But Sweden has a LOT to answer for by establishing the phony award for economics and borrowing the Nobel name even though such a prize was not in Alfred Nobel's will. The official name of the award is: The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. This blatant dishonesty will be long remembered as Sweden giving its stamp of approval to right-wing crackpots.
In case the Swedish fools you, it's the Swedish Central Bank prize in the economic sciences (science--wink, wink--get it--economics is just like physics) given in the memory of a guy who would have been horrified if he had seen his name used in such a manner.
This prize has been a superb way to glorify the big thinkers of neoliberalism. Stiglitz and Krugman are the exceptions (but just barely). The rest of the prize-winners have been these arrogant hacks who were given the duty of explaining why the Producer classes are now irrelevant because in the heady new world of magic money, the gunslinger with the best algebra wins.
There are numerous nominations for the biggest fools to win the Riksbank Prize, but my favorites are the dynamic duo of Merton and Scholes who took their Riksbank-approved wonder theory and opened a shop called Long-Term Capital Management which almost brought down the global markets. They gave a Riksbank to Gary Becker who is so dull and conventional, he could be mistaken for a houseplant.
Unfortunately, this year's crop is right out the Gary Becker School of DEEP thought.
Three share Nobel Prize in economics
Two Americans, Peter Diamond and Dale Mortensen, along with British-Cypriot citizen Christopher A. Pissarides, win the award for their studies of markets and the nature of problems such as high unemployment.
"The laureates' models help us understand the ways in which unemployment, job vacancies and wages are affected by regulation and economic policy," the citation said. (AFP/Getty Images / October 11, 2010)
Reporting from Washington — A trio of economics scholars, including an MIT professor whose nomination to the Federal Reserve board has been held up in the Senate, won the Nobel Prize in economics on Monday for their studies of markets and how mismatches between buyers and sellers can contribute to such problems as high unemployment.
Peter A. Diamond of the Massachusetts Institute of Technology and fellow American Dale T. Mortensen, a professor at Northwestern University, will share the $1.5 million award with Christopher A. Pissarides, a British and Cypriot citizen who teaches at the London School of Economics.
The three men pioneered and developed models that help explain, among other things, why there are so many jobless people even as there are a large number of job openings — a problem that is particularly relevant today as the United States and other developed countries grapple with stubbornly high unemployment.
The U.S. jobless figure for September was reported Friday at 9.6%.
"The laureates' models help us understand the ways in which unemployment, job vacancies and wages are affected by regulation and economic policy," the Royal Swedish Academy of Sciences said in announcing the prize.
"This may refer to benefit levels in unemployment insurance or rules in regard to hiring and firing," the statement said. "One conclusion is that more generous unemployment benefits give rise to higher unemployment and longer search times." (my emphasis) moreAnd there you have it--the money quote. These clowns were chosen because they could "prove" that unemployment is partly caused by excessively high unemployment benefits. With the help of the Riksbank Prize, the jobless are about to be thrown to the wolves.
Their argument is that there are frictions that makes it possible to have times when jobs go unfilled. Of course, this does occasionally happen but the problem with this line of thinking is that it is utterly irrelevant to today's conditions. If you have a good job to offer, you can routinely expect 250 applications for every opening. The math is overwhelming--there are five jobless for every job. This is MUCH more than a little friction in the job markets. (sheesh!)
These guys are talking about a world that basically doesn't exist except in their fevered right-wing imaginations. And in the face of a global catastrophe caused in part by the inventions of the Riksbank Prize winners, one could imagine the jury giving it someone other than some more irrelevant neoliberal hacks this year. One's imagination was wrong.
Like I said--this is embarrassing!