the methodology to be used to "demonstrate" their own hypotheses, if only to obtain a so-called Price Nobel.

Alfred Nobel is probably turning in his grave!