October 15, 2013

Let's have the Oscar voters do the Nobels, and vice versa

Given some of the recent Nobel Prize awards, it can't be a bad idea.

On the Peace Prize, among recent winners, President Obama was a clearly political choice, and hindsight makes clear he's not all that peaceful. Ellen Johnson Sirleaf and Leymah Gbowee, among 2011 laureates, aren't all the European-American foreign policy consensus cracked them up to be.

The European Union last year was iffy, and it's too soon this year on the UN chemical weapons agency.

Add to this the ridiculousness of this year's Economics Prize winners, whose award is justly and thoroughly sent up here. Besides what the author says, about even Milton Friedman rejecting Eugene Fama's ideas, and adding Robert Schiller as a recipient when he actually significantly undercuts Fama to serve as a "hedge," the Great Recession obliterated Fama's thesis.

Indeed, Schiller attacks Fama here:
"The efficient markets (theory) assumes that everyone is smart all the time -- and that's just wrong,'' he said.

And worries about a new round of irrationality here.

What really drives economics? If anything, it's greed, not rationality, per Schiller.

Beyond that, behavioral economics, from Daniel Kahnemann (a previous Nobelist!) and Dan Ariely to many others, has undercut rational-market ideas, even though the Economics Prize committee explicitly claimed otherwise in its award.

And, beyond that, quantum theory, World War II, the Holocaust and much more have put paid to Enlightenment-era ideas of rational human nature in general.

The Economics committee said in its announcement that its focus was on asset prices. Well, given that Schiller largely refuted Fama, why did he even get a share of the award?

I mean, there have been occasional controversial prizes in the past, but the Peace Prize committee has been more off than on for several years now. And, speaking of Friedman, the Prize in Economics has certainly had its past controversies.

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