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Hayek on economics prize

Appropriately enough, in a discussion about (Nobel laureate) Paul Krugman, someone mentioned a speech by (Nobel laureate) Hayek that he gave after winning the prize:

I do not yet feel equally reassured concerning my second cause of apprehension. It is that the Nobel Prize confers on an individual an authority which in economics no man ought to possess. This does not matter in the natural sciences. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence. But the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally.

There is no reason why a man who has made a distinctive contribution to economic science should be omni-competent on all problems of society – as the press tends to treat him till in the end he may himself be persuaded to believe. One is even made to feel it a public duty to pronounce on problems to which one may not have devoted special attention.

I am not sure that it is desirable to strengthen the influence of a few individual economists by such a ceremonial and eye-catching recognition of achievements, perhaps of the distant past. I am therefore almost inclined to suggest that you require from your laureates an oath of humility, a sort of hippocratic oath, never to exceed in public pronouncements the limits of their competence.

Or you ought at least, on conferring the prize, remind the recipient of the sage counsel of one of the great men in our subject, Alfred Marshall, who wrote:

“Students of social science, must fear popular approval: Evil is with them when all men speak well of them”.

This works for all kinds of lauded experts, not just in economics but in climate science, nutrition, psychology and education, for example.

18 comments to Hayek on economics prize

  • The term ‘science’ is misapplied here. And there.

  • Brian Micklethwait (London)

    I actually met Hayek a few times, when I worked in the Alternative Bookshop. We sold lots of his works, and had him there for book signings and such.

    Built into his entire way of thinking is that knowledge is dispersed throughout society, and this isn’t just a geographical thing. He had immense respect for workers of all kinds, and for the different kinds of knowledge they acquired about how they did their work. Even booksellers! He was always very polite and respectful to others about the work they did, and would sometimes cross-examine them about it, often to their considerable surprise. Why does a great man like Hayek care about how I do nursing, or school-teaching, or working in a library, or running an African safari park? I saw this, and heard about it from others who had spent time with him. So you can see how he would be very apprehensive about living in a world in which his particular sort of knowledge would be accorded excessive power, with the knowledge of others being steamrollered into impotence.

    By the way, I rather think that in the German speaking world, the word “science” just means systematic knowledge, of any kind. Hence “social science”. Anglos prefer to use the word more tightly, to describe only the “hard” sciences.

  • Lee Moore

    It’s not just “experts” – movie stars, pop stars, writers of fiction, celebrities – all sorts of famous people have their inane drivel paraded before us, just cos they’re famous (so long as their views are PC, natch.)

    As for the Nobel economics prize, well, much like the peace prize, is now 100% political. Ol’ Milt could never win it now.

  • By the way, I rather think that in the German speaking world, the word “science” just means systematic knowledge, of any kind. Hence “social science”. Anglos prefer to use the word more tightly, to describe only the “hard” sciences.

    Interesting – thanks, Brian. I wonder how much has been lost/gained in translation, if anything.

  • Mr Ed

    There is no Nobel Prize in Economics. There are Prizes in Chemistry, Physics, Medicine or Physiology, Literature and Peace, but not Economic Science.

    There is a cuckoo in the nest, however, the Swedish National Bank Prize in Economic Sciences in Memory of Alfred Nobel, but that has no more to do with the Nobel Prizes established by Alfred Nobel than a swimming certificate. The Prize is funded by the Swedish Central Bank.

    The Latin word ‘scio’ means ‘I know’, hence science is derived from that verb, in short.

    If a scientist tells you that two parts hydrogen gas and one part oxygen gas are explosive when ignited at 300K and 20 atmospheres, and that the result is water (in equilibrium), you can test that and repeat it (depending on how close you were to the test, the volumes used and how well contained the reaction is).

    If an economist tells you that you will sell X units of item Y at price Z, you might find that he was guessing.

  • Jacob

    Another distinction between economics and science:
    In economics there is no rule, statemnt or pronouncement for which you won’t find economists claiming the exact opposite to be true.

    Now you know what we need Paul Krugman for.

  • Tedd

    An important lesson I learned many years ago is that an expert’s opinion is only worthwhile within the limits of their expertise and, crucially, that those limits are very narrow. My earliest memory of realizing this involves a discussion I had about an issue in engineering mechanics with a professor of engineering mechanics, when I was a first-year student. I was certain that he was wrong, but it was not until some years later that I worked out why he was wrong. So here was a PhD and professor of engineering mechanics, pronouncing on a problem in engineering mechanics, and completely wrong because it was a problem that he had no personal experience with. That was a very powerful lesson in just how narrow expertise actually is. I have since had many opportunities to reinforce that lesson.

  • Rob Fisher (Surrey)

    Mr Ed: “no more to do with the Nobel Prizes established by Alfred Nobel than a swimming certificate”

    This does not necessarily contradict you, but it does add more information:

    the only non-Nobel prize that has ever been associated officially with the Nobel Foundation

  • John Blake

    Hayek recaps the classic fallacy of “ad credentia”: Awards such as the Nobel recognize but confer no expertise, which must be earned rather than asserted, and moreover is non-transferable.

    As Hayek noted, celebrity status may guarantee a public hearing but is no proof against wrongheaded opinion misapprehended as authoritative in extraneous venues.

    In economics the hyper-partisan Paul Krugman, a purblind ideologue, is but the latest charlatan in an all-too lengthy line.

  • Mr Ed

    @ Rob, hence my use of the wording ‘established by Alfred Nobel’, had he wished to provide for a Prize in the Economic Sciences, he could have done so in his will. He left no dynamite under the trustees as a deterrent to degrading his foundation, but trustees cannot always be trusted.

  • Gene

    That Hayek truly applied his insights into the use of knowledge and the limits of same to all aspects of life makes me admire him even more than I had before. The lack of that kind of wisdom is today, as it has always been, a scourge upon humankind.

  • Dyspeptic Curmudgeon

    Thomas Sowell put up an apposite quote on National Review from Calvin Coolidge, which clearly applies to Krugman:

    “It is difficult for men in high office to avoid the malady of self-delusion. They are always surrounded by worshipers. They are constantly, and for the most part sincerely, assured of their greatness. They live in an artificial atmosphere of adulation and exaltation which sooner or later impairs their judgment. They are in grave danger of becoming careless and arrogant.”
    — Calvin Coolidge

    Substitute ‘high regard’ for ‘high office’.

  • Julie near Chicago

    Rob: “This works for all kinds of lauded experts, not just in economics but in climate science, nutrition, psychology and education, for example.” –Great list of examples. Love it!

    Brian: Thanks for drawing the clear distinction between the two usages of the word “science.” I had been struggling to articulate it.

  • Paul Marks

    I simply do not have time to more than skim read the thread (and I have already got into trouble for that). So I will concentrate on the post itself.

    Paul Krugman is not a person of science – not in the modern sense of the “scientific method” (i.e. the empirical method) he is not interested that government spending has not actually been cut (he will just pretend it has been cut – and someone who makea up data to suit himself is not following “scientific method”). Nor is Paul Krugman a person of science in the old sense – i.e. a “body of knowledge” (in this even such subjects as history are “sciences”) as there are vast gaps in his knowledge of basic economics – indeed virtually the only branch of economics he seems to know anything much about is international trade (although knowing a bit about trade theory should not have got him the N. prize).

  • Tedd – You are quite correct in the narrowness of expertise. But those who are distinguished in any particular field usually have enough acolytes around them telling them how clever they are to become convinced of their own greater genius. That’s when they become dangerous, and the current and recent presidents of the Royal Society provide excellent examples. They’ve all been suckered by snake-oil salesmen who tell us their remedies must work because they’re backed by Nobel prizewinners.

  • Shane Pleasance

    Would that we had more humble and self aware men of prominence nowadays…

    All post graduate study – and particularly my masters degree – taught me, was how little I knew of any given field.

    More importantly, I was moved from a state of ‘unconscious incompetence’ invariably, to one further round the learning matrix.

    The ‘Dunning-Kruger’ effect, if you will.

  • Eric Tavenner

    Now you know what we need Paul Krugman for.

    As someone to deride and feel superior to? Or maybe target practice.